The Best (And Worst) First-Quarter Technology Vendor Stocks

Tech Stock Gainers Slightly Outnumber Losers In Q1

It's been a long, cold winter in much of the country and for some IT vendors it's been a tough three months on Wall Street. Of the 36 vendors whose shares we track, 19 gained in value during the first calendar quarter of 2014, 15 lost value and one was unchanged.

The broader market indexes also went in different directions. The Dow Jones Industrial Average closed at 16,457.66 on March 31, down 0.72 percent for the first calendar quarter. The NASDAQ Composite, in contrast, closed at 4,198.99, up 0.54 percent for the quarter.

Here's a look at the winners and the losers, based on the difference in their stock closing prices between Dec. 31, 2013 and March 31, 2014.

Symantec

Interim CEO:

Dec. 31, 2013: $23.58

March 31, 2014: $19.97

Change: -15.31%

Symantec's board fired CEO Steve Bennett in March after the company struggled with a major ongoing overhaul of its product line and go-to-market strategy. Board member Michael Brown replaced him as interim president and CEO . Channel partners said Bennett's removal signals ongoing turmoil at the company. In late January, it reported sales in its third fiscal quarter ended Dec. 27 were $1.71 billion, down 5 percent from the same period a year earlier, while net income was up 31 percent to $283 million.

CommVault Systems

CEO:

Dec. 31, 2013: $74.86

March 31, 2014: $64.95

Change: -13.24%

In February, CommVault said it spent approximately $48 million to repurchase 740,000 shares of the company's stock. While stock buybacks usually boost the price of a company's stock, that doesn't seem to have been the case here. In January, the data management technology company reported revenue of $153.3 million for its third fiscal quarter ended Dec. 31, up nearly 20 percent year-over-year. Net income climbed more than 44 percent in the quarter to $17.6 million.

NetApp

CEO: Georgens

Dec. 31, 2013: $41.14

March 31, 2014: $36.90

Change: -10.31%

Data storage system maker NetApp reported its fiscal third quarter, ended Jan. 24, results in February. Revenue was down more than 1.2 percent from the same period one year earlier to $1.61 billion while net income soared 21.5 percent to $192.1 million.

In February, NetApp unveiled its FAS8000 system that helps businesses unify SAN, NAS and storage virtualization into a single hybrid storage array.

Lenovo Group

CEO: Yuanqing

Dec. 31, 2013: $24.43

March 31, 2014: $22.09

Change: -9.58%

The fall in Lenovo's share price is puzzling. In February, the company reported that in its third fiscal quarter ended Dec. 31 sales reached U.S. $10.8 billion, passing the U.S. $10 billion figure for the first time. And earnings reached U.S. $265 million, up 30 percent year-over-year. In the past year, Lenovo has become the worldwide No. 1 PC vendor, made significant gains in the server and smartphone markets, and is acquiring IBM's x86 server business for $2.3 billion, and Motorola Mobility from Google for almost $3 billion.

Citrix Systems

CEO:

Dec. 31, 2013: $63.25

March 31, 2014: $57.44

Change: -9.19%

Citrix is currently searching for a new chief executive after CEO Mark Templeton announced in January that he plans to retire within the next year. Templeton joined Citrix in 1995 and has been the cloud and virtualization technology company's CEO since 2001.

For its fourth quarter ended Dec. 31, Citrix's net income grew 22 percent year-over-year to $138.6 million. Revenue grew more than 8 percent during the quarter to $802.4 million.

NetSuite

CEO:

Dec. 31, 2013: $103.02

March 31, 2014: $94.83

Change: -7.95%

Cloud application developer NetSuite has focused on growth rather than profitability. Until recently, the company's stock price has grown along with its sales. But maybe shareholders are starting to question that strategy given the drop in its stock price this quarter. For the fourth quarter ended Dec. 31, NetSuite reported sales growth of 35 percent to $115 million, and 34 percent sales growth for all of fiscal 2013 to $414.5 million. Net losses were $20.2 million and $70.4 million for the quarter and fiscal year, respectively.

CA Technologies

CEO: Gregoire

Dec. 31, 2013: $33.65

March 31, 2014: $30.98

Change: -7.93%

In late January, CA Technologies reported sales of $3.43 billion for the first three quarters of fiscal 2014 ended Dec. 31, down nearly 2 percent from the same nine-month period in fiscal 2013. But net income was up more than 13 percent during that three-quarter period to $807 million. CA at that time also made a number of changes in its executive ranks, including the departure of George Fischer, executive vice president of worldwide sales and services, after 20 years at the company. Adam Elster was his replacement.

