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From Briefing.com: 4:39PM ESS Tech beats by $0.08; issues downside Q1 guidance (ESST) 3.99 -0.01 : Reports Q4 (Dec) loss of $0.25 per share, excluding non-recurring items, $0.08 better than the Reuters Estimates consensus of ($0.33); revenues rose 2.3% year/year to $44.1 mln vs the $41.3 mln consensus. Co issues downside guidance for Q1, sees loss of -$0.36-0.38 vs. -$0.31 consensus; sees Q1 revs of $26-30 mln vs. $36.59 mln consensus.

4:35PM Micrel beats by $0.01, guides Q1 revs above consensus (MCRL) 12.48 +0.22 : Reports Q4 (Dec) earnings of $0.11 per share, $0.01 better than the Reuters Estimates consensus of $0.10; revenues rose 9.6% year/year and 4% sequentially to $65.1 mln vs the $66.0 mln consensus. Co issues upside guidance for Q1, sees Q1 revs of $67.1-70.4 mln vs. $66.8 mln consensus. Co says order rates increased nicely on a sequential basis in Q4 resulting in a book-to-bill ratio above one and that this order strength has continued into January.

4:33PM O2Micro misses by a penny, ex items (OIIM) : Reports Q4 (Dec) earnings of $0.07 per share, excluding non-recurring items, $0.01 worse than the Reuters Estimates consensus of $0.08; revenues rose 20.0% year/year to $28.6 mln vs the $29.4 mln consensus.

4:28PM JDS Uniphase reports in-line results; issues in-line guidance (JDSU) : Reports Q2 (Dec) net of breakeven, excluding non-recurring items, in line with the Reuters Estimates consensus of ($0.00); revenues rose 73.4% year/year to $312.9 mln vs the $312.6 mln consensus. Co issues in-line guidance for Q3, sees Q3 revs of $304-321 mln vs. $308.95 mln consensus.

4:19PM Cadence Design beats by a penny, ex items; guides in-line (CDNS) : Reports Q4 (Dec) earnings of $0.29 per share, excluding non-recurring items, $0.01 better than the Reuters Estimates consensus of $0.28; revenues rose 10.3% year/year to $378.4 mln vs the $366.7 mln consensus. Co issues in-line guidance for Q1, sees EPS of $0.19-0.21, ex items vs. $0.19 consensus; sees Q1 revs of $315-325 mln vs. $325.97 mln consensus. Co issues in-line guidance for FY06, sees EPS of $0.96-1.04, ex items vs. $0.97 consensus; sees FY06 revs of $1.4-1.45 bln vs. $1.41 bln consensus.

4:20 pm : Late in the session, the market's major averages breached the tight range that had contained them all day. Relieved that Google's (GOOG 405.00 -27.66) earnings disappointment did not sink Wednesday's market, buyers stepped in and sent eight of the ten economic sectors higher. Strong earnings results from Boeing (BA 71.62 +3.31) supported the market, countered Google's effect, and drove the Dow's outperformance.

Lifted by Boeing, the Industrials sector (+0.8%) led. Honeywell (HON 39.27 +0.85) and Caterpillar (CAT 69.17 +1.27), which also recently delivered strong profit reports, were also influential leaders. Earnings results from those industrial bellwethers underpin our Overweight rating on the sector. Fueled by the biotechnology industry, Healthcare (+0.7%) offered additional leadership. Amgen (AMGN 76.18 +3.29) was the particular bright spot following reports that FDA approval of Roche's competing anemia drug may be delayed until 2009. Largely to the credit of AT&T (T 26.56 +0.61), which was positively featured in the Financial Times today, Telecom jumped 1.1%.

Google's earnings disappointment sat center stage and weighed heavily upon the Technology sector (+0.5%). But as investors acknowledged that the company's earnings miss relative to the consensus estimate was the result of a much higher than expected tax rate, Google shares well pared their losses and lessened the pressure within the sector. A surge in semiconductors was also responsible for the sector's climb and the Nasdaq's clearance of the flat line.

Unexpected rises in January auto sales contributed to afternoon buying efforts. Ford (F 8.68 +0.10), General Motors (GM 24.60 +0.54), and DaimlerChrysler (DCX 58.08 +0.76) each reported gains. Upside earnings from Time Warner (TWX 18.24 +0.71) lent further muscle to the Consumer Discretionary sector (+0.4%). Homebuilders and retailers, however, were offsetting areas. With respect to the latter industry, investors were cautious ahead of the January same-store sales results that will begin to stream in this evening.

