Tech Stock News And Analysis

Trident, which has previously said it would restate past results to correct its stock-options accounting, did not give a specific reason for Lin's resignation, which was effective Nov. 15. The company said a non-executive employee who reported to Lin has also resigned. Glen M. Antle, a director with the company, has been appointed acting CEO.

The company said it expects to record stock options expenses between $40 million to $50 million between 1994 and 2006 as a result of the options irregularities.

Trident said it also plans to separate the roles of chairman and CEO going forward, and will review its corporate governance practices. Trident will also revise the process for administering employee stock options, including limiting the authority to grant stock options.

Trident is among more than 100 companies under investigation for possibly backdating stock options grants, a practice that can increase the potential windfall for options recipients and be illegal if it is not disclosed to investors or accounted for properly.

The company's filing of its results for the fiscal year ended June 30, as well as the fiscal first quarter of 2007 ended Sept. 30, have been delayed pending the completion of its stock options review.

Shares fell $1.01, or 4.8 percent, to $19.80 in after-hours trading, having earlier closed down 11 cents at $20.81 on the Nasdaq.

Nvidia shares gained 19 cents to $35.48 in premarket electronic trading, after closing the regular session Thursday at $35.24 on Nasdaq, where they have traded in a 52-week range of $16.42 to $36.20. The shares have gained about 10 percent over the past year.

The Santa Clara, Calif.-based company posted quarterly earnings of 39 cents per share before stock option expenses, well above the Thomson Financial estimate of 35 cents per share. Revenue jumped 19 percent to $820.6 million, beating Wall Street's target of $753.6 million.

Jen-Hsun Huang, the company's president and chief executive, called the quarter one of the best in the company's history.

However, some analysts recommended profit taking on the shares, as they see more limited upside potential at the company.

Stifel Nicolaus analyst W. Blake Fischer downgraded the shares to "Sell" from "Hold," citing concern about the potential for gross margin improvements and the stock's price.

ThinkEquity Partners analyst Eric Ross also noted that the stock is trading well above its peers and faces "more risk than bulls care to admit," adding that average selling prices were down overall, die sizes are increasing and rival ATI Technologies is likely to have a competitive offering in the near future. Ross reiterated his "Sell" rating on the stock and raised his price target to $28 from $25.

Freidman Billings Ramsey analyst Chris Caso said Nvidia still has good momentum entering 2007, due to the expected ramp of its new high end graphics processing unit, as well as the launch of Microsoft Vista. He still sees upside potential and reiterated his "Outperform" rating, raising his price target from $36 to $40 on higher estimates.

The tech bellwether also profited from its recent $6.9 billion acquisition of Scientific-Atlanta Inc., the world's second-largest cable television box seller, which added $584 million to Cisco's sales during the quarter. The deal closed in February.

Cisco's net income for the quarter ending Oct. 28 was $1.61 billion, or 26 cents per share, compared with $1.26 billion, or 20 cents per share, in the same period last year.

Quarterly sales for the San Jose-based company, which makes the routers, switches and other devices used to link networks and direct traffic on the Internet, were $8.18 billion, compared with $6.55 billion last year. Cisco also produces digital subscriber line and cable broadband equipment, Voice over Internet Protocol telephone service products and network management software.

Excluding one-time charges, Cisco would have earned $1.9 billion, or 31 cents per share.

The company was expected to earn, on average, 29 cents per share on $7.9 billion in revenue, according to analysts surveyed by Thomson Financial.

John Chambers, Cisco's chief executive officer, said in a conference call that Cisco is succeeding in convincing customers to think of the network as the central platform for communications and IT needs.

"The balance was amazingly good everywhere," Chambers said. "All elements of our vision have evolved as we thought."

Sales increased across the company's core line of products. Growth was particularly strong in emerging markets such as Eastern Europe, Latin America, Africa and the Middle East, where orders were up over 40 percent, and the commercial and service provider markets, said Dennis Powell, Cisco's chief financial officer.

"It wasn't just one area that drove this," Powell said in an interview with The Associated Press. "We were hitting on all cylinders. Every product and every geography was performing extremely well for us."

Cisco expects the momentum to help drive 24 to 25 percent year-over-year revenue growth in the fiscal second quarter, which would translate to about $8.2 billion or $8.3 billion in quarterly revenue, Powell said.

Analysts said Cisco's broad-based growth reflected a general strengthening in the networking industry, as customers scramble to upgrade outdated gear and accommodate growing bandwidth demands.

"It's not quite the perfect storm, but a lot of things aligned nicely for them to be able to put these numbers up," said Zeus Kerravala, an analyst with the Yankee Group. "There was strength all over the place."

