Tech Stock News And Analysis

Tech Stock News and Analysis

Friday, September 29, 2006

Shares of Smart Modular Technologies Inc., a maker of PC cards, embedded computers and memory modules, got a boost in Friday trading, a day after the company said its fourth-quarter profit nearly doubled, topping analysts' expectations.

Shares of Smart Modular Technologies, which previously traded between $6.98 and $10.21 over the last year, were up 44 cents, or 4.4 percent, at $10.42 in afternoon trading on the Nasdaq. Earlier in the session shares set a new year-high of $11.10.

Citigroup analyst Jim Suva, who rates the stock at "Buy," said he expected the company's results to continue to buoy the stock.

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"We expect Smart Modular's stronger-than-expected results and outlook to graduate the shares from the single-digit dollar level to the double-digit level on its way to our $12 target price, as the company completed its first fiscal year posting solid and better-than-expected results each quarter with great fundamental business momentum," Suva wrote in a note to clients.

J.P. Morgan analyst Thomas Dinges, who has an "Overweight" rating on the stock, was equally optimistic about Smart Modular's long-term outlook.

"We're sticking with the Overweight rating as we believe there are sufficient new revenue opportunities for Smart Modular in the memory, embedded computing, and thin-film-transistor liquid crystal display markets to keep earnings momentum going over the next 12 to 18 months and to continue driving returns higher," Dignes wrote in a note to clients.

Maxim gets delist warning from Nasdaq

Maxim Integrated Products Inc. said late Thursday it received an expected warning from Nasdaq over late filing of financials, and will request a hearing.

Sunnyvale-based Maxim (NASDAQ:MXIM) announced earlier that a special committee of its board launched an independent review of the company's past stock option grants and practices.

Maxim said it intends to file its Form 10-K as soon as possible after completion of its internal review.

Thursday, September 28, 2006

TranSwitch Corp. (TXCC NASDAQ) on Thursday said it expects lower third-quarter revenue due to a change in production plans by a major customer, sending the stock down more than 12 percent.

The chipmaker said it now expects third-quarter revenue of about $9.3 million, compared with its previous outlook of about $10.3 million.

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For the third quarter, four analysts on average were expecting the company to post a loss of 2 cents a share, excluding exceptional items, on revenue of $10.7 million, according to Reuters Estimates.

TranSwitch shares fell 20 cents to $1.40 in late morning trade on the Nasdaq.

Tvia Inc., a maker of digital display processors used in flat-panel televisions, said Thursday it expects to report a sharp drop in fiscal second-quarter revenue as TV manufacturers cut production because of supply problems with liquid crystal display panels.

Tvia expects revenue in the quarter ending Sept. 30 between $300,000 and $400,000, down at least 92 percent from last year's $5.1 million.

The company expects LCD panel availability to improve in the coming period, which it anticipates will increase demand for its products.

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But Tvia also said it is "continuing to experience competitive pressure resulting from price decreases by other processor manufacturers."

The company's shares were sharply lower in early trading on Nasdaq, falling $2.11, or 60.3 percent, to $1.39.

Wednesday, September 27, 2006

Jabil Circuit (JBL) rose 6% after the electronics-manufacturing services company reported revenue that beat expectations. For the period ended Aug. 31, the company had revenue of $3.0 billion, up from $2.0 billion a year earlier. Analysts expected revenue of $2.84 billion. Jabil didn't report its bottom-line results because the company is continuing to probe its historical stock options practices.

Jabil anticipates first-quarter revenue of $3.1 billion to $3.3 billion. Analysts project revenue of $3.07 billion. Shares were trading up $1.57 to $29.46.

Red Hat Inc., which provides software, was downgraded by two brokerages on Wednesday after the company lowered its second-quarter earnings forecast and full-year cash flow on higher costs related to the JBoss merger.

In a research note, Jefferies & Co. lowered its rating to "hold" from "buy" and cut its price target on the stock to $24 from $34.

Separately, Prudential Equity Group lowered its rating on the company to "neutral weight" from "overweight" and cut the price target to $25 from $35.

Both brokerages said the company faces higher costs to integrate software maker JBoss, which Red Hat purchased in June.

Prudential said it is concerned that ongoing execution issues could cause Red Hat to miss outlook.

Shares of the company closed at $26.32 Tuesday on the Nasdaq.

Tuesday, September 26, 2006

Shares of Merix Corp. tumbled Tuesday, after the maker of printed circuit boards lowered its earnings outlook for the fiscal first quarter.

In making the revision, the Forest Grove, Ore.-based company cited higher raw material costs and outsourcing and pension costs in Asia.

Shares of Merix fell $3.51, or 25 percent, to $10.54 in late trading on the Nasdaq Stock Market. Tuesday's weakest level, on heavy volume, was $10.34. On a 52-week basis, there was a low of $5.10 last Sept. 28 and a high of $14.39 on Monday.

After market close Monday, Merix said it expects first quarter, per-share earnings of 15 cents to 17 cents, compared with an earlier forecast of 25 cents to 30 cents.

Excluding items, Merix expects per-share earnings for the quarter ended Aug. 26 of 19 cents to 21 cents. That's down from an earlier forecast of 31 cents to 35 cents.

Analysts surveyed by Thomson Financial had forecast, on average, first-quarter earnings of 31 cents a share. Such estimates typically exclude items.

