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Tech Industry

STOCKS TO WATCH: Broadcom, Iomega, Rambus, Sun Microsystems and theglobe.com

Expect the following technology stocks to be among Friday's most actively traded issues: Broadcom, Iomega, Rambus, Sun Microsystems and theglobe.com.

  • Broadcom Corp. (Nasdaq: BRCM)

    The maker of networking chips eased past analysts' estimates in its third quarter Thursday, earning $27.2 million, or 26 cents a share, on sales of $138.4 million.

    First Call consensus expected Broadcom to earn 20 cents a share in the quarter.

    The $138.4 million in sales represents a 149 percent improvement versus the year-ago quarter when it made $5.2 million, or 5 cents a share, on sales of $55.5 million.

    Broadcom recorded one-time charges of $4.1 million, or 3 cents per share, related to acquisitions of HotHaus Technologies and AltoCom. Including those costs, Broadcom earned 23 cents per share.

    Its shares closed off 2 11/16 to 116 13/16 ahead of the earnings report.

  • Iomega Corp. (NYSE: IOM)

    Iomega posted a wider-than-expected loss in its third quarter Thursday, dropping $78.3 million, or 29 cents a share, on sales of $356.6 million.

    First Call consensus expected it to lose only 3 cents a share in the quarter.

    Not that anyone would notice, but Iomega's shares closed off 1/16 to 3 5/16 ahead of the earnings report.

    Earlier this quarter, Iomega fired off the latest in a long line of profit warnings, telling analysts that it would lose around $5 million in the quarter.

    It turned out to be much worse.

    The $356.6 million in sales represents a 9 percent decline from the year-ago quarter when it lost $14.8 million, or 6 cents a share, on sales of $391.7 million.

    Company officials blamed this latest disappointment on lower-than-expected revenue from its Jaz and Ditto product lines.

    Investors looking for a silver lining might find Iomega's press release less than reassuring.

    "(Iomega) is optimistic about achieving profitability in the fourth quarter. However financial results in the quarter will be heavily dependent on a number of factors, including the success of recently introduced products, recurrence of typically strong fourth quarter sales, and the Company's ability to resolve current Zip drive component constraints."

    In what might be a related announcement, Iomega announced that Jodie Glore has resigned from the company's board of directors.

    Iomega shares were trading at 10 3/16 in January but fell to a 52-week low of 3 in September.

  • Rambus Inc. (Nasdaq: RMBS)

    The chipmaker rolled past analysts' estimates in its fourth quarter Thursday, pocketing $2.6 million, or 10 cents a share, on sales of $12.3 million.

    First Call consensus expected the Mountain View, Calif. chipmaker to earn 8 cents a share in the quarter.

    Its shares closed up 1 9/16 to 72 3/4 ahead of the earnings report.

    The $12.3 million in sales marked a 27 percent improvement versus the year-ago period when it earned $2 million, or 7 cents a share, on sales of $9.7 million.

    For the fiscal year, Rambus earned $8.7 million, or 35 cents a share, on sales of $43.4 million compared to $6.7 million, or 28 cents a share, on sales of $37.9 million in fiscal 1998.

    Rambus shares were pummeled in September after the company confirmed that it was wrestling with programming bugs in memory chipsets it was making for Intel Corp.'s (Nasdaq: INTC) "Camino" chip.

    The stock fell from more than $90 a share in late September to less than $60 a share in just a few days.

    Rambus shares peaked at 117 1/2 in July after falling to a low of 51 1/2 in April.

    First Call consensus expects Rambus to earn 68 cents a share in fiscal 2000.

  • Sun Microsystems Inc. (Nasdaq: SUNW)

    Sun came through for its investors once again Thursday, beating Street estimates by 2 cents a share by returning a profit of $275 million, or 33 cents a share, on sales of $3.12 billion in its first quarter.

    First Call consensus expected Sun to earn 31 cents a share in the quarter.

    In a sign of typical investor caution, Sun shares closed up only 1/32 to 89 13/32 ahead of the earnings report.

    The $3.12 billion in sales represents a 25 percent improvement compared to the year-ago period when it raked in $114 million, or 14 cents a share, on sales of $2.5 billion.

    In the quarter, Sun took a $3.5 million charge related to the acquisition of Star Division Corporation and certain assets and liabilities of Star Division Software-Entwicklung und Vertriebs GmbH. Due to the structure of this transaction, Sun also incurred an increase of $1.3 million to its income tax provision.

    Including those charges, Sun posted of $271.1 million, or 33 cents a share, in the quarter.

    "Our success in the first quarter came at the expense of our traditional competitors," said CEO Scott McNealy in a prepared release. ``We gained share in many of our key markets, especially in servers for the Internet and service providers. Many are talking about 'e-everything' strategies while we are delivering real solutions for the service-driven network. Sun is powering the 'Net."

    McNealy, clearly reveling in his company's outstanding performance, used the first-quarter earnings report as an opportunity to take some swipes at competitors such as Hewlett-Packard Co. (NYSE: HWP) and IBM.

    "The public challenge to Sun by HP, IBM and others would be even more of a concern if we were fighting against new and improved strategies, but we're not," McNealy said. "If imitation is the highest form of flattery, we are 'very' flattered."

    Company officials said corporate customers downloaded nearly one million copies of its StarOffice suite in a little more than a month.

    Sun shares peaked at 99 7/16 earlier this month after trading at a 52-week low of 21 13/16 last October.

  • theglobe.com Inc. (Nasdaq: TGLO)

    theglobe.com warned that its third-quarter sales will fall short of analysts' estimates.

    Company officials said it now expects sales of between $4.7 million to $4.9 million in the quarter, slightly below most analysts estimates of around $5.1 million.

    Of course, this shortfall will still represent a 200 percent improvement versus the year-ago quarter. And theglobe.com officials are quick to point out that it will meet analysts' earnings estimates.

    Loss estimates they must mean.

    First Call consensus expects it to lose 34 cents a share in the third quarter and $1.25 a share in the fiscal year.

    theglobe.com will report its third-quarter earnings on Nov. 3.

    Its shares closed off 1/8 to 13 5/8.

    The stock has steadily unraveled since it split 2-for-1 in May.

    After peaking at 48 1/2 in April, its shares fell to an all-time low of 9 3/4 in August.

    Last quarter, it lost $6.7 million, or 27 cents a share, on sales of $4.1 million.