The Best (And Worst) Vendor Stocks Of Q3 2010
3Q Tech Stock Winners, Losers
The third quarter was a great one for some IT companies on Wall Street, a not so great one for others. Of 37 companies tracked by CRN, 21 saw their share prices increase more than the Dow Jones (10.4 percent) or Nasdaq (12.3 percent) indices for the third quarter ended Sept. 30. But six companies, including some of the biggest in the industry, saw their stocks fall compared to their June 30 closing prices. Here's a look at the big winners and losers.
Seagate Technology
June 30, 2010: $13.04
Sept. 30, 2010: $11.78
Percent Change:-9.7%
Shares closed as high as $14.98 in early July, but after Seagate posted fourth-fiscal quarter financial results that didn't meet Wall Street expectations, shares fell almost 10 percent on July 20 and reached a quarter low of $10.14 on August 26.
Western Digital
June 30, 2010: $30.16
Sept. 30, 2010: $28.39
Percent Change:-5.9
Western Digital posted a 32 percent increase in sales and a 185 percent increase in earnings compared to the year-ago quarter in July, but its stock still fell nearly $4 per share over the next two days. It reached a low of $23.62 on Aug. 26, but gained almost $2 per share the next day and has slowly climbed back up in September.
Websense
June 30, 2010: $18.90
Sept. 30, 2010: $17.89
Percent Change:-5.3
Websense shares fell more than 12 percent to $18.71 on July 28 after reporting disappointing second-quarter results the day before. The stock rebounded to close at more than $20 per share as recently as Sept. 9 before sliding back down.
Advanced Micro Devices
June 30, 2010: $7.32
Sept. 30, 2010: $7.11
Percent Change:-2.9
AMD shares soared to as high as $8.21 on July 27, but soon settled back down into the $6 to $7 range. In late September, the company announced the release of new Athlon and Phenom microprocessors.
Hewlett-Packard
June 30, 2010: $43.28
Sept. 30, 2010: $42.07
Percent Change:-2.8
It was an interesting quarter for HP, to say the least. The company's shares fell almost $5 per share after CEO Mark Hurd resigned in early August. And then shares fell slightly again on Sept. 30 after the company named Leo Apothekter as his replacement.
Intel
June 30, 2010: $19.45
Sept. 30, 2010: $19.32
Percent Change:-0.7
Intel shares reached $21.62 in late July, but fell below the $20 per share mark on August 10 and haven't been back since. In late September, the company announced it was slashing prices for Core i5 and Core i7 chips.
Cisco Systems
June 30, 2010: $21.31
Sept. 30, 2010: $21.95
Percent Change: 3.0
Cisco shares fell more than $2 per share Aug. 12 after the company disclosed fiscal fourth-quarter financial results. Last month, the company detailed its much-buzzed about collaboration platform.
Novell
June 30, 2010: $5.68
Sept. 30, 2010: $5.96
Percent Change: 4.9
Novell shares were in a holding pattern for much of the third quarter, fluctuating between $5.50 and $6.50 amid reports Novell is close to selling some assets.
QLogic
June 30, 2010: $16.62
Sept. 30, 2010: $17.64
Percent Change: 6.1
Shares of QLogic were on a roller-coaster ride in the third quarter, ending the quarter near the top of a hill. Shares reached $18.83 on July 15, then fell to $14.52 on Aug. 24, then rebounded to close the quarter at $17.64, its highest close in more than two months.
Microsoft
June 30, 2010: $23.01
Sept. 30, 2010: $24.49
Percent Change: 6.4
Shares of Microsoft reached a high in the quarter of $26.19 on Aug. 2 and the company paid a 13-cent dividend two weeks later. During the quarter, Microsoft announced it is building a $500 million data center.
Dell
June 30, 2010: $12.06
Sept. 30, 2010: $12.97
Percent Change: 7.5
Dell's biggest headlines during the third quarter came for something it didn't do: acquire 3Par. The company was outbid by HP for the virtualization specialist, but it saved $2 billion it can spend elsewhere.
Panasonic
June 30, 2010: $12.53
Sept. 30, 2010: $13.54
Percent Change: 8.1
On July 29, the company reported a 35 percent increase in sales for the first quarter and a profit vs. a loss in the year-ago quarter.
In September, Panasonic Solutions unveiled the new Toughbook U1 Ultra and the Toughbook S9 notebooks.
