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From Briefing.com: 6:19PM Thursday After Hours prices levels vs. 4 pm ET: The after hours is sporting a postive bias as the futures indications trade higher relative to fair value. Presently, the S&P futures, at 1090, are 1 point above fair value, and the Nasdaq 100 futures, at 1402, are 4 points above fair value. An April semiconductor equipment book-to-bill ratio that rose to 1.14 has renewed interest in tech.

The below table lists the night's other relevant developments, as well as the stocks' reactions:

After Hours Mover % Change Move Reason for Move
Gap Inc (GPS) unch After raising its Q1 (Apr) EPS outlook on May 6, specialty retailer exceeds the revised Reuters Research estimate by $0.02 on revenues that rose 9% to $3.67 bln (consensus of $3.68 bln); Same store sales increased 7%, on top of 12% last year - proof that last year's turnaround was not just the benefit of easier year/year comparisons; Briefing.com turned positive on GPS in Story Stocks this time last year, when the stock was $16.66

Marvell Tech (MRVL) +6% Semiconductor maker posts a 79% increase in Q1 (Apr) EPS and 60% rise in revenues - both figures ahead of the market's expectations; In Briefing.com's Earnings Preview on In-Play, a Platinum Product, we noted analysts were generally positive going into tonight's earnings; Stock has shown relative strength to the Nasdaq year-to-date

McData (00C0) -6% Switch maker tops the Q1 (Apr) Reuters Research estimate of breakeven by a penny; however, revenues fell 6% to $97.2 mln (consensus of $99.0 mln); Company goes on to warn for Q2's (July) top and bottom-line; McData's direct competitor, Brocade, reported last night, and the stock also sold off as investors were disappointed with the lack of upside

Nordstrom (JWN) +4% After increasing its Q1 (Apr) EPS guidance twice, the high-end department store surpasses the revised consensus estimate by $0.05; Same store sales surged 13.2% and provided a tremendous boost to the bottom-line; Management goes on to issue better than expected Q2 (July) forecasts - putting EPS at $0.70-0.74 versus the consensus of $0.65

SERENA (SRNA) +16% Provider of infrastructure software shows strong upside to the Street's Q1 (Apr) estimates; Also reports that software license revenues were $15.8 mln, up 46% over the same quarter a year ago; Company goes on to guide Q2 (July) EPS and revenues well above consensus estimates; SERENA recently announced plans to acquire British-based Merant Plc, creating the second-largest provider of enterprise change management software

Tomorrow, the earnings and economic calendars are fairly barren and should not provide any catalysts for the market. Volume should be noticeably light in response and lead to fairly volatile trading.

For more detail on these, and other developments, be sure to visit our Stock Market Update and Daily Sector Wrap. -- Heather Smith, Briefing.com

5:59PM Semi Book-to-Bill : Semi equipment industry book-to-bill ratio rose to 1.14 in April. Bookings of 1.59 bln came in 15.6% above March's level of $1.37 bln and 111.0% above the $757 mln in orders posted in the same time a year ago.

4:31PM Ultratech Stepper guides for Y04 (UTEK) 15.74 -0.13: For the full year of 2004, co is expanding the ranges of the guidance. Co states, "Based on the current order outlook and visibility, UTEK could achieve annual revenue growth on the order of 20%-30% compared with 2003. Gross margin looks to be in a range of 48%-51%, based on the projected product mix for the year. Operating margin for the year looks to be in a range of 5%-10%. The projected tax rate for the year looks to be about 10%, due primarily to the jurisdictional effect. Earnings per share (diluted) for the year are projected in a range of $0.35-$0.50. Cash flow for the year is still anticipated to be positive", Reuters Y04 EPS consensus is $0.44 and rev guidance is $126 mln. Revs 20-30% growth is approx $120-130 mln.

4:21PM McDATA beats by a penny, ex items, light on revs, guides Q2 below consensus (MCDTA) 4.77 -0.02: Reports Q1 (Apr) non-GAAP earnings of $0.01 per diluted share, excluding charges, $0.01 better than the Reuters Research consensus of $0.00; revenues fell 5.8% year/year to $97.2 mln vs the $99.0 mln consensus and the $99.0 mln First Call consensus. Co also guides, sees Q2 non-GAAP loss of $0.02 to breakeven, ex items, vs the R.R. consensus of $0.01, and revenues of $92-100 mln, estimate $105.3 mln.

4:16PM Marvell beats by $0.02, ex items, beats on revs (MRVL) 39.81 -0.17: Reports Q1 (Apr) earnings of $0.34 per share, excluding items, $0.02 better than the Reuters Research consensus of $0.32; revenues rose 60.2% year/year to $269.6 mln vs the $267.6 mln consensus.

Close Dow -0.07 at 9,937.64, S&P +0.50 at 1,089.18, Nasdaq -1.58 at 1,896.59: The day opened with a whimper and closed with a whimper...stocks opened modestly higher today in part because oil prices were slightly lower...Tellabs (TLAB 7.95 -1.24) acquiring Advanced Fibre (AFCI 18.96 +2.13) and an earnings warning from Navistar (NAV 33.96 -6.25) were the top corporate news items...the May Philadelphia Fed Index at 12:00 ET was a disappointment at 23.8 compared to expectations of 31.0, and this slight sign of slower manufacturing growth in that region took the indices into the red...but they quickly recovered and meandered near unchanged for the rest of the day...
the July crude oil contract closed down $0.72 at $40.80, which provided some modest support to stocks...the 10-year note rallied 14/32 and the yield fell to 4.71%, temporarily easing rate fears a bit...still, the most noteworthy statistic from today's action is the extremely low volume figure of 1.2 billion shares traded on the NYSE...there simply isn't a lot of activity right now...there are no economic releases tomorrow although it is an options expiration day...NYSE Adv/Dec 1951/1362, Nasdaq Adv/Dec 1339/1782

11:54AM Metrologic Inst subsidiary awarded additional orders from Lawrence Livermore National Labs (MTLG) 14.77 -0.09: Co announced that its subsidiary, Adaptive Optics Associates, has been awarded Purchase Orders from Lawrence Livermore National Labs for design enhancements to the Input Sensor Packages and Output Sensor Packages used on the National Ignition Facility Construction Project. The total value of these additional purchase orders is $559K.

