CONFERENCE CALLS
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FOOL PLATE SPECIAL
The Red Flags Are Flying
Warning! Warning! While some companies exceed investor expectations, blowing away the earnings estimates of Wall Street analysts, others fail to meet these expectations and are usually punished with a sell-off and a decline in stock price. Sometimes, though, the lower-than-expected earnings do not have a great effect on the price. Why? Because companies often warn investors ahead of time when they are experiencing troubles. Today saw a host of such warnings, along with the accompanying price drops, some of them quite severe.
-- VERITY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: VRTY)") else Response.Write("(NASDAQ: VRTY)") end if %>, the Internet search and publishing software concern, saw its shares decimated by a $11 1/4 to $12 7/8 drop after the firm warned that it expects to lose $0.12 per share in its first quarter, and not earn the $0.05 expected. Alex. Brown downgraded Verity from "buy" to "neutral."
-- WORKGROUP TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: WKGP)") else Response.Write("(NASDAQ: WKGP)") end if %> was also slashed in half, off $7 1/2 to $7 1/2 after the data management software concern warned of impending losses.
-- KENTEK <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: KNTK)") else Response.Write("(NASDAQ: KNTK)") end if %>, the beleaguered printer company, warned that its first quarter will fall 15-20% below expectations and saw its shares plunge $1 1/16 to $5 5/16. Perhaps weighing on the shares are pricing pressures from Hewlett Packard as well as H-P's acquisition of Oce, which Kentek was "in talks with."
-- CYBEROPTICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CYBE)") else Response.Write("(NASDAQ: CYBE)") end if %> dropped $7/8 to $11 1/2 after warning that it expects to post a small loss for its third quarter, due to overcapacity and inventory problems in the semiconductor industry. It was expected to earn $0.06 per share.
-- CANANDAIGUA WINE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: WINEA)") else Response.Write("(NASDAQ: WINEA)") end if %> uncorked some bad news today, revising its earnings estimates downward by nearly half due to its higher-than-expected cost of product sold, lower-than-expected efficiency of production, and lower-than-expected sales. Shares soured $4 3/4 to $17 1/4. You can call 1-800-759-8643 (passcode 1234) to listen to the company's conference call about its earnings.
-- WYLE ELECTRONICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WYL)") else Response.Write("(NYSE: WYL)") end if %> said that slowing semiconductor orders will cause it to disappoint analysts in its third quarter. Shares were off $3 7/8 to $29 1/2.
-- TRIMBLE NAVIGATION <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: TRMB)") else Response.Write("(NASDAQ: TRMB)") end if %>, specializing in satellite geo-positioning equipment, fell $2 5/8 to $15 5/8 after warning of an upcoming loss and announcing plans to lay off 10% of its workforce.
-- KOMAG INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: KMAG)") else Response.Write("(NASDAQ: KMAG)") end if %> shares tumbled $1 to $19 1/4 after the thin-film media manufacturer reduced its earnings forecasts by as much as 50% or more. Hambrecht & Quist upped the firm from "buy" to "strong buy."
-- METATEC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: META)") else Response.Write("(NASDAQ: META)") end if %> warned that its optical disks won't be bringing in as much revenue and earnings as expected. Shares were off $1 1/8 to $8 1/8.
-- COMPUCOM SYSTEMS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CMPC)") else Response.Write("(NASDAQ: CMPC)") end if %> joined the party, warning of slowing growth and falling $2 1/4 to $8 1/2.
UPS
Help-desk software developer REMEDY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: RMDY)") else Response.Write("(NASDAQ: RMDY)") end if %> surged $10 1/2 to $59 on company bullishness and on brokerage upgrades. Alex. Brown and Hambrecht & Quist both upped Remedy from "buy" to "strong buy," while H&Q raised its 1997 estimates from $1.10 per share to $1.44.
Disk drive-maker SEAGATE TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SEG)") else Response.Write("(NYSE: SEG)") end if %> drove its share price up $1 to $46 3/8 by announcing plans to buy back up to 7 million shares (nearly 7% of its float).
