The Best And Worst Technology Company Stocks In Q3 2014

Many Winners -- And Some Big Losers -- In Q3 Tech Vendor Stocks

The Dow Jones Index was up 1.3 percent in the third quarter ended Sept. 30 while the Nasdaq was up more than 1.9 percent.

But the 37 IT vendors on the CRN watch list were decidedly more volatile during the quarter. Twenty-one saw their share values increase in the third quarter, six of them by double-digit amounts But 16 suffered falling share prices -- some by significant double digits.

Here's a look at who was up and who was down in the third quarter of 2014, based on stock closing prices between June 30, 2014, and Sept. 30. 2014.

Brocade Communications Systems

CEO: Lloyd Carney

June 30, 2014: $9.20

Sept. 30, 2014: $10.87

Change: +18.2%

Carney, named a Top 25 Innovator by CRN earlier this year, has energized the data and storage networking company and helped guide it to the industry's next big opportunities in data center virtualization, cloud computing and software-defined networking. Wall Street has noticed.

NetApp

CEO: Tom Georgens

June 30, 2014: $36.52

Sept. 30, 2014: $42.96

Change: +17.6%

Despite declines in its OEM sales, storage equipment maker NetApp reported strong earnings in the company's first fiscal quarter ended July 25, thanks to a recovery in the enterprise market.

In September the company debuted its long-awaited FlashRay all-flash storage platform and the new Mars OS storage operating system.

Citrix Systems

CEO: Mark Templeton

June 30, 2014: $62.55

Sept. 30, 2014: $71.34

Change: +14.1%

In late June Citrix announced that Templeton, who earlier this year announced his intention to retire, had changed his mind and would stay on as CEO. That news was widely seen as adding stability and focus to the company at a time when it's under pressure from VMware and other competitors.

Citrix reported 7 percent sales growth to $782 million in its second fiscal quarter ended June 30. But net income for the quarter was down nearly 18 percent year over year to $53 million.

Intel

CEO: Brian Krzanich

June 30, 2014: $30.90

Sept. 30, 2014: $34.82

Change: +12.7%

At the Intel Developer Forum in September the chip maker unveiled new Xeon processors, debuted an Internet of Things micro-computer platform, and showed off its next-generation mobile processor based on the company's Skylake 14-nanometer architecture.

In July Intel reported strong results for its second quarter ended June 28, including 8 percent sales growth to $13.8 billion and a 40 percent surge in net income to $2.8 billion, due to better-than-expected results in the PC market and gains in the tablet computer arena.

Microsoft

CEO: Satya Nadella

June 30, 2014: $41.70

Sept. 30, 2014: $46.36

Change: +11.2%

On the last day of the quarter Microsoft took the wraps off Windows 10, the next generation of the company's flagship software and the product investors are hoping will put the poorly received Windows 8 behind the company.

During the quarter Microsoft also announced a $2.5 billion deal to buy gaming company Mojang, developer of Minecraft. That's the first major acquisition by Microsoft under CEO Satya Nadella.

And in July the company said its fourth-quarter revenue (ended June 30) was up 17 percent to $23.4 billion, coming on the heels of plans to lay off some 18,000 workers.

EMC

CEO: Joe Tucci

June 30, 2014: $26.34

Sept. 30, 2014: $29.26

Change: +11.1%

In late September EMC was the subject of a swirl of rumors that the storage technology giant might be considering a merger with either Hewlett-Packard or Dell. Activist hedge fund company Elliott Management acquired a stake in EMC in July and has urged the company to sell off its stake in VMware.

For its second quarter ended June 30 EMC reported a 5 percent gain in revenue to $5.9 billion. But net income was $589 million, down 16 percent from the same period one year earlier.

Lenovo Group

CEO: Yang Yuanqing

June 30, 2014: $27.19

Sept. 30, 2014: $29.75

Change: +9.4%

On Sept. 30 Lenovo completed its long-awaited acquisition of IBM's x86 server business, a move that immediately puts the Chinese computer company into the data center market dominated by companies such as Hewlett-Packard, Dell and IBM.

