Symantec (NASDAQ:SYMC) is in a $1 bln court dispute with the IRS involving dealings among two affiliated companies. Symantec said the IRS is seeking more than $757 mln in back taxes owed by Veritas Software, a company acquired by Symantec in 2005.
The biggest threat to cable companies is the internet. Tons of media content that ranges from television shows to newly released movies can be downloaded from the internet. Cable operators are not stupid and are not entering the online-video realm to tap into new revenue sources and fight off ballooning competition from startups, entertainment companies and large Internet sites that offer video on the Web. Comcast (NASDAQ:CMCSA), the biggest cable company, is buying new technology and accumulating broadband rights to a wide variety of movies, TV programs and other videos that it plans to make available on its Web site. It plans to enable subscribers to route all its Web-based video content to regular TV sets, a move that would greatly expand what's available to them on television. In addition, in a first among cable players, Comcast wants to make its broadband content available not just to its own high-speed Internet subscribers but to users of the Internet everywhere.
Red Hat (RHAT), the largest distributor of Linux computer software, said that costs from its acquisition of JBoss will be higher than expected. Red Hat also reported profit rose 11 percent to $13.8 million as sales climbed 38 percent.
Micron Technology (NASDAQ:MU), the largest U.S. maker of computer-memory chips, said it had sales of $1.31 billion in the fiscal third-quarter ended June 1, trailing an estimate of $1.36 billion by JPMorgan analyst Shawn Webster.
Thomas Weisel notes that Micron's 33rd quarter was shy of expectations on an operating basis but notes that MU's diversification efforts continued strongly in 3rd quarterQ, with C.M.O.S. image sensors contributing 16% of revenues and N.A.N.D. 5% of sales. Firm expects double-digit growth from both segments in 4th quarter.
UBS cuts their Xilinx (NASDAQ:XLNX) target to $26 from $30 based on a lower P/E multiple as a results of the raised risk premium and the firm's lower EPS estimates that could arise to address past options grant practices. The firm also cut their 2007 & 2008 estimates.
Janney says that wage inflation in the Offshore IT Services industry remains a concern, especially at the middle mgmt level, but they believe it is still manageable. Firm says that Cognizant (NASDAQ:CTSH) appears to be in the best position to fend off margin pressure; while Infosys (NYSE:INFY), Satyam (SAY), and Wipro (NYSE:WIT) seem to have similar flexibility in their models although on a lesser scale.
Rochdale downgraded Oracle (NYSE:ORCL) to Hold. The firm is saying they are concerned about the sustainability of the company's rapid growth and due to the uncertainty in the economic environment, high investor expectations and potential seasonal weakness.