THE DAY AHEAD: Stocks to Watch
Expect the following technology stocks to be among Wednesday's most actively traded issues: Adforce, Adobe Systems, AOL, Comverse Technology, McLeodUSA and Newbridge Networks.
As expected, AdForce lost GeoCities as a client when it was folded into Yahoo! Inc.'s (Nasdaq: YHOO) own internal ad server network. The GeoCities account comprised 17 percent of AdForce's revenue.
Another shoe to drop is Netscape, also an AdForce customer that will likely be absorbed into America Online Inc.'s (NYSE: AOL) ad server. Watch AdForce if 24/7 Media Inc. (Nasdaq: TFSM) or privately-held AdSmart Inc. get acquired, since both are also AdForce clients.
Shares fell 1/15 to 28 15/16.
The software developer will have something important to say Wednesday morning ahead of the opening bell and it might concern its second-quarter earnings.
Company officials said late Tuesday that it would hold a conference call with analysts before the market opens. It could be good news related to some type of acquisition or it could bad news related to its upcoming earnings.
Either way, it should make for an interesting day for Adobe shareholders.
First Call consensus expects it to earn 64 cents a share in the second quarter.
The stock closed off 1 5/8 to 72 1/2 Tuesday.
The online service provider bought online music companies Spinner Networks Inc. and Nullsoft Inc. for a total of $400 million in stock. Spinner has an Internet radio service with 1.5 million listeners and Nullsoft is a developer of MP3 technology.
AOL dropped 6 1/8 to 113 1/8.
Comverse Technology beat analysts' estimates in its first quarter Tuesday, raking in $36.5 million, or 48 cents a share, on sales of $160.4 million.
First Call consensus expected the Woodbury, N.Y. company to earn 45 cents a share in the quarter.
Comverse Technology shares closed off 9/16 to 67 ahead of the earnings report.
In the year-ago period, Comverse earned $23.9 million, or 34 cents a share, on sales of $200.5 million.
The first-quarter earnings exclude a one-time charge of $934,000, or 1 cent a share, related to acquisition of Amarex Technology.
The telecommunications service provider agreed to buy Access Communications Inc. and SJ Investments Inc. for 1.9 million shares, or $101 million, $50 million in cash and $97 million in assumed debt. Total: $248 million. McLeod dropped 3/16 to 53 5/16.
The Canadian network-equipment maker missed reduced estimates in its fourth quarter Tuesday, earning only $33 million, or 12 cents a share, on sales of $457.1 million.
First Call consensus expected it to earn 13 cents a share in the quarter.
The fourth quarter turned out to be about as bad as expected for Newbridge Networks Corp. (NYSE: NN).
In fiscal fourth quarter results released after market close Tuesday, the Canadian network equipment maker posted net income of $33 million, or 12 cents a share, excluding one-time charges. Analyst consensus predicted earnings of 13 cents.
Despite the dour news, which company officials warned of in April, company officials tried to put their best foot forward.
Newbridge is seeing "excellent" demand for its ATM and IP switches, said Alan Lutz, president and chief operating officer. It will take two quarters to fix supply problems so that output matches orders, he said.
Newbridge shares fell 9/16 to 27 1/16 in Tuesday's trading prior to the quarterly report.
-Eric C. Fleming contributed to this report.