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From Briefing.com: 4:46PM MIPS Techs Announces Transition for CFO, Kevin C. Eichler (MIPS) 5.71 -0.05:Co announces the planned departure of Kevin C. "Casey" Eichler, Chief Financial Officer. Mr. Eichler joined MIPS Technologies in May of 1998. Mr. Eichler will remain in his current role until the middle of first quarter calendar year 2006 working with John Bourgoin, President and CEO and the company's executive team to ensure a smooth transition.

4:44PM Integrated Silicon beats by $0.02 (ISSI) 8.06 +0.06:ISSI reports EPS of -$0.03 ex items vs -$0.05 consensus; reports revs of $61.5 mln vs $59.9 mln consensus

4:43PM Aeroflex beats by $0.02, guides DecQ higher (ARXX) 9.02 -0.23:Reports Q1 (Sep) earnings of $0.11 per share, ex-items, $0.02 better than consensus of $0.09; revenues rose 15.1% year/year to $125.6 mln vs the $122.3 mln consensus. Co issues upside guidance for Q2 (Dec), sees EPS of $0.13, ex-items, vs. $0.11 consensus; sees Q2 revs of $132-134 mln vs. $129.2 mln consensus.

4:41PM Adaptec beats by $0.01, beats on revs (ADPT) :Co reports non-GAAP loss of $0.01 vs loss of $0.02 consensus; revs of $115.1 mln vs $100 mln consensus.

4:37PM Staktek Holdings beats by $0.01 (STAK) 3.68 +0.21:Reports Q3 (Sep) earnings of $0.02 per share, ex-items, $0.01 better than consensus of $0.01; revenues fell 20.4% year/year, but rose 13% sequentially to $12.8 mln vs the $10.4 mln consensus (2 analysts). Co issues upside guidance for Q4, sees EPS of $0.02, ex-items, vs. $0.01 consensus (2 analysts); sees Q4 revs of $12.2-12.7 mln vs. $11.4 mln consensus (2 analysts).

4:29PM Digi Intl reports in-line; guides in-line (DGII) :DGII reports Q4 EPS of $0.15 vs $0.15 consensus; reports revs of $36.2 mln vs $35.75 mln consensus. Co sees DecQ EPS of $0.12-0.17 vs $0.15 consensus; sees revs of $34-37 mln vs $36.88 mln consensus. Co sees FY05 EPS of $0.60-0.70 vs $0.67 consensus; sees revs of $150-160 mln vs $153.8 mln consensus.

4:24PM Powerwave beats by $0.03 (PWAV) :Co reports Q3 EPS of $0.15, ex items vs $0.12 consensus; reports revs of $217.8 mln vs $203 mln consensus.

Close Dow +49.86 at 10522.59, S&P +5.18 at 1219.94, Nasdaq +15.91 at 2160.22: The market rallied for the fourth time in five days, as non-inflationary Q3 productivity data and strong October retail sales enticed broad-based buying efforts. Before the bell, a report showed Q3 productivity rose a stronger than an expected 4.1% - the highest since Q204 (consensus 2.6%), while unit labor costs unexpectedly fell 0.5%, keeping inflation in check and kick starting early buying interest. Meanwhile, investors sifted through monthly same-store sales figures from more than 60 retailers, coming to the realization that the arrival of cold weather, which helped Oct. comps rise a better-than-expected 4.4% (above the year-to-date average of 3.9%), also improved the outlook for holiday shopping. Speaking of, investors again found bargains across the board, as six of ten economic sectors closed higher. Leading the charge was Energy, as crude oil prices closed up 3.3% at $61.71/bbl after OPEC reported the first drop (-360K bbls/day) in output since January. In fact, Energy's leadership was largely responsible for the market's resilience to the commodity's surge which had taken some steam out of the market late in the day. Technology also advanced more than 1.0%, extending yesterday's leadership amid a 9% surge in Qualcomm (QCOM 44.02 +3.64), which was upgraded at Citigroup after it issued an upbeat Q1 outlook. A rebound in hardware, following a better than expected Q3 report from Symbol Technologies (SBL 10.12 +2.00), continued momentum in chip stocks, especially Intel (INTC 23.89 +0.60), and reports that Scientific-Atlanta (SFA 38.23 +1.83) - a suggested holding in Briefing.com's Active Portfolio - may put itself up for sale, also lent sector support. News that Merck (MRK 29.48 +1.07) won a total victory in the New Jersey Vioxx case eased drug liability concerns, helping the Health Care sector and the Dow Jones Industrials both turn in winning performances. A new historic high on the Dow Jones Transportation Average helped the Industrials sector minimize its 4.5% year-to-date loss while strength in drug retail, the day's best performing S&P industry group following solid FY06 guidance from CVS (CVS 26.44 +1.95), helped Consumer Staples. Telecom Services, however, merely extended its S&P sector leading year-to-date loss of 8.6% as shares of Verizon (VZ 30.88 -0.59) and SBC Communications (SBC 23.50 -0.41) plunged amid concerns about the extent of the FCC's authority over the TV licensing process. Financial was also a weak spot during an otherwise solid session, as banks continued to feel the brunt of a narrowing yield curve looming overhead. Making his last testimony in front of the Joint Economic Committee, Fed Chairman Alan Greenspan said that while the economy is retaining "important forward momentum" as economic fundamentals remain "firm," "uncertainty surrounds the outlook for inflation," words that confirmed the Fed will continue to ratchet-up rates. As a result, the 10-year note closed down 9 ticks to yield 4.64%, matching the year's highest closing level reached on March 28.DJTA +1.2, DJUA +0.3, DOT +0.1, Nasdaq 100 +1.4, Russell 2000 +0.3, SOX +1.9, S&P Midcap 400 +0.3, XOI +1.7, NYSE Adv/Dec 1656/1594, Nasdaq Adv/Dec 1669/1360

