Expect the following technology stocks to be among Wednesday's most actively traded issues: Engineering Animation, New Era of Networks, Vantive and ValueVision.
Engineering Animation will slash 130 jobs as it shuts down its interactive division. That's never a good thing for a stock.
The Ames, Iowa-based software vendor said it will close units that focused on creating 3D animation for gaming, scientific and medical uses. Interactive product development generates about 20 percent of the EAI's revenue, but the business has faced "market instability" in recent quarters, said Matthew Rizai, president and CEO of EAI.
First Call consensus expects it to earn 21 cents a share in the quarter.
Closing the gaming and science divisions means losing 100 full-time and 30 part-time positions, and will be accounted for as discontinued operations in future reports, the company said. EAI will create a reserve to cover the costs of closing those units over the next nine months.
The announcement comes two months after EAI reported a disappointing first quarter. At the time, EAI said it was taking longer than expected to close important sales. "By focusing on our enterprise solutions business, we can best position EAI for future growth and performance," said Marty Vanderploeg, executive vice president and chief technology officer.
Shares of EAI gained 5/16 to 23 1/8 Tuesday.
It's already ugly for New Era Networks.
After market close Tuesday, the Denver, Colo.-based software vendor said it expects to report a loss ranging between 12 cents and 22 cents a share for the quarter ended June 30, not including taxes and acquisition-related writedowns. First Call's survey of nine analysts had predicted a profit of 12 cents a share.
CEO Rick Adam blamed the shortfall on a failure to close on some sales that had been expected at the end of the quarter. New Era also continued racked up costs from infrastructure spending, Adam said.
Shares of New Era closed up 2 11/16 to 44 1/16, prior to Tuesday's warning. The stock was down 20 points in after-market trading on Instinet. Of nine analysts polled by Zack's Investment Research, eight recommend New Era as a "strong buy", and one maintains the equivalent of a "moderate buy" rating on the stock.
Vantive gave its investors some more bad news Tuesday, warning that it would post a loss of between 12 cents to 14 cents a share in its second quarter. Its shares closed off 11/32 to 12 13/16.
First Call consensus expected the Santa Clara, Calif.-based software developer to earn 4 cents a share in the quarter.
Company officials said it will take a restructuring charge of 7 cents a share in the quarter. It also said sales will fall somewhere between $47 million to $49 million in the quarter.
This isn't the first time Vantive has warned of an earnings shortfall.
Last quarter, it preannounced lower-than-expected sales and earnings. It made $252,000, or 1 cent a share, on sales of $44.8 million. First Call consensus was expecting a profit of 6 cents a share in the quarter.
It also issued a profit warning in the year-ago quarter.
Vantive shares hit a 52-week high of 17 3/4 last July before falling to a low of 5 in October.
Six of the 10 analysts following the stock rate it a "hold."
ValueVision should get a boost Wednesday after announcing that it and NBC announced a long-range, multi-year agreement for DIRECTV to begin carriage of ValueVision's home shopping network, effective July 31, 1999.
DIRECTV is the leading direct broadcast satellite television provider, reaching 5.1 million subscriber households.
This multi-year deal, in conjunction with other distribution arrangements announced today, ensures that ValueVision will increase its reach from 15 million households to approximately 23 million full-time equivalent subscribers across the United States. This represents more than a 50% increase in homes that receive ValueVision as part of their cable or satellite service. No financial details of the deal were revealed.
ValueVision shares closed up 3, or 15 percent, to 23 5/8 Tuesday.