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A large number of earnings reports will be released during the shortened second week of earnings season. Here is a summary of some of the top surprises likely to come.


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NetScreen Technologies, Inc. (NSCN) made our Earnings Whisper Play list on Friday, January 17, 2003 with an Earnings Whisper ® number that is two cents above the consensus estimate of $0.07.

Walter Pritchard at SoundView Technology Group told clients that last week that he expects NetScreen to report an upside to the consensus and his higher-than-consensus estimate. Around the same time, Joel Fishbein at Janney Montgomery Scott told his clients that his checks suggest NetScreen has "won several significant deals" during the quarter and has a robust pipeline. In addition, NetScreen continues to achieve new government sales.

Chris Russ at Wachovia Securities told clients that NetScreen should exceed their estimates of $45.3 million in revenue and earnings per share of $0.07 due to a particularly strong quarter in Europe and Asia, which lead to a shortage of supply in NetScreen’s lower-end products.

Also, last week, Jordan Klein at UBS PaineWebber raised his target price from $19 to $21 because of his expectation for a strong quarter. Mr. Klein stated that NetScreen "has more gas left in the tank when it comes to potential share price appreciation as well as delivering strong quarterly financials." He added that his research suggests that investors expecting an upside earnings surprise will not be disappointed.

NetScreen will be reporting earnings after the market closes on Wednesday, January 22, 2003, which will be reported at http://www.earningswhispers.com. The conference call will be broadcast from http://ir.netscreen.com/ireye/ir_site.zhtml?ticker=NSCN&script=1010&item_id=697450 beginning at 4:30 PM ET.

Network Associates (NET) was also on Friday’s Earnings Whisper Play list. Ed Maguire at Merrill Lynch told clients that he believes Network Associates "will likely beat the consensus and [Merrill Lynch] EPS estimate of $0.24 per share." Mr. Russ told his clients last week that Network Associates will meet his estimate and there is potential for upside to the estimates.

The real consensus among the analysts is that Network Associates will have strong sales across all its product lines, but overall revenue will be roughly inline with the consensus revenue estimate of $255 million. There is a chance for some revenue upside, but the earnings surprise will likely be from an upside in margins.

Network Associates is expected to report earnings before the market opens on Thursday, January 23, 2003, which will be reported at http://www.earningswhispers.com. The conference call will be broadcast from http://www.irconnect.com/net/conf/4q2002.mhtml beginning at 8:30 AM ET. The Earnings Whisper ® number is $0.25 per share.

Making the Earnings Whisper Play list for Tuesday, January 21, 2003 is Emulex (ELX). Emulex and McData (MCDTA) are closely leveraged to EMC (EMC). Both McData and EMC pre-announced a positive earnings upside, which has given support for a positive earnings surprise from Emulex when it reports Thursday after the market closes.

The consensus estimate is for revenue of $74 million and earnings per share of $0.19. John Roy, an analyst for Merrill Lynch, said he expects Emulex to at least meet these estimates and could exceed them. The Earnings Whisper ® number for Emulex is $0.20 per share on revenue of $75 million.

Emulex’s conference call will be broadcast from http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=ELX&script=1010&item_id=697576 beginning at 4:30 PM ET on Thursday. A transcript of the call will be posted at http://www.earningswhispers.com/stocks.asp?symbol=ELX shortly after the completion of the conference call.

Mr. Maguire told clients that Merrill Lynch’s revenue estimate of $49.4 million for Informatica (INFA) is slightly ahead of the consensus revenue estimate of $48.8 million and his checks suggests there will be a modest upside to his number. Mr. Maguire added that Informatica will beat his break-even earnings estimate.

Mr. Maguire also said that this is a "show me" quarter for Informatica, while Nathan Schneiderman at Wedbush Morgan Securities told clients that Informatica’s management has become "impatient with its near break-even results and wants to move quickly into solidly profitable territory." As a result, Mr. Schneiderman increased his earnings estimates. He also increased his price target from $8 to $9 - 1/3 above the current price of $6.76.

The Earnings Whisper ® number is $0.02 per share on revenue in excess of $50 million. The consensus earnings estimate is $0.01. Informatica will release earnings after the market closes on Thursday and the conference will begin at 5:00 PM ET from http://www.shareholder.com/infa/MediaRegister.cfm?MediaID=6858.