<% ' AvantGo:MarketMidday %>DJIA 8828.71 +122.56 (+1.41%) S&P 500 1125.39 +14.55 (+1.31%) Nasdaq 1821.91 +33.48 (+1.87%) Value Line ndx 884.51 +13.32 (+1.53%) 30-Year Bond 103 22/32 -19/32 5.25% Yield<% ' AvantGo:End %>
Lunchtime News | |
Related Items | |
|
FOOL PLATE SPECIAL
An Investment Opinion
by Dale Wettlaufer
Disks Drive
<% ' AvantGo:FoolPlate %>Disk drives are moving again, more than a year after the industry was decimated by price cuts from Korean and Asian producers and then by an accumulation of inventory in the distribution and retail channels. When product isn't moving, the disk drive industry suffers, but it also doesn't help when your troubled competitors from Korea are getting rid of inventory at almost any price to raise cash. To draw a parallel, De Beers <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DBRSY)") else Response.Write("(Nasdaq: DBRSY)") end if %> and gold producers aren't exactly excited about Russia's cash struggle and its sales of massive amounts of diamonds and gold.
The entire sector has begun to firm up in the last 10 to 15 trading sessions, with Seagate <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SEG)") else Response.Write("(NYSE: SEG)") end if %> leading the way out. Today, the world's largest disk drive company is up $1 3/16 to $28 7/8. Quantum <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QNTM)") else Response.Write("(Nasdaq: QNTM)") end if %> is up $1 3/4 to $20 1/16 today and Western Digital <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WDC)") else Response.Write("(NYSE: WDC)") end if %> is up $1 3/4 to $14 3/8 after jumping 20% yesterday. Rather than one huge catalyst, a confluence of factors have manifested themselves in the revival of these stocks after a fitful slumber. In its recent Q3 earnings report, Maxtor <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: MXTR)") else Response.Write("(Nasdaq: MXTR)") end if %> reported strong operating leverage and said that its own inventories and channel inventories were thinning out. Quantum at the same time reported that it would cut off its head-making joint venture with MKE, which isn't necessarily a positive for the entire industry, but it is for Quantum. Computer products distributor CHS Electronics <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HS)") else Response.Write("(NYSE: HS)") end if %>, which is up $2 7/16 to $17 3/4 today after a strong earnings report on Monday night, has reported on inventory health for two quarters now and serves as a good barometer on product allocation issues.
Another incremental bit of information coming out today is from head suspension assembly manufacturer Hutchinson Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HTCH)") else Response.Write("(Nasdaq: HTCH)") end if %>, which reports encouraging progress and outlook in volume. In addition, the company also reported excellent progress with its trace suspension assembly products, which can help to drive ahead seek times and drive capacity. Finally, there's the obvious volume growth at the large PC companies. Volume growth should be ahead 13-15% this year, after another year of dire forecasts. The drive industry's slump over the last year has been somewhat of a replay of past cycles, though it's been more pronounced with vicious inventory reduction programs killing pricing. With some capacity reigned in, and marginal players reducing their commitment or getting out of the industry, and rogue inventory having been liquidated, hopefully things are looking better. If the PC industry stays healthy and no fringe players mess up things in the drive industry, this upward move is not the last one for the major disk drive players.<% ' AvantGo:End %>
<% ' AvantGo:Ups %>Casual clothing designer Tommy Hilfiger Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TOM)") else Response.Write("(NYSE: TOM)") end if %> hip-hopped its way $4 3/4 higher to $51 1/4 after reporting fiscal Q2 EPS of $1.20 versus $0.77 (pro forma) a year ago, beating the Street's mean estimate by a dime. The company said the integration of licensees Pepe Jeans USA and Tommy Hilfiger Canada, which were acquired in May, is "proceeding very smoothly."
Internet portal firm Yahoo! <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: YHOO)") else Response.Write("(Nasdaq: YHOO)") end if %> gained $5 5/16 to $147 7/16 after the company's Yahoo! Europe arm formed an alliance with telecommunications firm British Telecommunications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BTY)") else Response.Write("(NYSE: BTY)") end if %> to launch a U.K. version of Yahoo! Click, which is a pay-as-you-go Internet access service and Web guide. The service is scheduled to be launched in the U.K. later this month.
