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Novell, Marvell and the Dreaded Unemployment Report

Posted by Cassie Slane on Tue, Nov 25, 2008 @ 07:25 PM
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After a shortened holiday week, investors will get back into this swing of things as they hear earnings from a number of companies as well as November's unemployment report. The unemployment rate is expected to rise to 6.7% in November, with companies expected to cut another 268,000 jobs, according to Thomson Reuters. In October, the unemployment rate was 6.5% with 240,000 job losses.

As for earnings, investors will be closely watching the last big discount retailer to report results: Big Lots Inc. (BIG). Shares of the retailer plunged on November 6 after it reported a 0.2% decline in third-quarter same-store sales. Big Lots is expected to post third quarter profit of $0.16 per share, up from $0.14 per share a year ago, on revenue of $1.03 billion.

On Tuesday, Marvell Technology Group Ltd. (MRVL) reports its third-quarter results after the close. Last quarter, the maker of microchips used in iPhone forecast that its third-quarter sales would be below analyst estimates. Still, analysts are expecting Marvell to report a 50% jump in earning to $0.21 per share compared to a year ago on revenue of $793.8 million. If you're long this stock, you may want to hold your position into next day. The stock has a near-term tendency to widen its moves in the following regular session, doing so three out of the past four quarters. On August 28, the stock dropped 3.1% in after-hours trading after guiding for lower third-quarter sales. The loss widened the following regular trading session, down 4.4%.

Novell Inc. (NOVL) is set to report fiscal fourth-quarter results after the close on Thursday. The software maker is expected to report earnings of $0.6 per share, unchanged from a year ago, on sales of $249.8 million. The stock continues to be beaten up, dropping below $4 per share in the past few trading days. Novell has a strong tendency to widen its after-hours move in the regular session, doing so in 14 of the last 18 after-hours earnings events MidnightTrader.com has tracked. On August 29, shares climbed 1.5% in after-hours trading after posting strong quarterly results that beat analyst estimates on strong sales of its Linux business. Shares extended those gains in the following regular session, ending up 7.0%.

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