"We do owe our investors bottom-line profitability enhancement with the revenue growth," said Merix Treasurer Lynda Ramsey, who called the market's reaction to the news disappointing. "We have some work to do to get our margins back in line. Overall, it's still a very healthy environment."

But analyst Kevin Kessel of Bear Stearns said in a research report that he expects printed circuit board makers to struggle with passing through higher costs.

The company has said its supplier of copper laminate, which increased prices in July, plans to raise them again in October.

Kessel cut his rating on the stock to "underperform" from "peer perform" on Tuesday. He doesn't have a position in the stock. Bear Stearns doesn't have an investment-banking relationship with Merix.

While Merix and competitor TTM Technologies Inc. are facing higher costs, "the issues with Merix are more company-specific," analyst Shawn Harrison of Longbow Research said. Harrison doesn't own shares of Merix. Longbow doesn't have an investment-banking relationship with the company.

"TTMI has no Asian operations," Harrison said. "Merix generates approximately half their revenue from Asia, where raw materials are a significant portion of their cost of goods sold."

Merix is talking with customers about raising prices for the first time, Harrison said. The company's current contracts in the automotive sector, which account for 16 percent of revenue, don't include escalator clauses for raw material costs, he added.

"Once these issues work out, things will begin to normalize," Harrison said. "That will take at least two quarters for Merix."

Ramsey said that, while the current automotive contracts don't include escalators, the company will be including those in this fall's negotiations.

Bear Stearns analyst Kessel cited "moderating demand" in cutting his rating on the stock.

Ramsey said Merix hadn't seen any slowdown in orders, but wouldn't speculate on whether one might develop.

"The only thing we can refer to is what we see in our own factories," she said. "We have seen very slight softening in Asia, but our North American demand is still extremely strong."

Red Hat Inc. (RHAT), a distributor of open-source Linux software, expects its sales in the greater China region to double in fiscal 2007 and grow by 85 percent in fiscal 2008, an executive said on Tuesday. "Our plan is to have 100 percent growth this year, and 85 percent growth next year," Michael Chen, general manager of Red Hat China, told Reuters in an interview.

Red Hat posted total sales of $278.3 million for the last business year through February. The firm's greater China region, which includes Hong Kong, mainland China and Taiwan, made up 2 percent of that figure, he added.

Customers of Red Hat, which competes against Novell Inc., a developer of networking software, include Goldman Sachs Group Inc. and Amazon.com Inc. .

Headcount in the region is expected to reach 80 by the end of this year, Chen said, from around 55 now.

Monday, September 25, 2006

Tower Semiconductor Ltd. (Nasdaq: TSEM), a pure-play independent specialty foundry, today announced that it has signed a definitive long-term foundry agreement with International Rectifier (IR) (NYSE: IRF) to produce semiconductor wafers for IR at Tower's most advanced facility, Fab2, utilizing IR's proprietary technology.

The agreement is for high-volume wafer manufacturing.

"We chose Tower as a foundry partner following a rigorous evaluation process," said Dr. Alex Lidow, International Rectifier's CEO. "Tower's experience in successful technology transfers, combined with a can-do attitude and great engineering talent, made it the best choice for us. We are confident this foundry partnership will further strengthen our leading position in the market."

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"We are thrilled that IR, the world leader in power management, chose Tower as a foundry partner," said Russell Ellwanger, Tower's CEO. "Such a decision from a premier company in the semiconductor industry validates the capabilities of Tower's engineering and manufacturing teams. We look forward to many years of partnership and mutual success."

TSEM shares were up 8% in trading on the Nasdaq.

Microsemi Sinks on Outlook, Downgrade

Microsemi Shares Fall Sharply on 4Q Warnings, Needham Cuts Rating on Stock

Shares of power management semiconductor maker Microsemi Corp. plunged in Monday morning trading, setting a new year low, after the company lowered its fourth-quarter outlook, prompting a downgrade at Needham & Co.

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On Friday, Microsemi said it expects fourth-quarter results to fall short of previous expectations due to "weakness in the overall market."

Shares of Microsemi, which have traded between $21.20 and $31.85 over the last year, were down $2.90, or 12.7 percent, at $19.87 in morning trading on the Nasdaq. Earlier in the session shares set a new 52-week low of $19.73.

The company now forecasts fourth-quarter earnings of 25 cents to 27 cents per share, excluding one-time charges, and projects sales will be roughly flat to up 2 percent sequentially. In July, the company said it expected earnings of 29 cents to 31 cents per share for the fourth quarter on a 7 percent to 9 percent sequential increase in sales.

Needham & Co. analyst N. Quinn Bolton cut his rating on the stock to "Buy" from "Strong Buy," and lowered his price target to $25 from $32. Still, Bolton thinks the company's future prospects appear sound.

"The company's longer-term revenue growth and operating margin expansion opportunities still remain intact in our opinion," Bolton wrote in a note to clients. "We encourage investors to accumulate positions in the low-$20 range."

Microsemi's announcement comes on the heels of similar warnings from other integrated circuit manufacturers, including Maxim Integrated Products Inc., Microchip Technology Inc., Silicon Laboratories Inc. and Advanced Analogic Technologies Inc.

