STOCKS TO WATCH: Agilent, Applied Materials, Commerce One, Go.com, H-P, NeoMagic and Priceline.com

5 min read

Expect the following technology stocks to be among Thursday's most actively traded issues: Agilent Technologies, Applied Materials, Hewlett-Packard, NeoMagic and Priceline.com.

  • Agilent Technologies Inc., (Proposed ticker: A)

    Agilent priced at $30 a share Wednesday for its 65 million-share public offering, well above its revised range of $26 to $28 a share.

    The underwriters include Morgan Stanley Dean Witter, Goldman, Sachs & Co., Credit Suisse First Boston, Merrill Lynch & Co. and Salomon Smith Barney, among others.

    The spin off of computer maker Hewlett-Packard Co. (NYSE: HWP), which provides test and measurement products for such high-growth areas as the semiconductor and healthcare industries, was one of the businesses on which H-P was founded.

    On Wednesday, H-P topped analysts' lowered estimates in its fourth quarter, earning $760 million, or 75 cents a share, on sales of $11.4 billion.

    "The diagnostic measurement industry is growing quickly, and Agilent seems to be on top of the game," said Tom Taulli, analyst with Internet.com.

    "Agilent should do well -- the downside has been minimized because of the company's big revenues, and actual profits. This is a real company -- it would be a nice addition to institutional portfolios," Taulli said.

    Agilent had revenue of $5.88 billion for the last 9 months, compared to $5.96 billion in the 1998 period. Net earnings were $366 million, compared to $308 million in the 1998 period.

  • Applied Materials Inc. (Nasdaq: AMAT)

    Applied Materials will take off in early trading Thursday after the chip-equipment maker blew past analysts' estimates in its fourth quarter.

    In the quarter, Applied Materials earned $307 million, or 77 cents a share, excluding one-time costs which totaled less than a penny per share.

    The 77 cents a share figure includes 8 cents a share from discontinued operations. Earnings from continuing operations were 69 cents a share.

    First Call consensus expected it to earn 65 cents a share in the quarter.

    Fourth quarter revenue rose to $1.57 billion, up 9 percent sequentially and a gain of 133 percent from the year-ago period, when it earned $8 million, or 2 cents per share.

    Industry wide improvement throughout the fourth quarter helped Applied Materials, said James C. Morgan, CEO and chairman. Asia's continuing economic rebound, higher memory chip prices and reduced supplies of other chips allowed customers to increase capital budgets, Morgan said.

    New orders increased 13 percent from the third quarter, to $1.65 billion from $1.46 billion. North America generated 28 percent of new orders, followed by Taiwan with 25 percent and Europe with 2 percent.

    Applied Materials increased its gross margin to 50.1 percent in the fourth quarter, compared to 48.7 percent in the third, and 42.3 percent a year earlier.

  • Commerce One Inc. (Nasdaq: CMRC)

    The maker of special computer servers said it will split its stock 3 for 1 for stockholders of record Dec. 3. The split will be effective Dec. 23 and increase the number of shares to 72.2 million from 24.1 million. Commerce One fell 11 to 310.

  • Go.com/Infoseek (NYSE: GO)/(Nasdaq: SEEK)

    Shareholders of Walt Disney Co. approved the company's spin-off of its Internet assets into a separately traded on-line company called Go.com. Shareholders of Infoseek Corp voting at a separate meeting, also approved Infoseek's acquisition by Disney, paving the way for Go.com.

    Disney shares were off 1/8 at 26 in late trading on the New York Stock Exchange. Infoseek shares were up 2-11/16 to 37-1/2 on Nasdaq. Although Infoseek's fourth-quarter sales more than doubled to $41.3 million, analysts have questioned how Disney will leverage its Internet assets to boost shareholder value.

  • Hewlett-Packard Co. (NYSE: HWP)

    H-P met reduced analysts' estimates in its fourth quarter Wednesday, earning $760 million, or 73 cents a share, on sales of $11.4 billion.

    H-P shares closed up 1 5/16 to 77 7/16 ahead of the earnings report.

    First Call consensus expected it to earn 73 cents a share in the quarter. However, analysts were expecting a profit of 85 cents a share earlier this quarter before H-P warned analysts that sluggish corporate PC sales and weakness in its UNIX workstation business would crimp fourth-quarter sales and earnings.

    The $11.4 billion in sales represents a 10 percent improvement versus the year-ago quarter when it raked in $710 million, or 72 cents a share, on sales of $10.3 billion.

    "We executed solidly despite this quarter's challenges," said CEO Carly Fiorina in a prepared release. "We have an aggressive agenda for change, and we're making good progress on it."

    Fiorina said she expects the company to achieve sales and earnings growth of 12 to 15 percent in fiscal 2000.

    For the year, H-P pocketed $3.5 billion, or $3.34 a share, on sales of $42.3 billion compared to a profit of $2.9 billion, or $2.77 a share, on sales of $39.4 billion in fiscal 1998.

    For the quarter, total sales in the U.S. jumped to $5.3 billion, a 9 percent improvement. Sales from outside the United States, which was 54 percent of the company's total this quarter, rose 12 percent and totaled $6.1 billion. In Europe, revenue was $3.9 billion, an increase of 5 percent.

    In Asia Pacific, revenue increased 41 percent and was $1.4 billion. In Latin America, revenue increased 18 percent to $600 million.

  • NeoMagic Corp. (Nasdaq: NMGC)

    NeoMagic should rally Thursday after it rolled past analysts' estimates in its third quarter, earning $4.1 million, or 16 cents a share, on sales of $70.3 million.

    First Call consensus expected the chipmaker to earn 11 cents a share in the quarter.

    Ahead of the earnings report, NeoMagic closed up 1 1/4 to 11 11/16.

    The $70.3 million in sales represents just a 4 percent improvement versus the year-ago quarter when it earned $8.6 million, or 33 cents a share, on sales of $67.4 million.

    NeoMagic shares surged to a 52-week high of 23 3/4 in December before slipping to a low of 7 1/8 in June.

    First Call consensus expects it to earn 12 cents a share in its fourth quarter and 67 cents a share in the fiscal year.

    Two of the three analysts following the stock rate it a "hold."

  • Priceline.com Inc. (Nasdaq: PCLN)

    Priceline.com figures to make a big move Thursday after BancBoston Robertson Stephens analyst Lauren Cooks Levitan reiterated her "strong buy" recommendation late in the day.

    "We are impressed by Priceline's ability to establish supply agreements with the major airlines in just over two years of operations," Levitan said in a research report. "We believe Priceline's rapid success in signing with the major airlines is a testament to the company's unique-business model and portends additional opportunities in other markets."

    Priceline.com shares closed up 8 1/8 to 76 7/8 after it said it will sell tickets for the three major airlines it does not already serve, United Air Lines, American and US Air, and will take a one-time, $1.1 billion charge related to the deal.