STOCKS TO WATCH: Applied Materials, Ariba, BEA Systems, H-P, Network Appliance, and Priceline.com
Expect the following technology stocks to be among Wednesday's most actively traded issues: Applied Materials, Ariba, BEA Systems, Hewlett-Packard and Network Appliance.
One of the Nasdaq's strongest performers in the past three months, Applied Materials will deliver its fourth-quarter earnings report Wednesday.
First Call consensus expects it to earn 64 cents a share in its fourth quarter, a huge improvement from the 7 cents a share it earned in the year-ago quarter.
Last quarter, the semiconductor-equipment maker raked in $244 million, or 61 cents a share, on sales of $1.43 billion. Analysts had expected a profit of 53 cents.
At this time last year, its stock was trading at $35 a share.
Its shares closed up 1/4 to 105 1/2 Tuesday.
Ariba figures to make big gains for the second day in a row Wednesday after it approved a 2-for-1 stock split for shareholders of record on Dec. 3. Its shares closed up 6 5/8 to 216 5/8 ahead of the announcement.
Company officials said the stock split is payable on or about Dec. 17 to shareholders of record on Dec. 3. The stock split will increase the number of shares of Ariba common stock outstanding from about 46 million shares as of Nov. 16 to about 92 million shares.
Late Monday, Ariba announced it would buy TradingDynamics Inc. for $400 million in stock.
Company officials said the deal will be accounted for as a purchase and that it expects it to close by the end of March.
TradingDynamics makes software that lets customers create any kind of auction, reverse auction or bid/ask exchange. Drew Harman, head of marketing for TradingDynamics, said in an interview that the combination of the two companies would make them an even more formidable competitor to rival Oracle Corp. (Nasdaq: ORCL).
Ariba shares hit an all-time high of 218 earlier this month after falling to a low of 61 in August.
BEA Systems was already on a roll in after-hours trading Tuesday after it beat analysts' estimates in its third quarter, earning $14.4 million, or 12 cents a share, on sales of $126.5 million. It also set a 2-for-1 split.
First Call consensus expected the maker of software for integrating and overseeing corporate applications to earn 10 cents a share in the quarter.
Its shares closed up 1 3/8 to 72 1/2 ahead of the earnings report.
The $126.5 million in sales represents a 56 percent improvement compared to the year-ago quarter when it raked in $7.9 million, or 7 cents a share, on sales of $80.9 million.
The stock surged to an all-time high of 79 11/16 earlier this month after trading at 8 11/16 in December.
Nine of the 11 analysts following the stock maintain either a "buy" or "strong buy" recommendation.
Another technology bellwether will report its fourth-quarter earnings Wednesday. Earlier this quarter H-P warned that it would likely miss the original Street estimate of 85 cents a share.
Now, First Call consensus is predicting a profit of 73 cents a share.
In its profit warning, the chip and PC maker said its UNIX workstation business was struggling and corporate PC sales were lagging.
Earlier in the quarter, CEO Carly Fiorina had said H-P had "a decent shot" at meeting the First Call consensus estimate of 98 cents a share in the fourth quarter. She added, however, that it expected total sales growth to be at the low end of the 10 percent to 13 percent range projected by analysts.
Since then, however, the company has been unable to make up for the North American sales shortfall through cost cutting and upside in other business areas, as it had hoped.
Company officials also said last month's earthquake in Taiwan had disrupted PC production and limited the potential for upside in that business. H-P said that PCs were not a problem area but because of the earthquake, that division would not deliver any positive surprises.
The stock closed up 1 1/2 to 76 1/8 Tuesday.
Network Appliance also beat Street estimates in its second quarter Tuesday and announced a 2-for-1 stock split.
The provider of file server and network caching technology pocketed $16 million, or 19 cents per share, on sales of $124.7 million. First Call predicted a profit of 17 cents a share.
Following the split, the company will have 149.3 million shares outstanding.
Second quarter revenue increased to $124.7 million, a 90 percent increase from $65.6 million in the year ago period, when Network Appliance earned $8.4 million, or 11 cents per share.
Shares of Network Appliance gained 13 9/16 to 103 7/16 in Tuesday's regular trading and jumped another $6 a share in after-hours trading.
The online travel site said it plans to record a $1.1 billion charge for the fourth quarter to expand its airline alliances.
Priceline said the charge will cover new warrants it will give to three airlines joining its name-your-own-price system for purchasing travel tickets. UAL Corp.'s United Airlines, US Airways Group Inc. and AMR Corp.'s American Airlines confirmed their involvement in the Priceline ticket system. Priceline already sells tickets for most major airlines, including Delta Air Lines, Continental Airlines, Northwest Airlines, Trans World Airlines and America West Airlines.
The whopping one-time fourth-quarter charge will come from the issuing of warrants for 20.5 million shares of common stock to the airlines in its ticketing system at an average exercise price of $56 a share. The shares underlying the warrants amount to about 10 percent of Priceline's fully diluted common stock.