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From Briefing.com: 4:23PM Powerwave beats by $0.02, ex items (PWAV) : Reports Q4 (Dec) earnings of $0.17 per share, excluding non-recurring items, $0.02 better than the Reuters Estimates consensus of $0.15; revenues rose 65.4% year/year to $258.7 mln vs the $262.2 mln consensus.

5:30PM Powerwave earnings update (PWAV) : Co's as reported Q4 EPS of $0.15 actually includes a $0.02 charge. Excluding all items, EPS of $0.17 is comparable to $0.15 consensus. We have edited earlier story to reflect comparable actual.

4:41PM Adaptec beats by 7 cents (ADPT) : Reports Q3 (Dec) earnings of $0.03 per share, excluding non-recurring items, $0.07 better than the Reuters Estimates consensus of ($0.04); revenues fell 16.8% year/year to $77.8 mln vs the $76.2 mln consensus.

4:37PM Asyst beats by $0.06, ex items; guides Q4 EPS above consensus, revs in-line (ASYT) : Reports Q3 (Dec) earnings of $0.10 per share, excluding non-recurring items, $0.06 better than the Reuters Estimates consensus of $0.04; revenues fell 33.8% year/year to $106.8 mln vs the $110.8 mln consensus. Co guides for Q4, sees EPS of $0.08-0.12 vs. $0.07 consensus; sees Q4 revs of $110-120 mln vs. $117.54 mln consensus.

4:29PM ATML reports Q4 EPS of $0.11, vs ($0.01) consensus; revs were $425.2 mln, vs $428.2 mln :

4:05PM Pixelworks announces resignation of CFO (PXLW) 5.69 +0.34 : Co reported that Jeff Bouchard, Vice President, Chief Financial Officer and Corporate Secretary, has resigned from Pixelworks as he has accepted the position of Chief Financial Officer of a private high-technology company in Silicon Valley. His resignation is effective February 10, 2006.

4:20 pm : What was widely expected to be a cautious day of trading, in anticipation of bidding farewell to Alan Greenspan's 18-year reign as Fed Chairman with a 14th consecutive 1/4% fed funds rate hike (to 4.50%), ended the same way it began, in negative territory.

Even though a second straight change was made to the FOMC policy statement's wording, signaling that the series of "measured" 1/4% rate hikes that began in June 2004 has now ended, mention that "some further policy firming may be needed" to keep economic growth and inflation balanced weighed on sentiment. That ambiguity, along with the statement that "Although recent economic data have been uneven, the expansion in economic activity appears solid," was more hawkish than investors hoped for and strongly suggests that another rate hike is coming at the March meeting. Despite modest market weakness and turning in the day's worst performance among the three major averages, the S&P enjoyed its best January since 2001.

Of the split industry leadership that dictated much of the late-day choppiness, Technology paced the way to the downside. Profit-taking in semiconductor offset an intraday 52-week high on Microsoft (MSFT 28.15 +0.15) following its patent case victory. Energy was also an influential leader to the downside as a pullback across the energy complex weighed heavily on the sector as did consolidation in Valero Energy (VLO 62.43 -0.77), last year's best performing S&P constituent (+128%) which beat forecasts but not by as much as many expected.

Consumer Discretionary was also weak, playing into why we've had an Underweight rating on the sector since April 2004, as losses in homebuilding and media were accompanied by discouraging Q4 guidance from Goodyear Tire (GT 15.64 -3.12). Consumer Staples lost ground as a cautious FY06 outlook from Altria (MO 72.34 -1.57) overshadowed a strong report from Archer Daniels Midland (ADM 31.50 +2.76) which has sent ADM shares to a historic high.

Materials, though, held onto a modest gain as strength in gold, steel and an analyst upgrade on Alcoa (AA 31.50 +0.97) help offset a 64% drop in Q4 profits from Phelps Dodge (PD 160.50 -1.60), a suggested holding in our active portfolio which had rebounded of late as copper prices continued to hit historic highs. Health Care also clung to a slight gain, as strength in HMOs, ahead of President Bush's State of the Union address, barely offset losses in the drug group, as Merck's (MRK 34.50 +0.04) better than expected report lost momentum into the close.

