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Stocks to watch Tuesday
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July 10, 2000: 7:49 p.m. ET
Krispy Kreme sees strong results, Reynolds, Santa Cruz warn of shortfalls
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NEW YORK (CNNfn) - Earnings pre-announcements shared the spotlight with quarterly reports after the bell on Monday and included potentially bullish news from donut maker Krispy Kreme and Web infrastructure company Alteon Websystems.
Conversely, Reynolds & Reynolds said it expects its quarterly results to fall short of Wall Street expectations, as did Aspect Communications. In addition, market watchers are seen keeping their eyes on Axcelis Technologies Inc. ("ACLS"), a semiconductor equipment manufacturer, which raised $341 million through an initial public offering on Monday.
Krispy Kreme
Krispy Kreme Doughnuts Inc. said it expected its second-quarter same-store sales growth would be in the mid-teens range, above analysts' expectations of high single digit growth.
"We believe that the significant publicity surrounding our initial public offering in April carried over into the succeeding months and contributed to this higher than expected growth," chief executive Scott Livengood said in a statement released after the close of market.
The Winston-Salem, N.C. company said some of its stores that were scheduled to close for remodeling during the quarter stayed open longer than planned, contributing to the high growth rate.
The percentage growth rate following the second quarter will be in the mid-
single digits, in line with expectations, the company said.
Shares of Krispy Kreme (KREM: Research, Estimates) closed down 6-3/8 at 73-1/8 on the Nasdaq stock market.
Alteon Websystems
Alteon WebSystems Inc. said it reached operating profitability in its fourth quarter, which ended June 30, three quarters ahead of previous expectations.
The company, whose products include Web switches, server adapters and traffic management software, also said that revenue for the quarter was about $51 million, an 80 percent sequential increase over revenue for the previous quarter.
A consensus of analysts surveyed by First Call expected the company San Jose, Calif.-based company to report a loss of $0.01 a share in the fourth quarter.
"Web switch revenue grew approximately 90 percent sequentially and it entered the first quarter of fiscal 2001 with the strongest backlog in the history of the company," Alteon said in a statement.
Alteon saw strong growth across all product lines, across all geographies worldwide and across all customer segments, the company said.
Alteon said that while it expects to see continued strong revenue growth in future quarters, it does not expect to sustain the very high growth rate seen in the just-ended quarter.
Shares of Alteon (ATON: Research, Estimates) closed up 5-1/16 at 95-7/8, and jumped to over 100 in after hours trade.
Reynolds & Reynolds
Reynolds & Reynolds Co., which provides computer systems and services for the auto and health-care markets, said it expected its third-quarter profits to be about 31 cents per share, well below Wall Street expectations.
Wall Street analysts' consensus estimate was a profit of 38 cents per share, according to First Call.
The Dayton, Ohio,-based company said it expects the results of its core automotive operations to be in line with estimates before a reorganization charge of 2.5 cents per share.
Reynolds and Reynolds said third-quarter profits from discontinued operations are expected to be about 6 cents per share lower than those in the second quarter, partly due to lower sales and a customer bankruptcy.
Shares of Reynolds & Reynolds (REY: Research, Estimates) closed at 17-1/2, down 1/4, on Monday.
Intuit
Financial software provider Intuit Inc. said it plans to buy the shares of privately held technology company Venture Finance Software Corp. it does not already own for $120 million to $150 million in cash.
Intuit initially acquired a stake in the privately held technology company in May 1998, and the final purchase price will be calculated based on a formula negotiated at that time.
The deal is expected to close during Intuit's first quarter of fiscal 2001. Further details were undisclosed.
Based in Mountain View, Calif., Virtual Finance Software developed technology that enabled Intuit to move functions of its popular Quicken financial software from desktop computing to Web-based applications.
The technology has enabled Mountain View-based Intuit to offer services through which its customers can view and pay bills online, as well as monitor and manage their personal finances, Intuit said.
Shares of Intuit (INTU: Research, Estimates) closed up 5/16 at 44-3/4 on Monday.
Santa Cruz Operation
Computer network software company Santa Cruz Operation Inc. warned of greater-than-expected net loss for its fiscal third quarter in the face of weak markets and delayed government contracts.
Santa Cruz Operation said it expects a net loss of 50 cents to 55 cents a share on sales ranging from $26 million to $28 million for its fiscal third quarter ended June 30.
Analysts had expected the company to report a net loss of 13 cents per share, according to First Call. In the same period one year ago, Santa Cruz Operation generated a net profit of 13 cents per share.
In a statement, the Santa Cruz, Calif. company cited a slower-than-expected recovery in sales after Y2K computer concerns began to wane.
Shares of Santa Cruz (SCOC: Research, Estimates) closed down 5/16 to 5-11/16.
After-hours quotes on CNNfn
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-- from staff and wire reports
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