Xerox

CEO:

Dec. 31, 2013: $12.17

March 31, 2014: $11.30

Change: -7.15%

Xerox reported sales of $5.57 billion in its fourth fiscal quarter ended Dec. 31, 2013, down 3 percent from the same period one year earlier. Net income for the quarter was down 9 percent to $306 million.

For all of fiscal 2013, Xerox reported sales of $21.44 billion, down 1 percent from fiscal 2012, and a 3 percent decline in net income to $1.16 billion.

Red Hat

CEO: Whitehurst

Dec. 31, 2013: $56.04

March 31, 2014: $52.98

Change: -5.46%

Red Hat remains on a strong growth path. On March 27, the company reported that sales in its fourth quarter ended Feb. 28 grew 15.1 percent to $400.4 million, while net income rose 4.9 percent to $45.1 million.

For all of fiscal 2014, sales grew 15.5 percent to $1.53 billion while net income rose 18.7 percent to $178.3 million.

Motorola Solutions

CEO:

Dec. 31, 2013: $67.50

March 31, 2014: $64.29

Change: -4.76%

In January, Motorola Solutions reported a 2.6 percent sales increase in its fourth quarter ended Dec. 31 to just over $2.5 billion. Earnings edged up 2 percent to $343 million.

For all of fiscal 2013, the communications company's sales were flat at $8.7 billion. But earnings for the year were up almost 25 percent to $1.1 billion.

Apple

CEO: Tim Cook

Dec. 31, 2013: $561.02

March 31, 2014: $536.74

Change: -4.33%

Apple's stock price has been hovering in the mid-$500s in recent months, struggling to regain momentum after hitting $700 a share in September 2012, and then tumbling back below $400 a share. In January, Apple reported financial results for its first fiscal quarter ended Dec. 28. Sales reached $57.6 billion, up more than 5 percent year-over-year. But net income was flat at just over $13 billion.

Panasonic

CEO:

Dec. 31, 2013: $11.66

March 31, 2014: $11.44

Change: -1.89%

Panasonic Corp. of North America recently announced the formation of the Panasonic Enterprise Solutions Company, which will focus on developing, selling and implementing large-scale audio/visual systems for businesses, especially in the sports and entertainment sectors. The new operation also will develop and implement "eco solutions" including solar power systems.

Intel

CEO: Krzanich

Dec. 31, 2013: $25.96

March 31, 2014: $25.81

Change: -0.58%

Intel's processor sales have been hit by the slowdown in the PC market, while the company has sought to catch up with rivals in the market for chips for mobile devices.

In January, the company announced plans to reduce its global work force by 5 percent, or about 5,000 employees, to offset losses in 2013 and buffer expected weak demand for microprocessors this year.

Google

CEO:

Dec. 31, 2013: $559.79

March 31, 2014: $556.70

Change: -0.55%

These share prices reflect Google's two-for-one stock split executed on April 2.

In March, Google launched an expanded, three-tier channel program for its Google Cloud Platform, seeking partners with the skills and expertise to drive demand for the company's cloud services.

Cisco Systems

CEO:

Dec. 31, 2013: $22.43

March 31, 2014: $22.42

Change: -0.04%

In February, Cisco Systems, citing ongoing weakness in its service provider business and emerging markets, reported steep drops in both sales and earnings for its second fiscal quarter ended Jan. 25. Revenue was down 7.8 percent to $11.2 billion while net profits for the quarter were $1.4 billion, down 54 percent. In March, Cisco rolled out a massive public cloud service initiative that competes with public cloud offerings from industry heavyweights such as Amazon, Google and HP.

Seagate Technology

CEO: Luczo

Dec. 31, 2013: $56.16

March 31, 2014: $56.16

Change: 0.0%

That's not a typo -- Seagate's stock price was the same at the start and end of this three-month period.

In late January, the hard disk and storage technology manufacturer reported sales of $3.53 billion for its second fiscal quarter ended Dec. 27, down 3.8 percent from the same period a year earlier. Net income for the quarter was down 13 percent to $428 million. In March, Seagate shipped its 2 billionth hard disk drive.

Quantum

CEO: Gacek

Dec. 31, 2013: $1.20

March 31, 2014: $1.22

Change: +1.66%

Storage technology developer Quantum is the first vendor on our watch list to record a gain in its stock price during the first quarter. On Jan. 29, Quantum reported that revenue for its third fiscal quarter ended Dec. 31, 2013 was down 8 percent from the same period one year before. The company also reported a $2.4 million loss for the quarter.

Netgear

CEO:

Dec. 31, 2013: $32.94

March 31, 2014: $33.73

Change: +2.40%

At the end of March, Netgear launched the NetgearDocsis 3.0 AC1900 Voice and Data cable gateway. For its fourth quarter ended Dec. 31, Netgear reported revenue of $356.6 million, up 14.6 percent over the same period one year before. But net income dropped more than 40 percent to $11.4 million. For all of 2013, revenue grew 7.7 percent to $393.6 million; net income fell 36.2 percent to $55.2 million.