For the company's first fiscal quarter ended June 30 Lenovo reported that revenue grew 18 percent to $10.4 billion. Net profit in the quarter increased 23 percent to $214 million.

Apple

CEO: Tim Cook

June 30, 2014: $92.93

Sept. 30, 2014: $100.75

Change: +8.4%

On Sept. 9 Apple debuted the iPhone 6, the next generation of the company's popular smartphone, as well as the Apple Watch, Apple Pay and iOS8. In the first 24 hours of taking preorders for the new iPhone, Apple had sold 4 million units.

In late September Apple suffered a rare embarrassment and had to issue an apology when its iOS 8.0.1 was found to have bugs that caused some users to lose cellphone service and Touch ID functionality.

Xerox

CEO: Ursula Burns

June 30, 2014: $12.44

Sept. 30, 2014: $13.23

Change: +6.4%

In September Xerox rolled out a series of updates to its hardware, software and services lines, including updating its ConnectKey platform for networking multifunction printers.

For its second quarter ended June 30 Xerox reported revenue of $5.29 billion and net income of $266 million -- both down 2 percent from the same period a year earlier.

Western Digital

CEO: Steve Milligan

June 30, 2014: $92.30

Sept. 30, 2014: $97.32

Change: +5.4%

In July hard drive manufacturer Western Digital led a $20 million round of funding for hybrid storage technology developer Avere Systems.

For its fourth quarter ended June 27 Western Digital reported revenue of $3.65 billion, down 2 percent from the same period one year earlier. Net income was $317 million, up from a reported loss of $265 million in the same quarter one year before.

Hewlett-Packard

CEO: Meg Whitman

June 30, 2014: $33.68

Sept. 30, 2014: $35.47

Change: +5.3%

Earlier this month Hewlett-Packard dropped the blockbuster news that it would split itself into two companies, one focused on PCs and printers and the other on enterprise systems, software and services. But that news came after Sept. 30 and so it had no impact on the company's stock price during the third quarter.

HP has remained the No. 1 vendor in the server market this year in terms of both revenue and units shipped. For the company's third fiscal quarter ended July 31, HP reported revenue of $27.59 billion, up 1 percent from the same period a year earlier, while net earnings declined more than 22 percent to $985 million.

IBM

CEO: Virginia Rometty

June 30, 2014: $181.27

Sept. 30, 2014: $189.83

Change: +4.7%

IBM completed the sale of its x86 server business to Lenovo on Oct. 1. With the closing of that deal announced days in advance, investors' opinions on the strategic move were certainly built into IBM's closing share price on Sept. 30, if not before.

In July IBM established a strategic partnership with Apple through which IBM will develop applications, platforms and services to bring Apple iPads and iPhones into corporate computing environments.

For its second quarter ended June 30 IBM reported sales of $24.4 billion, down 2.2 percent from one year earlier, while net income rose 28 percent to $4.1 billion.

Check Point Software Technologies

CEO: Gil Shwed

June 30, 2014: $67.03

Sept. 30, 2014: $69.24

Change: +3.3%

For its fiscal second quarter ended June 30, security technology appliance vendor Check Point Software Technologies reported revenue of $362.6 million, up 7 percent from the same period last year. Net income increased almost 6 percent year over year to $159.7 million.

NetSuite

CEO: Zach Nelson

June 30, 2014: $86.88

Sept. 30, 2014: $89.54

Change: +3.1%

Cloud application vendor NetSuite continues to focus on growth, even at the cost of short-term profitability. For its second quarter ended June 30 the company reported revenue of $131.8 million, up 30.5 percent from the same period last year. But the company's loss increased to $23.2 million from $20.4 million one year earlier.

During the quarter NetSuite acquired London-based e-commerce company Venda for $50.5 million in a move CEO Zach Nelson said would help NetSuite establish a stronger footprint in Europe.