Crude's 2.4% drop to $66.31 per barrel underpinned the late-day bias. Although the EIA's inventory report initially had a generally muted effect, traders ultimately focused upon the better than expected builds in crude oil and gasoline supplies. On the flip-side, the data spurred a 1.9% slide in the Energy sector. While that decline weighed heavily, broad-based buying across the rest of the market offset its effect.

On the economic front, The January ISM manufacturing survey fell to 54.8 from 55.6 in December. The read was slightly below expectations, but nonetheless reflects expansion. December construction spending was up a stronger than expected 1.0%. Neither release has had much affect on trade, but the ISM data helped the dollar extend its rise. The market remains focused on Friday's employment data as it, and the data between now and the March 28 FOMC meeting, will help dictate the Fed's next course of action.DJ30 +89.09 NASDAQ +4.74 SP500 +2.38 NASDAQ Dec/Adv/Vol 1401/1642/2.32 bln NYSE Dec/Adv/Vol 1458/1796/1.92 bln

2:18PM Varian Semi announces 3-for-2 split (VSEA) 50.96 +1.43 :

4:15 pm JetBlue (JBLU)

11.18 -1.86: Et tu JetBlue? Since going public in 2002, JetBlue has never reported a quarterly loss - until today. Like so many other carriers, JetBlue endured the vagaries of record high fuel prices and a tough revenue environment (read: competition). The end result was that the airline operator reported a net loss of $42.4 million, or $0.25 per share, for its fourth quarter. Excluding two unusual items, the reported net loss comes to $32 million, or $0.19 per share, versus net income of $1.5 million, or $0.01 per share, in the year-ago period.

The market's disappointment is evident in JetBlue's stock price, but that disappointment has more to do with the company's guidance than its actual result. Despite its extended history of profitability, JetBlue was expected by analysts to lose $0.16 per share in the year-end period. However, it wasn't expected to project a loss for the first quarter and the full year. It did just that, though, noting that it expects to report a negative operating margin between 3% and 5% for the first quarter based on an all in aircraft fuel cost per gallon of $1.92 and a capacity increase of 27-29%. According to Reuters Estimates, JetBlue was expected to post a profit of $0.06 per share in the March quarter and a profit of $0.19 for 2006.

The added source of concern is that JetBlue is now in a position where it will have to increase ticket prices to return to profitability. At first blush, that sounds like a simple solution, but pricing power and the airline industry haven't exactly gone hand-in-hand given the proliferation of low-cost carriers, which helped drive legacy carriers, like Delta, Northwest and United, into bankruptcy with their leaner operating models. Incidentally, United emerged from Chapter 11 bankruptcy today after being under the court's protection for three years.

For JetBlue, its return to profitability doesn't seem assured over the near-term as its capacity increase, and that of other carriers aiming to pick up market share, will limit its success in sustaining the pricing power it needs to eliminate its red ink. Moreover, fuel prices remain at stubbornly high levels in the face of concerns about Iran's nuclear ambitions and show few signs of abating in any meaningful way. With profit prospects for JetBlue up in the clouds, then, investors are better off taking flight with other stocks.

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

3:59 pm Anheuser-Busch (BUD)

41.31 -0.13: Anheuser-Busch on Wednesday reported fourth quarter profits fell 39%, due to rising commodity costs and continued weakness in the domestic beer business. For the period, the St. Louis-based company said it earned $201 million, or $0.26 per share, down sharply from $332 million, or $0.42 per share, a year earlier. Net sales of $3.37 billion remained flat from the prior year period, due to lower domestic bear sales, offset in part by higher sales for international beer.

According to Reuters Estimates, the company, whose brands include Bud Light and Michelob, was expected to post earnings of $0.26 per share on revenue of $3.35 billion. Anheuser-Busch shares traded flat on the lower than expected results; however, investors already accounted for the impact of increased cost pressures following the company's profit warning in November. In addition, with shares underperforming significantly over the past two years, expectations have largely been subdued with demand for domestic beer faltering.

Sales from the domestic beer segment declined 2.3% in the quarter on lower revenue per barrel despite a slight increase in beer sales volume. The decline reflects the deferral of price increases until early 2006, as well as higher promotional activities. Domestic sales volume increased 0.8% to 23.1 million barrels during the period. Meanwhile, international beer volume grew 13.3% year/year to $5.4 million barrels, driven by increased demand for China Budweiser operations, Canada, and Mexico.