Symantec
June 30, 2010: $13.88
Sept. 30, 2010: $15.13
Percent Change: 9.0
The third quarter saw Symantec unveil its first hardware product, a backup appliance with dedicated deduplication functionality and integration with its NetBackup data protection software, after years of denying it would ever enter the hardware business.
IBM
June 30, 2010: $123.48
Sept. 30, 2010: $135.87
Percent Change: 10.0
IBM shares fell more than $3 per share after the company announced its second-quarter financial results on July 19, but the company's stock quickly recovered and closed the third quarter up 10 percent from its 2Q closing price.
During the third quarter, IBM unveiled plans to acquire Netazza for $1.7 billion.
SAP
June 30, 2010: $44.30
Sept. 30, 2010: $49.31
Percent Change: 11.3
Much like IBM, SAP's stock hit a third-quarter high during the last three days of the quarter, closing at $49.31 per share.
In August, SAP and its Sybase subsidiary said they will develop a mobile computing infrastructure platform that will allow customers to access SAP applications and business intelligence software from any mobile device. SAP closed its Sybase acquisition July 29.
EMC
June 30, 2010: $18.30
Sept. 30, 2010: $20.37
Percent Change: 11.3
EMC reported a double-digit percentage revenue gain in July, while positioning itself for building virtualized, private cloud and public cloud systems. Earnings grew 108 percent to $426.2 million.
Quantum
June 30, 2010: $1.88
Sept. 30, 2010: $2.12
Percent Change: 12.8
Quantum owns the lowest per-share price of all the companies listed here, but it posted a double-digit percentage increase in the third quarter, even after disclosing in July a $2.7 million loss for its second fiscal quarter.
Apple
June 30, 2010: $251.53
Sept. 30, 2010: $283.70
Percent Change: 12.8
While Quantum had the lowest per-share price for companies tracked here, Apple has the highest, by more than a 2-to-1 margin over IBM. Shares crossed the $290 mark in late September before settling down at $283.70 to end the quarter.
Brocade Communications
June 30, 2010: $5.16
Sept. 30, 2010: $5.86
Percent Change: 13.6
Brocade shares posted a solid increase in the third quarter, a period in which it confirmed several additions to its professional services and support delivery partner programs. Brocade's Support Delivery Program (SDP) will morph to a value-based model through which Brocade will provide greater benefits based on partner certifications and customer satisfaction ratings, moving away from flat discounts and more toward pay-for-performance rebates.
Lenovo Group
June 30, 2010: $10.75
Sept. 30, 2010: $12.29
Percent Change: 14.3
Maybe Wall Street was impressed with Lenovo's naming of Chris Frey to permanently head North America channel sales. What else explains Frey's hiring on the first day of the quarter, a period in which Lenovo's stock increased more than 14 percent? OK, a swing back to profitability ($54.9 million for the second quarter) from a year-ago loss ($16.0 million) doesn't hurt.
CA Technologies
June 30, 2010: $18.40
Sept. 30, 2010: $21.12
Percent Change: 14.8
On Sept. 28, CA shares passed the $21 mark for the first time since May. A week earlier, the company reorganized its channel leadership with the appointment of new executives in charge of its cloud and data protection business organizations. With the executive changes, CA made it clear that it is emphasizing cloud computing and Software-as-a-Service and the ties between them and its fast-growing storage business.
CommVault Systems
June 30, 2010: $22.50
Sept. 30, 2010: $26.03
Percent Change: 15.7
Shares of CommVault jumped more than $3 per share on Aug. 23 and continued to rise through the quarter after Dell and HP engaged in a bidding war for 3Par, another enterprise storage company.
Oracle
June 30, 2010: $21.46
Sept. 30, 2010: $26.85
Percent Change: 25.1
Oracle shares got a bump of more than $1.50 after naming Mark Hurd as its new president on Sept. 6 and shares continued to climb after that. Wall Street was probably also happy to hear that Sun operations are now profitable.
Check Point Software Technologies
June 30, 2010: $29.48
Sept. 30, 2010: $36.93
Percent Change: 25.3
Shares of Check Point increased steadily throughout the quarter, with its high-water closing mark occurring on Sept. 30. At VMworld, CheckPoint announced the new Security Gateway Virtual Edition to help secure the cloud from internal and external threats.
Salesforce.com
June 30, 2010: $85.82
Sept. 30, 2010: $111.80
Percent Change: 30.3
Salesforce shares soared more than $16 per share Aug. 20 after reporting a 25-percent sales increase even though earnings fell more than 30 percent from the year-ago quarter.
