By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Big losses from network-equipment
maker Infoblox Inc. and Web-hosting company Rackspace Hosting Inc.
stood out among tech stocks Tuesday after both companies gave
weaker-than expected earnings outlooks.
Infoblox (BLOX) plunged by more than 47%, to $17.57 a share,
after the company said late Monday that it expects to report a
second-quarter profit of 10 to 12 cents a share on revenue between
$60 million and $61 million. Wall Street analysts had forecast
Infoblox to earn 10 cents a share on $65.7 million in sales for the
quarter. Infoblox Chief Executive Robert Thomas said the company
suffered a shortfall of business in January, with fewer deals worth
$1 million or more than had been expected.
Needham & Co. analyst Alex Henderson cut his rating on
Infoblox to hold, and Sterne Agee analyst Alex Kurtz lowered his
rating on the company's stock to neutral from buy saying evidence
suggests that "lack of projected [2014] growth is a deeper issue
internally than merely a few key deals slipping during the
quarter."
Rackspace (RAX) shares fell by 15%, to $34.27 after the
Web-hosting company on Monday said Chief Executive Lanham Napier
would retire and be replaced by co-founder and former CEO Graham
Weston. Rackspace also said it would continue with shifting toward
being a cloud-software developer. Rackspace also forecast
weaker-than-expected revenue for all of 2014.
Groupon Inc. (GRPN) was also in the red, falling more than 6% to
$10.35. The daily deal and e-commerce company said in a Securities
and Exchange Commission filing on Monday that Jeff Holden, its
senior vice president of product management, will leave the company
on March 18.
Losses also came from eBay Inc. (EBAY), Amazon.com Inc. (AMZN),
Netflix Inc. (NFLX) and AOL Inc. (AOL).
However, the overall tech sector advanced, with gains from Apple
Inc. (AAPL), Yahoo Inc. (YHOO), Hewlett-Packard Co. (HPQ),
Microsoft Corp. (MSFT) and IBM Corp. (IBM). The Nasdaq Composite
Index (RIXF) rose 13 points to 4,161 and the Philadelphia
Semiconductor Index (SOX) was up by almost 1%.
More must-reads from MarketWatch:
Morning financial reads
Customer complaint: 'I was locked inside my bank'
Can Yellen top Bernanke's S&P 500 average gain on
Humphrey-Hawkins days?
Subscribe to WSJ: http://online.wsj.com?mod=djnwires