In light of sinking demand for domestic brands, a key question for Anheuser-Busch is how it will diversify its portfolio away from the domestic beer business. Furthermore, higher costs resulting from commodity cost pressures from aluminum, glass, and energy continue to crimp profits. Until the company can realign its brands to current trends and improve cost controls, we would stay away from the stock as it continues to trend lower.

--Richard Jahnke, Briefing.com

2:49 pm Flextronics (FLEX)

10.40 -0.06: One thing you can count on when electronics manufacturing services company Flextronics reports its results is that its operating margins will be slim. That's due primarily to the company's high cost of sales as competition in its industry, which is built on the model of saving other companies money, is intense. Accordingly, it was little surprise to see Flextronics' fiscal third quarter operating margins top out at 3.22%.

There were some surprises, nonetheless, in the latest report from Flextronics and they skewed to the negative side of things. Specifically, this was the first time in nine quarters that operating margins didn't improve versus the prior year (3.66%). In addition, Flextronics acknowledged that the transfer of Nortel's manufacturing operation in Calgary had been rescheduled to take place in the June quarter of 2006 versus the March quarter. Consequently, management expects fiscal fourth quarter EPS to be $0.15-0.16 on revenues of $3.5-3.7 billion versus prior guidance of $0.16-0.18 on revenues of $3.6-3.8 billion. According to Reuters Estimates, analysts were forecasting a profit of $0.16 on revenue of $3.70 billion.

This isn't the first time that the company has incurred delays with the transfer of Nortel assets nor is it the first time that the company has disappointed with its guidance. Flextronics lowered its FY06 outlook last April, citing delays, and in October, its guidance for the quarter just reported was well shy of consensus estimates at the time. The latter incident led to a sharp sell-off in the stock from which FLEX has been gradually recovering on the basis that it is apt to benefit from identifiable growth catalysts that include the Nortel integration, the increased installed base of Xbox 360, and cell phone demand.

The latest update from Flextronics is indeed a setback in its rebound bid. However, the market's measured response to the latest disappointment offers some sense that the company's struggles have largely been accounted for in its lagging stock price and that the Nortel issue will prove temporary. That doesn't mean the stock will take off from here, but as we intimated in a recent Bargain Hunting column, a floor of support will be established on the idea that FLEX offers growth at a reasonable price for patient-minded investors.

At its current level, FLEX trades at 14.6x trailing twelve month earnings, which is nearly a 50% discount to its 5-year historical average. With earnings projected to grow 18.8% over the next five years, the corresponding price-to-earnings growth ratio of 0.78 also speaks to the stock's value proposition.

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

1:11 pm Legg Mason (LM)

134.70 +5.00: Legg Mason said that third quarter net income totaled a record $760 mln. However, that included a huge $643 mln after-tax gain on the sale of the firm's brokerage and capital markets operation, which was sold to Citigroup (C) in exchange for its asset management business on December 1, 2005. After excluding all non-recurring items, including $25 mln of transaction-related compensation costs, pro forma earnings were $0.96 per share, six cents shy of what Wall Street was expecting.

Revenues rose 68% year/year to a record $689 mln, exceeding the Reuters Estimates consensus of $552.3 mln, with the majority of the increases attributable to the two businesses purchased during the quarter. Legg Mason also acquired Permal, which closed on November 3, 2005, and added $19 bln to total assets under management (AUM). Combined with the $401 bln in assets attributable to Citigroup Asset Management and the $431 bln in assets attributable to Legg Mason's "legacy" managers, the company's total AUM reached $851 bln.

Investment advisory fees from proprietary funds soared 136% year/year to $282 mln, as performance fee revenues totaled $28 mln (from $19 mln) due largely to those earned by Permal; distribution and service fee revenues were up 72% year/year to $115 mln.

With a sharper focus on making Legg Mason one of the largest asset managers in the world, following the divestiture of its brokerage business, the Baltimore, Maryland-based company also substantially increased its global footprint, as assets managed for non-U.S. clients now exceed $265 bln, or 31% of total AUM. The stability and predictability of asset management fees underscores why asset managers have performed as well as they have despite a rising interest-rate environment that has played into our Market Weight rating on the Financial sector.