Xerox
June 30, 2010: $8.04
Sept. 30, 2010: $10.48
Percent Change: 30.3
Xerox shares enjoyed a slow, steady climb through the quarter. During the quarter, Affiliated Computer Services, the services arm of Xerox, won the exceptional service award in public safety, public works and administration, part of the 2010 Best Fit Integrator Awards from e.Republic’s Center for Digital Government. The award recognized ACS’ ability to develop specialized technology to help the City of Riverside, Calif., better serve its residents.
Motorola
June 30, 2010: $6.52
Sept. 30, 2010: $8.59
Percent Change: 31.7
Motorola unveiled the Droid 2 in the third quarter, a slicker, faster version of the original Motorola Droid but upgraded with a more user-friendly keyboard and more processing power, as well as up-to-date software and version 2.2 of Google's Android OS. The company also took the wraps off a new mobile computing device designed for health-care settings.
Juniper Networks
June 30, 2010: $22.82
Sept. 30, 2010: $30.35
Percent Change: 33.3
Juniper shares vacillated greatly in the third quarter, from less than $23 to greater than $31 before settling at $30.35 at the end of the quarter, an increase of one-third compared to the end of the second quarter. The networking vendor acquired SMobile Systems, a mobile security firm, during the quarter.
NetApp
June 30, 2010: $37.31
Sept. 30, 2010: $49.79
Percent Change: 33.4
NetApp shares got a boost after announcing a 36 percent increase in sales and a 173 percent interest in earnings in August for the second quarter, but like Brocade, they also got an indirect spike after Oracle CEO Larry Ellison hinted that he'd like to have NetApp's business.
VMware
June 30, 2010: $62.59
Sept. 30, 2010: $84.94
Percent Change: 35.7
VMWare shares increased $5 on July 7. and the only thing the company did was announce that earnings would be released two weeks later. But when you are the company in the hottest technology area right now, everybody wants some. VMware shares increased almost $3 per share on three other occasions during the quarter.
Lexmark International
June 30, 2010: $33.03
Sept. 30, 2010: $45.13
Percent Change: 36.6
Lexmark shares increased $2.95 on July 27 after the company reported $85 million in 2Q earnings, up from $17 million in the year-ago quarter. Shares fell back to $34.99 on Aug. 31, but they ascended rapidly again in September.
Red Hat
June 30, 2010: $28.94
Sept. 30, 2010: $41.25
Percent Change: 42.5
Red Hat shares had already posted sizable gains in July and August before jumping 9 percent on Sept. 23 after the company posted 2Q financial results that surpassed expectations.
Compellent Technologies
June 30, 2010: $12.12
Sept. 30, 2010: $18.18
Percent Change: 50.0
Count Compellent as another company that benefited from the HP-Dell war for 3Par. On Aug. 23, Compellent shares jumped nearly 9 percent after HP increased its bid for 3Par.
Netgear
June 30, 2010: $17.84
Sept. 30, 2010: $27.01
Percent Change: 51.4
Netgear topped second-quarter earnings in late July and continued that positive momentum on Wall Street throughout the quarter. In late September, Netgear took the wraps off of several new midmarket-oriented products, including the company's first-ever centralized network management console and a 10 Gbps managed Ethernet switch.
McAfee
June 30, 2010: $30.72
Sept. 30, 2010: $47.26
Percent Change: 53.8
McAfee agreed to be acquired by Intel in a blockbuster move in mid-August, increasing its stock by more than 50 percent.
Citrix Systems
June 30, 2010: $42.23
Sept. 30, 2010: $68.24
Percent Change: 61.6
On July 29, shares of Citrix reached a 10-year high after reporting better-than-expected revenue for the second quarter and raising its forecast for the rest of the year. And they kept rising, closing at almost $15 per share more than that by the end of the quarter. Also in the quarter, Citrix teamed with Cisco Systems to provide a virtual desktop infrastructure offering based on the two vendors' technology and aimed specifically at solution providers.
NetSuite
June 30, 2010: $12.64
Sept. 30, 2010:$23.57
Percent Change: 86.5
The top-performing tech stock tracked by CRN in the third quarter belongs to NetSuite. The company's shares had already increased more than 50 percent when CEO Zach Nelson said in mid-September that he was willing to listen to takeover offers. It increased an additional $3.67 per share before the quarter ended.