Separately, consumer confidence in January rose a stronger than expected 106.3, the highest level since mid 2002, but since the data don't correlate well with spending trends, the report was largely dismissed ahead the FOMC's wording. Jan. Chicago PMI checked in at 58.5, slightly below forecasts and a Dec. read of 61.5, but was overshadowed in anticipation of tomorrow's more influential national ISM manufacturing index. Also, a 0.8% rise in the Q4 employment cost index was also overlooked in favor of seeing how the text of the policy directive would set the table for Ben Bernanke, as he steps in as the new Fed Chairman tomorrow. BTK +0.9% DJ30 -35.06 DJTA +0.3% DOT +0.3% NASDAQ -0.96 SOX -1.4% SP500 -5.12 XOI +0.2% NASDAQ Dec/Adv/Vol 1411/1636/2.08 bln NYSE Dec/Adv/Vol 1534/1758/1.77 bln

12:48PM Marvell and Kyocera Wireless initiate strategic alliance to enable W.L.A.N/cellular convergence (MRVL) 68.26 -0.60 : The co and Kyocera Wireless (KYO) announce a strategic alliance to incorporate the co's W.L.A.N technology and chipsets into a dual-mode Wi-Fi/CDMA handset platform.

1:23 pm Kellogg (K)

42.97 -0.71: With a fourth quarter profit of $0.47 per share, Kellogg checked in a penny ahead of Wall Street's expectations. Compared with the year-ago period, EPS rose about 4.4%. Excluding the effect of one extra shipping week in 2005, the company noted that Q4 EPS grew approximately 16%.

The company's top line remained virtually unchanged, with its $2.39 billion in revenues falling slightly short of the $2.41 billion consensus estimate. Kellogg's internal sales, which exclude the effects of foreign-currency translation and differences in the number of shipping days, reflected 6% growth. The company is segmented into four geographic divisions. North America accounts for about 68% of total revenues and sales there grew 2.4%. With solid growth across its North America Retail Cereal (+8%), Retail Snacks (+8%), and Frozen and Specialty Channels (+8%) businesses, internal sales for Kellogg North America grew 8%. International sales fell 4%, but rose 3% on an internal sales basis.

As a result of its FY05 performance, Kellogg raised its FY06 guidance. Excluding the estimated effect of a stock-based compensation expense, EPS of $2.52-2.57 is anticipated. That translates to approximately 7-9% year-over-year EPS growth. According to Reuters Estimates, analysts are expecting Kellogg to deliver a profit of $2.54 per share. The company acknowledged that it will face significantly higher fuel, energy, and benefit costs, but that it will execute additional cost saving initiatives. In the fourth quarter Kellogg's gross margin contracted 130 basis points to 43.6%, while its operating margin declined 90 basis points to 14.4%. The company expects its gross margin to expand during 2006, however, due in part to price increases taken in 2005.

Because of the headwinds of a strengthening dollar, higher packaging and raw material costs, and the threat of generic competition, we maintain a Market Weight rating on the Consumer Staples sector. The industry groups we prefer in the sector are hypermarkets, drug store retailers, and household products. Kellogg trades at 16.8x estimated earnings, which is relatively in-line with competitor General Mills (GIS) and the sector multiple.

--Lisa Beilfuss, Briefing.com

12:08 pm Nasdaq Stock Market (NDAQ)

41.50 -5.20: After the close Monday, the Nasdaq Stock Market reported fourth quarter profits that beat Wall Street's estimate, aided by strong revenue growth and a slight contribution from the recent acquisition of the Inet ECN. However, shares of the company fell more than 12% in early trading , as investors responded to a weaker than expected forecast for the full year.