Legg Mason shares were up 64.5% in 2005 and are up another 13.7% so far in 2006. While we currently favor Alliance Capital Management (AC) among the list of asset managers and continue to keep a close eye on Franklin Resources (BEN), Legg Mason warrants further consideration for long-term investment value.

--Brian Duhn, Briefing.com

10:38 am Symantec (SYMC)

16.87 -1.51: Shares of Symantec, maker of the popular Norton line of antivirus and security software, traded lower on Wednesday after the company said third quarter profits fell 44%, due to costs related to its acquisition of Veritas. Furthermore, the company offered fourth quarter guidance that fell short of Wall Street's estimate, sending shares plunging more than 8% in early trading.

At the current price, shares of Symantec are trading at 14.8x forward earnings, a discount to 17.1x for McAfee (MFE) and 20.4x Verisign (VRSN). Although transition issues are largely behind the company, increased competitive pressures, particularly from Microsoft (MSFT), are embedded in the current valuation and a key reason why we wouldn't recommend purchase of the stock at this point.

Based in Cupertino, California, Symantec said third quarter profits fell to $91 million, or $0.08 per share, from $163.6 million, or $0.22 per share, a year earlier. That included approximately $166 million of expenses related to the purchase of storage software maker Veritas last July. Excluding this cost and other one-time items, the company said it earned $281 million, or $0.26 per share - a penny better than the Reuters Estimates consensus of $0.25.

Third quarter revenue rose 5% to $1.25 billion, up from $1.19 billion, on a comparable basis. International revenue represented 49% of the top line and grew 8% from the year ago period. The Americas, including the U.S., Canada, and Latin America, grew 2% year/year, while the Europe, Middle East, and Africa region grew 8%. By segment, revenue from Data Protection, Storage Management, Enterprise Security, and Services all demonstrated strong growth. However, Symantec's Consumer business, which represents 26% of total revenue, declined 10% during the quarter as a result of its shift to a ratable revenue recognition model.

Looking to the fourth quarter, the company expects to earn $0.25 per share on revenue between $1.25 and $1.28 billion, lower than the consensus estimate for EPS of $0.26 on revenue of $1.3 billion. For the full year, earnings are forecasted to be $0.99 per share with revenue in the range of $4.95 to $4.98 billion. That compares with the Reuters Estimates consensus of $1.00 per share on revenue of $4.91 billion. In addition, the company expects earnings of $1.14 per share on revenue of $5.4 to $5.6 billion for fiscal 2007, in line with the consensus estimate for EPS of $1.14 and revenue of $5.5 billion.

--Richard Jahnke, Briefing.com

10:00 am Duke Energy (DUK)

28.44 +0.09: Colder weather and asset sales catapulted Duke Energy's profits 69% in the fourth quarter. The largest US utility owner said its earnings rose to $606 mln, or $0.63 per share, over the past year. Duke, which is in the middle of acquiring rival Cinergy (CIN), earned $0.43 cents per share, excluding items, six cents above consensus. Most likely, the company will issue full year guidance for earnings before interest and taxes ("EBIT") on today's conference call.

Operating earnings at its franchise electric segment grew 10% to $279 mln on the back of colder weather trends that increased residential sales 14%, along with strong bulk power marketing results. Transmission segment EBIT was roughly flat at $344 mln, while International Energy grew earnings by 60% on favorable pricing, margins, and positive currency impacts to $97 mln. The company has sold a considerable chunk of its natural gas field service unit, but earnings in the quarter still rose over 30% to $162 mln on higher gas prices and improved sales.

Duke benefited from a substantially lower tax rate of 30.9% versus 35.7% in the prior year caused by the repatriation of foreign earnings. Duke ended the year with cash and short-term investments of $1.05 bln. Its capital structure stands at 48% debt, 50% common equity, and 2% minority interest.

Overall, it was a strong showing from Duke across the board. Duke Energy is a different company than it was a few years back and it will look even more different with the integration of Cinergy. Shares are running slightly ahead of the market in year-to-date returns and trade at a forward multiple of 15.8x. For investors looking for defensive stocks, one of the reasons behind our Market Weight rating on the sector, DUK's dividend yield of 4.37% certainly puts it near the top of the list. Possible catalysts for shares include a dividend hike, asset sales, and a possible resumption of share buybacks.