Entertainment and consumer products direct marketer K-tel International <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KTEL)") else Response.Write("(Nasdaq: KTEL)") end if %> danced up another $2 9/16 to $15 13/16 after rising yesterday on news that it will operate a co-branded online music store on the namesake Web site of Playboy Enterprises <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PLA)") else Response.Write("(NYSE: PLA)") end if %>. Last night, K-tel said its new president will be Lawrence Kieves, who is a cousin of Chairman and CEO Philip Kives.
International telecommunications carrier Pacific Gateway Exchange <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PGEX)") else Response.Write("(Nasdaq: PGEX)") end if %> gained $9 3/8 to $38 1/2 after Salomon Smith Barney started coverage with a "buy" rating and a 12-month price target of $60 per share.
Electronic design automation (EDA) tools developer Cadence Design Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CDN)") else Response.Write("(NYSE: CDN)") end if %> marched $2 3/16 higher to $22 3/16 after saying it will take a roughly $36 million restructuring charge in Q4 to account for a 12% reduction in its global workforce. The company is hoping the restructuring will trim $8 million in costs from its Q4 results and result in another $60 million in cost savings in fiscal 1999.
Poultry producer and processor Tyson Foods <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TSN)") else Response.Write("(NYSE: TSN)") end if %> hatched a $1 1/2 gain to $25 1/2 after Merrill Lynch raised its near-term rating on the company to "buy" from "accumulate," citing in a research note the firm's "dominant market share and improving cost structure."
Digital subscriber line (DSL) systems designer Orckit Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ORCTF)") else Response.Write("(Nasdaq: ORCTF)") end if %> advanced $1 11/16 to $16 5/8 after signing a sales and marketing agreement with telecommunications equipment maker Lucent Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LU)") else Response.Write("(NYSE: LU)") end if %>, which will sell Orckit's Asymmetric DSL products to Lucent clients in Europe, Africa, and the Middle East. Lucent was up $3 3/8 to $85 9/16 as well.
Casino operator Station Casinos <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STN)") else Response.Write("(NYSE: STN)") end if %> rolled $1 3/16 higher to $8 after Credit Suisse First Boston raised its rating to "buy" from "hold." Also, Bear Stearns upgraded the company to "attractive" from "neutral."
Spirits and entertainment company Seagram Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VO)") else Response.Write("(NYSE: VO)") end if %> bubbled up $1 5/16 to $34 11/16 after reporting fiscal Q1 EPS of $0.27 (excluding gains and discontinued operations), which was below the $0.32 posted last year but ahead of the First Call mean estimate of $0.24. Earnings before interest, taxes, depreciation, and amortization (EBITDA) slid 4% in the quarter $415 million, due mostly to a 24% decline in EBITDA attributed to the firm's spirits and wine business.<% ' AvantGo:End %>
<% ' AvantGo:Downs %>Photronics Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PLAB)") else Response.Write("(Nasdaq: PLAB)") end if %>, which makes photomasks used in the production of semiconductors, tumbled $3 3/16 to $17 3/8 after it said sagging fiscal Q4 sales are expected to pull EPS down to between $0.10 and $0.14, well off the market's $0.23 consensus projection. "The lackluster pace of design activity and competitive pressures continued to affect our business as our customers deal with the prolonged downturn affecting the global semiconductor industry," said CEO Michael Yomazzo.
Allergy and asthma drug company Dura Pharmaceuticals <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DURA)") else Response.Write("(Nasdaq: DURA)") end if %> gasped for a $2 1/16 loss to $10 5/16 after it said it has received a letter from the Food and Drug Administration saying that it won't approve the company's next-generation asthma inhaler unless "certain deficiencies" are addressed. Dura now doesn't expect to be able to launch the product before 2000, although CEO Cam Garner said the company hadn't expected the inhaler to contribute to earnings during 1999. Hambrecht & Quist downgraded Dura to "buy" from "strong buy."
Coronary stent and related medical devices maker Boston Scientific Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BSX)") else Response.Write("(NYSE: BSX)") end if %> lost $3 3/8 to $43 this morning after falling $5 7/8 yesterday before being halted. After the halt, the firm said it has discovered accounting problems in its Japanese operations that have resulted in $40 million to $50 million of improperly booked sales in the first nine months of fiscal 1998. For a closer look at the situation, check out last night's Evening News.
