Wall Street Watch: Tech Bellwether Xyratex Sounds a Warning
Earnings season has yet to get started, but the disappointments are already trickling in. Xyratex (XRTX) is taking a hit after coming up short in its latest quarter and warning of near-term weakness.
Xyratex is a provider of enterprise data storage systems, making it a bellwether for corporate tech spending.
Its latest quarter was bad enough. Analysts were expecting an adjusted profit of $0.44 a share, just ahead of the $0.42 a share it posted a year earlier. Xyratex checked in on Tuesday night with a surprising decline there, ringing up adjusted net income of only $0.37 a share.
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Things get hairier as we approach the current quarter. Xyratex now sees adjusted earnings clocking in between $0.15 a share to $0.43 a share on $235 million to $285 million in revenue. It's a pretty wide range on both fronts, but it's apparently not wide enough. The average analyst target was for earnings of $0.49 a share on $328 million in revenue.
Ouch.
Other Things Worth Watching
• President Barack Obama and GOP challenger Mitt Romney will square off tonight in the first presidential debate of the season. It won't rattle any particular stocks during the day, but political rhetoric could certainly move stocks afterward. Is Obama still behind offering rebates to buyers of electric cars? Will Romney take a stand one way or another on the mortgage interest tax deduction? What will either candidate do about the fiscal cliff if elected? Regardless of where you may stand as we head to the polls next month, it is important to weigh the words of both contenders.
• Sourcefire (FIRE) is holding up well, but it's going to need a new hand at the helm. The provider of network security solutions announced after Tuesday's market close that CEO John Burris -- who was on a medical leave of absence earlier this year -- will be leaving the company immediately. It will be an unfortunate retirement for Burris, but he leaves the company in good shape. Sourcefire adds that its preliminary financial results for the quarter that ended this past weekend will come in above the high-end of the revenue and adjusted earnings guidance that it issued over the summer.
Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. Motley Fool newsletter services have recommended buying shares of Sourcefire.
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