The Night Watch: Microsoft, eBay and Nortel Make After-Hours Gains Following Earnings

Updated from 6:30 p.m. EST

Tonight's trading session has seen Microsoft (MSFT Quote - Cramer on MSFT - Stock Picks), Nortel (NT Quote - Cramer on NT - Stock Picks) and eBay (EBAY Quote - Cramer on EBAY - Stock Picks) rise on the back of their earnings releases and Sun Microsystems (SUNW Quote - Cramer on SUNW - Stock Picks) fall on the heels of its financial statement -- with heavy traffic in all of the stocks with news this evening.

Microsoft Advances on Heavy Volume

Earlier this evening, Microsoft posted second-quarter earnings that met reduced estimates. The software giant posted a profit of 47 cents a share, in line with analysts' expectations and above the year-ago 44-cent result. Revenue for the quarter came in at $6.59 billion, vs. Wall Street's target of $6.51 billion.

Just last month, Microsoft issued its first-in-a-decade warning that took its earnings estimate down about 3 cents. The company blamed the shortfall on the decline in information-technology spending and sagging personal computer sales.

But for the moment, tonight's news was enough to win back investor confidence. Shares of Microsoft gained 6.6% to $59.19 on Instinet -- with 3.6 million shares in play -- and added 6.3% to $59 on Island ECN -- with 650,000 shares changing in hands.

Nortel Climbs

After the closing bell, Nortel reported fourth-quarter earnings in line with Wall Street's forecast. The manufacturer of telecommunications equipment announced earnings of 26 cents a share, even with consensus estimates and above the year-ago 21-cent profit. Revenue for the quarter came in at $8.8 billion, also in line with analysts' expectations.

The company, however, confirmed investors' concerns about a slowdown in near-term growth for the networking sector. For the first quarter, Nortel said that revenue growth would be 30% for 2001, compared to its previous forecast of 30% to 35% growth. Nortel expects first-quarter revenue to be $8.1 billion, which is also slightly below Wall Street's consensus of $8.2 billion. The company kept its profit expectations at 16 cents per share.

Despite the company's forward guidance, shares of Nortel lifted 6% to $38.88 on Instinet.

eBay Soars

Tonight, eBay posted fourth-quarter results that surpassed the Street's estimates. The online auctioneer -- one of the few Internet companies to record a profit -- stated earnings of 9 cents a share, ahead of analysts' expectations of a 7-cent result and above the year-ago profit of 2 cents a share. Revenue was listed at $134 million, higher than consensus estimates of $125.5 million.

On Tuesday, eBay said it would raise the fees it charges to list items for auction, encouraging a slew of analyst upgrades and giving investors further confidence in the company's business model.

Shares of eBay rocketed 8.8% to $51 on Instinet and surged 10.3% to $51.69 on Island.

Sun Microsystems Slips

In extended trading, Sun Microsystems stated second-quarter earnings in line with Wall Street's expectations, but announced revenue that was below analysts' targets. The Unix-systems honcho said that it earned 16 cents a share, even with analysts' predictions. Revenue, however, totaled $5.12 billion, nearly $130 million below the Street's $5.29 billion estimate.

Sun slightly lowered its revenue growth forecast for 2001 to 30% to 35% from the previous estimate of revenue growth in the mid-30 percent range.

As a result, Sun shed 1.4% to $34.38 on Instinet and lowered 1.7% to $34.30 on Island.

Commerce One Surges

On the night watch, Commerce One (CMRC Quote - Cramer on CMRC - Stock Picks) posted better-than-expected fourth-quarter revenue and a lower-than-expected loss. The software company posted a loss of 5 cents a share, compared to Wall Street's forecast of a 7-cent loss. Revenue for the quarter was listed at $191.4 million, above the Street's $175.6 million target.

Commerce One's revenue result places it ahead of its rival Ariba (ARBA Quote - Cramer on ARBA - Stock Picks), which reported revenue of $170.2 million last week.

All in all, the B2B firm's report card appeared to please investors -- who bid the stock up 19.9% to $26 on Instinet and 19.8% higher to $25.98 on Island.

