Tech Stock News And Analysis

Tech Stock News and Analysis

Thursday, December 28, 2006

The NASDAQ Composite Index has recently bounced off of the 50 day moving average. This level is providing strong support and indicates that the market wants to move higher in the near term.

Sunday, December 24, 2006

The NASDAQ Composite Index pulled back this past week and is currently testing support at the 50 Day Moving Average. Next week could be a turning point as the NASDAQ looks to either break down or move higher into 2007.

Friday, December 22, 2006

Shares of Red Hat Inc.(NASDAQ RHAT) surged in premarket trading Friday after the maker of computer operating systems reported third-quarter earnings showing the company survived the first phase of attack from Oracle Corp.

Red Hat posted third-quarter adjusted profit, excluding charges, of 14 cents per share, beating forecasts for profit of 12 cents per share. The Raleigh, N.C.-based maker of Linux operating systems said revenue rose 45 percent to $105.8 million.

Some analysts said the quarter was surprisingly strong but it's too early to declare the Oracle threat over. Red Hat's shares lost a quarter of their value in October after business software maker Oracle in October said it would sell maintenance services for Red Hat's Linux operating system and charge less than Red Hat.

Jefferies & Co. analyst Katherine Egbert in a client note called the report "cheerful," but said "it's too early to gauge the full effect of competition from Oracle" as well as Microsoft Corp.'s support of Novell Inc.'s version of Linux.

Still, the "breakout quarter should help allay investor concerns," Merrill Lynch analyst Kash Rangan wrote in a research report. The competitive threats from Oracle and Microsoft may be exaggerated, Rangan said, as Red Hat lost only a few customers in the first five weeks of competition.

"Oracle's Linux push is validating the market and expanding the pie, which is driving more business for Red Hat," Rangan said.

Shares of Red Hat rose $2.71, or 15 percent, to $20.67 in trading on the NASDAQ.

Thursday, December 21, 2006

Shares of PMC-Sierra Inc (NASDAQ PMCS)., maker of chips used in telecom, networking, and storage equipment, fell sharply in premarket trading after the company cut fourth-quarter revenue estimates.

The company said after market close on Wednesday it expects $100 million to $105 million in revenue, down from a previous projection for $105 million to $112 million, because of slower demand. Wall Street is looks for earnings of 5 cents per share on $108.9 million in revenue.

Stanford Group Co. analyst Tim Kellis, who has a "Sell" rating on the stock, thinks the company is no longer the leader in the communications space, and lowered his fourth-quarter revenue estimate to $99.1 million from $106.4 million. He also cut his earnings estimate to 3 cents per share from 5 cents per share.

Kellis' target price is $5.

Shares of PMC-Sierra lost 19 cents, or 2.8 percent, at $6.70 in early trading on the NASDAQ.

Wednesday, December 20, 2006

Smart Modular Technologies Inc., a maker of memory chips and modules, said Tuesday its fiscal first-quarter profit rose 56 percent, sending shares up in after-hours trading.

For the three months ended Nov. 30, earnings climbed to $14.6 million, or 23 cents per share, from $9.3 million, or 17 cents per share during the same period last year. Results beat the company's November guidance of 21 cents to 22 cents per share.

Revenue increased 50 percent to $237.2 million from $158.3 million in the year-ago quarter.

Analysts polled by Thomson Financial forecast a profit of 21 cents per share on $210.9 million in sales.

For the second quarter, the company said it expects to earn 20 to 21 cents per share on $230 million to $240 million in sales.

For the fiscal year, the company said it expects to post a profit of 88 cents to 90 cents.

Shares of Smart Modular Technologies gained 5.4 percent to $13.18 in after-hours trading on the INET electronic exchange, after adding 28 cents, or 2.3 percent, to close at $12.51 on the Nasdaq.

Tuesday, December 19, 2006

Embarcadero Technologies Inc., a maker of data management software, said Monday an agreement to be acquired by an of affiliate of Thoma Cressey Equity Partners has been ended by mutual agreement.

