Tech Stocks Soar on Strong Quarterly Results
Several Orange County technology stocks surged Thursday, buoyed by solid quarterly financial performances and a strong stock market overall.
Shares of Broadcom Corp., QLogic Corp. and Newport Corp. racked up double-digit percentage gains a day after unveiling strong quarterly financial performances.
They helped propel the Orange County Bloomberg index to a gain of nearly 20 points, closing at 370.26 to recoup most of the losses absorbed over the last two weeks.
The index of 125 stocks, which is heavily weighted with technology issues, surged as technology stocks in general staged a dramatic rebound Thursday, lifting the Nasdaq composite index 247.04 points, or 7.79%, to 3,418.60, the third biggest percentage gain ever.
In Orange County, tech stocks dominated the list of big gainers, accounting for nine of the 10 biggest percentage moves. Overall, 73 of the index’s stocks moved higher, while only 28 lost ground and 24 were unchanged.
QLogic was one of the local market’s best performers, surging $19.56, or 28%, to $90.44 in Nasdaq trading. The Aliso Viejo designer of chips and circuit boards that link computers and data-storage systems reported second-quarter earnings of 24 cents a share, excluding charges, surpassing analysts’ estimates of 22 cents.
Broadcom’s stock rose $24.75, or 12%, to $234.13 a share, a day after the Irvine maker of computer chips for cable modems posted huge gains in operating income and revenue that trounced analysts’ estimates.
Broadcom’s third-quarter sales more than doubled to $319.2 million as profit, excluding acquisition costs, climbed to $78.7 million, or 30 cents a share. Analysts had expected Broadcom to earn 24 cents a share, excluding acquisition costs, on estimated sales of $282 million.
Broadcom is benefiting from higher sales of its chips to Motorola Inc., Cisco Systems Inc. and others. The company, which is the top maker of chips for digital cable set-top boxes, is using its high-flying stock to buy makers of chips and expand into the market for large telecommunications networks.
The quarter “was a blowout,” said Venu Reddy, an analyst at Waddell and Reed Financial Inc., which owns about 1 million Broadcom shares. “It looks like the service providers are accelerating set-top box deployments.”
Sales could top $2 billion next year, said analyst Alex Gauna of Banc of America Securities.
Newport Corp.’s stock also climbed after the Irvine maker of precision components and instruments reported that net income more than quadrupled in the third quarter on an 86% spurt in sales. The shares closed at $146, up $15.50, or nearly 12%.
Even Conexant System’s stock benefited from the rally after slumping early in the session to a 52-week low of $24.25. The Newport Beach chip maker report fourth-quarter earnings that met Wall Street’s target, but warned that sluggishness in two crucial areas could put a dent in results for the current quarter.
The stock rallied to close at $29.48, up $3.17, or 12%, in heavy trading. Nearly 23 million shares changed hands, making Conexant the 17th most active stock in U.S. markets.
Another high-profile tech stock, Emulex Corp., climbed $18.06 a share, or nearly 14%, to $148, even though the Costa Mesa company didn’t release its quarterly results until after the market closed.
After the developer of high-speed data storage products reported that earnings nearly doubled on a 92% increase in revenue, the shares jumped as high as $160 in after-hours trading on Nasdaq.
Bloomberg News was used in compiling this report.
* O.C. STOCKS SOAR
Tech shares fuel big gain in O.C. Bloomberg index. C3