Friday, September 22, 2006

Technology Select Sector SPDR, (XLK)

The most popular tech ETF, Technology Select Sector SPDR, (XLK) has gained 6.7% in the past month.

At the same time, Energy Select Sector SPDR (XLE) is down more than 9.61% in the past month. It's the most heavily traded energy ETF, averaging 17 million shares per day.

"We're seeing a rotation out of energy into tech," said Anthony Welch, a money manager at Sarasota Capital Strategies. "We really noticed it around mid-July. As a result, we've sold all of our energy positions."

Shares of software makers CommVault Systems Inc. and DivX Inc. jumped in market debuts on Friday, continuing a recent uptick for initial public offerings in the technology sector.

After a difficult year for tech IPOs with ten delayed offerings, shares of DivX and CommVault gained in openings on Friday, after pricing at the top or above a forecast range.

"The bigger picture is that these deals are strong fundamentally," said David Menlow, president of IPOfinancial.com. "Market gyrations shouldn't turn sentiments toward these deals into any negative thinking."

CommVault shares opened up 10 percent at $16 and closed at $17 on the Nasdaq.

Shares of DivX opened up 22 percent at $19.50, climbing as high as $20.44, before closing at $18.70 on the Nasdaq.

Both companies trade at roughly 50 times expected 2006 earnings, but have strong revenue growth and high gross margins, which bodes well for sustained gains, said Francis Gaskins, an independent IPO analyst and president of IPO Desktop.

"What people are looking for is top-line revenue growth where the company's technology is being adopted," Gaskins said. "(DivX and CommVault) are in the spotlight now."

CommVault designs software that backs up, protects and recovers data and sells products under the QiNetix brand.

For the three months ended June 30, the Oceanport, New Jersey-based company earned $3.34 million on $33.5 million in total revenue.

The company's 11.1 million share offering raised $161 million on Thursday after pricing at $14.50, the top of range, and gave the company an initial market capitalization of almost $604 million.

Media software maker DivX roughly doubled revenue from technology licensing between the first half of 2005 and 2006.

The San Diego, California-based company's software was downloaded more than 50 million times over the last 12 months, according to financial statements submitted to the U.S. Securities and Exchange Commission.

The 9.1 million share offering raised $145.6 million on Thursday, pricing at $16 per share, above a forecast range, and gave the company an initial market capitalization of about $535 million.

Shares of Advanced Analogic Technologies Inc. fell on Friday to their lowest level since listing more than a year ago, after the chip maker cut its quarterly outlook, prompting at least two brokerage rating downgrades.

The stock fell 18.31 percent to $5.80 in afternoon Nasdaq trade, after touching a year low of $5.75. The stock listed in August 2005 at $10.

Late Thursday, Advanced Analogic, which makes power management chips in audio devices and mobile phones, cut its third-quarter forecast citing falling sales in Korea and Taiwan and softness in the wireless handset market.

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Analyst Quinn Bolton of Needham & Co. lowered his rating on the stock to "hold" from "buy".

He said the magnitude of Advanced Analogic's pre-announced revenue and profit shortfall for the second half of 2006 raises many questions regarding the company's business with Samsung Electronics Co. Ltd. <005930.KS> and LG Electronics <066570.KS>, which are its two largest customers.

The miss also highlights the risk associated with the company's concentration at the two Korean companies, which account for 50 percent of sales, the analyst added in a research note.

Bolton also said the uncertain revenue outlook together with Advanced Analogic's lawsuits with Linear Technology will pressure its shares in the near-term.

Analyst Michael Davies of Next Generation also downgraded his view to "neutral" from "buy".

Davies noted that Samsung, which accounted for 27 percent of Advanced Analogic's revenue in the second quarter of 2006, has faced challenges in the handset market and has been slow to order newer products such as the switching regulator until after a ruling on the dispute with Linear Technology.

The companies are disputing over patent infringement.

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On Thursday, Advanced Analogic said it expects a third-quarter loss of 4 cents to 6 cents a share, on revenue of about $19 million to $20 million.

The Sunnyvale, California-based company previously said it expected to report third-quarter earnings ranging between a loss of 1 cent a share to net income of 1 cent a share, on revenue of $22 million to $24 million.

Prior to the outlook announcement, analysts on average were expecting the company to earn 3 cents a share, excluding exceptional items, on revenue of $23.4 million, according to Reuters Estimates.

Thursday, September 21, 2006

Riverbed shares rise 48 percent in debut

Shares of computer networking company Riverbed Technology Inc. rose as much as 48 percent in its market debut on Thursday, a day after pricing above a forecast range.

The shares opened up 47 percent at $14.30 before extending the gains to $14.40 in morning trading on the Nasdaq.

Riverbed's first day gains come in contrast to other technology IPOs so far this year. Due to investors' aversion to risk, 10 tech companies this year postponed or withdrew offerings, accounting for about 23 percent of the 44 IPO delays, according to Dealogic data.

The 8.8 million share offering raised $85.8 million Wednesday, after pricing at $9.75 compared with a $7 to $8.50 forecast.

The pricing gave the company an initial market capitalization of about $627 million.

The San Francisco, California-based company makes appliances that increase data transmission speeds across wide area networks (WANs) by five to 50 times, according to the filing with the U.S. Securities and Exchange Commission.

