Updated from 11:27 a.m.

Microsoft's

(MSFT) - Get Report

nickname, "Mr. Softie," seems particularly apt after the company announced that second-quarter revenue and earnings data would be lower than expected due to weakness in the economy, which means slow PC sales and corporate spending.

Bill Gates'

software behemoth announced that its second-quarter earnings would come in between 46 cents and 47 cents a share, lower than the 49 cents expected by the fine folks at

First Call/Thomson Financial

. Revenue will come in between $6.4 billion and $6.5 billion, lower than the $6.77 billion expected by analysts.

And the future ain't looking too bright, neither: Microsoft said fiscal 2001 results would come in 5% lower than previously announced and earnings would be between $1.80 and $1.82 a share. Analysts expected $1.91 a share. Microsoft closed down $6.31, or 11.4%, to $49.19.

After Thursday's Close

Sheesh! Well,

that

was easy!

Oracle

(ORCL) - Get Report

didn't break a sweat, easily beating second-quarter analyst expectations, reporting a 66% increase in sales of its key business applications software. Larry Ellison's company posted earnings of 11 cents a share, a penny better than what analysts expected, according to

Multex.com

. In the year-ago quarter, the company earned 6 cents a share.

But the number everyone on Wall Street was watching for was the applications sales figure. After a disappointing increase of only 42% during its fiscal first quarter, Oracle had to prove that its push into the applications-software business was taking hold. And with $279 million in applications sales, it did just that. Analysts were looking for growth of at least 50%, and Oracle's 66% growth easily topped that. Sales of Oracle's database software, meanwhile, also were up, climbing 19% to $775 million.

"Our applications business is strong and getting stronger," Ellison said in a statement. "This quarter's results prove that we're winning more and more of these best-of-breed battles against

Ariba

(ARBA)

,

i2

(ITWO)

,

Siebel

(SEBL)

and other niche specialists."

Oracle closed up $1.06, or 3.9%, to $28.56, Ariba closed up 81 cents, or 1.2%, to $67.13, i2 was down 31 cents, or 0.6%, to $50.69 and Siebel was down $2.13, or 2.7%, to $77.25.

CMGI

(CMGI)

made the best of a losing effort, beating analyst expectations by losing less money than the smart guys thought it should. The Internet infrastructure company said its fiscal first-quarter results came in at a 25 cent per share loss, better than last year's 49 cent loss.

Now, those figures

exclude

expenses, amortization, assets and charges. But for whatever reason, the analyst estimates

include

such items. So, comparing apples to apples, CMGI posed a loss of $2.07 a share this quarter, which was 6 cents better than the $2.13 loss estimate from First Call/Thomson Financial. And for those of you more interested in the flat amount of money lost in the first quarter, you might want to take a seat. CMGI lost $636.6 million, about $3 million worse than the year-ago period.

But first-quarter revenue was $366.1 million, up from $129.1 million a year ago.

In its report, CMGI -- which holds a portfolio of search and portal sites, such as

AltaVista

and a smorgasbord of Internet infrastructure, services and marketing companies -- said the "interactive advertising industry continues to face near-term pressure."Uh, yeah --

no kidding

. CMGI also said it hopes to increase its "base of licensing, software and enterprise-derived revenues, as well as to significantly reduce cash burn.'' Brilliant! CMGI closed down 78 cents, or 8.6%, to $8.28.

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Mergers, acquisitions and joint ventures

Sold! Or, rather: "Verkauft!" German chemical company

BASF

sold its

Knoll

drug unit to

Abbott Laboratories

(ABT) - Get Report

for $6.9 billion in cash.

This move gets BASF out of the drug business, allowing it to focus on the chemical business, while Abbott Labs goes deeper into the pharmaceutical world. BASF closed up 13 cents, or 0.3%, to $41.19.

Peoples & Union

will go to the

First Farmers & Merchants

. No, this isn't some cryptic Marxist haiku, it's a business transaction.

First Tennessee National

(FTN)

announced that its Peoples & Union banking unit would be sold to First Farmers & Merchants National Bank for an undisclosed amount. First Tennessee said it would record a $12 million pretax gain on the deal. First Tennessee closed up 6 cents, or 0.3%, to $25.06.

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Earnings/revenue reports and previews

Power-tools maker

Black & Decker

(BDK)

took a belt sander to its fourth-quarter earnings outlook, shaving a nice chunk off the bottom line on weak sales. The company said that the fourth quarter will come in between 95 cents and $1.05 a share, much lower than the consensus 11-analyst call of $1.46. Full-year earnings will now come in between $3.48 and $3.58 a share, lower than the $3.99 estimate.