Symantec

CEO: Michael Brown

June 30, 2014: $22.90

Sept. 30, 2014: $23.51

Change: +2.7%

Earlier this month Symantec announced that it is splitting into two companies, one focused on security technology and the other on data management. While rumors of the split have been circulating for some time, the official word came after the end of the third quarter covered in this analysis.

The third quarter did bring news that Symantec had named interim president and CEO Michael Brown to be the company's permanent CEO, replacing previous CEO Steve Bennett who was fired earlier this year.

CommVault Systems

CEO: N. Robert Hammer

June 30, 2014: $49.17

Sept. 30, 2014: $50.40

Change: +2.5%

For the company's first fiscal quarter ended June 30 data management CommVault reported revenue of $152.6 million, up more than 13 percent from the first quarter last year. But net income for the quarter was down more than 5 percent to $12.7 million.

Tableau Software

CEO: Christian Chabot

June 30, 2014: $71.33

Sept. 30, 2014: $72.65

Change: +1.9%

Data visualization software developer Tableau went public in May 2013 at $47 a share and the company has continued to ride the big data technology wave.

For its second quarter ended June 30 Tableau's sales grew nearly 82 percent year over year to $90.7 million. Like a few other companies on our watch list, however, Tableau is focused on growth rather than the bottom line: The vendor's loss in the quarter increased to $4.6 million from $2.6 million one year earlier.

Red Hat

CEO: James Whitehurst

June 30, 2014: $55.27

Sept. 30, 2014: $56.15

Change: +1.6%

Red Hat CTO Brian Stevens unexpectedly stepped down from his position Aug. 28 after 13 years at the vendor, leaving a company known for its remarkably stable management. A short time later Stevens was named vice president of cloud platforms at Google.

In September Red Hat announced a deal to acquire Feed Henry, the enterprise mobile application platform developer, for more than $81 million.

For its fiscal second quarter ended Aug. 31 Red Hat reported revenue of $445.9 million, up 19 percent from the same quarter last year. Net income for the quarter grew nearly 15 percent to $46.8 million.

Cisco Systems

CEO: John Chambers

June 30, 2014: $24.85

Sept. 30, 2014: $25.17

Change: +1.3%

In late September Cisco was one of several major companies rumored to be considering an acquisition of storage giant EMC, a report that Cisco CEO John Chambers quickly squashed.

In mid-September Cisco disclosed plans to acquire semiconductor memory technology developer Memoir Systems for an undisclosed sum. Around the same time Cisco said it would acquire MetaCloud, a provider of OpenStack-based private cloud technology.

For its fourth quarter ended July 26 Cisco reported revenue of $12.4 billion, down 0.5 percent from one year earlier, and a 1 percent decline in net income to $2.2 billion. The vendor also said it would cut 6,000 jobs as part of a corporate restructuring.

Seagate Technology

CEO: Stephen Luczo

June 30, 2014: $56.82

Sept. 30, 2014: $57.27

Change: +0.8%

For its fourth quarter ended June 27 disk drive and storage technology manufacturer Seagate reported revenue of $3.3 billion, down almost 4 percent from one year before. Net income for the quarter dropped 8 percent to $320 million.

Google

CEO: Larry Page

June 30, 2014: $575.28

Sept. 30, 2014: $577.36

Change: +0.4%

Google has been expanding its search engine roots to redefine itself as a supplier of enterprise business IT products.

For its second quarter ended June 30 Google reported revenue of just less than $16 billion, up 22 percent from a year earlier, and net income growth of 6 percent to more than $3.4 billion.

Salesforce

CEO: Marc Benioff

June 30, 2014: $58.08

Sept. 2014: $57.53

Change: -0.9%

Saleforce is the first company on our watch list to see its stock price decline in the June 30 to Sept. 30 period.

For its second fiscal quarter ended July 31 cloud software developer Salesforce reported revenue of $1.32 billion, up 38 percent year over year. But the company reported a $61.1 million loss for the quarter compared to net profit of $76.6 million in the same period one year before. The loss was due to a number of one-time expenses including stock-based compensation expenses, amortization of purchased intangibles, and interest expense.

