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Eye On Stocks
Eye On Stocks For Thursday, Jan. 20
Peter Kang, 01.19.05, 5:17 PM ET
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Despite a rise in listings for novelty food items, shares of eBay
(nasdaq:
EBAY -
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) fell hard in extended trading after the Internet auction giant projected 2005 earnings and revenue below Wall Street estimates. The stock was seen down more than 12 points in after-hours trading. Investors were disappointed with eBay's 2005 earnings guidance of $1.48 to $1.52 per share and net revenue of $4.25 billion to $4.35 billion. Analysts polled by Thomson First Call expected 2005 earnings of $1.61 per share and revenue of $4.37 billion. EBay also missed the fourth-quarter earnings estimate by a penny, reporting income of 33 cents per share, while revenue was in-line at $934 million. Fourth-quarter listings totaled 404.6 million, eBay said, compared with an estimate of 406 million by Credit Suisse First Boston. In addition, as predicted by some Wall Street analysts, eBay also announced a two-for-one stock split set for Feb. 16 to shareholders of record Jan. 31.
Qualcomm
(nasdaq:
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) fell 6% in the after-hours session on disappointing second-quarter guidance. The wireless company announced fiscal first-quarter earnings of 28 cents per share and revenue of $1.39 billion, compared with the analysts' consensus estimate of 27 cents per share and $1.402 billion. Qualcomm said it expects second-quarter adjusted earnings to range from 25 cents per share to 27 cents per share, below the Street estimate of 30 cents. Last week, CSFB maintained a "neutral" rating and $42.50 target price on Qualcomm. In our view, the current share price is already discounting optimistic 3G scenarios in Europe, China and North America and we continue to believe upside remains limited over the next six to 12 months," CSFB said. "We would look for evidence of improved emerging markets momentum or more aggressive WCDMA pricing by European operators to become more constructive in 2005."
AT&T
(nyse:
T -
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) will report fourth-quarter results tomorrow morning. The telecom services giant is expected to report earnings of 58 cents per share and revenue of $7.15 billion, compared with year-ago earnings of 43 cents and $8.01 billion. Earlier today, Morgan Stanley said quarterly earnings "will likely be a study in contradictions." AT&T is facing double-digit revenue declines, the research firm said, but could top consensus earnings expectations "due to aggressive cost cutting." Morgan Stanley, which maintained an "underweight" rating for AT&T, expects conservative 2005 guidance given uncertainties in the telecom industry.
Macromedia
(nasdaq:
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) reported third-quarter earnings in-line with the consensus but shares rose almost 5% in after-hours trading on the software firm's bullish fourth-quarter outlook. Macromedia reported quarterly earnings of 21 cents per share and revenue of $108.6 million, compared with analysts' forecast of 21 cents and $107 million. Fourth-quarter revenue is expected to range from $108 million to $113 million, compared with the Street estimate of $108 million. In addition, Macromedia, the developer of Flash technology, announced the appointment of Stephen Elop as chief executive. Previously Macromedia's chief operating officer, Elop takes over for Rob Burgess, who will retain his role as board chairman.
Symantec
(nasdaq:
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) announced third-quarter earnings above consensus estimates. The security software firm reported quarterly income of 24 cents per share and revenue of $695 million, compared with analysts' forecasts of 22 cents per share and $665 million. The company also guided fourth-quarter and 2005 earnings and revenue guidance slightly above expectations. Symantec announced in December its intention to acquire Veritas Software
(nasdaq:
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) for approximately $13.5 billion. Earlier this month, JP Morgan upgraded Symantec to "overweight" from "neutral" and said shares (then trading below $24) were at an attractive entry point. "We have liked the idea of the Veritas deal for Symantec's long-term, but have been waiting for a better valuation entry point to give us comfort accepting the headline risk of Microsoft entering the AV (antivirus) market in the second half of 2005, and the integration of two large software companies," it said. "We now believe we have reached an attractive level where we believe the upside is much better than the downside."
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