Tech investors might have been fixated on Netflix's (NAS: NFLX) 22% explosion today; the company turned the tide on streaming customer defections and posted a stellar quarter. However, aside from Netflix's gain, the Nasdaq had a pretty soft day, closing down 0.46%. Rounding out the losers was flash-memory provider SanDisk, which posted weak results in large part because high sales from Apple crushed other mobile companies SanDisk supplies. Likewise, Logitech also posted disappointing earnings as weakening PC sales in markets like Europe and the United States led to a 5% sales fall-off from last year.
Technology is rapidly evolving. While some companies are claiming to make the jump, earnings season often sorts out the contenders who will rule the next sea change in technology against the pretenders that aren't seeing traction. With that in mind, let's take a peek at four exciting technology companies that all in one way or another are at the forefront of growth fields in technology and see why they're either soaring or plunging after hours.
Informatica (NAS: INFA) : The company posted revenue of $227 million and EPS of $0.47, beating analyst estimates of $226 million in sales and EPS of $0.44. Its full-year revenue guidance was unchanged. The fact that such a modest beat -- and lack of upped guidance -- is producing a 6% after-hours gain seems a bit generous. Free cash flow dropped from last year, and the company's growth in unearned revenue -- an important measure of new long-term contracts for IT companies -- declined from last year. If anything, Informatica is rising because it shed more than 25% in the past six months, thanks in large part to IT-spending uncertainty, and investors were expecting management would have a hard time sticking to its full-year targets.
Riverbed Technology (NAS: RVBD) is sinking by a whopping 14% after hours. While the company exceeded expectations for the current quarter, its first-quarter guidance of $0.19 to $0.20 was below estimates of $0.25 per share. Riverbed came into earnings trading at a sky-high 88 times earnings, and when you're a growth company that can't meet expectations in a see-sawing market, you get hit hard. While the company appears to be hitting a minor bump in the road, it's still the dominant player in a powerful niche of technology. Throw in the fact the company is in the midst of a major product refresh to its flagship Steelhead appliance, and that Riverbed is expanding to an adjacent market with a new product, and I think investors are overreacting to a short-term blip in earnings. Long story short, Riverbed's placement at the center of a rapidly expanding market looks secure.
After preannouncing that it would trounce earnings, Cirrus Logic (NAS: CRUS) reported earnings tonight in line with its previous boost to guidance and guided above expectations for next quarter. Then the stock promptly plunged 7% in after-hours trading.
After that drop, earnings settled back in to a loss around 3%. While the drop might seem unwarranted to investors it's worth noting that Cirrus Logic is up 37% over the past month. That jump comes largely on the back of riding Apple's record quarter. Cirrus Logic now sees a stunning 70% of its revenue from Apple. While that's a huge risk, it also means that if Apple trumps earnings estimates again next quarter, it should drag Cirrus ahead with it.
Finally, Juniper Networks (NYS: JNPR) stepped up to the earnings plate tonight and also whiffed. The company had already pre-warned that the quarter's earnings would come in light, but its guidance for next quarter also scared investors. The telecom sector has been reining back capital spending, which has been a drain on Juniper. Unfortunately, with AT&T and Verizon both posting uninspired earnings this week, the bottom in the market could still be a long way off.
There's your checkup on tonight's earnings. If you're looking for one tech company riding the technology revolution of the decade, The Motley Fool has a just released free report on mobile named "The Next Trillion-Dollar Revolution" that details a "hidden" component play inside mobile phones that also is a market leader in the exploding Chinese market that Intel praised for leading it to success last quarter. Hundreds of thousands have requested access to previous reports, but you can be among the first to access this just-released report -- and it's free.
At the time thisarticle was published Eric Bleeker owns shares of no companies listed above. The Motley Fool owns shares of Cirrus Logic, Logitech International, Intel, and Apple.Motley Fool newsletter serviceshave recommended buying shares of Informatica, Intel, Netflix, Logitech International, Riverbed Technology, and Apple, writing covered calls in Riverbed Technology and Logitech International, and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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