Fiber-optic transmission products maker Ortel Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ORTL)") else Response.Write("(Nasdaq: ORTL)") end if %> dropped $2 to $10 3/4 after it said it expects to report a net loss for fiscal Q2 when it announces results Dec. 1. The extent of the loss will be known at the end of an ongoing review of operations. Ortel already plans to stop producing 980nm pump lasers for telecommunications applications, which CEO Wim Selders said is estimated to produced a "less than acceptable return on our investment." Analysts currently expect Ortel to report Q2 EPS of $0.07.
Office products and supplies company Corporate Express <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CEXP)") else Response.Write("(Nasdaq: CEXP)") end if %> sank $3 7/8, or 35%, to $7 3/16 after it said yesterday evening that Q3 EPS are expected to fall below Wall Street's mean estimate. Disappointing performance from several non-core units -- primarily delivery and U.K. operations -- is expected to account for a shortfall of about $0.07 per share for the quarter. A First Call survey of five analysts currently projects the company's Q3 EPS at $0.16, $0.03 above year-ago levels.
American Coin Merchandising <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMCN)") else Response.Write("(Nasdaq: AMCN)") end if %>, which operates skill-crane machines that dispense toys, jewelry, and other items, dropped $6 1/16 to $10 1/16 today. The company said it expects Q3 EPS to be below second-quarter levels as amortization of goodwill from recent acquisitions jacked up general and administrative expenses, which are seen climbing into 1999. Two analysts had predicted a mean Q3 EPS of $0.23, up from Q2's $0.21 result.
Dental and medical digital radiographic imaging systems developer Schick Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SCHK)") else Response.Write("(Nasdaq: SCHK)") end if %> slid $3 9/16 to $16 3/8 after it reported preliminary fiscal Q2 revenues of $14.2 million, up from $8.2 million last year but held back slightly because $2.5 million in orders processed by the company on the final day of the quarter were booked as Q3 revenue. Schick plans to report Q2 results after the market's close today.
Imaging and data storage technologies company Imation Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IMN)") else Response.Write("(NYSE: IMN)") end if %> fell $1 3/16 to $17 3/16 after it said poor European performance in Q3 makes it "cautious for the fourth quarter, which could show a similar operating result to the third quarter." The company reported Q3 EPS of $0.18 (before one-time items), a dime higher than last year but a penny off estimates. Wall Street currently projects Q4 EPS of $0.35.
Steinway Musical Instruments <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LVB)") else Response.Write("(NYSE: LVB)") end if %> didn't sound that great this morning, wailing $2 3/4 to $20 3/16 after it said slow export sales, particularly to Asia, have lead to a domestic oversupply, which CEO Dana Messner expects will impact results "well into 1999." Steinway reported Q3 EPS of $0.35, a penny ahead of Wall Street projections and better than last year's $0.28.
Earnings Movers
Boron, LePore & Associates <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: BLPG)") else Response.Write("(Nasdaq: BLPG)") end if %> down $1 1/2 to $27 1/4; Q3 EPS: $0.24 vs. $0.13 last year; Estimate: $0.22
Coach USA Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CUI)") else Response.Write("(NYSE: CUI)") end if %> down $1 15/16 to $24 1/2; Q3 EPS: $0.81 (before one-time items) vs. $0.60 last year; Estimate: $0.81
Waste Industries <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WWIN)") else Response.Write("(Nasdaq: WWIN)") end if %> down $3 1/8 to $19 1/8; Q3 EPS: $0.23 (pro forma) vs. $0.16 last year; Estimate: $0.24<% ' AvantGo:End %>
Please see the Motley Fool's Conference Calls page for call information and links to synopses.
Click here for continually updated Portfolio Numbers.
See something moving a stock that we didn't cover?
E-mail the Fool News Team
and we will start working on the story.
Unfortunately, we cannot answer every e-mail
or respond to individual questions.
|
Contributing Writers Yi-Hsin Chang (TMF Puck), a Fool Brian Graney (TMF Panic), another Fool David Marino-Nachison (TMF Braden), a new Fool
Editing |