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Tough Thursday for techs
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April 2, 1998: 10:59 a.m. ET
Several technology shares punished after disappointing earnings warnings
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NEW YORK (CNNfn) - It was a dreary start for several Nasdaq technology stocks Thursday as they stepped forward to receive their punishment from investors after warning of weaker earnings.
The hardest hit of the group was Rogue Wave Software Inc. The Boulder Colo.-based maker of development software used with Java and C++ programming languages said it expected its fiscal second-quarter earnings to be 4 cents to 5 cents per diluted share (RWAV).
(Chart Rogue Wave's stock trading Thursday)
The First Call consensus of analysts was looking for Rogue Wave to make 13 cents per diluted share. Its stock was down 6-1/4 to 9-1/4 in early Thursday trading.
In the security software sector, Security Dynamics Technologies Inc. shares (SDTI) dropped 12-15/16 to 29-9/16 after the company said its first-quarter results will fall short of expectations.
The Bedford, Mass.-based company forecasts earnings of about 14 cents per share but Wall Street was hoping for 19 cents per share. The network and data security firm blamed a failure to close some of its sales over the quarter.
(Chart Security Dynamics stock Thursday)
"As a result of the shortfall, we will need to perform further analysis to determine whether any adjustments to our business plan need to be made for the balance of 1998," said Charles R. Stuckey, Jr., chairman, president and CEO of Security Dynamics.
SmartTalk TeleServices Inc., a phone card company, said after markets closed Thursday that it will post a first-quarter loss of about $40 million, or 5 cents per share. The prediction strongly disagreed with analysts' estimates of 6 cents per share.
Revenues for both the quarter and the year were hurt by its acquisition of call center operations from ConQuest and also by lower-than-expected promotional revenues.
(Chart SmarTalk stock trading Thursday)
The company plans to launch prepaid cellular products during 1998, but doesn't expect to get any earnings help from that until at least the third quarter. Its stock (SMTK) lost 8-1/8 to 23 in early trading.
Rounding out the ring of bad news was Pittsburgh-based Respironics Inc., a maker of medical devices. It said it looks for third- quarter earnings per share of between 12 cents to 14 cents. First Call estimates were for 29 cents per share.
(Chart Respironics stock trading Thursday)
Currently, the government is developing guidelines for a certain line of medical devices made by Respironics, among others. Until it is determined what kinds of those devices are covered by governmental medical programs, health-care providers have been reluctant to purchase them.
That reluctance has held down some of Respironics' sales, the company said, contributing to the low results. Respironics shares (RESP) fell 10-9/16 to 18-1/2 as trading began.
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