Today: Yahoo and VMware rebound from early losses in a busy day for Silicon Valley earnings reports. Also: Extreme Networks switches CEOs.
The Lead: Yahoo, VMware and Intuitive Surgical fall after earnings
Yahoo and VMware turned around early losses after Tuesday’s crop of Silicon Valley earnings reports, and Yahoo CEO Marissa Mayer detailed recent layoffs and new possibilities for Yahoo Japan.
Yahoo missed expectations for both profits and revenues with its quarterly financial statement Tuesday. The Sunnyvale Web firm reported profits of $21.2 million, or 2 cents a share, on sales of $1.23 billion; after adjustments, Yahoo said it had profits of 15 cents a share on revenues of $1.04 billion. Analysts had expected adjusted profits of 18 cents a share on sales of $1.06 billion, according to Thomson Reuters.
Yahoo shares initially fell more than 2 percent in late trading, but those losses turned to gains later in the afternoon, after Mayer dropped some news that investors wanted to hear. After reports of a prolonged round of selective layoffs at Yahoo offices around the world in the past few months, the CEO said in Tuesday’s conference call that she had cut about 1,100 workers in the first quarter of 2015 for a total of 2,800 net reductions since she arrived.
Mayer also revealed that Yahoo had hired advisers to look into the company’s stake in Yahoo Japan, which investors see as another big Asian asset that Yahoo could cash in on after spinning off its stake in Chinese e-commerce giant Alibaba. Mayer said the company hopes to “maximize value” from Yahoo Japan after “careful study,” and she plans to announce results on a future conference call.
After falling in early after-hours trading, Yahoo shares gained more than 1 percent after the news about layoffs and Yahoo Japan. The stock closed Tuesday with a 0.4 percent decline at $44.49.
In other earnings results:
— VMware followed a similar path Tuesday, falling more than 2 percent in immediate late trading before rebounding to gains as executives laid out information on a conference call. The Palo Alto virtualization company earned $196 million, or 45 cents a share, on revenues of $1.51 billion in the first quarter, its slowest revenue growth in nearly two years. The stock — which closed with a 1.3 percent advance at $85.40 — initially dove more than 2 percent, but shares ended up trading for more than $86 after VMware discussed its forecast and promised $1 billion in 2015 stock buybacks in a conference call.
— Intuitive Surgical earned $97 million, or $2.57 a share, on sales of $532.1 million, and shares fell about 4 percent after closing with a 1.1 percent decline at $546.73.
— Super Micro suffered a big dive in the last hour of trading, closing with a 6.1 percent decline at $34.81, then declined more than 2 percent in late trading after its earnings report hit. The San Jose company revealed profits of $23.1 million, or 44 cents a share, on sales of $471.3 million.
— Dolby reported profits of $58 million, or 56 cents a share, on sales of $271.9 million, and shares gained slightly from a closing price of $38.12.
— Infinera, which is trying to acquire a Swedish networking firm, earned $12.4 million, or 9 cents a share, on sales of $186.9 million. Shares increased about 2 percent after closing with a 1.4 percent gain at $20.22.
— Proofpoint lost $21.7 million, or 56 cents a share, on sales of $57.8 million, and the security company’s stock dropped more than 4 percent after closing at $58.90.
SV150 market report: Fortinet soars to record, new CEO at Extreme
Stocks fell overall Tuesday after strong gains to kick off the week, but Silicon Valley tech stocks gained as Fortinet soared after its earnings.
Monday’s batch of five SV150 earnings reports resulted in big swings, with the companies experiencing the two largest declines and three of the top four gains in the index Tuesday. Fortinet roared to record highs after beating expectations, gaining 10 percent to $38.08 as spending on security software soars. The only major Silicon Valley tech firm to have a better day was fellow Sunnyvale company Rambus, with the chip firm adding 11 percent to $14.18 after beating revenue expectations. Fremont’s Lam Research also enjoyed post-earnings gains, with an 8.1 percent increase to $77.84. On the other side, Hayward’s Ultra Clean plummeted 19.2 percent to $5.52 and Sanmina lost 11.4 percent to $20.69 after their reports.
Extreme Networks announced that CEO Chuck Berger had resigned and the San Jose networking company appointed board chairman Ed Meyercord to the top spot; shares rose 0.8 percent to $2.53. Hewlett-Packard made a couple of deals Tuesday, partnering with next-generation security companies including Milpitas-based FireEye and selling off its Snapfish photo business; HP stock fell 0.6 percent to $33.21 while FireEye gained 2.5 percent to $43.49. As analysts debated whether Gilead Sciences should spend billions to acquire Boston’s Vertex Pharmaceuticals, excited investors sent the Foster City company’s shares up 4.5 percent to $105.20.Twitter dropped 0.2 percent to $51.32 while launching new tools to stop abuse on the social network, and Netflix fell 1.2 percent to $560.44 while seeking to have more ownership of its original programs. Tesla Motors advanced 2 percent to $209.41 in regular trading, and Bloomberg News reported after the bell that its upcoming launch event will focus on residential batteries, as expected.
Up: Gilead, EA, Applied Materials, Yelp, SolarCity, Zynga, Tesla, SanDisk, VMware, SunPower
Down: AMD, GoPro, Netflix, Intel, Pandora, HP, Apple
The SV150 index of Silicon Valley’s largest tech companies: Up 5.63, or 0.32 percent, to 1,768.79
The tech-heavy Nasdaq composite index: Up 19.5, or 0.39 percent, to 5,014.1
The blue chip Dow Jones industrial average: Down 85.34, or 0.47 percent, to 17,949.59
And the widely watched Standard & Poor’s 500 index: Down 3.11, or 0.15 percent, to 2,097.29
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