After taking a bath yesterday following flat same-store sales numbers, GAP <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GPS)") else Response.Write("(NYSE: GPS)") end if %> gapped up $1 1/8 to $30 1/8 today, added to Goldman Sachs's "recommended" list. Alex. Brown upped the retailer from "buy" to "strong buy," as well.
J.B. HUNT TRANSPORT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: JBHT)") else Response.Write("(NASDAQ: JBHT)") end if %> drove ahead $3/4 to $16 1/8 after Alex. Brown upgraded the freight and transportation concern from "neutral" to "buy." Yesterday TRISM INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: TRSM)") else Response.Write("(NASDAQ: TRSM)") end if %> agreed to buy Hunt's special commodities unit.
Shares of ophthalmic laser system developer SUMMIT TECHNOLOGY <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: BEAM)") else Response.Write("(NASDAQ: BEAM)") end if %> beamed up $7/16 to $6 1/4 after the company, enmeshed in legal squabbles with competitor VISX INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: VISX)") else Response.Write("(NASDAQ: VISX)") end if %>, sent its founder and Chief Executive Officer (CEO) packing. VISX jumped $2 1/4 to $20 3/4.
MEDTRONIC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MDT)") else Response.Write("(NYSE: MDT)") end if %> shares popped up $2 1/8 to $58 1/8 as Smith Barney initiated coverage with a "buy" rating.
DIANA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DNA)") else Response.Write("(NYSE: DNA)") end if %> advanced $3 1/4 to $37 on news that a fund manager bought 20,000 shares for his personal account at $20.50 per share, while his Funds bought $323,000 shares at an average price of $31.73. Asensio & Co. reiterated its "strong sell" recommendation for Diana.
Shares of INPHYNET MEDICAL MANAGEMENT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: IMMI)") else Response.Write("(NASDAQ: IMMI)") end if %> jumped $1 7/8 to $16 7/8 after the company agreed to manage healthcare for over 50,000 Floridian members of PHYSICIAN CORP. OF AMERICA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PCAM)") else Response.Write("(NASDAQ: PCAM)") end if %>.
DOWNS
Shares of ERD WASTE CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ERDI)") else Response.Write("(NASDAQ: ERDI)") end if %> were wasted to the tune of a 39% drop, falling $2 7/8 to $4 1/2 after the New York State Department of Environmental Conservation moved to close its Long Beach, N.Y. resource recovery facility.
BOISE CASCADE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BCC)") else Response.Write("(NYSE: BCC)") end if %> shares were shredded $3/4 to $31 1/2 on news of a Goldman Sachs downgrade from "trade buy" to "market perform."
Meanwhile, BOISE CASCADE OFFICE PRODUCTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BOP)") else Response.Write("(NYSE: BOP)") end if %> fell $5 1/2 to $17 1/4 after Dean Witter Reynolds cut its estimates substantially, on lower-than-expected sales.
Shares of SCICLONE PHARMACEUTICALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SCLN)") else Response.Write("(NASDAQ: SCLN)") end if %> succumbed to a round of profit-taking after the stock advanced strongly in recent days, following clearance to market its Zadaxin drug in China. Today shares tumbled $9/16 to $9 7/8.
PRIMADONNA RESORTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PRMA)") else Response.Write("(NASDAQ: PRMA)") end if %> were humbled today, falling $1 1/4 to $17 3/4 on a Hancock downgrade from "buy" to "hold," based on the "abrupt" departure of the company's President earlier this week.
Investors were selling shares of KENT ELECTRONICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KNT)") else Response.Write("(NYSE: KNT)") end if %> today, after the company warned of disappointing impending earnings and was cut from "buy" to "hold" by Stephens Inc. and from "buy" to "hold" by Smith Barney. Shares dropped $5 1/8 to $16 1/4.
FOOL PROTFOLIO STOCKS
Randy Befumo (MF Templar),
a Fool
Selena Maranjian (MF Selena)
another Fool