--Kimberly DuBord, Briefing.com

09:36 am Monster Worldwide (MNST)

42.53: Underscoring the reality that labor demand remains strong, the operator of the world's largest job search web site posted a 56% increase in fourth quarter operating profits. Monster Worldwide's net income increased to $36.5 mln or $0.29 per share. Excluding discontinued operations related to last year's disposal of its Directional Marketing segment, Q4 operating earnings of $0.28 per share matched the Reuters Estimates consensus.

Total revenues rose 24% year/year to a record $267 mln (consensus $264.6 mln), with 84% of the company's top line coming from its Monster division, which grew 30% year/year to $224 mln. The company's Advertising & Communications business contributed $43 mln to total revenue, but was essentially flat with last year's comparable quarter. In North America, the company continued to attract thousands of new customers each month, while deepening its relationships with the nation's largest employers. Overseas, Monster's organic revenue growth rate improved for the second quarter in a row, as its International business grew 46% from a year ago.

Looking to build on its leadership position in 2006, the company's balance sheet remains solid. The $45 mln of free cash flow generated in Q4 brought total 2005 cash equivalents to $182 mln and lifted Monster's overall net cash position to $273 mln, more than double the amount at the end of 2004. Such liquidity bodes well for investors should management continue to return shareholder value in the form of stock buybacks and expand its global footprint via M&A activity. During Q4, the company used $90 mln to acquire JobKorea, the leading online recruitment company in South Korea, and also used $8 mln on share repurchases. For Q1, management sees EPS of $0.26-0.27 (consensus $0.27) on revenues of $278-285 (consensus $280.73 mln). For fiscal 2006, management expects the company to earn $1.21-1.26 per share (consensus $1.24), which includes $0.05 per share for stock compensation expenses, on revenues of $1.16-1.21 bln (consensus $1.18 bln).

--Brian Duhn, Briefing.com

09:14 am Google (GOOG)

432.66: After the close Tuesday, Google said fourth quarter earnings surged 82% as it continued to expand its core search and advertising business. However, the results, excluding the impact of stock option expenses and other charges, fell short of analysts' expectations, as more international revenues were taxed at a higher domestic tax rate. That ended the Internet search giant's continuous record of outperformance since its IPO in late 2004 and has raised concerns over the company's seemingly excessive valuation.

Based on the news, Google shares plunged more than 18% in after hours trading on Tuesday and are expected to open sharply lower. Despite the lower than expected earnings, however, Google continued to demonstrate astounding growth in the most recent quarter. While the stock's valuation, arguably, remains at an excessive level, the reaction to the results is largely over done.

For the fourth quarter, the Mountain View, California-based company said it earned $372 million, or $1.22 per share, compared with $204 million, or $0.71 per share, in the year ago period. Excluding certain charges, the company would have earned $469 million, or $1.54 per share, well below the Reuters Estimates consensus of $1.77. Google attributed the weak bottom line results to a higher than expected tax rate, which increased to 41.8% in the quarter. At the previously forecasted tax rate of 30%, adjusted earnings would have been $1.81 per share - four cents better than the consensus estimate.

Revenue for the latest period totaled $1.92 billion, up 86% from a year ago and 22% from the previous quarter, driven by stronger seasonal trends in the U.S. Traffic acquisition costs, the commission paid to other Web sites in Google's advertising network, was $629 million, or 33% of advertising revenues. Revenues from Google's proprietary sites contributed $1.1 billion, or 57% of total revenues, reflecting an increase of 24% over the prior quarter. Partner sites, through the company's Ad Sense programs, generated $799 million, or 42% of total revenues. That was an 18% increase over revenues generated in the third quarter. Meanwhile, international revenue contributed 38% of total revenue, compared to 35% last year and 39% last quarter. The decline reflects a stronger U.S. dollar as well as stronger seasonal trends in both traffic and monetization in the U.S.

--Richard Jahnke, Briefing.com

09:08 am Allstate (ALL)

52.05: Still reeling from the nation's worst hurricane season ever, Allstate Corp. said after the bell last night that fourth-quarter profits fell 8.8%. The nation's largest publicly-traded property and casualty insurer reported Q4 (Dec) net income of $1.04 bln, or $1.59 per share, but that included after-tax catastrophe losses of $427 mln, $330 mln of which were directly attributed to Hurricane Wilma. Excluding losses and realized capital gains, operating earnings were down about 1% year/year, checking in at $1.49 per share and eight cents worse than the Reuters Estimates consensus of $1.57.

