NETWORKS

Zacks.com releases details on a group of stocks that are part of their exclusive list of Stocks to Sell Now. Since inception in 1988 the S&P 500 has outperformed the Zacks #5 Ranked Strong Sells by 96.9% annually (12.0% vs. 6.1% respectively). While the rest of Wall Street continued to tout stocks during the market declines of the last few years, they were telling customers which stocks to sell in order to save themselves the misery of unrelenting losses. Below is a synopsis of why these two stocks have a Zacks Rank of 4 (Sell) and should also most likely be sold or avoided for the next 1 to 3 months. Cray Inc. (NASDAQ:CRAY) designs, builds and sells high-performance vector processor and general-purpose parallel computer systems. For its first quarter, Cray reported a loss of 5 cents per share, which reversed a year-ago profit while also falling short of the consensus' profit expectation. Total revenue came in at $42.1 million, compared to $44.1 million last year. The company stated that the quarter's results were impacted by government procurement delays and a general slow-down in the defense segment. The company went on to say that revenue weakness in the first quarter will continue through the first half, even though it is making progress on the sales front and orders have begun to pick up. The company has experienced several downward revisions from analysts of late, sending earnings estimates for this year, ending December 2004, below levels from one month ago. However, Cray has big plans for the second half, including the introduction of the Cray X1E(TM), Red Storm and Cray XD1(TM). The company anticipates accelerated growth once these products become available, but it is unlikely to make up for the first half shortfall in time to meet its 2004 plan. Investors may want to stay on the sidelines a little bit longer with this innovative company, and wait for its earnings estimates to rise down the road. Foundry Networks Inc. (NASDAQ:FDRY) designs, develops, manufactures and markets a comprehensive suite of high performance networking products for enterprises and Internet service providers. Late last month, Foundry Networks posted first quarter net income of 14 cents per diluted share, which rose from the year-ago total but fell short of the consensus by approximately -17%. The company stated that revenues in Japan were below expectations in the quarter due to the timing of several service provider follow-on orders through its largest customer/reseller in Japan, Mitsui. Looking forward, Foundry Networks forecasted second quarter earnings of between 13 cents and 15 cents per share, which was below the consensus at the time. Earnings estimates for the year ending December 2004 moved lower by 7 cents, or about -10%, from levels achieved one month ago. However, Foundry Networks saw several positive signs in the quarter, including an improvement for its domestic business and continued strong sales to the Federal Government. In addition, revenues in the quarter did improve upon last year. Foundry Networks continues to introduce solutions to address demand in emerging markets, but for now investors may want to hold off on allocating funds to their portfolios until analysts give its earnings estimates a boost.