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Tech Industry

STOCKS TO WATCH: Dell, HP, Nortel and Priceline

    Expect the following technology stocks to be among Friday's most actively traded issues: Dell, HP, Nortel and Priceline.com.

  • Dell Computer (Nasdaq: DELL)

    Dell will be active Friday after it missed analysts' estimates in its fourth quarter, announced it will lay off more than 1,700 employees and said that it will also miss analysts' estimates in its first quarter.

    The PC maker posted a profit of $508 million, or 18 cents a share, on sales of $8.67 million.

    Analysts were expecting a profit of 19 cents a share on sales of $8.5 billion.

    The stock closed up $2.06 to $25 ahead of the earnings report before falling to $23.63 in after-hours trading.

    In the year-ago quarter, it earned $436 million, or 16 cents a share.

    Company executives told analysts to expect earnings of 17 cents a share in the first quarter, down from current Wall Street estimates of 19 cents.

    Dell said the company would not give guidance beyond its first quarter because of poor visibility.

  • Hewlett-Packard (NYSE: HWP)

    HP managed to hit analysts' lowered earnings estimates in its first quarter but fell short on the top line.

    In the quarter, it earned $727 million, or 37 cents a share, on sales of $11.9 billion.

    Analysts were expecting a profit of 37 cents a share on sales of $12.37 billion.

    In the year-ago quarter, HP earned $825 million, or 40 cents a share, on sales of $11.7 billion.

    HP shares closed up $1.96 to $36.35 ahead of the earnings report before gaining a nickel in after-hours trading.

    CEO Carly Fiorina told analysts to expect only single-digit sales growth this year.

    Fiorina said part of HP's problem was inadequate spending on programs that generated demand for its Unix and Intel servers.

    Although the picture might improve in the second half, HP warned that it is too early to tell whether the economy will pick up.

    "We are maintaining our revenue guidance for the second fiscal quarter in the low- to mid-single digits," Fiorina said. "We could see revenue growth improvement in the second half if the U.S. economy improves as some economists expect and current foreign exchange rates hold."

  • Nortel Networks (NYSE: NT)

    Nortel is going to get crushed Friday after warning that it will miss analysts' estimates in the first quarter and fiscal 2001, and that it will lay off 10,000 employees by year's end.

    The stock closed up 20 cents to $29.75 ahead of the warning before plunging to $22.39 in after-hours trading.

    Company executives said it now expects to lose 4 cents a share on sales of $6.3 billion and sales for the entire year will grow between 10 percent and 15 percent over 2000.

    In a statement, Nortel Chief Executive Officer John Roth said the warning is a result of a slowing economy and reduced spending by telecom carriers. He added that this slowdown will likely continue into the fourth quarter of this year.

  • Priceline.com (Nasdaq: PCLN)

    The name-your-own-price online retailer posted a wider-than-expected loss in its fourth quarter but did predict profitability by the second quarter of 2001.

    In the quarter, it lost $25 million, or 15 cents a share, on sales of $228.2 million.

    First Call Corp. consensus pegged it for a loss of 7 cents a share on sales of $300 million.

    Priceline.com's shares closed up 44, or 17 percent, to $3 ahead of the earnings report.

    The $228.2 million in sales represents a 35 percent improvement from the year-ago quarter when it lost $10 million, or 6 cents a share, on sales of $169.2 million.

    Chief Financial Officer Bob Mylod told analysts during a conference call the company expects sales to improve between 15 percent to 20 percent in the first quarter, though it will post a loss of between 5 cents and 7 cents a share.

    Mylod said sales should grow between 10 percent and 15 percent sequentially in the second quarter and that it will reach profitability on a pro forma basis.

    Priceline.com also announced that Asian conglomerate Hutchison Whampoa Ltd. and Cheung Kong Ltd. had made a $50 million equity investment in the company by virtue of buying 24 million shares of Priceline.com common stock at $2.10 a share.