Activision and Adobe Dominate Tech Business Recap
Taiwanese motherboard makers are also feeling the effects of the Thai floods. Representing a large percentage of the global market, these companies expect fourth quarter shipments to decline 10-15 percent due to hard drive shortages, according to a DIGITIMES article. This drop will have a snowball effect on Intel Corporation (NASDAQ:INTC) and Advanced Micro Devices, Inc. (NYSE:AMD) CPUs and Dell Inc. (NASDAQ:DELL) and Hewlett Packard Co. (NYSE:HPQ) computers.
Suntech Power Holdings (NYSE:STP) released preliminary third quarter earnings and saw a 6.1 percent drop in its stock. The company reported a $800 million revenue vs. a $780.7 million estimate with a third quarter gross margin for approximately 13 percent. The company said it expects a larger-than-expected foreign exchange loss for the quarter from euro/dollar volatility.
Rovi Corporation (NASDAQ:ROVI) issued a downward guidance but maintained a Buy rating from a Canaccord Genuity analyst with a lowered $63 price target. The analyst wrote, “Our lowered estimates are the result of expected declines in non-core businesses. ROVI’s core businesses remain strong… [We] remain confident that numerous growth opportunities exist in 2011 and beyond.”
A trio of bipartisan senators have unveiled federal legislation, called the Marketplace Fairness Bill; this will allow the 50 states to collect sales tax on internet purchases. The bill will bypass California and the other states fighting with Amazon.com (NASDAQ:AMZN) over sales tax and “exempt sellers with annual sales of $500K or less from collecting state sale tax.”
Sens. Richard J. Durbin (D-Ill.), Lamar Alexander (R-Tenn.) and Michael B. Enzi (R-Wyo.) are sponsoring the bill.
Even though Activision Blizzard Inc. (ATVI) beat third quarter estimates, increased its 2011 guidance and received a good analyst report, its stock has been selling off today. One area affecting this is the 800,000 quarter over quarter subscriber decline to 10.3 million in its World of Warcraft game. While subscribers pay $15 per month, the company saw its costs of sales come to less than $60 million in the third quarter. Dig Deeper: Activision Blizzard Analyst Earnings Recap.
Adobe Systems Incorporated (NASDAQ:ADBE) says it will discontinue developing Flash for mobile browsers amid long-term criticism from Apple Inc. (NASDAQ:AAPL) that it is unstable for both phones and tablets. Apple will not use it on their products. This stoppage may affect mobile browsers for videos, websites and applications.
It’s been a tough week for Adobe. On Tuesday it announced a restructuring plan that includes a 7 percent employee layoff.