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STOCKS TO WATCH: ADC Telecom, Brocade, Portal Software

Expect the following technology stocks to be among Thursday's most actively traded issues: ADC Telecom, Brocade and Portal Software.

  • ADC Telecommunications (Nasdaq: ADCT)
  • ADC will be active after it managed to tiptoe past analysts' estimates in its first quarter but lowered its sales and earnings targets for the second quarter and the rest of the fiscal year.

    ADC shares finished off 69 cents to $10.44 ahead of the earnings report but moved up to $11 in after-hours trading.

    In the quarter, it earned $57 million, or 7 cents a share, on sales of $805 million, topping estimates.

    The company said it expects to report fiscal 2001 pro forma earnings of 48 cents to 55 cents a share on sales of $3.5 billion to $3.8 billion. This would drop sharply in the second quarter to earnings of about 9 cents to 10 cents a share from sales of $825 million to $870 million.

    A slight rebound is expected in the third quarter, with earnings of 13 cents to 16 cents a share on sales of about $895 million to $985 million. In the fourth quarter, ADC expects earnings of about 19 cents to 22 cents a share on sales of about $1.035 billion to $1.14 billion.

    Analysts were expecting earnings per share of 10 cents, 16 cents and 22 cents in the second, third and fourth quarters, respectively. For the 2001 fiscal year, analysts were expecting 55 cents.

  • Brocade Communications (Nasdaq: BRCD)

    Brocade's in for a long day after it beat the Street in its first quarter but also lowered its second-quarter and fiscal year expectations.

    The maker of fiber channel switches and related software for storage area networks, earned $32.5 million, or 13 cents a share, on sales of $165 million.

    Analysts were projecting a profit of 12 cents a share on sales of $162.4 million.

    In a conference call following the release, CEO Eric Reyes said the company was "somewhat concerned with softening economic climate."

    Company executives said second-quarter growth would be "modest" at best when compared to the first quarter. It also expects 2001 earnings per share of 60 cents compared with the 62 cents previously expected.

    Brocade shares closed off 17 cents to $44.70 ahead of the earnings report before plunging more than 20 percent in after-hours trading.

  • Portal Software (Nasdaq: PRSF)

    Same story for these guys.

    After topping analysts' estimates in its fourth quarter Wednesday, Portal warned that its sales and earnings will fall short of estimates in the next couple quarters and for the fiscal year.

    In the quarter, it pocketed $6.9 million, or 4 cents a share, on sales of $81.1 million.

    First Call Corp. consensus pegged the Internet software developer for a profit of 3 cents a share on sales of $81.7 million.

    Its shares closed off 19 cents to $9.75 ahead of the earnings report before inching up to $9.78 in after-hours trading.

    The $81.1 million in sales represents a 108 percent jump from the year-ago quarter when it earned $369,000 on sales of $39 million.

    During a conference call with analysts, Chief Financial Officer Jack Acosta warned that first-quarter sales will be flat or as much as 7 percent below the $81.1 million it recorded this quarter. He said earnings per share would come in at breakeven or 1 cent a share.

    Analysts were expecting it to post sales of $90.2 million and earnings of 3 cents a share.

    "We're cautious about the current macroeconomic conditions," Acosta said. "While the pipeline appears to be very strong, we don't really know what short-term impact this will have on our business."

    Acosta said fiscal 2002 sales would come in between $360 million and $400 million with earnings of between 14 cents and 20 cents a share.

    First Call Corp. consensus was looking for sales of $437.1 million and earnings of 19 cents a share.