IBM

CEO: Rometty

Dec. 31, 2013: $187.57

March 31, 2014: $192.49

Change: +2.62%

The gain in IBM's stock price during the quarter could be seen as shareholder approval for IBM's late January deal to sell its low-performing x86 server business to Lenovo for $2.3 billion.

For fiscal 2013, ended Dec. 31, IBM reported sales of $99.75 billion, down almost 5 percent from fiscal 2012. And net income was just short of $16.5 billion, down 0.7 percent year-over-year.

Salesforce.com

CEO: Benioff

Dec. 31, 2013: $55.19

March 31, 2014: $57.09

Change: +3.44%

Salesforce.com is another company that remains in growth mode. Revenue in its fourth fiscal quarter ended Jan. 31 was $1.15 billion, up 37 percent from the same period a year earlier. And revenue for the full fiscal 2014 ended Jan. 31 surpassed the $4 billion mark at $4.07 billion, a 33 percent gain over fiscal 2013. At a recent event, Salesforce President Keith Block vowed it would overtake SAP as the world's third-largest enterprise software company. Recruiting channel partners is part of that effort.

Advanced Micro Devices

CEO:

Dec. 31, 2013: $3.87

March 31, 2014: $4.01

Change: +3.62%

In March, AMD unveiled updates to its channel program that reward partners that help create new markets and generate new business for the manufacturer's microprocessors. For its fourth quarter ended Dec. 28, AMD reported sales of $1.59 billion, up almost 9 percent from the same quarter one year before. Net income almost doubled to $89 million. But for all of fiscal 2013 ended Dec. 28, AMD reported a 2.3 percent decline in sales to $5.30 billion and an $83 million loss.

Check Point Software Technologies

CEO: Shwed

Dec. 31, 2013: $64.50

March 31, 2014: $67.63

Change: +4.85%

Security technology developer Check Point Software Technologies reported a 5 percent increase in sales to $387.1 million for its fourth fiscal quarter ended Dec. 31. For all of fiscal 2013, sales grew 4 percent to $1.39 billion.

Oracle

CEO:

Dec. 31, 2013: $38.26

March 31, 2014: $40.37

Change: +5.51%

For its third fiscal quarter ended Feb. 28, Oracle reported sales grew 4 percent year-over-year to $9.31 billion, while net income grew 2 percent to $2.57 billion. In January, Oracle said it would acquire Corente, a developer of software-defined networking technology that accelerates the deployment of cloud-based applications. In February, Oracle struck a deal to acquire BlueKai, a developer of a cloud-based big data platform.

QLogic

CEO: Rampalli

Dec. 31, 2013: $11.83

March 31, 2014: $12.75

Change: +7.78%

For QLogic, which has been struggling of late, the gain in its stock price is welcome news. It might signal a vote of confidence for Prasad Rampalli, who was hired away from EMC in December as the network infrastructure technology company's new president and CEO. In January, QLogic reported that sales in the company's third fiscal quarter ended Dec. 29 was $119.4 million, flat with the same period one year earlier. But net income for the quarter rose more than 55 percent to $20.6 million.

BlackBerry

CEO:

Dec. 31, 2013: $7.44

March 31, 2014: $8.08

Change: +8.6%

After a disastrous 2013, BlackBerry seems to have at least stabilized under John Chen, who was named CEO of the company in November.

In March, BlackBerry reported that in its fourth quarter the company lost $423 million -- less than Wall Street had expected. Sales for the quarter dropped 64 percent year-over-year to $976 million. Chen said BlackBerry was on track to break even in 2015 and return to profitability in 2016.

SAP

CEOs: HagemannSnabe

Dec. 31, 2013: $74.86

March 31, 2014: $81.31

Change: +8.62%

In March, SAP struck a deal to acquire Fieldglass, a developer of cloud-based contingent workforce management applications.

For its fiscal year ended Dec. 31, SAP reported total revenue of 16.82 billion Euros (about $23 billion), up 4 percent from fiscal 2012. And after-tax profit surged 18 percent to 3.33 billion Euros (about $4.6 billion).

EMC

CEO: Tucci

Dec. 31, 2013: $25.15

March 31, 2014: $27.41

Change: +8.99%

While data storage system giant EMC has maintained revenue and sales growth, the company has been undergoing an internal restructuring, including employee cutbacks, in the current quarter. For the fourth quarter ended Dec. 31, EMC reported 11 percent growth in revenue to $6.7 billion while net income rose 17 percent to $1.0 billion. For all of fiscal 2013, sales grew 7 percent to $23.2 billion, while net income grew 6 percent to $2.9 billion. EMC is laying off a number of its workers as part of a restructuring.