10:18AM Guidant (GDT) Citigroup downgrades Hold to SELL . The firm believes without the JNJ deal, GDT is in a difficult spot given: its sharp fall off in CRM sales, limited data on its Xience DES program, potential shareholder litigation, and the need to find a new CEO.
10:16AM Career Education (CECO) CSFB downgrades Outperform to NEUTRAL. CSFB downgrades CECO following Q3 results and Q4 guidance below their ests.

10:15AM Symbol Tech (SBL) Thomas Weisel upgrades Peer Perform to OUTPERFORM. Baird upgrades SBL following better-than-expected results citing valuation. They say that while retail remains weak and sales force maturity is needed, they see positive signs of incremental revenue opportunity and improved operational discipline.

10:09AM SPX Corp (SPW) Prudential upgrades Underweight to NEUTRAL. Target $40 to $43. Firm believes while long-term growth visibility for SPX has yet to significantly improve, recent enhanced pricing flexibility, improved operating execution and enhanced financial flexibility should allow increased share repurchase while awaiting improved end market demand.

10:09AM Noble Corp (NE) Calyon Securities initiates BUY. Target $83. Firm believes rising demand for offshore drilling rigs, in conjunction with a shortage of available units, is driving day rates to record levels in all of the world's primary drilling markets. With about half of its rigs rolling off contracts over the next 14 months, they think NE is in an excellent position to capitalize on rapidly rising day rates.

10:08AM Beckman Coulter (BEC) Bear Stearns upgrades Peer Perform to OUTPERFORM. Bear Streans upgrades BEC after 3Q results. Although firm states one quarter hardly makes a trend and BEC results may be volatile over the next 3 to 5 quarters as mgmt executes on its restructuring initiatives, at this point, firm believe BEC's risk/reward ratio suggests a buying opportunity.

10:06AM RIT Technologies (RITT) CE Unterberg Towbin downgrades Buy to MARKET PERFORM. CE Unterberg downgrades RITT following Q3 results, on valuation and given the longer than anticipated carrier sales cycles. They look to be more positive as the co converts potential carrier opportunities into wins during 2006.

10:06AM Skyworks (SWKS) Am Tech/JSA Research upgrades Hold to BUY. Target $8. Amtech upgrades SWKS following Q4 results, as they believe the co has come to the conclusion that they should not be in baseband business from competitive point of view and effectively stopping to put R & D dollars into baseband development. Based on their checks, they believe SWKS is in negotiations with various suppliers to sell their Mexicali assembly and test factory or get into a supply agreement by handing over the facility to a supplier.