Embarcadero had agreed to be acquired by EMB Holding Corp. in September in a $234 million deal that valued the company at $8.38 per share.

The company said that both parties have agreed to release all claims they may have against each other and that neither party will have to pay a termination fee.

The companies did not disclose the recent for ending the deal, although Embarcadero's stock had lost about 16 percent of its value after the company said last month it had found evidence that stock option grants made in 2000 and 2001 were backdated.

Monday, the company said it will need to restate its historical results, and financial statements from Jan 2000 through the present should not be replied upon.

Embarcadero added that the issues at the center of the financial restatements represent material weaknesses in the effectiveness of internal control over financial reporting, and it expects to receive an adverse report from its public accountant.

Embarcadero is one of at least 194 companies that have launched internal probes or are under investigation by federal regulators for possibly backdating stock option grants.

Shares of Embarcadero plunged $1.17, or 16.8 percent, to $5.80 trading on the Nasdaq.

Monday, December 18, 2006

SanDisk Corp., which makes Flash memory cards for digital cameras, on Monday said it plans to repurchase $300 million in common stock over the next two years.

The company said the buyback would help offset dilution caused by stock incentive awards to employees. By reducing the number of shares outstanding, a company can boost its earnings per share.

Sunday, December 17, 2006

Dell Inc. (NASDAQ DELL) said on Friday it received a letter from Nasdaq saying the computer maker was not in compliance with listing requirements because it was late in filing its fiscal third-quarter report.

The world's No. 2 PC maker previously said it would delay filing the report due to an investigation by the U.S. Securities and Exchange Commission into the company's accounting and financial reporting for possible misstatements.

In addition to the SEC, the U.S. Attorney for the Southern District of New York and the company's audit committee have raised questions about Dell's financial reporting.

Last month, Dell delayed publishing third-quarter results due to the accounting probes. When it did report -- nearly a week late -- it said results were preliminary and it did not expect to file its quarterly report on time with the SEC.

Round Rock, Texas-based Dell also has not yet filed its second-quarter earnings report with the SEC.

Earlier this year, Dell recalled batteries made by Sony Corp. in what was the biggest-ever consumer electronics recall. It has also had complaints of poor after-sales service and recently lost its status as top PC maker to longtime rival Hewlett-Packard. (NYSE HP)

Dell shares fell 34 cents, or 1.3 percent, to close at $26.53 on Nasdaq.

Friday, December 15, 2006

Adobe Systems Inc. (NASDAQ ADBE) reported on Thursday that quarterly profit grew 16 percent, meeting forecasts on higher sales of design software, and it reassured investors that new products are on schedule, sending its shares up 6 percent.

Adobe said it was on track to start shipping new versions of its Creative Suite line of 14 design programs at the end of the second quarter. It also announced that a preliminary version of the upgrade of one of its top sellers, Photoshop photo editor, will be available for download on Friday.

Adobe also issued a first-quarter earnings forecast that was generally in line with Wall Street expectations.

Investors had worried that the company's fourth-quarter results might miss forecasts or that its outlook for the current quarter would disappoint as buyers waited for the updated programs due out next year, analysts said.

The programs that are being upgraded include Acrobat document-sharing software, the Illustrator drawing program and Dreamweaver Web site developer.

ADBE shares are up 5.5% to $43.10 in mid day trading on the NASDAQ.

Thursday, December 14, 2006

Chordiant Software Inc (NASDAQ CHRD)., a maker of software that helps businesses manage their customer relations, said Wednesday its fourth-quarter loss, on a preliminary basis, widened by 53 percent from last year.

Choridant is one of at least 193 companies that have launched internal reviews, or are being investigated by federal regulators for possibly backdating stock option grants. The company said it has concluded its review, and expects to record an additional $8 million in stock-based compensation expenses. Choridant is currently working with auditors to restate financial results for several years, going back to 2001, and reviewing the factors that may have led to the options that incorrectly accounted for.