1:56PM Brocade Communications (BRCD) 5.55 +0.42: Brocade reported Q2 results after the close on Wednesday. The provider of SANs (storage area networks) infrastructure solutions published pro-forma EPS of $0.03 on revenue of $145.579MM (+11.2% Y/Y) vs. Reuters Research consensus at $0.03 on $145.17MM. GAAP EPS was ($0.01).

Director business was strong. Port count increased over 5%, which helped to offset an approximate 5% decline in average selling prices. Sales in the Entry-level segment were down sequentially, which management attributed to product transition as a result of the mid-quarter introduction of new entry-level switches. Sales in the Mid-Range segment were in line with Q1. Sales in the Enterprise segment benefited from the introduction of SilkWorm 24,000, which offer customers product protection.

Enterprise IT spending continues to improve. Management expects the pricing environment to remain stable. The adoption of blade servers, information life cycle management, and utility computing are expected to drive demand for intelligent switching and network storage solutions. IDC forecast the blade server market to grow from under $700MM in 2003 to over $8B by 2008. The mid-range and enterprise SAN market segments are forecast to grow 38% and 45% per year respectively through 2007. The entry-level market, for small and large enterprises alike, is under-penetrated and represents emerging, rapidly growing large market opportunities. The following table shows market penetration and port growth for SAN solutions by customer market segment. Segment Market Penetration Port Growth 2003-2007
FC SAN Server FC SAN-Attached Storage
Entry-Level 5% 15% 300%
Mid-Range 25% 50% 38%
Enterprise 50% 65% 45%
Gross margin increased 129 bps Y/Y to 55.3%. Extra week in quarter added approximately 3% to revenue but operating expenses declined 4.1% Y/Y as management reduced sales and marketing expense. Operating margin increased Y/Y from a loss to 6.6%.

Management announced headcount reductions totaling 110 people to further optimize business model; 40 positions were eliminated in Q2. Guided for Q3 revenue of $147-152MM (+10.1-13.9% Y/Y). Gross margin is expected to be 55-56%. Target for 2005 is 55-58%. Operating expense is expected to be $67-69MM, 44-47% of sales vs. target at 38-40%. Capex is expected to be $6-8MM. Headcount related cost savings expected to total $3-4MM, and will help offset planned increases in product development. Reuters Research consensus at $0.04 on $150.65MM.

The following table shows price multiples and Y/Y growth rates for BRCD compared against industry comps within the computer systems & peripherals and software & programming groups. Company *P/SG **P/OPG P/S Y/Y Revenue Growth
TTM 2004E 2005E TTM 2004E 2005E
Brocade Comm (BRCD) 1.6 (10.5) 2.4 2.2 2.0 0.6% 13.8% 12.7%
CNT (CMNT) 0.1 (2.9) 0.4 0.3 0.3 141.1% 19.5% 13.6%
CIENA (CIEN) 5.1 17.4 5.8 4.6 3.2 9.5% 24.1% 42.1%
Cisco Systems (CSCO) 3.8 18.2 7.1 6.7 5.8 3.2% 16.6% 14.6%
EMC (EMC) 2.1 34.3 3.7 3.1 2.7 21.8% 29.3% 14.3%
Hewlett-Packard (HPQ) 0.5 15.3 0.8 0.8 0.7 18.4% 9.2% 5.9%
IBM (IBM) 1.1 11.5 1.6 1.5 1.4 9.7% 8.0% 6.1%
McData (MCDTA) 0.6 (50.4) 1.3 1.3 1.1 49.2% 3.7% 15.5%
QLogic (QLGC) 2.4 7.7 4.8 4.6 4.1 25.6% 5.5% 11.0%
Sun Microsystems (SUNW) 0.9 (18.8) 1.1 1.2 1.1 (6.9%) (4.2%) 1.9%
Veritas (VRTSE) 2.7 15.0 5.9 5.1 4.5 21.8% 16.5% 11.4%
Computer Sys & Peripherals 0.9 17.2 1.3 n/a 11.2% n/a
Software & Programming 2.7 34.1 4.8 6.9%
Blended 1.4 22.0 2.2 9.9%
*P/SG Ratio: Normalized Trailing 12 month (Price / Sales) / Growth ratio as of May 14, 2004.
**P/OPG Ratio: Normalized Trailing 12 month (Price / Operating Income) / Growth ratio as of May 14, 2004.

BRCD has declined over 20% since the Q1 review, when we suggested investors wait for a 15-20% pullback or for growth to accelerate and operating margin to expand into the lower teens before initiating a new position. Shares are now, based on our inverted EVA/DCF model, priced for sustained upper teens revenue growth from F07 assuming 23% operating margin.

Increased revenue momentum reflects improved product positioning and firming market demand but shares continue to price in relatively high expectations for revenue growth and operating improvement. Management's 2005 operating margin goal is 15-20%. We would wait for an additional 15-25% pullback.--Ping Yu, Briefing.com

http://biz.yahoo.com/mu/story.html