Today's Early Winners and Losers

Shares of Rackable Systems(RACK) surged 19% in late trading Thursday after the server and storage system company beat analysts' fourth-quarter estimates. Excluding certain items, the company reported earnings of $7.6 million, or 33 cents a share, compared with a loss of $513,000, or 9 cents a share, a year earlier. Revenue rose 45% to $83.1 million. Analysts polled by Thomson First Call projected earnings of 24 cents a share and revenue of $70.6 million. Rackable Systems gained $5.91 to $37.02.

Shares of Fossil(FOSL) tumbled after the watch company lowered its fourth-quarter projections and predicted 2006 results below Wall Street's forecast. Fossil put fourth-quarter EPS at 28 cents to 31 cents, down from its guidance of 48 cents. The company cut its sales estimate to $324 million from $343 million. The company attributed the profit shortfall to lower-than-anticipated sales and gross margins. Analysts expected fourth-quarter earnings of 49 cents a share and sales of $334 million.

For fiscal 2006, Fossil expects to earn $1.05 a share, including 3 cents to 4 cents for expensing stock options and a 6-cents-a-share benefit from a lower share count. Shares were down $6.09 to $26.26 in after-hours trading.

SafeNet(SFNT) fell 16% after the information security company's earnings and outlook came in well below expectations. The company posted fourth-quarter earnings, before items, of $11.7 million, or 45 cents a share, up slightly from $11 million, or 44 cents a share, a year earlier. The earnings per share missed analysts' projection by a dime. Revenue rose 21% to $77.1 million from $63.8 million, but fell short of Wall Street's target of $80 million.

SafeNet forecast first-quarter earnings of 29 cents to 37 cents a share, before items, on revenue of $65 million to $69 million. Analysts had predicted earnings of 40 cents a share and revenue of $71 million. For all of 2006, the company expects earnings of $1.50 to $1.95 a share, before items, and revenue of $290 million to $310 million. Wall Street forecast earnings of $1.88 a share and revenue of $312 million. SafeNet shares dropped $5.17 to $27.55 in late trading.