For the fourth quarter ended Sept. 30, the company expects to post a loss of $8.4 million, widening from a loss of $5.5 million, or 7 cents per share, last year. Excluding stock-based compensation and amortization expenses, the company lost $7.1 million.

Revenue for the quarter is expected to total $21.7 million, up 2 percent from $21.3 million.

Analysts polled by Thomson Financial expected the company to post a loss, on average, of a penny per share on $26.7 million in revenue.

For the full year, the company expects to post a loss of $16 million, narrowed from a loss of $19.5 million, or 26 cents per share, last year. Excluding certain expenses, the company lost $9.2 million.

Revenue for the year is expected to hit $97.5 million, up 16 percent from $83.7 million last year.

Looking forward, the company projected full year income growth, excluding certain expenses, of between 6 percent to 10 percent, on $115 million to $120 million in revenue in fiscal 2007.

Analysts are currently looking for profit of 15 cents per share on $115.8 million in revenue.

Shares of Chordiant were trading at $2.81, down 44 cents, or 13.5 percent, from Wednesday's closing price of $3.25 on the Nasdaq.

Wednesday, December 13, 2006

Shares of integrated circuit maker Atmel Corp. soared in Wednesday trading after the company announced a reorganization plan that is expected to result in tens of millions in annual savings by 2008.

As part of the plan, the company said Tuesday it plans to sell two European plants and cut 10 percent of its non-manufacturing work force.

The plan is expected to result in annual savings of $70 million to $80 million in 2007, and between $80 million and $95 million by 2008.

Wedbush Morgan Securities analyst Craig Berger said the move could add 5 cents to 7 cents per share in annual earnings per share savings, and he suggested the stock is undervalued.

"We maintain a 'Buy' rating on Atmel because the stock is a restructuring play with further realignment opportunities to pursue in 2007 and 2008; and because Atmel is transitioning into a microcontroller firm with higher margins," Berger wrote in a note to investors. He has an $8 target price on the shares.

Shares of Atmel rose 61 cents, or 11.6 percent, at $5.89 in midday trading on the Nasdaq.

Tuesday, December 12, 2006

Endwave Corp. tumbled $1.79, or 14 percent, to $11 after the maker of wireless communication components warned its 2006 revenue will fall below its prior guidance after the bell Monday.

The company said it now expects fourth-quarter revenue between $10 million and $12 million, which would imply sales growth of about 20 percent to 25 percent for 2006. This is below the 35 percent annual growth rate the company guided for previously.

Endwave said the decline would be temporary.

Nokia Corp., which is one of Endwave's customers, recently said it plans to reduce inventory more than previously expected, in a move related to a joint venture with Siemens AG.

Shares of Endwave closed at $12.79 Monday on the Nasdaq.

Monday, December 11, 2006

The NASDAQ Composite Index seems poised to test the multi year highs set at the end of November. This one year chart shows the index making a nice bounce off of the 2350 level which was previously a spot of overhead resistance. With continued positive economic data, as well as M&A developments, the index could make a run toward 2500 before the end of 2007.

Shares of chip test equipment maker Credence Systems Corp. soared in afternoon trading on Friday after the company posted a significantly smaller fourth-quarter loss and named a new CEO.

On Thursday the Milpitas, Calif.-based company posted a fourth-quarter loss of $1.9 million, or 2 cents per share, narrowed from $22.5 million, or 23 cents per share, last year.

The company also said Chief Executive officer Dave Ranhoff stepped down and would be replaced by Lavi Lev, a semiconductor industry veteran who previously held positions at National Semiconductor Corp., Intel Corp. and Sun Microsystems Inc.

Needham & Co. analyst Robert Maire lifted his rating on the stock to "Buy" from "Hold" with a $7 price target, but he hardly gave the stock a gushing endorsement.

"While things are far from being good, the downward spiral has reversed and we are at a level of business that is in the black," Maire wrote in a note to investors. "Our view is that the near-term business opportunities are enough to sustain the company until we see an uptick in the overall tone of the market."

Goldman Sachs analyst James Covello was made equally tepid comments.