Riverbed lost $17.4 million on revenue of $22.9 million in 2005 after losing $9.8 million on revenue of $2.6 million in 2004, the filing said.

Other issues set to debut Thursday did not fare as well as Riverbed in their pricing on Wednesday. Prescription drug maker Warner Chilcott Holdings Company Ltd. and Home Diagnostics Inc. which makes supplies for diabetics, were priced below their forecasted range.

Underwriters led by Goldman, Sachs & Co. have the option to buy an additional 1.3 million Riverbed shares to cover overallotments, according to the SEC filing.

Silicon Laboratories Revises Revenue Outlook for the Third Quarter

Silicon Laboratories Inc. (Nasdaq:SLAB) today announced that it is revising its revenue outlook for the third quarter of fiscal 2006, which ends on September 30, 2006. The company now anticipates that revenue for the third quarter will be in the range of $113 to $116 million. The company previously announced that it expected third quarter revenue would be in the range of $122 to $127 million.

Revised third quarter expectations for the mobile handset business include both weaker than expected demand for Aero® transceivers due to prolonged inventory adjustments in China and lower than anticipated sales to some ODMs due to demand shifts at their OEM customers. The broad-based mixed-signal business is also expected to be down slightly sequentially due to weaker than expected analog modem demand.

The company also revised third quarter earnings per share guidance. Diluted net income per share on a GAAP basis is expected to be $0.05 to $0.08. Non-GAAP third quarter diluted net income per share is expected to be $0.22 to $0.25. This excludes anticipated non-cash charges of $0.14 for stock compensation expense and approximately $0.03 for the in process R&D write-off from the StackCom acquisition.

Silicon Laboratories' third quarter financial announcement and conference call are scheduled for October 23rd, at which time the company will discuss results in more detail as well as the outlook for the fourth quarter of fiscal 2006.

About Silicon Laboratories Inc.

Silicon Laboratories Inc. is a leading designer of high-performance, analog-intensive, mixed-signal integrated circuits (ICs) for a broad range of applications. Silicon Laboratories' diverse portfolio of highly integrated, patented solutions is developed by a world-class engineering team with decades of cumulative expertise in cutting-edge mixed-signal design. The company has design, engineering, marketing, sales and applications offices throughout North America, Europe and Asia.

Wednesday, September 20, 2006

Shares of American Technology Corp., a former portable radio maker that now develops advanced sound technology, fell on Wednesday after the company slashed its revenue expectations for the present quarter and fired a number of executives.

Shares of San Diego-based American Technology fell 90 cents, or 21 percent, to $3.46 in afternoon trading on the Nasdaq, trading at about five times its average volume. It has traded in a 52-week range of $1.90 to $4.

The activity came after the company said revenue in the quarter should be in the range of $2 million to $2.5 million, down sharply from the $3 million to $4 million it previously expected. The company blamed the shortfall on a customer's decision to postpone some work.

American Technology said it also fired Chief Financial Officer Steve Stringer and said Tom Brown, its newly minted chief executive, would assume those responsibilities. Bruce Gray, head of the company's commercial sales group was also dismissed. Charles Peacock, head of American Technology's government and military sales group, will assume those responsibilities.

The company also dismissed David Carnevale, vice president of marketing; James T. Taylor III, vice president, general counsel and secretary; and Rose Tomich-Litz, vice president of operations. Three non-executive employees were also fired.

In addition, American Technology announced plans to close its sales office in Maine. The closure comes after the company shut down its Carson City, Nev., office earlier this summer.

Taken together, the moves are expected to save more than $1.5 million annually, the company said.

8x8 Surges on Upgrade

8x8 Shares Climb After Analyst Says Stock "Just Too Cheap"

Voice over Internet Protocol service provider 8x8 Inc. shares jumped in Wednesday afternoon trading after a Merriman Curhan Ford analyst said "sometimes a stock is just too cheap" and upgraded it.

Analyst Colby Synesael raised the stock to "Buy" from "Neutral" and said that although he is concerned "about the company's long-term growth opportunity," the stock should trade inline with its fair value.

"Although we think the stock is greatly undervalued -- which we previously attributed to bankruptcy risk -- it is still not clear to us that 8x8 will be successful with its virtual office strategy and therefore its ability to meaningfully grow revenue long term," Synesael wrote in a note to clients.

Shares of 8x8, which have traded between 65 cents and $3.39 over the past 52 weeks, were up 15.2 percent, or 15 cents, at $1.14 per share on the Nasdaq.

Yahoo Warns That Slowing Ad Growth Will Depress Third-Quarter Results; Stock Down 11.2%

Yahoo Inc. warned Tuesday that slowing ad growth will depress its third-quarter results, marking the Internet powerhouse's latest letdown.

Investors took out their frustration on the company's stock price, which plunged by more than 11 percent to deepen a yearlong slump.

Two of Yahoo's top executives, Chairman Terry Semel and Chief Financial Officer Susan Decker, delivered the bad news during a joint appearance at a New York investment conference that was streamed over the Internet.

"I think in this current quarter we are seeing some slowing (in ads) with perhaps two of the largest sectors, in both autos and financial services," Semel said. "They are still growing, but they are not growing as quickly as we would have hoped in this moment of time."