Consolidated revenues rose 0.7% year/year to $8.95 bln. Allstate brand standard auto and homeowners written premium grew 3.5% and 6.3% year/year, respectively, as the auto insurance business generated very good profitability helped by the favorable trends that management continues to see in the frequency and severity of automobile accidents.

Allstate said that it signed a new catastrophe reinsurance agreement that will help significantly reduce its exposure to earthquakes and hurricanes. The agreement covers the entire country, excluding Florida, and has a $2 bln limit on losses in excess of $2 bln. Management also said it is intentionally slowing the writing of new property insurance business in certain markets to limit its exposure to catastrophe losses caused by hurricanes and earthquakes. For fiscal 2006, the company expects to earn $5.60-6.00 per share, which is below the $6.03 consensus estimate.

Despite being hit by three of the 10 most costly natural disasters in U.S. history, Allstate's "ability to be profitable in such a difficult year is a testament to the effectiveness of our strategy," according to Chairman and CEO Edward M. Liddy. Allstate shares were up approximately 7.0% in 2005. The stock is down 3.7% year-to-date, however, amid concerns that that the auto insurance market is getting too competitive. At its current level, the dividend yield on ALL is 2.46%.

-- Brian Duhn, Briefing.com

08:55 am Time Warner (TWX)

17.53: The sleeping giant may not be sleeping any more. The world's largest media company reported 21% profit growth helped by a flick of Harry Potter's wand that led to the fastest sales growth in six quarters. Fourth quarter net income came in at $1.37 bln on revenue growth of 7% to $11.89 bln. Every unit, with the exception of AOL, reported a strong quarter, led by double-digit gains in the Cable unit. Earnings, excluding one-time items, beat the consensus estimates by three cents.

Adjusted operating income before depreciation and amortization, a key metric for media companies, rose 19% to $2.9 bln reflecting a double-digit gain in Filmed Entertainment, Cable, Networks, and Publishing. The standout was AOL, which the company agreed to sell a 5% stake to Google (GOOG). Revenues dropped 8% to $2.0 bln, as AOL lost 625k subs, bringing the total to 19.5 mln US members.

Cable remains the fastest growing unit as TWX added digital phone subscribers (246k in Q4) and high speed Internet clients (265k), generating a 13% increase in revenues to $2.5 bln with profits up 11% to $985 mln. The blockbuster that was "Harry Potter and the Goblet of Fire" drove film revenue and profit growth of 11% and 42%, respectively.

Last year the board authorized a $12.5 bln stock repurchase program that will be in effect until August 2007. To date, the company has purchased 167 mln shares for $3.0 bln. For the year, Time Warner is looking for single digit percentage growth in EBITDA compared to $10.3 bln in 2005. Time Warner's CEO Richard Parsons is facing rising pressure from activist shareholder Carl Icahn to split up the company. We continue to favor the media sector due to its increasing visibility, renewed focus on shareholder returns, and growth prospects for the industry, but the names we prefer are News Corp (NWS/A) and Disney (DIS), both of which are suggested holdings in our Active Portfolio.

--Kimberly DuBord, Briefing.com

08:45 am Boeing (BA)

68.31: After closing what was a record year for Boeing, the skies continue to look bright for the world's second largest plane maker, which has been propelled by its commercial aerospace business. Fourth quarter profits more than doubled on higher plane deliveries, with the per share figure flying past consensus by fourteen cents. Rising demand from discount and Asian carriers seeking more fuel-efficient jets boosted Boeing's deliveries by 9%.

We remain onboard with Boeing on the basis of its raised delivery guidance, backlog strength, possible margin expansion, operational performance, and robust cash flow - the company is firing on all cylinders. In addition, under new leadership, we hope to see Boeing further leverage its strong market position in the midst of this bull cycle in commercial aviation.

For the fourth quarter net income rose to $460 mln, or $0.58 per share. Stripping out a pension charge, adjusted earnings were $0.42 per share. Revenues rose 7% year/year to $14.2 bln with operating margins swelling to 3.8% from 0.2%. Boeing's backlog hit a record of just over $200 bln, representing a 19% sequential and 33% yearly gain, reflecting orders for 1,000 aircraft during the year. The Dreamliner booked 379 orders and commitments, including 291 firm orders. The Commercial Airplane unit's operating margins rose 8.4 points to 5.6% due to higher revenues of $5.9 bln that offset higher R&D costs. The defense unit (IDS) grew sales by 7.0% to $8.1 bln and also showed considerable margin improvement.