10:05AM SRA Intl (SRX) Adams Harkness downgrades Strong Buy to BUY. Target $43 to $36. Adams Harkness downgrades SRX based on near-term expectations of valuation multiple compression driven by slowing organic growth, lower valuations for peers, a difficult federal FY06 budget process as well as the likelihood of spending concerns tied to release of initial FY07 budget in February, and difficulty in hiring people to drive growth.

3:28PM Ann Taylor Stores (ANN)
26.46 +1.26: Ann Taylor (ANN) announced a 1.2% increase in October comparable-store sales. That was higher than the Briefing.com consensus estimate of -0.9% and on top of a 6.2% increase in the year-ago period. Total net sales for the four-week period increased 11.7% to $175.9 mln.

The company is separated into two divisions: Ann Taylor and Ann Taylor Loft. Comparable store sales in the former grew 2.2% last month while Loft sales increased 1.7%. For comparison, these figures compare to respective gains of 0.4% and 13.1% in the year-ago period. In terms of net sales during October, Ann Taylor stores realized a 3.1% increase; the Ann Taylor Loft division saw 21.0% growth.

The company noted it saw an improvement in its gross margin rate during the quarter and that it enjoyed greater leverage with respect to selling, general and administrative expenses as a percentage of sales. Citing its sales and margins to date, Ann Taylor reaffirmed the $1.17 FY05 earnings per share guidance it issued in May. According to Thomson First Call, analysts expect the company to report EPS of $1.12 for the full year, on revenues of $2.07 bln.

Ann Taylor is slated to release its third quarter earnings results on November 18. Wall Street forecasts revenues of $520.8 mln and EPS of $0.36, which reflects 80% year-over-year EPS growth. Including today's rise, ANN shares trade at 23.6x expected FY05 earnings, a premium to the stock's 5-year historical average of 21.0x.

--Lisa Beilfuss, Briefing.com

3:04PM Sunoco (SUN)

76.73 +0.40: Hurricane winds swept over the Gulf refiners as they resulted in downed production and record gasoline and diesel prices. Consumers bore a heavy burden from the inflated energy prices this summer, but now crude oil and refined products are back to pre-Katrina levels. Sunoco, one of the largest independent US refiners, saw its third quarter profit triple as profit margins skyrocketed.

The market has been trading refining stocks up in anticipation of record third quarter results. Q3 has come and gone, yet the bull market for the refiners remains on the winter run-up for heating oil. Sunoco is particularly well positioned as the largest refiner in the Northeast. Limited spare capacity and downed production will likely keep cracks well above historical levels. Investors should be cautious, however, as the refiners are high beta stocks.

Record refinery margins were the result of high refined product prices and utilization rates. Refining revenues were $341 mln, with total throughput of 866 mln barrels per day. To give an idea of the impact the hurricanes had on the refiners, Sunoco saw pre-hurricane refining margins of $7 per barrel spike to $11 per barrel! Marketing results were lower, as expected, on weaker retail margins, but marketing is expected to turn around in the fourth quarter. Chemicals, Logistics, and Coke were all in-line with projections. Sunoco, which dates back to the late 1800's, generated record quarterly earnings of $329 mln, or $2.39 per share, up from $104 mln or $0.69 per share, in last year's period. Excluding special items, the company earned $358 mln, or $2.60 per share, which was below the consensus estimate of $2.73. Revenues soared 42% to $9.3 bln.

Sunoco plans to spend $1.8 bln on capex at its refineries over the next three years. It anticipates capacity will increase by 100 mbd to 1,000 mbd. There is considerable pressure from Washington to ramp up US refining capacity. We have heard the Integrateds respond by raising capex for refining and would expect similar plans by the independents. As has been the case amongst all the energy companies, corporate expenses rose in the third quarter, which SUN blamed on higher employee-related costs. Sunoco ended the quarter with $816 mln in cash and $1.4 bln in debt. The market shook off the miss and traded the refiner higher, along with the rest of the energy sector.

--Kimberly DuBord, Briefing.com

2:21PM Clorox (CLX)

54.84 +0.75: Clorox posted lower net earnings for the fiscal first quarter as higher raw material costs offset the benefits of cost-savings and price increases. For the latest quarter, the consumer products company reported earnings from continuing operations of $109 million, or $0.71 per share, compared with earnings of $123 million, or $0.57 per share, in the year ago period. Excluding discontinued operations, the company would have earned $108 million, or $0.70 per share - in line with the consensus estimate.