For the three months ended December 30, Nasdaq said it earned $16.1 million, or $0.15 per share, compared with $1.6 million, or $0.02 per share, in the year ago period, which included a number of one-time items. Revenue rose 54.3% to $259.5 million from $168.1 million last year. By segment, revenue from market services, which provides transaction-based services and market information services, rose 72% to $200.2 million, while revenue from issuer services increased 14% to $59.3 million. According to Reuters Estimates, the company was expected to post earnings of $0.14 per share on revenue of $235.35 million.

For 2006, the company projected earnings in the range of $0.52 to $0.60 per share, including the impact of Nasdaq's cost reduction program and the integration of Inet. Excluding these expenses, the company expects to earn approximately $0.80 to $0.92 per share, versus the Reuters Estimates consensus of $0.92 per share. While the integration of Inet is likely to cause some near-term disruption, it should help Nasdaq establish a more efficient transaction system and create greater access to various markets in the face of a more dynamic and competitive environment.

(Disclosure: Briefing.com has a business relationship with Nasdaq)

--Richard Jahnke, Briefing.com

10:37 am Chicago Mercantile Exchange Holdings (CME)

415.00 +11.00: Shares of Chicago Mercantile Exchange Holdings opened higher on Tuesday, gaining nearly 3%, after the company reported a 34% increase in net income and a 24% increase in net revenues for the fourth quarter. For the period, the Chicago-based exchange said net income increased to $76 million, or $2.18 per share, from $57 million, or $1.64 per share, in the year ago period, helped by a more favorable mix of trading volume. Analysts, on average, were expecting the company to post earnings of $2.10 per share.

On the top line, net revenues increased to $233 million, as clearing and transaction fees rose 27%. That reflected a a 33% increase in average daily volume to 4.1 million contracts. Growth in the fourth quarter was led by 49% jump in higher margin foreign exchange product volume to a record 375,000 contracts per day, as well as a smaller proportion of trading volume for lower margin interest rate contracts. CME's rate per contract, a key measure of operating margin, improved to $0.687 per contract versus $0.659 per contract in the previous quarter.

The company also reported record earnings and revenue for the full year. Specifically, net income rose 40% year/year to $307 million, or $8.81 per share, and net revenues climbed 25% to $921 million for the year. The results were driven by the company's strong product diversity and volume growth across the board. For the year, total average daily volume grew 34%, while total volume exceeded one billion contracts for the first time in a single year. The company noted that 70% of the volume was traded electronically compared with 54% last year.

CME's shares have increased more than 11-fold since its initial public offering in late 2002, driven by the company's continued strong performance. Furthermore, momentum has been supported by the recent IPO of cross-town rival CBOT Holdings (BOT), as well as increased interest in publicly traded exchanges amid the New York Stock Exchange's planned merger with Archipelago Holdings (AX). At the current price level, shares are trading at 38.0x forward earnings, compared with 39.9x for BOT. Although a premium multiple is justified given the company's strong track record and comparative growth profile, the stock appears to be richly valued with a P/E-to-growth rate of 2.46. As such, we would recommend existing shareholders take some money off the table to lock in the gains from the stock's healthy run.

--Richard Jahnke, Briefing.com

10:05 am Kraft Foods (KFT)

29.28 -0.72: Kraft Foods delivered $0.56 in fourth quarter earnings per share. The figure, which excludes a dime in exit and implementation costs and impairment charges, exceeded analysts' expectations by two cents.

With net revenues of $9.66 billion, the top line grew 10.0%. Favorable currency and an extra week in the reporting period were beneficial factors. Pricing in multiple categories and positive mix across most of the portfolio also helped fuel the increase. The company is segmented into six divisions and its U.S. Beverages business experienced the most significant year-over-year revenue growth (+23.9%) . U.S. Convenient Meals, U.S. Snacks and Cereals, and Kraft North America Commercial also posted double-digit sales increases. Kraft's U.S. Grocery division placed last with 5.6% revenue growth.

