THE DAY AHEAD: Stocks to Watch
Expect the following technology stocks to be among Thursday's most actively traded issues: Amazon.com, EchoStar, Etec Systems, eToys, Lernout & Hauspie and Photronics.
The online bookseller filed a shelf registration with the SEC for up to $2 billion in debt securities Wednesday. Company officials said it would use the cash for general corporate purposes.
The registration means Amazon.com will be able to sell common and preferred stock to investors up to a total value of $2 billion.
Amazon.com shares closed up 6 15/16, or 5 percent, to 139 9/16 ahead of the announcement.
Back on Jan. 28, it raised another $1.25 billion in a debt offering.
In a press release, company officials said it filed the registration statement "to gain additional flexibility in accessing the capital markets."
The second largest U.S. satellite TV provider won approval from federal regulators to buy $1.46 billion in satellite assets from MCI WorldCom Inc. (Nasdaq: WCOM) and News Corp. (NYSE: NWS). Echostar said the added capacity would allow it to offer 500 channels to viewers. Shares rose 2 5/8 to 113 3/8.
Prepare for a big sell-off in Etec shares Thursday.
The semiconductor-equipment maker missed analysts' estimates in its third quarter Wednesday, earning $1.9 million, or 9 cents a share, on sales of $57 million.
First Call consensus expected it to earn 10 cents a share in the quarter.
Its shares closed up 4 11/16, or 15 percent, to 36 ahead of the earnings report.
Third-quarter sales were down 18 percent year-over-year, to $57 million from $70 million. Etec blamed industrywide trends, including consolidation among manufacturers of wafer masks, lower capital investment in Japan, overcapacity in Taiwan and falling prices in Europe.
Gross margin in the third quarter was 30 percent, or 44 percent if one-time events are excluded. Etec posted a gross margin of 51 percent in the third quarter of fiscal 1998.
Look for even lower revenue in the current quarter. The company expects fourth quarter sales to range between $45 million and $50 million, and break-even results for the full fiscal year, including one-time charges, said Steve Cooper, chairman and CEO.
EToys will receive a warm reception from Wall Street Thursday in its initial public offering. Late Wednesday, EToys priced its initial public offering at $20 a share.
EToys is offering 8.3 million shares with Goldman Sachs serving as the lead underwriter.
EToy's move to maximize its first public fund-raising effort comes as traditional competitors race to become Web players. Toys 'R' Us Inc. (NYSE: TOY), seeking to avoid the fate of Barnes & Noble Inc. (NYSE: BKS), has already announced plans to spin off its online unit.
And earlier today, KB Toys' parent company teamed with BrainPlay.com to form KBToys.com to sell toys online.
The speech recognition software company agreed to buy Fonix Corp. (Nasdaq: FONX) for about $28 million. L&H see the acquisition weakening this year's earnings but adding to them in 2000. Shares of L&H added 1 9/16 to 38 7/8.
The maker of photograhic masks that are used in imprinting images onto silicon chips missed the First Call Corp. consensus estimate of 11 cents a share for its second quarter, reporting a profit of 9 cents a share. Photronics gained 1 3/4 to 25 1/2.
-Eric C. Fleming contributed to this report.