Black & Decker warned that fourth-quarter sales would be 6% lower than the year-ago period and will carry about $800 million in inventory come the start of 2001. But even worse than that is the company's outlook for the first half of 2001. If the current economic weakness continues, then the company said 2001's first two quarters will either be even with or lower than the same period in fiscal 2000.

That said, the company affirmed the fiscal 2001 picture, saying that earnings per share are still expected to grow 10% and sales are expected to grow 4% over the full-year period.

"Having met or exceeded Wall Street expectations for 15 consecutive quarters, we are particularly disappointed with these developments," said Nolan D. Archibald, Black & Decker CEO and chairman. The company's stock closed up 13 cents, or 0.4%, to $32.56.

Macerich

(MAC) - Get Report

, a real estate development trust with an eye on shopping malls, announced that its 2001 earnings per share would come in between $2.96 and $3.02, lower than the analyst expectation of $3.02 a share. The company blamed lower-than-expected rent predictions for the miss. The company also said sales of $150 million in noncore assets would occur in late 2001, that is, assuming 50% leverage.

And in news that doesn't matter nearly as much, the company announced that it has repurchased 559,000 shares of common stock at an average price of $19.02 a share. That's just a fraction of the 3.4 million it announced it could re-buy on Nov. 10. Macerich closed flat at $19.81.

Another chip is down.

Micro Component Technology

(MCTI)

announced that fourth-quarter losses would come in between a penny and a nickel a share, much lower than the 10 cent profit expected from the guys at

First Call/Thomson Financial

. Revenue will come in between $13 million and $14 million, as orders slow down. Analysts were looking for $17 million in revenue. Micro Component closed down 88 cents, or 22.95%, to $2.94.

Polaroid

(PRD)

gave markets a better picture of its fourth-quarter earnings. A better picture, that is, after popping it out, shaking it and blowing on the result.

But let's call a spade a spade. The untouched picture isn't good. Polaroid said it sees fourth-quarter earnings coming in at "break-even," well below current earnings estimates of 52 cents a share. The film and camera maker did not disclose actual per-share earnings. Polaroid also said it has a more conservative outlook for 2001. Polaroid blamed the miss on lower shipments and "unfavorable manufacturing variances," saying that its fourth-quarter revenue could be off by $60 million to $70 million, affecting $40 million to $45 million in operating profit.

The company had already cut back manufacturing output because of lower demand. Polaroid vowed to sell underutilized real estate assets, reduce manufacturing costs and overhead and come up with new products. The company estimates these rather vague sounding initiatives will help it generate cash, reduce debt by at least $100 million and "navigate a potentially extended economic downturn."

Earlier this week,

Eastman Kodak

(EK)

warned that fourth-quarter earnings will come in between 65 and 75 cents a share, well short of the $1.07 expected by the folks at earnings tracker First Call/Thomson Financial. The full-year 2001 revenue is now expected to come in between $4.65 and $4.75 a share, again, much lower than the analyst expectations of $5.07 a share. Polaroid closed down 69 cents, or 9.6%, to $6.50; Kodak was down 75 cents, or 1.9%, to $38.19.

Ch-ch-ch-ch-ch-changes!

Ventana Medical Systems

(VMSI)

took a cue from a David Bowie hit, announcing that fourth-quarter sales would come in lower than expected after the company adjusted the way it records Japanese revenue.

Now, the lab testing equipper says sales will come in between $17 million to $18 million, $3 million to $4 million less than previous guidance. That puts per-share earnings into the loss category, with fourth-quarter losses coming in between 11 cents to 17 cents a share. The First Call/Thomson Financial estimate was a far cry from that -- it was for a 7 cent

profit

per share. Ventana closed down $2.50, or 11.3%, to $19.63.

After Thursday's Close

Adobe

(ADBE) - Get Report

, maker of Photoshop and other software, won't need to airbrush its fourth-quarter earnings report, beating estimates while expressing confidence that revenues will grow by 25% in the next quarter and in fiscal 2001 overall.

The company said it earned $127.5 million, compared with $90.0 million in the same period last year, resulting in earnings of 34 cents a share. That's better than the 29 cent estimate and the year-ago 23 cents a share. Sales for the quarter were $355.2 million, compared with $281.8 million last year. For fiscal 2000, which the company called a "phenomenal year," revenue was $1.27 billion, compared with $1.02 billion in fiscal 1999.

Adobe also announced President Bruce Chizen will become chief executive, while former CEO John Warnock will become chief technology officer. Warnock's position is a new one and, according to the press release, there are no hard feelings about the switcheroo. "The time is right for me to turn the CEO position over to him," Warnock said. Adobe ended the day up $5.13, or 8.9%, to $62.44.

Put away the Queen record.

