Shares in some of the world's biggest technology firms toppled in after-hours trading following a spate of profit warnings, signalling continued concern over the potential for a rebound in that industry.
Apple Computer Inc. and Advanced Micro Devices Inc. both suffered at the hands of investors after issuing after the bell warnings on earnings.
Ciena Corp. — in a release announcing shareholder approval for its purchase of ONI Systems Corp. — said third-quarter revenue could be "down meaningfully," prompting its shares to sink as well.
Apple shares dropped 11.5 per cent and Ciena stock fell 8.4 per cent, while AMD suffered the most, seeing its shares slip as much as 16 per cent.
AMD
In a statement Tuesday, AMD — the No. 2 chip maker — said it expects to report a "substantial" operating loss on weakness in the PC market, with revenue now forecast to come in well below Wall Street's estimates.
Sales for the quarter are expected to be between $620-million (U.S.) and $700-million, well behind the company's earlier guidance of $820-million to $900-million.
That shortfall, Sunnyvale, Calif.-based AMD said, will result in a "substantial operating loss" for the quarter. According to Thomson Financial/First Call, analysts had been expecting a loss of 9 cents a share for the three-month period.
"As we have seen in previous statements from a number of other companies, there is broad weakness in the personal computer market and it is adversely affecting AMD," AMD's chief financial officer Robert Rivet said in a statement.
Apple
Apple Computer, meanwhile, also guided lower for the quarter, saying it expects revenue to be down about 10 per cent as a result of softer sales to consumers as well as advertising and publishing businesses.
In a statement, Apple said it expects to report revenue of between $1.4-billion and $1.45-billion in the third quarter. That compares to its earlier forecast, which pegged revenue for the period at $1.6-billion.
Quarterly earnings are expected to be between 8 cents and 10 cents a share fully diluted, compared with earlier guidance which called for earnings of 11 cents or slightly better.
Ciena
Meanwhile, Ciena — which announced Tuesday that shareholders had given the green light to its purchase of ONI — said the two companies would cut about 225 jobs effective Wednesday and another 110 within the next three months as they integrate operations.
As well, the company warned it continues to operate in an "uncertain telecom environment."
"In this environment our business remains volatile and unpredictable, and our fiscal third quarter revenues will depend heavily on the timing of customer orders and acceptance of products for which we already have orders," the company said in a statement.
"It is possible, however, that depending on the timing of acceptance and customer orders, Ciena's third quarter revenues, including revenues derived from ONI, could be down meaningfully from Ciena's stand-alone second quarter revenues."
© The Globe and Mail
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