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STOCKS TO WATCH: Globespan, Texas Instruments, Verity

Expect the following technology stocks to be among Thursday's most actively traded issues: Globespan, Texas Instruments, Verity and Virata.

  • Globespan (Nasdaq: GSPN)

    The maker of integrated circuit, software and system designs for digital subscriber line applications will likely tumble Thursday after it warned that sales and earnings for at least the next two quarters will miss analysts' estimates.

    After the bell Wednesday, Globespan said it now expects first-quarter earnings of between 10 cents and 13 cents a share, well below the First Call estimate of 18 cents a share.

    It now sees second-quarter earnings coming in at between 8 cents and 10 cents a share, also below analysts' second-quarter estimate of 17 cents a share.

    "We are disappointed with the present environment where customers have repeatedly requested revisions and cancellations to their orders to balance their inventories, which has caused us to lower expectations," said Chief Executive Officer Armando Geday in a prepared release.

    The company now expects first-quarter sales of between $105 million and $115 million and second-quarter sales of between $100 million and $110 million.

    Its shares finished up 75 cents to $24.63 ahead of the warning before falling to $20.31 in after-hours trading.

  • Texas Instruments (NYSE: TXN)

    The chipmaker should see some volume Thursday after announcing it will shutter its manufacturing facility in Santa Cruz, Calif., and lay off about 600 employees by year's end.

    Company executives said the operations will be consolidated into existing plants, primarily in Dallas and Houston. The California plant, which primarily manufactures semiconductors used in computer hard-disk drives, will be closed in phases through the end of 2001.

    "Manufacturing can be more efficiently managed by consolidating this capacity into locations with the potential for higher-volume, more technologically advanced processes," said Kevin Ritchie, TI's senior vice president for worldwide manufacturing operations, in a prepared release.

    The company said this consolidation is part of previously discussed cost-reduction activity and is a follow-on to its decision to more tightly focus the semiconductor products it makes for the hard-disk drive market and shift more resources to higher-growth opportunities.

    TI shares closed off $1.30 to $31.51 ahead of the news before falling to $31.47 in after-hours trading.

  • Verity (Nasdaq: VRTY)

    Verity will be active after it topped analysts' estimates in its third quarter and left its sales and earnings targets unchanged for the fourth quarter.

    In the quarter, the software developer earned $9.2 million, or 25 cents a share, on sales of $38 million.

    First Call Corp. consensus pegged Verity for a profit of 23 cents a share.

    Ahead of the earnings report, its shares moved up 63 cents to $22.94 before moving up to $23.75 in after-hours trading.

    Company executives reiterated their guidance for the fourth quarter, predicting sales growth of between 8 percent and 12 percent from the third quarter to between $41 million and $42.5 million.

    Earnings are expected to come in between 24 cents and 27 cents a share, in line or slightly ahead of the current First Call Corp. consensus estimate of 25 cents a share on sales of $42 million.

    For the fiscal year, Verity now expects to record sales of between $144.8 million and $146.3 million, up more than 50 percent from fiscal 2000, and earnings of between 91 cents and 94 cents a share.

    Analysts were forecasting fiscal 2001 sales of $145.7 million and earnings of 92 cents a share.

  • Virata (Nasdaq: VRTA)

    Virata also warned that its fourth-quarter results will fall dramatically short of analysts' estimates after the bell Wednesday.

    The maker of communications software and semiconductors for DSL and network-equipment vendors said it will post a loss, excluding charges, of between 21 cents and 23 cents a share in the quarter on sales of 19 million.

    First Call consensus expected Virata to earn 3 cents a share on sales of $45.9 million in the quarter.

    Company executives said it would consolidate some of its manufacturing facilities and take a an unspecified restructuring charge in the quarter.

    Virata blamed an overall slowdown in the U.S. economy as well as a continued inventory backlogs and order cancellations for the shortfall.

    Virata shares closed off 94 cents to $11.75 ahead of the warning before falling to $9.88 in after-hours trading.

    Last quarter, Virata earned $2.8 million, or 4 cents a share, on sales of $37 million.

    Its shares peaked at $94 last March before falling to a 52-week low of $6.81 in January.