Weak Q4 Forecasts Send Tech Shares Down

by Christopher Freeburn | October 24, 2012 1:09 pm

Real America Index e1328569156142 Weak Q4 Forecasts Send Tech Shares Down[1]A sluggish economy is prompting computer and network equipment makers to trim their quarterly estimates as customers reduce spending on IT infrastructure.

Shares of Juniper Networks (NASDAQ:JNPR[2]) tumbled more than 7% after the company predicted current quarter earnings[3] of between 19 cents and 22 cents a share on revenue of between $1.1 and $1.13 billion. That missed Wall Street, which had expected of earnings of 24 cents a share on sales of $1.15 billion, Reuters noted.

Juniper said that it earned 16.8 million during the third quarter, down from $83.7 million last year. Adjusted EPS was 22 cents, which beat analysts by 5 cents. Revenue edged up 1% to $1.12 billion, which also exceeded forecasts.

A lower current quarter forecast sent shares of Broadcom (NASDAQ:BRCM[4]) down more than 2%. The company said that it expected revenue for the fourth-quarter[5] to range between $1.95 billion and $2.1 billion. Analysts had expected revenue of $2.11 billion.

Broadcom reported third-quarter revenue of $2.13 billion, up from $1.96 last year and surpassing the $2.09 billion that analysts had expected.

A reduced outlook also sent shares of EMC (NYSE:EMC[6]) down 2% after the company said that anticipates full year earnings[7] of between $1.68 and $1.70 a share on revenue of between $21.60 billion to $21.75 billion. That disappointed analysts who had expected a profit of $1.72 a share on revenue of $22.03 billion.

For the third-quarter, EMC posted a profit of $626.3 million and adjusted EPS of 40 cents, which fell short of the 38 cents Wall Street was looking for. Revenue during the quarter rose 6% to $5.28 billion, but missed the $5.46 billion analysts had forecast.

EMC is part of InvestorPlace‘s Real America Index[8], a list of companies — one from each state — whose performance provides a window on the health of the U.S. economy. EMC represents the state of Massachusetts[9] in the index.

In contrast to its parent, VMware (NYSE:VMW[10]), the publicly-traded unit of EMC, announced third-quarter earnings[11] that beat analysts estimates. The division earned $157 million during the quarter, down from $178 million last year. Adjusted EPS was 70 cents, which topped the 63 cents analysts were expecting. Revenue rose 20% to $1.13 billion, matching estimates.

VMware forecast current quarter revenue of between $1.26 billion and $1.29 billion. Wall Street anticipates revenue of $1.28 billion for the quarter. Shares of VMware rose more than 2% on the news.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2012/02/Real-America-Index-e1328569156142.jpg
  2. JNPR: http://studio-5.financialcontent.com/investplace/quote?Symbol=JNPR
  3. predicted current quarter earnings: http://www.reuters.com/article/2012/10/23/us-junipernetworks-results-idUSBRE89M1HN20121023
  4. BRCM: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRCM
  5. expected revenue for the fourth-quarter: http://articles.chicagotribune.com/2012-10-23/business/sns-rt-us-broadcom-earningsbre89m1dh-20121023_1_broadcom-chip-makers-cody-acree
  6. EMC: http://studio-5.financialcontent.com/investplace/quote?Symbol=EMC
  7. that anticipates full year earnings: http://www.reuters.com/article/2012/10/24/us-emc-results-idUSBRE89N13Q20121024
  8. InvestorPlace‘s Real America Index: http://investorplace.com/real-america-index/
  9. EMC represents the state of Massachusetts: http://investorplace.com/real-america-index/massachusetts-emc-corporation-a-tech-industry-original/
  10. VMW: http://studio-5.financialcontent.com/investplace/quote?Symbol=VMW
  11. announced third-quarter earnings: http://www.reuters.com/article/2012/10/23/us-vmware-results-idUSBRE89M1FW20121023

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