Wall Street Beat

Dell and Cisco disappoint investors

Dell lived down to its gloomy financial forecast from last week when it released its third-quarter earnings on Thursday, showing lower earnings than in last year's third quarter and revenue that is growing, but not as quickly as previously projected. Dell missed its revenue target for the second straight quarter. The company, once adored by Wall Street, is struggling with intense competition and with product-quality problems.

Investors continued tugging Dell's stock steadily downward all week. Dell (ticker symbol: DELL, on the Nasdaq exchange) scraped a 52-week low of $28.67 on Thursday in advance of its earnings release before rebounding to close at $29.21. Dell's shares ended Thursday down more than 30 percent from the company's 52-week high of $42.57.

Cisco Systems checked in Wednesday with solid earnings and 10 percent revenue growth, but still saw its stock whacked Thursday by investors dissatisfied that it didn't offer cheerier sales forecasts. Cisco's shares (ticker symbol: CSCO) closed down 3 percent, at $17.15, in Thursday trading on the Nasdaq exchange. Expensing stock options, as required by a new accounting rule, pulled down Cisco's earnings compared to the year-earlier period.

Investors sent shares of business software maker Geac Computer soaring Monday after a private equity firm announced plans to take Geac private in a $1 billion buyout. Golden Gate Capital agreed to pay $11.10 per share for Geac, a 27 percent premium on Geac's Friday closing price of $8.77, on the Nasdaq exchange. Shares of Geac (ticker symbol: GEAC) ended trading Monday at $10.75 and held on to those gains throughout the week, finishing Thursday at $10.67.

One of the week's big stories was the attempt being made by Microsoft's management to turn their lumbering freighter and catch the wave of "software as a service." Microsoft followed last week's launch of its new Live Software services platform with a major strategy memo by Chief Technical Officer Ray Ozzie, distributed throughout the company and passed on to reporters, examining the progress Microsoft has made in adapting to a services vision and the challenges it faces. "We're at the beginning of the biggest product cycle in the company's history," Ozzie wrote.

Microsoft shares have inched upward over the last two weeks. The stock (ticker symbol: MSFT) finished Thursday at $27.09, their highest closing price since early September.

Meanwhile, one suitor dropped out of the discussions media giant Time Warner is having about selling part or all of its struggling America Online (AOL) Internet access and content unit. Yahoo said Thursday that it walked away from talks after hearing the potential deal's proposed terms. Microsoft and Google are rumored to remain in the hunt. When Time Warner reported its quarterly financial results last week, it disclosed continuing slippage in AOL's revenue and subscriber numbers, which now has 26.7 million subscribers in the U.S. and Europe.

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