Tag - Voxx

Small-cap stocks remained sharply lower into midday, down 4.05% and unable to sustain a morning rally for the third consecutive day. Market Watch highlights so far today include:

• When President Bush spoke this morning, small caps were off about 1.2% and the Dow was down about 80 points. The President made a surprisingly quick prepared remark, took no questions, and the began falling hard … within an hour after his appearance the Dow was down more than 350 points and small caps were off 4%.
• After multi-year highs a few months ago, cattle/hog prices are down on fears that meat consumption will suffer in a global recession.
• Gold/silver stocks and oil/energy stocks are the weakest sectors in today's trading. Footwear and retail home improvement are up fractionally. Gold is currently off 10%.

Small Cap Gainers:

• Audiovox (Nasdaq:VOXX) swings to Q2 loss. Shares of the electronic products distributor shoot up 16%.
• Union Bankshares (Nasdaq:UBSH) upgraded by Robert W. Baird; shares surge 17%.
• Stifel Nicolaus initiates coverage on Umpqua Holdings (Nasdaq:UMPQ) with a “hold” rating. Shares jump 21%.
• Airline small-cap UAL Corp. (Nasdaq:UAUA) announced Thursday it will lay off 414 mechanics; stock is currently up 8.4%.
• Private equity firm Prospect Capital (Nasdaq:PSEC) to repurchase up . . .

A few years ago, communications equipment and wireless-broadband company UTStarcom, Inc. (Nasdaq:UTSI) was a rising star. Largely driven by its leading market share in China, where breakneck economic growth, soaring consumer demand and the Chinese government's commitment to speed up technology infrastructure helped the company annually double its sales and profits. But, alas, no more. A cycle of turmoil, including steady financial woes and management discord, dragged the company into the red in 2005 and it has stayed there until recently, with signs pointing to it bouncing back into the black.

Founded in 1991 and headquartered in Alameda, Calif., UTStarcom provides communications equipment, networking solutions and international service and support to telecommunication service providers that operate wireless and wireline networks. With R&D operations in the United States, Canada, China, India and South Korea, the company sells its broadband, wireless and handset solutions to operators in both emerging and established telecommunications markets around the world. The company has had most of its successes in China and India, where it controls 65% and 80% of mobility markets, respectively.

Of the five company segments, which include broadband infrastructure, multimedia communications, handsets and services, UTStarcom's broadband business appears the most promising. IPTV, or Internet protocol TV, a technology that allows computer users to watch streaming TV channels over the Internet, is burgeoning in China, Japan and India, three key places where UTStarcom does business. The company, which dominates the small but fast-growing Chinese IPTV market with 90% market share, expects to have some 20 million paying IPTV subscribers by 2010. It helps that UTStarcom has solid relationships with domestic carriers and content providers such as Shanghai Media Group, the second-largest media group in China that also works closely with Intel Corporation (Nasdaq:INTC).

Last week, UTStarcom announced it will help set up an interactive advertising system in China for Guangxi Telecom Co., a firm owned by Beijing-based China Telecom Corp. (NYSE:CHA). While the company didn't release the terms of the deal, it did say Guangxi Telecom will use UTStarcom's IPTV equipment in the new advertising network, which will reach 14 Chinese cities through set-top boxes in office . . .

Small-cap stocks plunged early Friday as a downward spiral developed among government-sponsored mortgage firms and record high crude oil prices sent equity bears on a stampede. At 10:00 a.m. ET, the Russell 2000 (NYSE:IWM) was down 3.09, or 0.46%, at 667.35, an ugly start to the day, but well off the initial morning lows.

The Michigan sentiment survey came in better-than-expected, with the headline figure at 56.6, compared with the median forecast of 55.5. The stock market appeared to bounce mildly off the lows in conjunction with the Michigan figures, but the market was already trying to mount a recovery move even before the data came out.