Agency.com

(ACOM)

isn't biting the dust, it's just restructuring and missing earnings. The company said its fourth-quarter would come in between 4 cents and 7 cents a share, at the low end of the 7 cent analyst prediction.

Agency.com said it will close its Vail, Colo. office and reduce its staff by 190 employees, 130 of those billable consultants. As a result of these moves, the company expects to take a charge of $11 million to $14 million in its fourth quarter, with cost savings between $12 million and $16 million over the next year. Agency.com closed down 88 cents, or 22.6%, to $3.

Danaher

(DHR) - Get Report

, which makes environmental tools and controls, announced that it's comfortable with analyst estimates in both 2000 and 2001. Rejoice! Danaher closed up $2.31, or 3.7%, to $65.13.

Israeli

ECI Telecom

(ECIL)

said its fourth quarter would miss estimates, citing slower-than-expected growth in the optical-networking sector. Revenues will now come in between $310 million and $330 million. ECI closed up $2.31, or 3.7%, to $65.13.

Emerson Electric

(EMR) - Get Report

makes electric equipment, but you might know 'em for the In-Sink-erator garbage disposal system. And the company also makes analyst estimates. The company announced that it is comfortable with its 83 cent analyst estimate and that it feels good about next year, too. Emerson closed down 75 cents, or 1%, to $71.25.

Enzo Biochem

(ENZ) - Get Report

reported diluted first-quarter earnings of 6 cents a share, missing the 7 cent analyst estimate and coming in exactly at the year-ago quarter's earnings. Still, this quarter's revenue and earnings are both records for the company, with revenue coming in at $13.9 million. Enzo closed down 75 cents, or 2.7%, to $27.25.

Lionbridge Technologies

(LIOX)

, a multilingual software education outfit, didn't need to know any foreign phrases to tell investors that it would miss fourth-quarter estimates. The company cited slower spending as a major factor behind fourth-quarter revenues coming in 15% lower than previously expected. Ah, earnings misses -- the universal language. Lionbridge ended the day not so courageously and burning bridges (and mixing metaphors) with a loss of $1.59, or 32.7%, to $3.28.

Linux supporter and Microsoft foe

Red Hat

(RHAT)

posted a third-quarter loss of a penny a share, better than the 2 cent loss predicted by the analysts and the year-ago 4 cent loss. But revenue more than doubled to $22.4 million for the period, up from $10.5 million in the same period a year ago. Red Hat closed down 6 cents, or 0.7%, to $8.63.

Attention all Muggles.

Scholastic

(SCHL) - Get Report

, best-known for its super-duper

Harry Potter

book series, announced that its second-quarter earnings would come in at $2.95 a share, crushing the $2.66 analyst estimate. The publisher raised its fiscal 2001 outlook to a range between $4.40 and $4.55 a share, which is also much higher than analysts' expectation of $4.21 a share.

Revenues at Scholastic, which before the Potter phenomenon was a rather sleepy educational publisher, rose 31% vs. the year-ago period as the wizard-in-training series drew huge sales from not only children, but their parents as well. The company also announced a 2-for-1 stock split. Scholastic closed up $4.81, or 6.8%, to $75.56.

Temple-Inland

(TIN)

announced that it would miss fourth-quarter earnings, thanks in part to higher energy costs and a slowdown in the American economy. The paper company said that its fiscal 2000, with the final fourth-quarter results to be officially released Feb. 2, will come in around $4 a share. A consensus estimate of seven analysts is $4.24. Temple-Inland closed down $1.31, or 2.6%, to $49.81.

Ultramar Diamond Shamrock

(UDS)

said it was comfortable with analyst expectations, hinting that it would have record profits. The company said it will meet or beat the $1.01 fourth-quarter per share estimates and was on track to top the 2001 estimate of $4.53 a share. Ultramar ended the day up 44 cents, or 1.6%, to $28.25.

UniSource Energy

(UNS)

said its fourth-quarter would power past estimates, coming in at $1.10 a share, better than the $1.03 per share expected by the folks at First Call/Thomson Financial. UniSource said profits increased thanks to unit

Tucson Electric Power's

success in the wholesale power market, which has been quite a lucrative area, thanks to the high margins on energy sales.

In fact, the outlook is so good at Tucson Electric that UniSource upped its estimates for 2001, pushing it to between $1.23 and $1.53 a share, topping the $1.22 estimate. UniSource closed flat at $16.25.

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Analyst actions

Credit Suisse First Boston

made some comments about

IBM's

(IBM) - Get Report

fortunes this morning, and the crystal ball wasn't so kind.