Boeing raised its guidance for FY06 to $3.25-$3.45 versus the consensus estimate of $3.32. Its revenues estimate is $60 bln, which is below the $63.0 bln consensus due to a previously disclosed accounting change taking effect this year. For FY07, it sees EPS of $4.10-$4.30 (consensus $4.15) on revenues of $63.5-$64.5 bln. The mid-point of its estimate equates to 25% earnings growth on almost 7% revenue growth. Plane deliveries this year are expected to reach 398 with FY07 deliveries of 440-445, 92% sold out.

--Kimberly DuBord, Briefing.com

10:26 am Powerwave: Needham & Co reiterates Buy. Target $15 to $15. Action follows Q4 results. They continue to believe PWAV is well positioned to benefit from what they think will be continued solid wireless equipment fundamentals in the remainder of 2006, including potential for incremental demand in the second half of the year from possible 3G activity from TMobile U.S.A. and China.

10:21 am bebe stores: Nollenberger Capital initiates Buy. Target $25. Firm believes the BEBE SPORT division is primed for aggressive expansion. They believe the rapid growth of the direct marketing/catalog program (including a separate BEBE SPORT catalog) provides another strong vehicle to drive store traffic.

10:20 am Thoratec: Lazard Captial downgrades Buy to Hold. Firm is citing steep recent appreciation combined with diagnostic division outlook moderation and many new expenses; they are cutting their 2006 and 2007 rev estimates to $225.8 mln and $285.9 mln from $235.0 mln and $294.7 mln, respectively. The firm notes that even after this reduction, their rev forecast remains above management guidance and probably still above consensus.

10:20 am Lifetime Brands: Brean Murray reiterates Strong Buy. Target $27.5 to $27.5. The firm is raising their Street-high 2006 EPS est 10% to $1.65 from $1.50 to reflect the updated guidance the co press-released yesterday to facilitate management's participation in their 2006 Small Cap Investor Conference. The release also confirmed their Street-high 4Q05 EPS est.

10:18 am SigmaTel: Am Tech/JSA Research downgrades Hold to Sell . Downgrade is following Dec qtr results, due to 1) numbers coming down significantly, 2) concerns that Windows Media MP3 players may take longer than expected to gain some traction as a legitimate #2 player in digital music, and 3) their largest customer, CREAF appears to be building inventory with poor sell-through.

10:17 am Google: WR Hambrecht reiterates Buy. Target $480 to $480. Firm is noting that higher than expected taxes, increased sales and marketing costs and expansion across multiple media platforms and International borders have increased costs and decreased EPS. They note that GOOG reported top-line revenue $8.7 mln below their expectations for the quarter, though they were pleased to see traffic acquisitions costs (T.A.C.) as a percentage of revenue were in line with our expectations at 33%. Moving forward, they say increased operating expenses, particularly in sales and marketing, will have a slightly negative impact on operating margins, decreasing margins approximately 1% more than they expected. As Google expands its software and services into International markets and develops a new, end-user multi-platform experience based on the Internet, increased costs and risk are to be expected.

10:16 am Flextronics: Am Tech/JSA Research downgrades Buy to Hold. Target $11. Firm's new price target is 15X their new calendar 2006 EPS est of $0.73. They are downgrading FLEX for three reasons. One, their confidence in management's ability to deliver on new program ramps promised in the Jun-05 quarter for contribution in fiscal 2007 has dropped considerably. Two, margin leverage is not materializing, primarily because of greater than expected startup costs related to vertical integration in new programs and the ODM business. Three, assuming the stock settles at around $10, the stock will be trading at 14X their new calendar 2006 EPS est, which they view as almost fully valued. Looking ahead, they think there is still some risk of est cuts.

10:15 am NCI Building Sys: Sanders Morris Harris reiterates Buy. Target $42 to $42. Firm is saying their optimism for the non-residential construction outlook in 2006 and their expectations that NCS's Q1 performance is developing greater momentum than their initial forecast.

10:14 am Symantec: Punk, Ziegel & Co upgrades Mkt Perform to Accumulate. Target $24. Firm is citing valuation, says that after eight months as a combined company, they believe most of the transition issues are behind it. They say the specter of increased competition, however, is still haunting the co.