US markets waver on mixed corporate results

US markets faltered yesterday amid mixed news on the corporate reporting front.

The blue-chip Dow Jones industrials index was stagnant while the Nasdaq was dragged down by faltering sentiment in technology stocks.

Telecoms equipment group Tellabs shed close to 10 per cent despite posting a reduced loss in the fourth quarter of 2003. The company, which closed its Irish operations at Shannon and Drogheda in 2002, reported a net loss of $23.2 million (€18.2 million) or six US cents per share against 21 cents a share in the same period in 2002.

Stripping out restructuring costs, the group recorded a three cent per share profit. The figures were ahead of forecasts.

Data storage group EMC was also slightly weaker despite turning in a profit in the three months to the end of December compared with a loss last time around.

EMC, which employs about 1,300 people in Cork, reported improved consumer demand and a boost from the fourth-quarter acquisition of two software firms, Legato Systems and Documentum. Dollar weakness also boosted sales by 5 per cent.

It said that fourth-quarter net income was $220.1 million. or nine cents per share, compared with a loss of $63.92 million, or three cents per share a year earlier. Revenue rose to $1.86 billion, up from $1.49 billion a year earlier. Analysts had expected earnings of seven cents per share and revenue of $1.78 billion.

The group is looking for 25 per cent growth in sales this year.

Shares in programmable microchip producer Xilinx shot higher following a return to the black in the three months to the end of December last.

Xilinx, whose chips are used in a variety of electronics, said the recovery from a loss in the same period in 2002 was driven by the economic recovery and a jump in sales into the communications industry.

The company, which employs 400 people at its European headquarters in Dublin, said sales rose 29 per cent to $365.6 million, well above expectations, and predicted higher revenue in the current quarter. Xilinx shares were 6.7 per cent ahead at $43.10.

In its fiscal third quarter, Xilinx reported a profit of $69.4 million, or 19 US cents a share, compared with a year-earlier loss of $3.4 million, or one cent a share, just ahead of forecasts.

Its optimism was not reflected by software group Siebel Systems, which reported a 9 per cent gain in quarterly earnings on revenue that slipped 7 per cent as the company clinched more contracts for its sales management software but with smaller dollar values.

Siebel, which employs about 100 people in a sales and marketing operation in Dublin, said the past quarter showed a turnaround in corporate spending on information technology and the gains from its earlier cost-cutting as it posted results in line with the higher forecast it had given earlier this month.

But it offered a cautious forecast for earnings in the current quarter compared to Wall Street expectations and its stock slipped.

Net profit for the fourth quarter was $41.5 million, or eight US cents per share, compared with a net loss of $38 million a year earlier. Revenue fell to $366.7 million from $394.7 million a year ago, the company said.

European technology stocks rallied yesterday as solid results from handset and engineering heavyweight Siemens and a bullish forecast from software firm SAP buoyed the sector.

Siemens said profits in its first quarter were better than expected, with operating profit up 24 per cent from a year-ago period at €1.36 billion, beating consensus forecasts.

(Additional reporting, Reuters)