Panasonic

CEO (North America): Joe Taylor

June 30, 2014: $12.18

Sept. 30, 2014: $11.98

Change: -1.6%

For its first fiscal quarter ended June 30 Panasonic Corp. reported revenue of 1.85 trillion Yen ($17.3 billion), up 1.5 percent from the same quarter last year. Net income for the quarter was 37.9 billion Yen ($354.8 million), down nearly 65 percent from one year before.

CA Technologies

CEO: Michael Gregoire

June 30, 2014: $28.74

Sept. 30, 2014: $27.94

Change: -2.8%

In August CA Technologies spun off its Arcserve data backup and recovery software business to a private equity investor. Earlier this year the company announced an agreement to spin off its ERwin data modeling software business to Embarcadero Technologies.

For the company's first fiscal quarter ended June 30 CA reported revenue of $1.07 billion, down more than 2 percent from the first quarter last year. Net income for the quarter was $217 million, down 35 percent from one year before.

BlackBerry

CEO: John Chen

June 30, 2014: $10.24

Sept. 30, 2014: $9.94

Change: -2.9%

After many quarters of plunging sales and a sinking stock price, BlackBerry's shares rebounded earlier this year as new CEO John Chen worked to turn around the mobile device maker. The company's negative stock performance in the September quarter might be a case of some investors cashing in on the earlier rising share values.

In September the company debuted the BlackBerry Passport, an enterprise-focused, high-end smartphone designed for business professionals.

For its second quarter ended Aug. 30 BlackBerry reported revenue of $916 million, down 42 percent from the same period one year earlier. The vendor's loss narrowed to $207 million compared to the $965 million loss one year before.

VMware

CEO: Pat Gelsinger

June 30, 2014: $96.81

Sept. 30, 2014: $93.84

Change: -3.1%

EMC has come under pressure from "activist investors" in recent weeks to sell off its stake in VMware. Those rumors did nothing to boost VMware's share price during the September quarter.

VMware launched a raft of new products at its VMworld conference in August, including new hyper-converged appliances and the VMware Workplace Suite bundle with the recently acquired AirWatch mobile device management technology.

For its second quarter ended June 30 VMware reported revenue of $1.46 billion, up 17 percent from one year before, but net income for the quarter was down almost 32 percent year over year to $167 million.

Quantum

CEO: Jon Gacek

June 30, 2014: $1.22

Sept. 30, 2014: $1.16

Change: -4.9%

In August data storage technology developer Quantum acquired Symform's cloud storage services platform, a move the company said would expand its cloud service offerings.

For its first fiscal quarter ended June 30 Quantum reported revenue of $128.1 million, down more than 13 percent year over year. The company also reported a $4.3 million loss for the quarter (compared to net income of $3.28 million a year earlier, including a one-time $15 million royalty payment).

Motorola Solutions

CEO: Greg Brown

June 30, 2014: $66.57

Sept. 30, 2014: $63.28

Change: -4.9%

Motorola reported sales of $1.39 billion for its second quarter ended June 28, down 7 percent from the same quarter one year before. But net income for the communications company's second quarter was $824 million, up 219 percent from the same quarter one year earlier.

Oracle

CEOs: Mark Hurd (pictured) and Safra Catz

June 30, 2014: $40.53

Sept. 30, 2014: $38.28

Change: -5.6%

Ever think you'd see someone other than Larry Ellison listed as Oracle CEO? Ellison surprised everyone Sept. 18 when he announced he was relinquishing the CEO role to co-presidents Safra Catz and Mark Hurd. But Ellison was named company chairman and took on the role of CTO, so don't look for any major shifts in the company's direction.

For its first fiscal quarter ended Aug. 31 Oracle reported revenue of $8.60 billion, up 3 percent from the same quarter a year earlier, and flat net income of $2.18 billion.

SAP

CEO: Bill McDermott

June 30, 2014: $77.00

Sept. 30, 2014: $72.16

Change: -6.3%

In September SAP struck a deal to acquire Concur, a developer of Software-as-a-Service travel and expense applications, for approximately $8.3 billion. That move will accelerate SAP's efforts to transform itself into a leading supplier of cloud software and services.

