Tech Industry

STOCKS TO WATCH: Compaq, Engage, Net2Phone and ON Semiconductor

Expect the following technology stocks to be among Wednesday’s most actively traded issues: Compaq, Engage, Net2Phone and ON Semiconductor.

  • Compaq Computer (NYSE: CPQ)

    It’s definitely not a surprise, but Compaq became the latest PC maker to warn that it will miss analysts’ estimates this quarter.

    Compaq now says it will post earnings of between 28 cents to 30 cents a share on sales of between $11.2 billion to $11.4 billion.

    First Call Corp. consensus was expecting a profit of 36 cents a share in the quarter.

    ”While we had a good start to the fourth quarter, it is now clear that market confidence has wavered, and that we will be affected by the general softness in U.S. consumer, small and medium business and dot-com markets,” said CEO Michael Capellas in a prepared release. “Business activity in the rest of the world remains on track.”

    Compaq shares closed up 53 cents to $20.77 ahead of the warning.

  • Engage (Nasdaq: ENGA)

    The struggling online advertising and marketing services provider will be active again Tuesday after it missed analysts’ reduced estimates in its first quarter.

    It even missed its own reduced estimate.

    In the quarter, it lost $48.7 million, or 26 cents a share, on sales of $41 million.

    First Call Corp. consensus expected the online advertising and marketing services provider to lose 23 cents a share in the quarter.

    That estimate was obviously too optimistic considering the company warned that it would post a loss of 25 cents a share earlier in the quarter.

    Company officials said it missed its own loss estimate primarily because some of its customers were unable to pay their bills this quarter.

    Its shares closed up 28 cents to $1.97 ahead of the earnings report.

    It posted a net loss of $112.3 million, or 64 cents a share in the quarter.

  • Net2Phone (Nasdaq: NTOP)

    Here’s a little bit of good news: Net2Phone posted a smaller-than-expected loss in its first quarter, dropping $14.7 million, or 25 cents a share, on sales of $30.8 million.

    First Call Corp. consensus expected the Internet telephony firm to lose 30 cents a share in the quarter.

    Its shares closed off $1.38 to a 52-week low of $9.75 ahead of the earnings report.

    The $30.8 million in sales represents a 135 percent improvement from the year-ago quarter when it lost $5.4 million, or 11 cents a share, on sales of $13.1 million.

    Gross profit margins in the quarter fell to 39 percent compared to 41 percent in the fourth quarter and 48 percent in the year-ago period.

    In the quarter, its total paid minutes of use grew to 214 million minutes, up 151 percent from the year-ago quarter and up 28 percent from the fourth quarter.

    Its customer base grew to 1.8 million users, up 50 percent from 1.2 million last quarter.

  • ON Semiconductor (Nasdaq: ONNN)

    ON Semiconductor figures to take even more abuse Tuesday after it joined the rest of the semiconductor industry in warning that its fourth-quarter sales and earnings will fall well below analysts’ estimates.

    Its shares closed off 22 cents to $8.75 ahead of the warning.

    Company officials told investors to expect a 7 percent to 9 percent decline in sales from the third quarter and earnings of between 10 cents to 12 cents a share.

    First Call Corp. consensus expected it to earn 18 cents a share in the quarter.

    The company said it expects first-quarter sales to be fall 5 percent to 7 percent from the watered down fourth-quarter estimates.

    Last quarter, ON Semiconductor beat the Street, earning $33.2 million, or 19 cents a share, on sales of $539 million.