Clorox, whose brands include Glad trash bags, Kingsford charcoal, Pine-Sol cleaner, and its namesake bleach, said sales grew 5% from a year ago to $1.1 billion, while volumes gained 1% due to higher shipments in Latin America and cat litter. Sales in its Household Group grew 3% as volumes were flat and pretax earnings rose 2% from continuing operations. The unit recorded record shipments of Clorox disinfecting wipes and increased shipments of Clorox bathroom cleaner, as well as Armor All auto-care products, offset in part by decreases in Clorox ToiletWand and Formula 409 cleaner. The Specialty Group, which includes cat litter, containers, and plastic bags, posted 3% sales growth and a 1% decline in volume growth. Pretax earnings, however, rose 22% due to a favorable year/year comparison, as well as the benefits of higher prices on Glad products. Meanwhile, International sales jumped 21% on volume growth of 14%. Segment profits increased 25% due to price increases and favorable exchange rates in the Latin America and Asia-Pacific regions.

Energy-related commodity and transportation costs weighed heavily on first quarter results, as gross margin declined 140 basis points from a year ago to 42.2%. Increased costs associated with Procter & Gamble's (PG) increased investment in the Glad joint venture also contributed to the decline in margins, but were partially offset by cost savings initiatives and price increases.

Looking to the second quarter, Clorox sees earnings from continuing operations of $0.41 to $0.47 per share, versus the $0.45 per share consensus estimate, and sales growth of 1% to 3%. For the full year, the company projected earnings between $2.91 and $3.06 per share, including $0.14 to $0.16 for stock compensation expenses, versus the $2.96 consensus estimate. Sales are expected to grow at the high end of the company's previously stated target of 3% to 5%.

Amid rising energy and commodity costs, which were fanned by the combined impact of hurricanes Katrina and Rita, Clorox shares are down more than 16% from their high of $66.04 set in April. Although the company has signaled additional price increases and cost-saving measures to help offset pressures, the near-term outlook continues to be overshadowed by increasing prices for raw materials. Until the company can make greater headway against commodity prices, investors should refrain from buying the stock.

--Richard Jahnke, Briefing.com

12:05PM Merck (MRK)

29.95 +1.54: A New Jersey jury on Thursday found Merck "not guilty" in the second product liability trial against the drug maker, in which the plaintiff Frederick Humeston, a 60 year old postal worker from Boise, Idaho, alleged that he suffered a heart attack as a result of use of the painkiller Vioxx. The verdict follows more than seven weeks of testimony and finds that Merck provided adequate warning to physicians over the risks associated with the use of Vioxx. In addition, the verdict signals that the company did not conceal information or commit consumer fraud in marketing the drug.

In a press release, Merck said it is satisfied with the jury verdict. Kenneth Frazier, senior vice president and general counsel of Merck, added, "there will be other Vioxx trials and we will vigorously defend them one by one over the coming years. Merck acted responsibly - from performing extensive clinical trials comparing Vioxx to NSAIDS or placebo in almost 10,000 patients prior to approval - to monitoring the medicine while it was on the market - to voluntarily withdrawing the medicine when we did."

Merck voluntarily pulled Vioxx from the market in September 2004 after studies linked it to increased risk of heart attack and stroke in long-term users. Last August, a Texas jury returned a verdict in favor of the plaintiff in the first civil case to go to trial. The jury found Merck negligent in the 2001 death of Robert Ernst and awarded his widow more than $250 million for damages. The company, however, plans to appeal that decision.

The outcome of the latest trial marks a needed victory for Merck, which has indicated that it will not settle the host of pending lawsuits against it. As the company faces more than 6,500 lawsuits, the verdict seemingly provides an early indication of the potential liability over the handling of Vioxx, which is estimated to be in the billions of dollars.

--Richard Jahnke, Briefing.com

11:19AM CVS Corp. (CVS)

26.42 +1.93: CVS Corp. (CVS) delivered third quarter earnings of $0.30 per share. That was in-line with the Reuters Estimates consensus and a 36.4% increase from the prior year. As had been previously announced, revenues rose 13% rise to $8.97 bln, which roughly matched analysts' expectations. Same-store sales for the quarter jumped 5.7%, with pharmacy same-store sales up 5.8% and front-end same-store sales up 5.4%. Total pharmacy sales represented 70.6% of the company's Q3 top line.

