The Night Watch: IBM, Apple Climb; Extreme, Redback Fall on Earnings News

(Updated from 7:36 p.m. EST)

Folks who follow the after-hours market were treated to another chartbuster session tonight. As is typically the case during the weeks that businesses pour their hearts out to investors (otherwise known as earnings season), this evening's postclose session was flooded with sharper-than-usual price movements and very few dull moments.

Companies in the earnings spotlight tonight included computer manufacturers Apple AAPL and IBM IBM -- whose shares rose on the back of their reports -- and networkers Extreme Networks EXTR and Redback Networks RBAK -- whose stock prices fell on the heels of their statements.

After the closing bell, Apple Computer posted a first-quarter loss -- its first loss in three years. Still, the shortfall was narrower than the downwardly revised number predicted by Wall Street.

Apple recorded a loss of 58 cents per share, topping analysts' prediction of a 65-cent loss but far below the year-ago 51-cent profit. Sales for the company fell to $1.01 billion from $2.34 billion in the year-ago period but came in slightly ahead of Apple's prediction of sales of $1 billion.

In extended trading, shares of Apple advanced 5.2% to $17.69 on Instinet and climbed 4.1% to $17.50 on Island.

Meantime, computing giant IBM released fourth-quarter earnings that exceeded Wall Street's expectations. More important, IBM recorded a revenue figure that was also above consensus. For the first quarter, IBM posted earnings of $1.48 per share, beating the consensus estimate of $1.46 per share. Sales, meantime, totaled $25.62 billion, about $130 million above expectations and 5.9% above the year-ago period.

On the night watch, shares of the PC maker -- which are generally traded on the postclose marketplace only when there's news on the company -- surged 6.5% to $103 on Instinet.

Moving on to other companies with earnings news tonight, Extreme Networks posted second-quarter earnings that were in line with Wall Street's forecasts but only slightly surpassed revenue targets, raising investor concerns about its growth prospects.

Extreme said that second-quarter earnings were 11 cents a share, meeting analysts' forecasts. Revenue for the quarter came in at $144.7 million, compared with $55 million in the year-ago period. Analysts had expected revenue of $142.3 million for the second quarter.

As a result, shares of the networker fell 13.3% to $41.53 on Instinet and dropped 12.3% to $42 on Island.

Redback Networks, the second networker to report this evening, stated fourth-quarter earnings that were ahead of Wall Street's targets but said that gross margins are declining.

The company posted earnings of 5 cents a share, just beating the 4 cent analyst estimate. The company reported revenue of $114.6 million, up from $26.1 million in the year-ago period.

Redback shares lost 3.2% to $47.02 on Instinet and declined 5.4% to $45.94 on Island.

Earnings news from the semiconductor sector was even less rosy than the networkers' reports. Chipmaker Xilinx XLNX recorded third-quarter earnings that missed analysts' lowered expectations. The company was quiet about its revenue forecasts for the fourth quarter.

Xilinx announced earnings of 31 cents a share, falling short of the Street's prediction of a 32 cent result but above the year-ago 20 cent result.

In recent action, Xilinx shed 3.6% to $46.56 on Instinet and slid 3.2% to $46.75 on Island.

Elsewhere in the sector, Advanced Micro Devices AMD announced earnings of 53 cents a share, below downwardly revised estimates. The company also indicated that it expects flat first-quarter revenue.

At last look, shares of AMD had not been traded on the after-hours marketplace.

Finally, business-to-business firm i2 Technologies ITWO reported earnings and revenue numbers that beat analysts' expectations.

i2, which makes software to help companies manage their inventory and manufacturing processes, said it earned 9 cents a share, excluding certain charges, in the fourth quarter. Analysts were looking for the company to earn 8 cents a share. The company earned 5 cents a share a year earlier. The B2B firm booked revenue of $378 million, compared with analysts' prediction of $350 million in revenue. A year ago, i2 Technologies logged $175 million in revenue.

Despite its better-than-expected earnings number, shares of i2 Technologies declined 7.4% to $49.88 on Instinet and decreased 6.4% to $50.41 on Island.

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10 most active stocks on Instinet (6:30 p.m. EST)
Company	Price	Change	Session Volume
Apple Computer AAPL	17.69	+0.88	1,272,150
Extreme Networks EXTR	41.53	-6.34	855,600
IBM IBM	103	+6.31	807,735
Sun Microsystems SUNW	33.25	+0.88	364,690
Redback Networks RBAK	47.02	-1.55	362,500
Intel INTC	30.75	+0.25	332,370
Safeguard Scientifics SFE	9	-0.13	278,600
Cisco Systems CSCO	39.31	+0.31	277,458
Dell Computer DELL	23.13	+0.44	275,882
Xilinx XLNX	46.81	-1.50	269,617

This information is provided by Instinet, a wholly owned subsidiary of Reuters RTRSY. For further information, please contact Instinet at www.instinet.com.

10 most active stocks on Island ECN (8 p.m. EST)
Company	Price	Change	Session Volume
Extreme Networks EXTR	42	-5.88	666,842
i2 Technologies ITWO	50.41	-3.47	412,709
Apple Computer AAPL	17.50	+0.69	402,500
Redback Networks RBAK	45.94	-2.63	355,367
eToys ETYS	0.64	-0.05	184,341
Ariba ARBA	36.13	+0.13	146,193
Intel INTC	30.87	+0.37	144,231
Nasdaq 100 QQQ	64.13	n.a.	135,254
Affinity Technology Group AFFI	0.28	+0.03	128,600
Juniper Networks JNPR	137.50	+1.31	122,232

Island ECN, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 7 a.m. to 8 p.m. EST.

Confused? TheStreet.com explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.