Fannie Mae (NYSE:FNM) collapsed some 40% shortly after the open, and similar losses were pinned on Freddie Mac (NYSE:FRE) on huge trading volume. Selling fury was fueled overnight by an article in the New York Times suggesting the government was considering a takeover of the embattled mortgage lending giants as the housing slump and credit crisis wallop the firms.

The freefall in GSEs spilled over to the rest of the financial sector, with large caps such as Wachovia Corp. (NYSE:WB) down 9%, Merrill Lynch down 6% and Lehman Bros. (NYSE:LEH) off 17%. Small-cap index products are peppered with regional and small banks, and they often have even more trouble gaining access to credit than the bigger banks, so heightened fears on the credit crunch could slice into the outperformance seen in the Russell 2000 versus large-cap index products (although in early trade, losses in the Russell 2000 were on a slower pace than its big-cap brethren).

“Retail and credit issues sparked selling yesterday and remain a concern today. Volatility is high right now. I think FNM and FRE are vulnerable to further losses, but the market is thinking that the government will aid the GSEs in some way and keep the financial system whole,” Nick Kalivas, vice president of financial research with MF Global, told SmallCapInvestor.com in an email interview.

“I think earnings news should be the main focus and Thursday’s DOW/ROH deal was bullish, but the credit environment is so uncertain and the market does not see the financing available for a host of deals. The market is cheap based on the M&A, but there may not be the liquidity or money to actually push it higher. That . . .

Audiovox Corp. (Nasdaq: VOXX) CEO Patrick Lavelle said the consumer electronics vendor plans to remain active in seeking mergers and acquisitions and is preparing for a “strong” holiday season. Lavelle made the comments during a midday conference call.

This fiscal year, the Hauppauge, N.Y.-based company acquired consumer electronics companies Thomson, Oehlbach and Incaar.

“Every one of these acquisitions were synergistic and together, they will add roughly $185 million to $200 million to our revenues on a full-year basis, while costing us only $67 million,” Lavelle said. “We will continue to be active on the [mergers and acquisitions] front.”

The chief executive said the volatile credit market has given Audiovox an advantage over private equity groups in pursuing acquisitions. The credit market has also forced more reasonable company valuations, he said.

“The breadth of our line, combined with our impressive brand portfolio and financial stability, makes us an attractive supplier to some of the world’s largest retailers,” Lavelle said. “In addition, we have significant financial resources at our disposal to continue to pursue the right strategic acquisition to help expand and enhance overall performance.”

After Wednesday’s close, Audiovox announced second-quarter revenue of $148.3 million, up 52.2% from $97.4 million a year earlier. The company’s net income for the three months ended Aug. 31 was $3.7 million, or $0.16 per share, compared to a loss of $2 million, or a loss of $0.09 per share, during the comparable prior year quarter.

STEC Inc. (Nasdaq: STEC) fell $0.83 a share, or more than 10%, to $7.30 in after-hours trading after issuing second quarter revenue guidance that fell short of analysts’ expectations. STEC, which uses Flash memory and DRAM technologies for memory applications, said after the close that it expects revenues of $41 million to $43 million in the second quarter ending in June, compared with analyst estimates centered at $49.2 million. For the first quarter ended March 31, STEC said it earned $6.71 million, or $0.13 a share, up from $104 million, or $0.02 a share, a year earlier. Analysts were expecting an average per-share profit of $0.06. Revenues rose to $47.2 million in the first quarter, compared with $40.4 million a year earlier and analyst estimates of $45 million.

ICF International (Nasdaq: ICFI) was trading at $26.13, up $2.41, or about 10%, in after-hours trading, after beating expectations with first-quarter results and guiding analysts to more profitability in the second quarter. For the three months ended March 31, net income was $0.60 per diluted share, compared with $0.11 a year earlier. Revenue was $151.7 million, dwarfing the year-ago quarter’s revenue of $53.4 million. Analysts had been looking for earnings per share of $0.45, and revenue of $129.35 million. The Fairfax, Va.-based consulting company also says it expects second quarter 2007 revenue to range from $135 million to $145 million, and full year 2007 revenue to range from $530 million to $550 million to $43 million.