Driven by growth in pharmacy sales and strong sales of Halloween merchandise, the company also reported today that total October same-store sales rose 5.6%, below the Briefing.com consensus of +6.1% but steady with September's 5.7% increase. On Wednesday, CVS's primary competitor, Walgreen (WAG), reported a 6.5% increase in same-store sales for October versus the Briefing.com consensus estimate of +7.6%.

CVS's quarterly same store sales figures reflect the positive impact of the Eckerd stores acquired last July; the 1,100 stores contributed approximately 80 basis points. CVS noted its same-store sales performance excluded 31 stores that were closed by the hurricanes for at least seven consecutive days.

The company's gross margins improved 60 basis points to 26.8% last quarter while perating margins expanded 90 basis points to 4.9%. The margin expansion, coupled with the sales and synergies of the Eckerd acquisition, were core factors behind the earnings growth.

According to Thomson First Call, analysts expect the company to report $1.38 per share and $37.05 bln in sales for the full year. For the fourth quarter, analysts foresee EPS of $0.40 and revenues of $9.74 bln. Including today's gain and based on First Call's FY05 estimates, CVS shares are trading at 19.1x current earnings, a slight discount to their five year historical average of 20.7x.

--Lisa Beilfuss, Briefing.com

10:52AM Career Education Corp. (CECO)

34.50 -1.68: Career Education Corp. said third quarter profits rose sharply, as compared with the year-ago period, but issued downside guidance for the current quarter. In turn, shares of the for-profit education company have traded lower during the regular trading session.

The company, based in Hoffman Estates, IL, reported late Wednesday net income of $54.9 million, or $0.53 per share, compared with $41.5 million, or $0.40 per share, for the same period last year - two-cents better than the consensus EPS estimate of $0.51. Income from continuing operations increased to $83.7 million, from $69.4 million a year earlier, while operating margin expanded 90 basis points to 16.8%.

Revenue for the latest quarter climbed 14% from a year ago to $497.5 million, due to an increase in student population, as well as higher average revenue per student. According to Reuters Estimates, the results fell short of analysts' expectation for revenue of $204.46 million. CECO said total student population, as of October 31, 2005, was about 107,300, up approximately 8% from last year. Total student population in its online education group rose 53% to 32,000, while on-ground enrollments have continued to deteriorate, including the Gibbs division schools, which have experienced a significant decline in student population relative to prior years.

CECO forecast fourth quarter earnings of $0.66 to $0.69 per share on sales of $522 to $532 million. Additionally, the company expects online revenue to be approximately $170 million. Analysts had been expecting earnings of $0.68 per share on revenue of $544.77 million, according to Reuters Estimates.

Given the counter-cyclical nature of CECO, the recovery in the labor market, coupled with increased competition and more regulatory disclosures, is likely to have a negative impact on the company's near-term performance. In addition, on-ground enrollments continue to decline, and exacerbate near-term pressures. As such, the upside opportunity appears to be limited.

--Richard Jahnke, Briefing.com

10:09AM Harrah's Entertainment (HET)

64.36 +3.26: The June 13th acquisition of Caesars Entertainment raised Harrah's third quarter profits by 42% to $169 mln. This compares to $118.8 mln earned in last year's period. HET was able to withstand the hurricanes, generating same-store sales growth of 7.3%. Cross-market play, another metric used by casinos to gauge customer loyalty, rose 13.0% over the prior year. Harrah's rolled the dice and came up with earnings two cents ahead of the consensus estimate of $1.01 per share, excluding items. Revenues were $2.33 bln - a gain of 7.2% year/year.

Harrah's divides its revenues according to region. Harrah's West properties, including Las Vegas and Northern Nevada, set the pace, generating consolidated revenues of $856.3 mln, up 48.4% y/y. Harrah's snatched up four new casinos on the Vegas strip including Caesars Palace and the Flamingo. The Atlantic City properties make up the bulk of the Eastern region. They too were joined by new additions, Caesars and Bally's. The acquisitions ramped up revenues by 66.6% to $562.1 mln. An Illinois tax adjustment impacted results within its North Central division, with revenues rising only 2% to $81.2 mln.

