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Friday's Early Winners & Losers

SanDisk has memory problems; Ariad Pharma to sell shares.

SanDisk (SNDK) shares tumbled after the Milpitas, Calif.-based company's third-quarter profit was pinched by plummeting flash-memory prices.The company said sales for the three months ended Oct. 1 surged 27% to $751 million, while analysts polled by Thomson First Call were looking for $737 million. Net income fell to $103.2 million or 51 cents a share, from $107.4 million, or 55 cents a share a year earlier. Excluding stock-compensation expense and the amortization of certain acquisition-related assets, SanDisk earned 61 cents a share, surpassing Wall Street estimates of 57 cents a share a year earlier. But investors focused on the more-than-60% drop in average selling prices per megabyte during the quarter. The company's gross margin fell to 32% from 37% a year earlier. The company said demand was strong in the third quarter for mobile flash chips; it now expects total megabytes sold in 2006 to grow by 200%. Shares were sliding $6.08, or 9.9%, to $55.65.

Ariad Pharmaceuticals

(ARIA)

lost ground after the Cambridge, Mass.-based company said it intends to sell about 3.1 million shares of its stock in a public offering. The company said the underwriter will have an option to buy up to an additional 466,942 shares of Ariad's common stock to cover overallotments. All of the shares in the offering are being sold by Ariad. Credit Suisse Securities is acting as sole underwriter for the offering. Shares were falling 32 cents, or 6.2%, to $4.86.

TranSwitch

(TXCC)

advanced after the Shelton, Conn.-based semiconductor company narrowed its third-quarter loss. TranSwitch posted a loss of $725,000, or 1 cent a share, compared with a loss of $1.3 million, or 1 cent a common share. The company reported revenue of about $9.6 million, up from $7.3 million a year ago. Wall Street was looking for a loss of 2 cents a share. Looking ahead, the company forecast a fourth-quarter loss of 3 to 4 cents a share on revenue of about $9.3 million. Shares were climbing 13 cents, or 8.9%, to $1.59.

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Xilinx

(XLNX) - Get Xilinx, Inc. (XLNX) Report

surged after the San Jose, Calif., chipmaker exceeded Wall Street's second-quarter expectations and raised hopes for the current quarter. The company posted a profit of $93 million, or 27 cents a share, including stock-options expense, compared to $82.3 million, or 24 cents a share, a year ago. Revenue was up 17% to $467.2 million. Without the options charge, the company would have earned 32 cents a share. Analysts were forecasting a profit of 23 cents a share, including options, on revenue of $456 million.

Last month, Xilinx lowered sales expectations, saying it expected revenue to be down between 4% and 7% sequentially, suggesting a range of between $448.1 million and $462.5 million. Looking to the third quarter, the company said it expects revenue to range from $476.5 million to $490.6 million, well above Wall Street's expectation of $474.2 million. Xilinx said it expects gross margins of 61% or 62%, but did not give an EPS forecast. Analysts are looking for a profit of 24 cents a share. Shares were trading up $1.83, or 7.7%, to $25.75.

Informatica

(INFA)

slumped after the Redwood City, Calif.-based software company missed Wall Street's third-quarter expectations. The company posted net income of $9.4 million, or 10 cents share, compared with $8.3 million, or 9 cents a share, a year ago. Excluding items, the company earned $14.8 million, or 16 cents a share, up from $10.1 million, or 11 cents a share, a year ago. Revenue increased 21% over from a year ago to $78.9 million. Analysts were looking for Informatica to post earnings of 14 cents a share on $80.3 million in revenue. Shares were tumbling $1.91, or 14%, to $11.75.