The company emphasized its progress against its Sustainable Growth Plan, and highlighted several factors that contributed to its fourth quarter results. Aggregate dollar market share rose 0.4% across its top 25 U.S. categories - its best quarterly performance in over three years. Positive product mix, strong new product results, solid growth in developing markets, and favorable restructuring results were also cited by Kraft. At the same time, two primary factors offset its progress: higher commodity costs and flat volume.

Kraft said it expects the "challenging environment to continue," but management believes that stronger brand value propositions and aggressive cost restructuring programs will drive improved results this year and beyond. To that end, Kraft announced that it would eliminate about 8,000 jobs, which represents about 8% of its work force, close up to 20 production plants, and reduce its brand portfolio by approximately 10%. Kraft said the cuts would save an additional $700 million in annual costs. It anticipates FY06 EPS to be in a range of $1.88-1.93 (excluding $0.50 in special items), which brackets the $1.90 consensus estimate. Kraft indicated that earnings growth will be skewed towards the back half of the year, as the carryover impacts of higher input costs will affect the first half.

During the quarter, the company declared a quarterly dividend of $0.23 per common shared. Kraft further returned value by repurchasing 13.9 million shares of its common stock - which brought its full-year repurchases to $1.2 billion. KFT shares currently trade at 15.4x estimated full-year earnings, a discount to the Consumer Staples sector's 17.2x multiple.

--Lisa Beilfuss, Briefing.com

09:41 am Phelps Dodge (PD)

158.05 -4.05: Phelps Dodge, one of the world's largest copper producers in the world and a suggested holding in our Active Portfolio, suffered a 64% drop in fourth quarter profits from lower production and hedging-related costs. The company pre-announced earnings and tempered production guidance on January 10th, sending shares down materially on the day. Over the past few weeks, however, shares have rebounded as copper prices set new records on low London Metal Exchange inventories and a Codelco worker strike.

Net income declined to $121.3 mln, or $1.19 per share, from $341.1 mln, or $3.40 per share, in the year earlier. On a comparable basis, excluding $2.01 in net special charges and a loss of $0.40 for discounted operations, earnings were $3.60 per share versus the consensus estimate of $3.28. This compares to PD's (Jan. 10) guidance for EPS to be in a range of $3.05-$3.35 per share. Revenues rose 24% on higher copper prices to $2.26 bln.

The board approved a share repurchase plan of up to $1 bln. However, the company stated it may issue additional special dividends in lieu of share repurchases. While lower molybdenum production and sales are a concern, we remain positive on shares, feeling the company remains well positioned to benefit from the strong underlying copper fundamentals resulting in high copper prices. Further, PD's financial strength and capital returns program should also cushion the effects if copper prices fall sharply.

--Kimberly DuBord, Briefing.com

09:12 am Merck (MRK)

34.46: Merck on Tuesday reported better than expected fourth quarter earnings, helped by strong sales growth of asthma treatment Singulair. For the quarter, the Whitehouse Station, New Jersey-based company earned $1.12 billion, or $0.51 per share, compared with $1.10 billion, or $0.50 per share, a year earlier. If not for the impact of reserving an additional $295 million for Vioxx legal defense costs and restructuring-related charges, the company would have earned $0.64 per share - two cents better than the Reuters Estimates consensus of $0.62.

Worldwide sales totaled $5.8 billion, up a modest 0.3% year/year. Restructuring costs for the quarter were $229 million, which includes site closures and the elimination of approximately 1,100 positions. As part of its global restructuring program announced in November, Merck plans to close five manufacturing facilities and two pre-clinical sites by 2008. In addition, it plans to eliminate approximately 7,000 positions worldwide.

Among its major drugs, sales of Singulair reached $819 million as demand for asthma medications remained strong. That represented 12% growth over the fourth quarter last year. Global sales of antihypertensive medicines, Cozaar and Hyzaar, grew 2% year/year to $782 million. Meanwhile, sales of osteoporosis medicines Fosamax and Fosamax Plus D fell 5% to $789 million, and cholesterol drug Zocor fell 8% to $1.1 billion, as increased generic competition continues to pressure key franchises.