The results were announced after the market closed. The company's stock price gained as much as 9 percent in after-hours trading, rising $2.26 to $27.36. Cisco's stock closed up 26 cents, or about 1 percent, to $25.10 on the Nasdaq Stock Market.

"Cisco delivered another strong quarter, with record results from a revenue, net income and earnings per share perspective," said John Chambers, Cisco president and CEO. "This strong momentum demonstrates that customers increasingly share our vision of the network as the platform for all forms of communication and IT."

"We are in the midst of a market inflection that is changing the landscape of networking, and we believe the network is becoming the platform for the next generation of IT, revolutionizing the way people connect, communicate and collaborate. We laid the cornerstones for our strategy to capture this shift several years ago and believe we are now uniquely positioned for continued growth and increased share of our customers' total IT spend."

Microsoft will pay Novell $240 million up front in subscription fees to allow the world's largest software maker to use its Linux software. Microsoft will pay an additional $108 million upfront for use of patents, Novell said in a filing with the U.S. Securities and Exchange Commission.

Last week, Microsoft and Novell entered a broad set of business and technological agreements to make their products work together better to serve corporate customers using both Linux and Windows computer servers.

Linux is the most popular variant of open-source software. Unlike proprietary software, open-source software lets developers share code and add functions, and users only pay for custom features, maintenance and technical support.

Microsoft agreed not to sign a similar agreement with any other Linux distributor for three years. Microsoft's pact with Novell dealt a blow to other Linux distributors such as market leader Red Hat Inc. (NASDAQ RHAT), according to analysts.

Under the pact, which will run until at least 2012, Novell will also pay Microsoft at least $40 million over five years for use of Microsoft's patents based on a percentage of its revenue from open-source products.

Microsoft also agreed to spend $12 million a year to market scenarios where users can virtually run Linux on Windows machines and vice versa. Microsoft will also spend $34 million over the life of the agreement to put in place a sales force devoted to the combined offering, Novell said.

Prior to the filing, Microsoft shares rose 11 cents to $28.95 in Tuesday Nasdaq trade. Novell, up more than 10 percent since news of the pact last week, fell 12 cents to $6.50.

Net income for the third quarter rose to $17.8 million, or 13 cents per share, from a loss of $18 million, or 16 cents per share, a year ago. The latest period includes various merger-related and other restructuring charges, as well as 2 cents per share in stock options costs. Excluding these, income was 16 cents per share.

Sales from continuing operations climbed 41 percent to $171.3 million from $121.3 million a year ago. The company said unit-driven sales, which accounted for 61 percent of the total, were about even sequentially, while capital-driven sales, or 39 percent of total sales, declined as expected from a particularly strong second quarter.

The company said gross margin suffered primarily because of isolated manufacturing inefficiencies at a North American facility as well as lower production levels.

According to Thomson Financial, analysts expected the company to earn 17 cents per share on revenue of $177.5 million.

Looking ahead to the fourth quarter, Entegris expects to earn 11 cents to 14 cents per share, excluding items, or 9 cents to 12 cents per share including items. Sales are pegged between $155 million and $163 million.

The estimates fell short of the average analyst estimate of 17 cents per share and sales of $178.9 million.

In premarket trading, shares of Entegris fell 5.3 percent, or 57 cents, to $10.22.

Under the agreement, the parties will cooperate to optimize Microvision’s IPM designs for high-volume manufacturing and may engage in marketing and product development discussions with prospective OEM customers. For confidentiality reasons, the name of the Asian manufacturer and other terms of the agreement were withheld. Potential applications for the IPM platform include ultra-miniature laser projectors for embedded or accessory solutions for mobile phones, personal media players, laptops and DVD players. Additional applications include lightweight color eyewear and heads-up displays for automobiles and airplanes. Target customers are major consumer electronics OEMs and large tier 1 automotive integrators.

“This agreement marks an important milestone on our roadmap to the commercialization of high-volume products based on the company’s new proprietary IPM architecture,” said Alexander Tokman, President and CEO of Microvision. “We are extremely pleased to be working closely with one of the world’s leading developers and manufacturers of consumer electronics and commercial equipment and a company with a truly global reach. To execute on our plan to bring the IPM to market with the right performance, quality and cost in products such as an embedded or accessory ultra-miniature laser projector (PicoP™) and automotive heads-up display, it is critically important for us to align ourselves with one or more proven, strategic manufacturing partners.

“We anticipate that our efforts with this world-leading consumer electronics partner will accelerate our time-to-market, and provide the potential for establishing the global capacity we require to serve large commercial markets with our IPM platform technology.”