For its second quarter ended June 30 SAP reported revenue of 4.2 billion Euros ($5.3 billion), up more than 2 percent from the second quarter last year. But after-tax profit was 556 million Euros ($707 million), down 23 percent from one year ago.

QLogic

CEO: Prasad Rampalli

June 30, 2014: $10.09

Sept. 30, 2014: $9.16

Change: -9.2%

QLogic reported revenue of $119.4 million for its first fiscal quarter ended June 29, up more than 5 percent from the same quarter one year earlier. More importantly for shareholders, the network infrastructure technology developer reported net income of $6.0 million compared to a $3.1 million loss one year before.

Juniper Networks

CEO: Shaygan Kheradpir

June 30, 2014: $24.54

Sept. 30, 2014: $22.15

Change: -9.7%

In September Juniper Networks' global channel chief David Helfer left the company to work for mobile security startup Lookout, the latest in a long line of company executives to depart Juniper in the last year.

In July Juniper struck a deal to sell its Junos Pulse mobile security suite to a private equity firm for $250 million, part of a plan outlined by CEO Shaygan Kheradpir earlier this year to cut costs and restructure the company to focus on its core business.

For its second quarter ended June 30 Juniper reported revenue of $1.23 billion, up 7 percent from the same quarter in 2013, while net income more than doubled to $221.1 million.

Netgear

CEO: Patrick Lo

June 30, 2014: $34.77

Sept. 30, 2014: $31.25

Change: -10.1%

Netgear reported revenue of $337.6 million for its second quarter ended June 29, down more than 3 percent from last year's second quarter, while net income grew 2 percent to $14.7 million.

Lexmark International

CEO: Paul Rooke

June 30, 2014: $48.16

Sept. 30, 2014: $42.50

Change: -11.8%

Considering Lexmark's shares increased more than 35 percent in value in the second calendar quarter of 2014, the third-quarter drop marks quite a change in fortunes for the company and its investors.

Lexmark has been transitioning from a hardware-centric printer manufacturing company to one focused more on document management software and print management solutions. The company is in the process of acquiring ReadSoft, a developer of business document processing software.

Lexmark reported revenue of $891.8 million in its second quarter ended June 30, up 0.5 percent from the same period one year earlier (but up 5 percent when excluding revenue from the inkjet business the company is exiting). But net earnings plummeted more than 60 percent in the quarter to $37.5 million.

Advanced Micro Devices

CEO: Lisa Su

June 30, 2014: $4.19

Sept. 30, 2014: $3.41

Change: -18.6%

AMD named COO Lisa Su its new CEO Oct. 8 after Rory Read unexpectedly stepped down from the chip designer's top job. Coming after Sept. 30, the management change isn't a factor in our stock price calculations.

AMD reported revenue of $1.44 billion for its second quarter ended June 28, a gain of 24 percent year over year, and a loss of $36 million compared to the year-ago loss of $20 million.

FireEye

CEO: David DeWalt

June 30, 2014: $40.55

Sept. 30, 2014: $30.56

Change: -24.6%

FireEye's high-flying stock price has returned to earth. After the security technology developer went public one year ago, its stock price hit a high of $95.63 per share in March. But the price has declined to less than a third of that since.

FireEye reported revenue of $94.5 million for its second quarter ended June 30, up 184 percent year over year. But the company's loss almost tripled to $116.8 million.

FalconStor Software

CEO: Gary Quinn

June 30, 2014: $1.70

Sept. 30, 2014: $1.15

Change: -32.4%

A share price drop of 55 cents per share may not seem like much. But it was almost one-third of FalconStor's share value and that puts the developer of data protection and storage virtualization software at the bottom of our tech vendor stock roundup.

FalconStor has been undergoing a restructuring. But that can't make up for declining sales. The company reported revenue of $11.3 million for its second quarter ended June 30, down more than 19 percent year over year. The company did report net income of $1.3 million compared to a loss of $5.2 million in last year's second quarter.