The drop-off began about two to three weeks ago, Decker said, and will be significant enough to undercut Yahoo's financial performance for the quarter ending Sept. 30. She said it's still too early to tell if the advertising malaise would spread into other industries besides auto and financial services.

Based on recent trends, Decker predicted Yahoo's revenue -- excluding commissions paid to the company's advertising partners -- will fall on the lower end of management's July estimate of $1.12 billion to $1.23 billion.

Assuming Yahoo hits the new target, the company's revenue will be just slightly below the average analyst estimate of $1.18 billion.

But the prospect of a slowdown in online advertising nevertheless rattled Wall Street, which has been operating under the assumption that Internet companies would fare relatively well even in a sluggish economic environment because of the Web's rapid overall growth.

"The Internet, and Yahoo in particular, was supposed to be a safe haven, so this is a little bit of a 'Whoops!' that tends to make people very nervous," said American Technology Research analyst Rob Sanderson.

Shares of Sunnyvale, Calif.-based Yahoo plummeted $3.25, or 11.2 percent, to close at $25.75 on the Nasdaq Stock Market.

The backlash also clipped Google Inc. amid fears that the online search engine leader might find it more difficult to live up to the lofty advertising expectations propelling its stock. Google shares fell $10.88, or 2.6 percent, to close at $403.81 on the Nasdaq.

Investors have grown increasingly disenchanted with Yahoo as it has struggled to gain ground on Google in the lucrative search engine market while trying to maintain the popularity of its Web site as other hot Internet destinations like MySpace.com, Facebook.com and YouTube.com lure more users.

Semel believes those concerns have been overblown, but those assurances haven't been enough to prop up Yahoo's stock, which has declined by 34 percent to wipe out $20 billion in shareholder wealth so far this year.

Much of the stock's earlier erosion occurred in July after Yahoo announced a delay to a much-anticipated improvement to its formula for picking out the ads to display alongside search results. The upgrade, which is supposed to result in more revenue-generating clicks, won't be introduced until next year, missing out the busy holiday shopping season.

Meanwhile, Google keeps processing more search requests -- activity that has enabled it to earn substantially more money than Yahoo. Through August, Google held a 44 percent share of the U.S. search market compared to 29 percent for Yahoo, according to statistics released Tuesday by comScore Media Metrix.

Tuesday, September 19, 2006

Oracle profit tops Wall Street forecasts, shares up

Business software maker Oracle Corp. posted a quarterly profit on Tuesday that topped Wall Street forecasts as strong sales of new licenses for applications helped boost revenue, sending its shares up 5 percent.

Net income for the fiscal first quarter rose 29 percent to $670 million, or 13 cents per share, from $519 million, or 10 cents per share, a year ago. Revenue rose to $3.59 billion from $2.77 billion.

Excluding items, the company said it posted a per-share profit of 18 cents. Analysts on average were expecting the world's biggest database software maker to post a per-share profit before items of 16 cents on revenue of $3.47 billion, according to Reuters Estimates.

Total software revenue rose 29 percent to $2.7 billion, led by an 80 percent gain in new license revenue from applications, compared with a Wall Street target for a 66 percent gain.

The Redwood Shores, California-based company said database and middleware new license revenue gained 15 percent while services revenue rose 33 percent to $846 million.

"We exceeded our guidance on every metric and delivered strong revenue growth across all product lines and geographies," Oracle Chief Financial Officer Safra Catz said in a statement.

The results come as investors are beginning to embrace the company's decision to spend some $20 billion over the past three years to push into the market for business applications as its core database software market matures.

Oracle shares have gained about 18 percent since June 15 when it first told investors of stronger-than-expected software license revenue for the fiscal fourth quarter. At the same time shares in its major rival, Germany's SAP AG, have fallen about 5 percent.

The company's shares jumped more than 5 percent to $17.01 in electronic trading from a Nasdaq close of $16.13.

Yahoo Inc. Chief Financial Officer Sue Decker said on Tuesday the company expects to deliver third-quarter results "at the bottom half of the range of financials" previously forecast.

"We have seen a little bit of weakness in the last few weeks" in auto and financial services advertising, Decker told investors at a Goldman Sachs media conference.

On July 18, Yahoo had forecast third-quarter revenue of $1.12 billion to $1.23 billion.

Yahoo is trading down $3.70 (12.70%) to $25.20 in afternoon trading on the NASDAQ.

Monday, September 18, 2006

Applied Materials said on Monday it will spend $5 billion in the next three years as part of its ongoing stock repurchase plan.

Shares of the company were up more than 2% in Monday afternoon trading. The 52-week range is $14.39 to $21.06.

Applied Materials is the world's largest maker of semiconductor production equipment. In fiscal years 2005 and 2006, the company spent $5.8 billion to repurchase about 340 million shares, or about 20% of its outstanding stock.

"We view Applied Materials shares as undervalued and the buyback as well timed," wrote Standard & Poor's Equity Research analyst David Kaplan in a note to investors.

Mike Splinter, president and chief executive officer at Applied Materials, said in a statement that the company has delivered increased value to stockholders through growth of revenue and earnings as well as our stock repurchase program and payment of quarterly dividends.

Applied Materials makes equipment to deposit film on chip wafers, to etch the circuits into the material and to fire ions into the wafers to change their electrical properties. The company also makes inspection equipment.

