Winners and Losers For the Week: Simpletech, Avici Systems, MGI Pharma and Spectrum Brands

by: Investopedia Advisor

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Shares of the flash and DRAM memory producer, Simpletech (NASDAQ:STEC) were up this week as it boosted its 2nd quarter revenue and EPS expectations. Overall, Simpletech expects that revenues will be around $78-79 million, which is a huge jump compared to previous expectations of $67 – 70 million. Subsequently, EPS is expected to be $0.09 – 0.10, which is almost double compared to earlier guidance of $0.05. Simpletech attributes these gains to the higher than expected demands for every one of its product categories. The market evidently liked Simpletech’s results as its shares jumped from $3.85 to $5.05 (or 31%).

Avici Systems Incorporated (AVCI)
received a big boost as its share price gained 30.5% over quarterly results that exceeded analyst expectations. Many predicted it would be slim pickings for the provider of high speed internet infrastructure equipment, as estimates placed this quarter's revenues to be at best $11 million, withEPS to be -$0.17. However, the company gave the market a positive surprise as it posted second quarter revenues of $25.3 million and EPS of $0.53. A company press release attributes that "a surge and acceleration in demand" caused the dramatic difference in earnings.


MGI Pharma Incorporated (MOGN) is living on life support as its share price tumbled from $21.43 to $14.68 (or 31.5%) over news of weak second quarter performance. The specialty biotech drug company had reported a second quarter EPS of -$0.08, which was below consensus estimates of +$0.01. Bad news is constantly on the heels of this company as not only did its lead product, a chemotherapy-related nausea treatment called Aloxi, did not sell as well as predicted, but a competitor is set to launch an inexpensive generic version of the drug much earlier than originally predicted. Despite all the negative news surrounding this company, some analysts still believe that the sales for Aloxi will still increase.

The title of biggest loser of the week belongs to consumer products company, Spectrum Brands (SPC). While the company did not disclose any numerical data, it did give dire predictions that its quarterly earnings will be "substantially lower than the latest earnings guidance (that was) provided in the company's May 2, 2006 earnings release." The company attributes to lower than expected sales particularly in its European battery business and its North American shaving and grooming products during Father’s day. Overall, the market did not take too kindly to the prospect of such negative news, which is evident in the fact that the company’s share price plummeted 42.7%.

By Albert Phung, Contributor - Investopedia Advisor

At the time of release Albert Phung owned no shares in the companies mentioned in this article.