"Despite solid results and guidance from Credence, we do not recommend the stock as it is down 43 percent year-to-date but it is up 116 percent off its August lows and has rallied 20 percent month to date...," Covello wrote in a note.

He added that the company may be vulnerable to inventory build in the supply chain, which could result in weak semiconductor fundamentals. He also believes there may be a 50 percent downside to his $2.30 price target.

Shares of Credence, which have traded between $1.80 and $9.62 over the last year, were up $1.03, or 26 percent, at $4.98 in afternoon trading on the Nasdaq.

Friday, December 08, 2006

Chip maker National Semiconductor Corp. said Thursday its second-quarter profit fell 20 percent, dragged by sluggish sales to distributors and lower foundry revenue.

Income for the quarter was $91.4 million, or 27 cents per share, down from $114.7 million, or 32 cents per share, last year.

Quarterly revenue fell 8 percent to $501.6 million from $544 million last year.

Analysts polled by Thomson Financial expected the company to post earnings, on average, of 27 cents per share on $501.5 million in revenue.

"While customer end demand did not demonstrate the seasonal uptick we usually see this time of year, the revenue decline this quarter was driven by inventory reductions at our distributors and some of our customers," said Brian L. Halla, chairman and chief executive officer.

Looking forward, the company projected third-quarter revenue would drop 8 percent to 11 percent sequentially from the second quarter, implying revenue of $446.4 million to $461.5 million. Wall Street is currently looking for $495.1 million in revenue.

The company also expects third-quarter margins to decline slightly in the third quarter.

Shares of the company fell 88 cents, or 3.6 percent, to $23.92 on the New York Stock Exchange.

Thursday, December 07, 2006

Convera Corp., a maker of Internet search software, has named Matthew G. Jones its chief financial officer, treasurer and secretary, according to a Thursday filing with the Securities and Exchange Commission. Jones had been serving as acting CFO, treasurer and secretary since July following the resignation of John R. Polchin, who had held the positions since May 2004.

Shares of Convera added 33 cents, or 7.4 percent, to $4.79 in afternoon trading on the Nasdaq.

Maxwell Technologies Inc., a maker of capacitors used to extend battery life in electronic devices, said Wednesday that a European wind energy company placed an order for 3 million ultracapacitors.

Financial details were not disclosed. However, the company said the order, which will be filled over two years, is for double the quantity of its previous largest "D cell" order.

The ultracapacitors are used for backup energy storage and power delivery in wind turbines.

Shares of Maxwell jumped 56 cents, or 3.8 percent, to $15.16 in after-hours trading, after gaining 31 cents, or 2.2 percent, to close at $14.60 on the Nasdaq.

Wednesday, December 06, 2006

Shares of open source software maker Novell Inc. sank to a new 52-week low on Wednesday after the company posted lower-than-expected fourth-quarter sales and issued disappointing 2007 guidance.

The Waltham, Mass.-based company said Tuesday its fourth-quarter sales fell 15 percent to $244.9 million from $287.6 million a year ago, partly due to sluggish sales of older products.

In a conference call that followed the release of fourth-quarter results, the company said in 2007 it planned to increase investment in several areas including research and development. The company also projected 2007 sales would be roughly flat with 2006.

"Given Novell's decision to invest over the near term combined with an uninspiring near-term revenue outlook is likely to pressure shares over the near term," said JMP Securities analyst Denny C. Fish Jr.

Fish Jr. kept his rating on the stock at "Market Perform".

Shares of Novell, which have traded between $5.73 and $9.83 over the last year, were down 34 cents, or 5.4 percent, at $5.99 in afternoon trading on the Nasdaq. Earlier in the session shares fell to a new year low of $5.70.

Tuesday, December 05, 2006

The NASDAQ 100 Index (QQQQ) hit an intra-day 52 week high on Tuesday at $44.97. This one year chart shows the tremendous run in the NASDAQ 100 over the past year. In a market driven my positive earnings news and M&A activity the Index may be poised to go much higher in the coming months.

