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Tech Industry

STOCKS TO WATCH: Cabletron, Dell, Seagate and Tech Data

Expect the following technology stocks to be among Thursday's most actively traded issues: Cabletron Systems, Dell, Seagate Technology and Tech Data.

  • Cabletron Systems Inc. (NYSE: CS)

    The network-equipment maker should see a positive reaction Thursday after topping analysts' estimates by a penny a share in its fourth quarter.

    Cabletron posted a profit of $28.1 million, or 15 cents a share, on sales of $381.8 million.

    First Call consensus expected it to earn 14 cents a share in the quarter.

    Ahead of the earnings report, Cabletron shares closed off 4 1/4 to 47 3/4.

    "We are very pleased with our results for the fourth quarter, the fifth consecutive quarter Cabletron has met or surpassed Wall Street expectations," said CEO Piyush Patel in a prepared release. "Our business metrics have continued to greatly improve and our balance sheet is the strongest it has ever been."

    After falling to a low of 7 3/16 in April, Cabletron officials knew it was time for a change.

    Last month, Cabletron announced that it would split into four separate companies.

    Following the announcement, Cabletron shares doubled to a 52-week high of 52 3/4 earlier this month.

    For the fiscal year, Cabletron earned $70 million, or 37 cents a share, on sales of $1.46 billion compared to a loss of $9.5 million, or 6 cents a share, on sales of $1.41 billion in fiscal 1999.

  • Dell Computer Corp. (Nasdaq: DELL)

    The PC giant will see heavy action Thursday after announcing James Schneider will replace Thomas Meredith as its new chief financial officer.

    Prior to taking the CFO gig, Schneider served as Dell's VP of finance.

    During Meredith's seven-year as CFO tenure, Dell's stock price has risen more than 10,000 percent. Shares closed Wednesday's regular trading at 53 13/16, down 2 1/16 for the session.

    Meredith's move coincides with the company's decision to expand Dell Ventures into an Internet incubator that helps companies with strategy and access to other services.

    "We are particularly interested in early-stage companies with products and services which have the potential to create breakthroughs in the evolving Internet age, with an aim to integrate those products and services into Dell's business and drive our future growth," CEO Michael Dell said in a prepared release. "Our investments in these companies will accelerate their development, and allow us to continue to lead the industry in computing and services for the Internet."

  • Seagate Technology Inc. (NYSE: SEG)

    Seagate will see plenty of action after late Wednesday's blockbuster deal that will make it a private company.

    Under the terms of a $20 billion agreement, the storage technology company would sell its 33 percent stake of Veritas Software (Nasdaq: VRTS) back to Veritas while a private investment group led by Silver Lake Partners would buy Seagate's operations for cash. The parties valued the deal at $20 billion, or roughly $77.50 per Seagate share, a 26 percent premium to Seagate's average price over the last 30 days.

    That calculation includes $5 from the Silver Lake group and 0.467 Veritas shares, worth about $72.50 for every Seagate share, as of Wednesday's close. It also assumes Veritas will keep about $500 million cash, although it has the right to up to $750 million in retained cash.

    Using Thursday's closing Veritas price of 142 1/2, the agreement is worth about $71.50 per Seagate share. Thursday's deal requires Silver Lake's group to pay about $2 billion cash for Seagate's core operations. Veritas will issue a total of about 116 million shares to recover 128 million shares from Seagate as well as the aforementioned cash and Seagate's holdings of Gadzoox Networks (Nasdaq: ZOOX), SanDisk (Nasdaq: SNDK), CVC (Nasdaq: CVCI) and Dragon Systems, which was acquired by Lernout & Hauspie (Nasdaq: LHSP).

  • Tech Data Corp. (Nasdaq: TECD)

    Tech Data should also get a nice pop Thursday after it topped analysts' estimates in its fourth quarter, posting a profit of $37.1 million, or 67 cents a share, on record sales of $4.8 billion.

    First Call consensus pegged it for a profit of 66 cents a share in the quarter.

    Ahead of the earnings report, its shares closed off 13/16 to 29.

    The $4.8 billion in sales marks a 24 percent improvement from the year-ago quarter when it earned $34.5 million, or 64 cents a share, on sales of $3.9 billion.

    For the fiscal year, Tech Data raked in $127.5 million, or $2.34 a share, on sales of $17 billion, up 47 percent from fiscal 1999 when it pocketed $119.4 million, or $2.29 a share, on sales of $11.5 billion.

    Tech Data shares soared to a 52-week high of 44 11/16 in July after falling to a low of 17 1/4 last March.

    First Call consensus expects it to earn $2.80 a share in fiscal 2001.

    Thirteen of the 15 analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.