The South Central unit, which includes Louisiana and Mississippi, was severely impacted by the hurricanes, which closed down four properties. HET hit the jackpot, though, when the state of Mississippi decided to permit shore-side gaming in order to rebuild the Gulf Coast, which is sure to be bigger and brighter than before. Acquisitions and storms dramatically ran up costs in the quarter. The market has already discounted the quarter due to the hurricanes. Even though we hold an underweight rating on Consumer Discretionary, the gambling industry remains a solid bet. The stock has fallen over twenty dollars in just three months, but after today's upside, the buyers clearly feel the timing is right.

--Kimberly DuBord, Briefing.com

9:51AM Gymboree (GYMB)

19.43 +1.30: Yesterday, Sprint Nextel and a consortium of cable providers announced a joint venture detailing a wireless offering that includes the "quadruple play" of video, wireless voice and data services, high speed Internet, and cable phone services. Today specialty retailer Gymboree, another one of Briefing.com's suggested holdings for active investors, announced a quadruple play of its own that included an 18.0% surge in October same-store sales (consensus +5.6%), above-consensus guidance for Q3 and Q4, above-consensus guidance for the full fiscal year, and a $55 million share repurchase authorization.

Gymboree investors were given a lot to cheer about, and not surprisingly, their enthusiasm is being reflected in the stock, which is up 7.0%. Briefing.com, for its part, was certainly pleased to hear the latest update from Gymboree as it validated the contrarian view of the stock we first highlighted in a Bargain Hunting article in January. Specifically, that view was predicated on the idea that GYMB had an attractive risk-reward profile given the market's depressed expectations, changes in management at the CFO and General Merchandise positions, and the company's solid balance sheet that offered an increased opportunity for the company to report positive surprises.

GYMB is up 58.0% since the January profile and it is up 46% since we added it to our portfolio for active investors in June. We continue to like the stock as signs of operational progress have clearly emerged while consensus earnings estimate trends continue to be revised upward.

In terms of the company's updated guidance, it expects Q3 EPS in the range of $0.35-0.37 (First Call consensus $0.29), Q4 EPS in the range of $0.37-0.39 (consensus $0.32) and FY05 EPS in the range of $0.77-0.81 (consensus $0.67). Comparable store sales, meanwhile, are anticipated to increase in the low to mid single digits in the fourth quarter, which encompasses the key holiday selling season.

--Patrick J. O'Hare, Briefing.com

9:28AM Activision (ATVI)

16.50 -0.31: Amid a period of transition, with new gaming systems expected to be released by Microsoft, Nintendo, and Sony in the coming months, video game publisher Activision swung to a second quarter loss on higher development costs and dwindling software sales for existing consoles. Still, the company topped analyst expectations for the latest quarter, and issued downside guidance for the important holiday quarter and for the full-year.

Late Wednesday, the Santa Monica, CA-based company reported a loss of $13.2 million, or ($0.05) per share, compared with net income of $25.5 million, or $0.09 per share, in the second quarter last year. That was two cents better than the consensus estimate of a loss of ($0.07) per share. Meanwhile, Activision, which publishes such notable franchises as Tony Hawk and Call of Duty, said revenue fell 28.4% from a year ago to $222.5 million. Analysts had expected sales of $204.46 million, according to Reuters Estimates.

Despite the difficult quarter, the company said seven of its titles sold more than one million copies each, to date, and that it expects a stronger product lineup for the current, holiday quarter. The company indicated, however, that other variables (e.g. rising gas prices, waning consumer confidence, and disruptions associated with the console transition) may adversely affect performance for the period. Reiterating its cautious note, Activision said it sees third quarter EPS of $0.52 on revenue of $790 million, versus the consensus estimate for EPS of $0.53 and revenue of $799.73. For the fiscal year, it expects earnings of $0.52 per share on revenue of $1.48 billion, compared with $0.54 per share and $1.49 billion consensus.

Although Activision is well positioned to benefit from the long-term opportunities that will result from the next-generation consoles, declining demand for legacy consoles and increased development costs continue to weigh on near-term results. Following the company's disappointing forecast, investors have focused on the negative, pushing shares lower during early trading Thursday. At the same time, though, shares are up nearly 50% year-to-date.

