Shares of Nortel took another tumble on Tuesday, but only this time it wasn’t because of accounting concerns.
Nortel’s stock fell 16% on concern about margins and pricing pressures. In the company’s bi-weekly update, CEO Bill Owens said “it is clear that our business model is not achieving our targeted operating cost … performance of below 40% of overall revenues and our targeted gross margin percent of mid-40s.”
Nortel is holding the regular updates until it is back in compliance with security laws, which the company expects in mid-August when it releases first-half results and restates results as far back as 2001.
When those results are released, Owens said the company “will provide a further update on the performance of our business and the actions that we will be taking to put into place an improved cost structure to optimize our financial performance.”
The rest of the market staged a long overdue bounce on better than expected consumer confidence and housing data.
The Nasdaq surged 30 to 1969, the S&P 500 rose 10 to 1094, and the Dow gained 123 to 10,085. Volume rose to 1.61 billion shares on the NYSE, and 1.77 billion on the Nasdaq. Advancers led 20-12 on the NYSE, and 21-9 on the Nasdaq. Upside volume was 68% on the NYSE, and 77% on the Nasdaq. New highs-new lows were 31-54 on the NYSE, and 26-169 on the Nasdaq.
After the close, PeopleSoft missed estimates. Veritas
beat lowered estimates, and Monster
, Akamai
, Avaya
, McAfee
, Websense
, Cree
and Kronos
also topped estimates. Sina.com
and Microstrategy
beat estimates but warned, and LSI
, UTStarcom
, iPass
and National Instruments
also warned. EDS
cut its dividend.
During the day, Microsoft slipped as an EU hearing date was set.
Verizon , Novatel
, FindWhat
, Genesis Microchip
, Powerwave
, BMC
and Rudolph Technologies
gained on better than expected results.
Cray plunged 40% on disappointing results and a downgrade, and Silicon Labs
and SonicWall
fell on their results.
Asyst fell after losing its CFO.
Symbol Tech fell 10% on an acquisition.