Symbol Technologies, Inc. (SBL)

Last Trade:	14.67
Trade Time:	4:01PM ET
Change:	1.96 (15.42%)

Shares of Symbol Technologies Inc., a maker of bar code and inventory scanning technology, rose 6.5 percent before the opening bell on Monday after the Wall Street Journal reported the company is auctioning itself.

Mobile phone company Motorola Inc. is seen as the most likely buyer, the report said.

Symbol shares were trading at $13.54 in electronic trading after closing at $12.71 on the New York Stock Exchange on Friday. Motorola shares closed at $24.85 on the NYSE on Friday.

Thursday, September 14, 2006

Transmeta Corp. (TMTA)

Last Trade:	1.32
Trade Time:	4:00PM ET
Change:	0.15 (12.82%)

Processor technology company Transmeta Corp. is expanding the initial scope of Toshiba's license to use the company's LongRun2 processor technologies.

Japan-based Toshiba will now be able to use LongRun2 for the complete range of semiconductors made suing 90-nm through 22-nm processes.

Transmeta's (Santa Clara, Calif.) LongRun2 technologies allow manufacturers and chip designers to reduce power consumption and variations between chips. The technologies enables designers to minimize transistor leakage, thus allowing chips to run at lower power.

"Managing chip power and transistor leakage is a critical issue for the semiconductor industry, and we are pleased to see Toshiba's license expansion as a sign of increasing confidence in the value of Transmeta's LongRun2 technologies," said Arthur Swift, president and chief executive of Transmeta, in a statement.

Adobe Systems up $3.98 to $37.63, rallied almost 12 percent Friday morning after reporting quarterly earnings and revenue late Thursday that topped estimates.

The software maker also issued bullish current-quarter earnings and revenue guidance.

The Goldman Sachs software index added 1.3 percent.

The tech sector has bounced all week amid sector rotation, as investors have pulled money out of oil, gold and silver stocks and put it into tech and other sectors.

Wednesday, September 13, 2006

WiderThan Co., Ltd. (WTHN)

Last Trade:	16.60
Trade Time:	3:52PM ET
Change:	2.63 (18.83%)

Digital media company RealNetworks Inc.'s plan to buy mobile music company WiderThan Co. Ltd. could pave the way for long-term growth, a Canaccord Adams analyst wrote Wednesday.

Shares of WiderThan rose $2.66, or 19 percent, to $16.63 in premarket trading after closing at $13.97 Tuesday on the Nasdaq. The stock has traded between $8.66 to $19.20 and is down about 8 percent from the beginning of the year.

Seattle-based RealNetworks, which is known for its music player and Rhapsody music service, said Tuesday it will acquire WiderThan for $350 million, or $17.05 per share. The deal should close in the first three months of next year.

WiderThan provides "ringback tones," which is music that plays when a person places a call, to more than 50 wireless carriers in 25 countries.

Steven B. Frankel in a client note said WiderThan complements RealNetworks' technology segment, which provides server software to carriers and outsourced streaming services.

"Strategically, we believe this transaction significantly improves the company's position in the wireless market, adding leading market share in ringback tones, an entry into the Asian market and broader Tier 1 customer relationships in the US," the analyst wrote. "For WiderThan, Real Networks lets the company reach beyond the handset to the Internet and broaden beyond music into video and gaming."

Frankel believes carriers will increasingly turn to third-party providers like RealNetworks for video, music and ringback services.

The deal should boost 2007 earnings by possibly 3 cents per share to 4 cents per share on about $150 million in revenue, the analyst wrote.

Difficulties in integration could include maintaining WiderThan's business relationships, successfully selling the unit's products in Europe and combining WiderThan's products with RealNetworks' video and gaming products, wrote Frankel.

But the field could mark a new leg of growth for RealNetworks. The analyst reiterated a "Buy" rating on shares, though he expects "typical investor skittishness related to acquisitions" could drive RealNetworks shares down in the short-term.

Tuesday, September 12, 2006

TeleCommunication Systems Inc. (TSYS)

Last Trade:	2.50
Trade Time:	3:54PM ET
Change:	0.22 (9.65%)

Shares of TeleCommunication Systems Inc. surged on Tuesday after the wireless communications provider said it was selected for the U.S. Army's $5 billion worldwide satellite systems program.

TeleCommunication Systems is one of six companies selected for the contract, including Boeing Co., General Dynamics Corp. and DataPath Inc.

Under the five-year contract, TCS will offer quick reaction solutions for communications worldwide for federal missions, the company said in a statement.

TCS and the other companies in the contract will work on portions of the program. The contract delivery order work has already begun, the company said.

Monday, September 11, 2006

Corporate credit ratings agency Standard & Poor's said Monday it placed Freescale Semiconductor Inc. on "CreditWatch with negative implications," based on reports of a possible leveraged buyout.

Earlier on Monday, The New York Times reported Freescale was in talks for a possible sale to a consortium of investment firms including Texas Pacific Group and Permira, in a deal valued at $16 billion. The company later confirmed it is in talks for a "possible business transaction," but did not offer further details.

"Standard & Poor's placed the ratings on CreditWatch following press reports that the company was the target of a possible leveraged buyout by a group of private equity firms," said Standard & Poor's credit analyst Bruce Hyman, in a written statement.