High-definition television set maker Syntax-Brillian Corp. said Monday it expects second-quarter revenue to come in ahead of a previous forecast, thanks to strong holiday sales over the Thanksgiving weekend.

The company now expects quarterly sales to come in at, or above, its previous guidance for $178 million to $190 million in revenue.

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Analysts polled by Thomson Financial expect the company to post $185.7 million in second-quarter revenue.

Shares of Syntax-Brillian were trading at $8.95 in the aftermarket session, up 39 cents, or 4.6 percent, from Monday's closing price of $8.56 on the Nasdaq.

Monday, December 04, 2006

LSI Logic Corp. shares plummeted in Monday morning trading after the company agreed to acquire competitor Agere Systems Inc. in a $4 billion stock swap, in a move to take market share from Marvell Technology Group.

LSI Logic said it will issue about 379 million shares to purchase Agere, which makes integrated circuits used in data storage and wireless network equipment.

Caris & Co. analyst Shebly Seyrafi argued the deal could be a negative for Marvell Technology Group Ltd., which has been gunning for new business from hard disk drive maker Seagate.

"LSI and Agere will share Seagate as a top customer," Seyrafi wrote in a note to investors. "Agere sells desktop and mobile drive Systems On Chips (SoC), but Marvell sells enterprise read channel chips to Seagate."

"It has been speculated that Marvell will displace LSI at Seagate in selling enterprise hard disk controllers, but the combined LSI-Agere entity may now have an improved chance of increasing its involvement with Seagate in that market due to the amount of business it will have from Seagate."

At least one analyst thought it was possible, though, that Marvell could grow its business with Seagate if there are any hiccups in the LSI-Agere merger.

"Mergers of this size are always difficult to pull off, though with Seagate the top customer for both LSI Logic and Agere, we would think great care would be taken to meet the needs of that customer," wrote CIBC analyst Allan Mishan in a note to investors. "Still, even with strong customer service, a focus on integrating the roadmap will be needed to fend off a very aggressive Marvell over the next 12 months."

Shares of Marvell, which have traded between $15.91 and $36.84 over the last year, were up 49 cents at $20.69 on the Nasdaq.

LSI shares fell $1.21, or 11.5 percent, to $9.35 in morning trading on the New York Stock Exchange. Meanwhile, Agere shares, which have traded between $11.94 and $18.90 over the last year, surged $2.01, or 11.3 percent, to $19.80 and earlier hit a new high of $20.40.

Friday, December 01, 2006

Shares of network components maker Finisar Corp. sank Thursday in after-hours trading the company said it launched a voluntary investigation into its historical stock option grants and that restatements will likely follow.

The company's stock plunged 20 cents, or 5.2 percent, to $3.63 in after-market trading on the INET electronic exchange, after adding 8 cents to close at $3.83 on the Nasdaq. The shares have ranged between $1.73 and $5.49 over the past year.

Finisar joins a list of at least 187 companies that have disclosed Securities and Exchange Commission, Justice Department or internal probes into possible stock options backdating, according to an AP review.

The company said it reviewed grants made since its initial public offering in 1999 and concluded that it is likely that measurement dates for certain stock option grants differed from the recorded grant dates, and that it will probably need to restate past historical statements to correct the accounting. The company said it does not yet know the financial impact of the restatements, and that the investigation is ongoing.

Finisar also said it will delay filing full fiscal second-quarter results until the probe is complete.

Revenue for the three months ended Oct. 29 rose 25 percent to $108.2 million, from $86.6 million a year ago. While sales fell in the middle of the company's own guidance to $106 million to $112 million, they missed Wall Street's view. Analysts polled by Thomson Financial were looking for revenue of $110 million.

Finisar said optical subsystems and components revenue rose 27.8 percent to $99 million in the quarter. Network test and monitoring systems revenue were flat at $9.2 million.

On Wednesday, the company said its board of directors had approved a medical leave of absence for Chief Financial Officer Stephen K. Workman.