Critical Path Plunges

Critical Path (CPTH Quote - Cramer on CPTH - Stock Picks) posted fourth-quarter results that badly missed Wall Street's forecasts. The company posted a loss of 16 cents per share, far below analysts' expectations of a 1-cent profit.

Going forward, the Internet messaging services provider expects revenue for the first quarter to be $54 million to $56 million and a loss, excluding charges, of 15 cents to 16 cents a share. For 2001, the company anticipates revenue of $255 million to $260 million, with the hope of becoming profitable in the third quarter. Analysts had been forecasting a profit not only for the latest quarter but also for each quarter in fiscal 2001, including an earnings projection of 3 cents for the first fiscal quarter.

At last look, shares of Critical Path were in critical condition -- down 45% to $11 on Instinet and lower 43.75% to $11.25 on Island.

Inktomi Drops

Inktomi (INKT Quote - Cramer on INKT - Stock Picks) posted first-quarter earnings that met analysts' reduced estimates, but told analysts to cut their near-term expectations. The company posted earnings of 1 cent a share, in line with estimates -- which were reduced from 3 cents a share.

Published reports indicated that Inktomi expects to incur a "modest loss" in the next two quarters, while analysts are expecting the company to earn 2 cents a share in the second quarter and 5 cents in the third quarter, according to First Call.

In recent action, Inktomi added 2.9% to $18 on Instinet and tacked on 0.36% to $17.56 on Island.

10 most active stocks on Instinet (6:30 p.m. EST)
Company	Price	Change	Session Volume
Microsoft (MSFT Quote - Cramer on MSFT - Stock Picks)	59.19	+3.69	3,648,253
Nortel Networks (NT Quote - Cramer on NT - Stock Picks)	38.88	+2.19	1,860,700
Critical Path (CPTH Quote - Cramer on CPTH - Stock Picks)	11	-9	1,356,100
Sun Microsystems (SUNW Quote - Cramer on SUNW - Stock Picks)	34.38	-0.50	1,036,799
Commerce One (CMRC Quote - Cramer on CMRC - Stock Picks)	26	+4.31	648,363
Cisco Systems (CSCO Quote - Cramer on CSCO - Stock Picks)	43.38	+1.50	528,413
Intel (INTC Quote - Cramer on INTC - Stock Picks)	33.13	+0.94	523,639
Oracle (ORCL Quote - Cramer on ORCL - Stock Picks)	34.88	+1.06	475,389
eBay (EBAY Quote - Cramer on EBAY - Stock Picks)	51	+4.13	430,449
JDS Uniphase (JDSU Quote - Cramer on JDSU - Stock Picks)	63.98	+3.67	347,063

This information is provided by Instinet, a wholly owned subsidiary of Reuters (RTRSY Quote - Cramer on RTRSY - Stock Picks). For further information, please contact Instinet at www.instinet.com.

10 most active stocks on Island ECN (7:45 p.m. EDT)
Company	Price	Change	Session Volume
Sun Microsystems (SUNW Quote - Cramer on SUNW - Stock Picks)	34.30	-0.58	1,045,308
Commerce One (CMRC Quote - Cramer on CMRC - Stock Picks)	25.98	+4.30	799,929
Microsoft (MSFT Quote - Cramer on MSFT - Stock Picks)	59	+3.50	650,508
eBay (EBAY Quote - Cramer on EBAY - Stock Picks)	51.69	+4.81	602,332
Critical Path (CPTH Quote - Cramer on CPTH - Stock Picks)	11.25	-8.75	494,660
CMGI (CMGI Quote - Cramer on CMGI - Stock Picks)	5.71	-1.13	433,359
Intel (INTC Quote - Cramer on INTC - Stock Picks)	33	+0.81	249,770
JDS Uniphase (JDSU Quote - Cramer on JDSU - Stock Picks)	63.70	+3.39	240,633
Emulex (EMLX Quote - Cramer on EMLX - Stock Picks)	109	+11.88	218,994
Cisco Systems (CSCO Quote - Cramer on CSCO - Stock Picks)	43.38	+1.50	204,956

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.