Based on the latest results, Merck offered in-line guidance for the fiscal first quarter. It expects to earn between $0.62 and $0.65 per share, compared with the Reuters Estimates consensus of $0.65. For the full year, the company sees earnings in the range of $2.28 to $2.36 per share, including $0.07 in stock based compensation expense, versus the consensus estimate of $2.36 per share. Despite the positive outlook, the ongoing legal issues with respect to the company's withdrawn painkiller Vioxx remain a significant overhang. As of December 31, the company faces approximately 9,650 lawsuits related to Vioxx after studies linked the drug to increased risk of heart attack and stroke in long term users.

--Richard Jahnke, Briefing.com

09:01 am OPEC Meeting

OPEC has unanimously voted to keep crude production unchanged with output currently running at a 26-year high. The production target will remain 28 million barrels per day, for now. The next meeting takes place in early March. Members agreed that supply is still ahead of demand, but according to Libya's Minister, "geopolitical events are having a big effect on the market." Crude futures have soared over 11% just this month to more than $68 per barrel, resulting in revenues for the cartel that are expected to top $500 billion.

The cartel, which has been meeting in Vienna over the last two days, is producing near capacity as consumption has remained strong and output slows. Tensions over Iran's nuclear program and rebel attacks at oil installations in Nigeria have sent oil prices near $70 per barrel once again. The Irani Minister stated Iran would not cut oil out because of its nuclear initiative, as it has no reason to mix politics with economics.

The 11-member group controls more than a third of the world's crude. Historically, production usually slows in the second quarter in anticipation of rising temperatures in the Northern Hemisphere. Due to the burgeoning economies of India and China, this seasonal effect has been lessened. Saudi Arabia anticipates these economies will spur demand for oil this year.

--Kimberly DuBord, Briefing.com

08:40 am Altria Group (MO)

73.91: The world's largest cigarette marker reported an 18% rise in fourth quarter profits, assisted by higher prices for Marlboro in the US. Net income for Altria, the parent company to Philip Morris and Kraft Foods, grew to $2.29 bln, or $1.09 per share, from $1.95 bln, or $0.94 a year earlier. Altria has surpassed expectations for the last four consecutive quarters, but this quarter, the Street was looking for earnings of $1.17. At this point, we do not have a comparable figure.

Kraft (KFT), which is 85% owned, reported Q4 results on Monday, surpassing expectations with profit growth of 23% to $773 mln. The food company also announced restructuring plans that included cutting 8,000 jobs and 20 plants through 2008.

Philip Morris leveraged the inelasticity of the demand curve in the quarter by raising prices considerably on its Marlboro brand. CEO Louis Camilleri stated the company raised cigarette prices in the US after gaining market share over the number two brand, Reynolds American, to 50.7%. Philip Morris International, which accounts for almost 50% of earnings, benefited from acquisitions in Indonesia and Columbia. Accelerating growth within the global tobacco market is the basis for the slew of bullish ratings on the stock.

Altria's stock has been on a wild ride over the last few months. Shares reached an all-time high on December 15th when the company's tobacco unit won a reversal of $10.1 bln in damages awarded to smokers of "light" cigarettes who claimed the company misled them about health risks. Altria forecasted earnings for FY06 of $4.85-$4.95. This figure includes a bevy of items, including 36 cents in Kraft restructuring charges, an unfavorable currency impact of 14 cents, and 10 cents for lower tobacco income in Spain. Accordingly, the guidance is not comparable to the consensus estimate of $5.48. MO trades at a forward multiple of 13.4x and offers a dividend yield of 4.3%.