Freescale's corporate credit rating with S&P is currently 'BBB-.'

Another credit ratings agency, Fitch, took the same route Monday, placing all of Freescale Semiconductor Inc.'s ratings on "Rating Watch Negative."

Fitch said the Rating Watch Negative affects $850 million in debt. Freescale's current issuer default rating, as well as its senior unsecured notes rating and its senior unsecured bank credit facility are all rated "BBB-" with Fitch.

Shares of Freescale, which have traded between $20.87 and $33.04 over the last year, were up $6.11, or almost 20 percent, at $36.86 on the New York Stock Exchange. Earlier in the session, shares set a 52-week high of $37.18

The one year chart of the Nasdaq 100 (QQQQ) shows a push to break through resistance. With money currently moving out of energy and commodities the Tech Sector could be poised to retest the highs set in Q1 of 2006.

Friday, September 08, 2006

Taiwan-based microchip designer Silicon Motion Technology Corp. on Friday raised its sales outlook for the third quarter, citing improved pricing and demand for flash memory products.

The company now expects third-quarter sales of about $27 million to $28 million, up from its previous forecast range of $25.5 million to $27.5 million.

Analysts on average expect sales of $26.8 million for the third quarter, according to Reuters Estimates.

Silicon Motion said it saw signs of improvement in prices for NAND flash memory, and expects demand to continue strengthening for flash memory cards used in cell phones.

NAND memory chips, which retain data even when power is shut off, are used in digital cameras and photo-snapping cellular phones.

SIMO closed Friday's session up 1.89% to $14.59 in trading on the Nasdaq.

Customers for Silicon Motion's flash cards include Creative Technology Ltd, Samsung Corp, and SanDisk Corp.

Thursday, September 07, 2006

Palm Shares Plunge on Revenue Shortfall, Analysts Worry NewTreos Might Not Solve Slowdown

Shares of Palm Inc. plunged Thursday morning as analysts en masse reacted to Wednesday's news that slow Treo smartphone sales will cause the company to miss its first-quarter sales outlook by about $30 million.

Palm's stock plummeted $1.35, or 8.7 percent, to $14.18 in morning trading on the Nasdaq, having traded as low as $12.25 and as high as $24.91 in the past year.

"After providing first-quarter guidance $30 million below expectations June 29, Palm ... now expects $30 million shortfall to new guidance," wrote RBC Capital Markets analyst Mike Abramsky in a note to investors.

The analyst downgraded Palm to "Sector Perform" from "Outperform" and dropped the price target to $16 from $23.

Palm said after the bell Wednesday it expects revenue of $354 million to $356 million for the quarter ended Sept. 1, down from the outlook it gave June 29 for revenue of $380 million to $385 million. However, the company said its outlook for adjusted earnings of 18 cents to 19 cents per share stands.

"The extent of impact from the $199 Motorola Q (vs. Treo 700 at $399) on Treo retail sellthrough appears to be greater than we expected," wrote Abramsky.

The analyst added that the Treo's features and design may not justify its premium price, but that the upcoming launch of a somewhat less-expensive Treo might not fix the first-quarter issues. "We do not believe market demand is the issue, which we think will continue to grow as strongly as the wireless data market expands, but is Palm-specific issues."

Morgan Keegan's Tavis C. McCourt wrote in a note to investors that a falling stock price may "provide an interesting opportunity in the stock depending on where the shares settle out." The analyst continues "to believe Palm will ultimately be bought by either a traditional computer manufacturer looking to get into the smartphone business ... or a mobile phone manufacturer looking to bring a better cost structure to a great product and a great brand."

McCourt maintained a "Market Perform" rating on Palm. Meanwhile, Lehman Brothers dropped their price target for the stock to $14 from $18.

Merrill Lynch analyst Vivek Arya took a more positive stance, maintaining a "Buy" rating and a $19 target for the stock.

Wednesday, September 06, 2006

Shares of Komag Inc. tumbled 15 percent Wednesday, after the maker of thin-film computer disks cut its third-quarter sales forecast due to slowing demand.

The news also dragged down shares of disk drive makers Seagate Technology and Western Digital Corp. Komag makes thin-film media for disk drives made by Seagate and Western Digital, two of the company's largest customers, among others.

Komag said Wednesday morning it expects third-quarter sales between $233.6 million and $240.6 million, or flat to 3 percent higher than the second quarter. This is below the company's earlier forecast of a 5 percent growth sales growth, or $245.3 million, as well as Wall Street's expectations.

Citing weaker demand and the easing of supply constraints, Bear Stearns analyst Andrew J. Neff downgraded Komag to "Peer Perform" from "Outperform," and said the company's guidance is "incrementally negative" for hard disk drive vendors like Seagate and Western Digital.

Komag's shares fell $5.27 to $30.99 in midday trading on the Nasdaq, having changed hands between $24.49 and $54.98 in the past 52 weeks.

Seagate's shares, meanwhile, fell $1.70, or 7.6 percent, to $20.53, and Western Digital slipped $1.36, or 7.4 percent, to $16.97 on the New York Stock exchange.

Komag also lowered its net margin outlook to between 14 percent and 16 percent, below its prior guidance of between 16 percent and 17 percent.