Western Digital

CEO:

Dec. 31, 2013: $83.90

March 31, 2014: $91.82

Change: +9.44%

For its second fiscal quarter ended Dec. 27, Western Digital reported sales of $3.97 billion, up 3.9 percent from the same period one year before. Earnings were $430 million, up more than 28 percent from one year earlier.

Microsoft

CEO: SatyaNadella

Dec. 31, 2013: $37.41

March 31, 2014: $40.99

Change: +9.57%

Microsoft hung out the "Under New Management" sign in February as company veteran SatyaNadella took over as CEO from the retiring Steve Ballmer. And shareholders apparently approve of the change, judging by the gain in the company's share price.

For the second quarter ended Dec. 31 Microsoft reported sales of $24.52 billion, up 14.3 percent, while net income grew 2.8 percent to $6.56 billion.

Juniper Networks

CEO: ShayganKheradpir

Dec. 31, 2013: $22.57

March, 2014: $25.76

Change: +14.13%

Juniper is coming off a rough year after losing a number of high-ranking executives. Kheradpir, previously chief information and technology officer at Verizon, took the reins as Juniper's CEO on Jan. 1. Executive departures aside, Juniper is doing quite well financially. For its fourth quarter ended Dec. 31, 2013, the company reported revenue of $1.27 billion, up 12 percent from one year before, while net income soared 59 percent to $151.8 million.

Hewlett-Packard

CEO:

Dec. 31, 2013: $27.98

March 31, 2014: $32.36

Change: +15.65%

HP reported sales for the first fiscal quarter ended Jan. 31 of $28.2 billion, above the Wall Street consensus of $27.19 billion, but down 1 percent from the prior-year period. The earnings report, released Feb. 20, said HP's personal systems business was up 4 percent overall, with commercial sales up 8 percent and consumer sales down 3 percent. The company's Enterprise Group reported a sales increase of 1 percent with industry-standard servers up 6 percent for the quarter, and networking sales up 4 percent.

FalconStor

CEO:

Dec. 31, 2013: $1.35

March 31, 2014: $1.58

Change: +17.04%

In February, FalconStor, which has been struggling in recent years, announced its return to profitability on a non-GAAP basis to $0.8 million in net income its fourth fiscal quarter ended Dec. 31. But the company still reported a loss from operations of $1 million on a GAAP basis in the quarter, and revenue for the period was down 35 percent to $14.6 million.

Brocade Communications

CEO: Lloyd Carney

Dec. 31, 2013: $8.87

March 31, 2014: $10.61

Change: +19.62%

Networking technology vendor Brocade reported revenue of $564.5 million for its first fiscal quarter ended Jan. 25, down 4.1 percent from the same period one year earlier. Net income, however, spiked to $80.9 million compared to the $21.3 million loss one year before. Last fall, the company said it would cut about 300 jobs from its global work force and realign resources to focus on its data center virtualization and software-defined networking strategies.

VMware

CEO: Gelsinger

Dec. 31, 2013: $89.71

March 31, 2014: $108.02

Change: +20.41%

VMware has been taking steps to expand beyond its core server virtualization business. Two of those efforts were center stage in the first quarter of 2014: Its long-anticipated Virtual SAN (VSAN) storage technology that's expected to ship shortly, and its new NSX network virtualization products. In January, the company surprised the industry when it announced a deal to acquire AirWatch, a mobile security technology developer, for $1.54 billion.

Lexmark International

CEO: Rooke

Dec. 31, 2013: $35.52

March 31, 2014: $46.29

Change: +30.32%

Printer maker Lexmark scored impressive gains in its stock price in the first quarter of 2014. It's been transitioning from a hardware-centric company to one focused more on software and solutions. While its sales growth has lagged, it has boosted its profitability. In the fourth quarter ended Dec. 31, net income soared more than 250 percent to $94 million, while revenue grew 4 percent to just over $1 billion. For all of fiscal 2013, sales declined 3.4 percent to $3.67 billion; net income grew 143 percent to $261.8 million.

FireEye

CEO: DeWalt

Dec. 31, 2013: $43.61

March 31, 2014: $61.57

Change: +41.18%

High-flying security technology developer FireEye went public in September with a lot of fanfare. And while some IPOs fail to live up to their hype, FireEye kept rolling in the first quarter of 2014. For the fourth quarter ended Dec. 31, FireEye reported sales of $57.3 million, up more than 80 percent from the same period one year before. It reported a $2.5 million loss, an improvement from the $12.6 million loss one year earlier. Sales for all of 2013 nearly doubled to $161.6 million, but the net loss for the year stood at $120.6 million.