--Kimberly DuBord, Briefing.com

10:11 am Atheros Communications: Needham & Co downgrades Buy to Hold. Downgrade is following a "blowout" Q4 and "superb" Q1 guidance, citing valuation. They note that the stock traded to $18+ in the aftermarket, saying that's a P/E multiple of 34. They note that the market cap is touching a billion dollars, or almost 4x estimated 2006 sales, and cash is $174 mln, or over $3 per share. Without higher revenues and EPS, that sounds to them like a full valuation for even a class leader such as Atheros.

10:10 am Radware: Ferris Baker Watts upgrades Neutral to Buy. Target $23.5. Upgrade is following Q4 results. The $0.01 upside to their EPS forecast was primarily due to a better-than-expected gross profit margin, which at 80.7% was 74 basis points above their forecast. They say deal size is up to $70k from $60k during 1H05, and note that customer quality is strong with several large telecommunications and financial institutions identified as major accounts in the quarter.

10:08 am Volterra Semi: Piper Jaffray reiterates Market Perform. Target $11 to $11. Firm believes that over the course of 2006, they believe that both the graphics side and the server/storage business will grow, but that servers will remain the bulk of sales. The stock saw a bottom in Q4 and has performed very well recently; Following the call, they think it appears that visibility on the timing of ramps does seem to be improving, they expect the stock to continue to trade well. They are raising their 2006 est to $0.49 EPS on rev of $75.6 mln, up from $0.47 and $72.1 mln.

10:07 am ITT Educational: Stifel Nicolaus upgrades Hold to Buy. Firm upgrades based on what they believe is a combination of improving fundamental trends and business metrics and a reasonable valuation relative to future growth prospects.

10:05 am Marvell: Am Tech/JSA Research reiterates Buy. Target $66 to $66. Firm believes that that 3-6 months from now, investors will be focused on CY07 estimates as a valuation metric as CY06 hits its mid-point. In their view, MRVL is well-positioned in 6 key growth areas including HDDs, GigE, WiFi, DVD optical drives, power management and VoIP.

10:04 am CRM Holdings: KeyBanc Capital Mkts / McDonald initiates Buy. Target $16. The firm believes the co should be able to generate earnings and rev growth in excess of 20% for the next 3-5 years, given the size of the tgt mkts and potential to expand into other states such as Nevada.

10:03 am Atheros Communications: CE Unterberg Towbin reiterates Buy. Target $15 to $15. Firm says that wirelss momentum continues to build, and new products, such as the PAS/PHS, ROCm and 802.11n WLAN, should provide growth opportunities for 2006 and into 2007.

10:02 am Trident Microsystems: CE Unterberg Towbin reiterates Buy. Target $25 to $25. Firms ups price target based on 30x their CY2007 EPS of $1.05. They believe investors will begin focusing on CY07 EPS power in the next 6 months, i.e., mid 2006, and view a 30x forward multiple as reasonable given TRID's leadership position within the DTV market, and its outlook for rev/eps growth of 84%/131% and 37%/29%, for CY06 and CY07 respectively.

10:01 am Cisco Systems: Miller Johnson upgrades Neutral to Buy. Target $19 to $19. Firm notes that their checks with industry contacts reveals that Cisco's quarter is likely to come in slightly above the high end of guidance or closer to 2% (guidance was flat to up 1%). They believe that given the revenue upside, EPS could come in a penny above consensus, which is currently $0.25. Their checks show that enterprise networking, particularly in the U.S. did well along with high-end routing. Firm raises their FY06 and FY07 ests.

10:00 am Pharmion: Lazard Captial upgrades Sell to Hold. Firm upgrades after the co announced it has in-licensed MGCD0103. While the combination of an HDAC inhibitor with Pharmion's Vidaza is appealing and makes synergistic sense, firm notes the crowded landscape of HDAC inhibitors that are just beginning to enter the clinic, with Pharmion's own admission that its first compound from the collaboration, MGCD0103, may not reach the market until 2009-2010. Firm also says milestone payments and increased R&D expenses wipes out the co's profitability for the foreseeable future.

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