Neff lowered his earnings 2006 estimates to $4.45 per share from the prior $4.90 per share. On average, analysts polled by Thomson Financial are looking for earnings of $4.83 per share for the year.

Tuesday, September 05, 2006

Illinois Tool Works Inc. said Tuesday it has agreed to acquire Click Commerce Inc., a maker of supply chain management software, for $292 million.

ITW, which makes automotive parts, construction supplies and food-service equipment, offered to buy the outstanding shares of Click Commerce for $22.75 each, representing a 27 percent premium over Friday's closing price.

Click Commerce makes software for demand chain management, real time RFID-enabled supply chain management and other functions. The company, based in Chicago, reported revenue of $74 million in the past 12 months.

Under the agreement, ITW said it has 10 business days starting Tuesday to commence a tender offer for the shares. The offer will be open for at least 20 business days during the initial tender period.

The boards of directors of both sides have approved the transaction, which is expected to close in the fourth quarter.

Shares of Click Commerce rose $4.59, or 26 percent, to close at $22.54 on the Nasdaq Stock Market, while ITW fell 4 cents to finish at $44.13 on the New York Stock Exchange.

David Speer, ITW's chairman and CEO, said Click Commerce is well-positioned to continue to expand its value-added software solutions and market presence across a wide range of industries, including several where ITW has a strong presence.

"The company's growth through a combination of internal product development initiatives and complimentary acquisitions is very similar to ITW's approach and affords us exciting future growth opportunities in this software solution space," he said.

Click Commerce had revenues of $59 million last year, compared with $12.9 billion for Illinois Tool Works.

Monday, September 04, 2006

Shares of VeriFone Holdings Inc. (PAY) rose more than 20 percent on Friday, a day after the electronic payment technology provider reported third-quarter results above Wall Street estimates and raised its 2006 and 2007 outlook.

VeriFone said it expects to close the acquisition of rival Lipman Electronic Engineering Ltd. by November 1 and remain confident it will receive clearance by the U.S. Department of Justice shortly.

The company said the outlook was also based on its long-term model which sees annual revenue growth of 10 percent to 15 percent and annual adjusted net income per share growth of 20 percent or more.

Raymond James upgraded VeriFone to "outperform" from "market perform" and set a price target of $28, citing strong results, outlook and business trends.

The brokerage said the transaction processing sector has historically enjoyed a 15 percent earning-per-share expansion, 10 percent top-line growth and 20 percent operating margins. It said VeriFone could meet or exceed all these metrics.

Shares of the company rose $4.85 to $28.00 in trading on the New York Stock Exchange.

ESS Technology (ESST) fell 13% after the chipmaker cut its third-quarter revenue forecast. The company now sees revenue of $23 million to $28 million, below its previous view of $31 million to $35 million. Analysts project revenue of $32.3 million.

"The September quarter has been affected by a serious slowing of demand in China for our DVD products which has resulted in lower than expected revenues in the quarter," ESS said. Shares recently were down 17 cents to $1.13.

Shares of Bookham (BKHM) fell 3% after the optical-components maker announced a private placement of about 8.7 million shares. The company sold the stock at $2.70 a share, a discount of 15% from Thursday's closing price of $3.18. Bookham also issued warrants for another 2.17 million shares.

The sale raised about $23.5 million in gross proceeds, which Bookham plans to use for working capital purposes. Shares were trading down 8 cents to $3.10.

VimpelCom (VIP) rose 6% after the Russian telecom company posted better-than-expected second-quarter results. The company earned $194.9 million, or 96 cents per American depository share, on revenue of $1.12 billion. Analysts expected earnings of 93 cents per ADS on revenue of $1.06 billion. During the year-earlier period, the company earned $158.8 million, or 78 cents a share, on revenue of $769.8 million.

"For the first time our quarterly revenue exceeded the $1 billion mark," VimpelCom said. "This success underlines our ability to deliver results against strategic priorities." Shares were trading at $57.47, up $3.15.

Shares of OmniVision Technologies (OVTI) slid 7% after the maker of semiconductor image sensors posted weaker-than-expected first-quarter results and gave a guidance below forecasts. For the period ended July 31, the company reported first-quarter earnings of $15.9 million, or 28 cents a share, on revenue of $136.9 million. Excluding stock-based compensation costs, OmniVision earned $22.1 million, or 39 cents a share. Analysts expected earnings of 40 cents a share and revenue of $139.8 million. During the year-earlier period, the company earned $14.4 million, or 25 cents a share, on revenue of $96 million.

For the second quarter, OmniVision predicts adjusted earnings of 26 cents to 34 cents a share on revenue of $135 million to $145 million. Analysts project earnings of 42 cents a share and revenue of $150.7 million. Shares were off $1.16 to $15.44.

Other technology movers included JDSU (JDSU) , unchanged at $2.27; Intel (INTC) , up 17 cents to $19.74; Cisco Systems (CSCO) , down 1 cent to $21.98; Microsoft (MSFT) , up 15 cents to $25.85; Ciena (CIEN) , down 14 cents to $3.81; Sirius Satellite Radio (SIRI) , up 2 cents to $4.10; Lucent Technologies (LU) , down 2 cents to $2.31; Oracle (ORCL) , down 1 cent to $15.65; and Sun Microsystems (SUNW) , up 5 cents to $5.04.