--Richard Jahnke, Briefing.com

9:15AM Qualcomm (QCOM)

40.38: The global growth of CDMA and WCDMA technologies will continue to be the backbone for Qualcomm over the next several years. The digital wireless communications company delivered an impressive quarter with strong top line growth, punctuated by margin expansion across all of its businesses. Revenues jumped 40% to $1.56 bln, up 15% sequentially. Licensing revenues were $525 mln versus the street's expectations of $502.9 mln. Net income grew 37% year/year to $538 mln, but slid 4% from last quarter. Earnings, excluding non-recurring items, were $0.32 per share, a penny shy of consensus, but a higher share count accounted for the miss.

CDMA Technologies, Qualcomm's chipset business, generated revenue growth of 19% quarter/quarter, to $912 mln. It sold 40 mln MSM chipsets, in-line with management's guidance. Operating margins improved to 29.2% - a significant acceleration on the back of several new product launches. WCDMA chipsets rose 42%. Technology Licensing reported sales of $497 mln, up 11% sequentially. Operating margins were 91%. The company recognized royalties on the sale of 48 mln CDMA/WCDMA handsets. Wireless & Internet grew revenues by 4% q/q to $170 mln with margins widening substantially to 12.4%.

Looking to 2006, Qualcomm anticipates another strong year with new CDMA handset shipment growth of 30%. It forecasts WCDMA handset sales of 86 mln units. For the first quarter, Qualcomm forecasts earnings in the range of $0.36 to $0.38 per share on revenues of $1.67-$1.77 bln, compared to consensus of $0.35 and $1.66 bln, respectively. The company noted solid visibility into the fourth quarter on MSM shipments of 46-48 mln units. For the full year, estimates were well within consensus range.

QCOM ended its fiscal year with $8.7 bln in cash and cash equivalents and no debt. R&D grew by 30% in the quarter to $271 mln. For the year, R&D spending totaled $1 bln on CDMA2000 1x-EV-DO, WCDMA, and GSM/GPRS amongst a bevy of multimode, multiband, and multinetwork technologies. Management addressed the recent complaints brought before the European Commission by licensees, but most analysts feel the issue will have little impact on Qualcomm in the year ahead. The stock trades at 27.7x forward earnings.

--Kimberly DuBord, Briefing.com

8:20AM Comcast (CMCSA)

28.80: The market has been tuned into the media stocks this week after strong results from Viacom (VIA.B) and Time Warner (TWX). On the schedule for Thursday was Comcast, the world's largest cable provider. Profits were little changed on the year, but similar to its peers, its digital service offering is taking hold. Comcast is offering a triple threat: digital cable, voice, and high-speed Internet services. It added 437,000 Internet subs and 46,000 digital phone users. Digital cable subscribers grew 12.4% to 9.4 mln, as basic subscribers continued to decline.

The cable providers are bundling services to drive subscriber growth and compete against satellite-TV operators and Verizon. Comcast is offering phone service over its Internet lines, targeting 250,000 customers by year end. The company earned $222 mln, or $0.10 per share, roughly flat with the prior year. Profit excluding an investment loss of $104 mln was $0.14 per share. Sales grew almost 10% to $5.6 bln. The Philadelphia-based company ended the quarter with 21.4 mln subscribers, down slightly from 21.5 mln last year.

Together with Sprint Nextel (S), Comcast was among four cable companies on Wednesday announcing it would from a joint venture to offer wireless services. Digital cable is nearing critical mass and Comcast, above all other operators, is driving home to consumers the benefit of video on demand. Its customers spend roughly $60 per month for a high-definition cable box and a digital video recorder. Instead of waiting for that commercial break, viewers can pause live TV or record shows in order to fast forward through the commercials. Digital has improved the quality of the picture and has enabled viewers to manipulate content to better serve their schedules and needs.

During the quarter, purchases of $1 bln in common stock were made, leaving another $1.3 bln in authorization on the table. The stock, which has lost 13% this year, looks to be back on prime time. The cable operator trimmed its FY05 cash flow guidance to 13% from 14-15% due to higher programming costs from its deal with the NHL. As stated in our earlier media coverage this week, 'tis the season to buy media stocks. So tune in, since it will be most likely a digitally-inspired holiday season. CMCSA trades at 29.3x forward earnings and 7.81x EV/EBITDA, compared to TWX at 20.3x and 11.0x, respectively.

--Kimberly DuBord, Briefing.com