THE DAY AHEAD: Stocks to Watch
Expect the following technology stocks to be among Tuesday's most actively traded issues: Ariel, Cisco, Intel, Microsoft, Motorola, Network Associates, TheStreet.com, Value America and Voicestream.
The communications-equipment maker reported a smaller-than-expected loss in its first quarter, losing $2.9 million, or 30 cents a share, on sales of $3 million but watched its total sales fall more than 50 percent compared to the year-ago quarter when it lost $1.8 million, or 19 cents a share, on sales of $6.2 million.
First Call consensus expected it to lose 34 cents a share in the quarter.
Ahead of the earnings report, Ariel shares closed off 1/16 to 3 3/4.
Gross profit margins improved to 55 percent in the quarter, up from 41 percent in the first quarter of 1998.
The world's leading network-equipment maker will announce its third-quarter results Tuesday, a good sign that Cisco will be even more active than it usually is.
Despite some worries about its product mix going forward, Cisco is still poised to deliver another huge profit this quarter.
First Call consensus expects it to earn 37 cents a share in the quarter. If history is any indicator, it'll probably make 39 cents or 40 cents a share.
Cisco closed up 3/4 to 109 1/4 Monday.
In the year-ago quarter, it earned $64.5 million on sales of $2.18 billion.
The world's largest chipmaker is expected to cut Pentium II and III prices by as much as 34 percent next week as Intel cleans out inventory to make for its new line of faster PIIIs. Advanced Micro Devices Inc. (NYSE: AMD) will likely follow suit to stay competitive.
Intel dipped 5/16 to 60 5/8.
The software company invested $600 million in Nextel Communications Inc. (Nasdaq: NXTL), and will co-brand a wireless Web portal with the company. Shares rose 5/8 to 79 11/16.
TFG Acquisition Corp., made up of former and current executives of the Schaumburg, Ill. company, made an unsolicited $1.6 billion offer to buy Motorola's chip components group. The offer was put on the table on March 30, according to a statement. Motorola gained 4 3/16 to 81 7/8.
The anti-viruns software company said it plans to buy back as much as $100 million of its shares in the next two years. Network Associates shares have suffered after a first quarter profit warning and from concerns about demand. Shares added 1/8 toi 12 1/4.
TheStreet.com priced its initial public offering at $19 a share, at the high end of its proposed range of between $17 to $19 a share.
The 5.5 million share offering will hit the Street Tuesday morning.
The New York-based financial news and information Web site initially filed to sell shares between a range of $11 a share and $13 a share, representing a 22 percent stake in the company.
TheStreet.com, a subscription-based financial news service, lost $16.4 million last year on sales of $4.6 million. In 1997, TheStreet lost $5.8 million on revenue of $589,000.
ZD Inter@ctive Investor competes with Marketwatch.com and TheStreet.com. ZDII is the financial channel of ZDNet (NYSE: ZDZ), the online unit of Ziff-Davis Inc. (NYSE: ZD).
The online computer and office-equipment retailer missed analysts' estimates in its first quarter Monday, losing $34.5 million, or $1.45 a share, on sales of $28 million.
The $28 million in sales represents tenfold improvement versus the year-ago quarter when it recorded sales of $2.2 million.
Value America recorded first quarter charges of almost $10.6 million related to accretion and dividends on preferred stock Net loss per common share, and $19.8 million to account for the difference between the price of preferred shares and common stock. Including those costs, Value America lost $2.72 a share.
Here's a classic Net stock gamble: Will investors pay more attention to the growth of sales, or that that the company didn't meet expectations? Remember Amazon's 1Q results, they clobbered sales and earnings expectations, but warned of slower second quarter growth - shares sank. The value of a stock is based upon its future performance as well as the present. And no, Value America didn't mention any concerns they had about their near-term prospects.
If there is such a thing as trend in Net stocks, it's that investors have foregone looking for profitability in the short-term as long as the future looks rosy and revenue growth grows like a weed. Place your bets.
Shares of Value America fell 2 15/16 to 29 15/16 in Monday's trading, prior to the earnings report.
The wireless phone systems maker reported a first quarter loss of 81 cents, 6 cents a share wider than the loss expected from the First Call Corp. estimate. Lat year, the company lost 75 cents a share. Voicestream shares fell 3 1/4 to 24 1/8.
-Eric C. Fleming contributed to this report.