"We continue to believe that IBM cannot avoid deteriorating industry fundamentals this quarter, which extend to the enterprise and commercial markets," analyst Kevin McCarthy wrote. "As a result, we believe there is downside to the Street's $26.75 billion revenue expectation for Q4. We currently estimate $25.75 billion."

Big Blue ended the day down $4.63, or 5%, to $87.81.

Merrill Lynch

reduced earnings estimates on a wide range of retailers.

Home Depot

(HD) - Get Report

,

Lowes

(LOW) - Get Report

,

Best Buy

(BBY) - Get Report

,

Circuit City

(CC) - Get Report

,

Office Depot

(ODP) - Get Report

,

Staples

(SPLS)

,

Group 1

(GPI) - Get Report

and

Sonic

(SAH) - Get Report

were all affected by the change.

Whoa, doggie, as they say in Alabama, and fasten your seat belts: Home Depot closed down $1.94, or 4.4%, to $41.94; Lowes was down 81 cents, or 1.9%, to $41.06; Best Buy was down $1.69, or 6.3%, to $25; Circuit City was up 6 cents, or 0.6%, to $10.38; Office Depot was down 19 cents, or 2.9%, to $6.38; Staples closed down 38 cents, or 2.8%, to $12.88; Group 1 was flat at $8.75; and Sonic was down 6 cents, or 0.95%, to $6.50.

Upgrades

BJ's Wholesale Club

(BJ) - Get Report

: UP to intermediate-term buy from accumulate at Merrill. BJ's ended the day up 25 cents, or 0.7%, to $37.13.

Costco Wholesale

(COST) - Get Report

: UP to buy from accumulate at Merrill, price target $50, added to "Merrill Lynch Focus One" list. Costco closed down 6 cents, or 0.2%, to $34.88.

General Growth Properties

(GGP)

: UP to strong buy from buy at

UBS Warburg

. General Growth closed up 13 cents, or 0.4%, to $34.63.

Henry Schein

(HSIC) - Get Report

: UP to buy from hold at UBS Warburg. Henry Schein closed up $1.13, or 3.8%, to $30.63.

Simon Property Group

(SPG) - Get Report

: UP to strong buy from buy at UBS Warburg. Simon closed flat at $24.25.

Downgrades

Alliance Semiconductor

(ALSC)

: DOWN to accumulate from strong buy at

Prudential Securities

. Alliance closed down 56 cents, or 4.1%, to $13.31.

Clorox

(CLX) - Get Report

: DOWN to hold from strong buy at Prudential. Clorox closed down $3.94, or 11.6%, to $30.06.

BRE Properties

(BRE)

: DOWN to intermediate-term neutral, long-term accumulate from intermediate-term accumulate, long-term buy at Merrill. BRE closed down $1.06, or 3.3%, to $31.19.

Fortune Brands

(FB) - Get Report

: DOWN to accumulate from buy at Merrill, price target $35. Fortune Brands closed up 38 cents, or 2.1%, to $18.38.

Primus Telecommunications

(PRTL)

: DOWN to hold from strong buy at

ING Barings

. Primus ended the day down 31 cents, or 9.1%, to $3.13.

Tribune

(TRB)

: DOWN to hold from accumulate at Prudential. Tribune closed down $1.63, or 4.1%, to $37.75.

Initiations

Aetna

(AET)

: NEW intermediate-term neutral, long-term accumulate at Merrill. Aetna closed down $1.44, or 4.2%, to $33.

Apogent Technologies

(AOT)

: NEW buy at CSFB; price target: $32. Apogent closed up 19 cents, or 0.8%, to $23.06.

Bone Care International

(BCII)

: NEW strong buy at Prudential; price target: $35. Bone Care closed down 69 cents, or 4.3%, to $15.44.

Kinder-Morgan

(KMI) - Get Report

: NEW buy at UBS Warburg; price target: $35. Kinder-Morgan closed up $2.31, or 4.97%, to $48.81.

Lincare

(LNCR)

: NEW intermediate-term accumulate, long-term buy at Merrill; price target: $60. Lincare closed up 6 cents, or 0.1%, to $51.81.

Plexus

(PLXS) - Get Report

: NEW buy at

Salomon Smith Barney

; price target: $65. Plexus took a shot in its solar, closing down $3.31, or 8.4%, to $35.94.

Rouse

(RSE)

: NEW buy at UBS Warburg; price target: $28. Rouse closed up 25 cents, or 1%, to $25.31.

Scios

(SCIO)

: NEW strong buy at Merrill; price target: $35. Scios closed down 75 cents, or 3.7%, to $19.50.

Group Moves

Prudential Securities upped its ratings on a bunch of oil companies, citing attractive valuations. Here are the crude folks affected:

  • British Petroleum (BP) - Get Report: accumulate from hold. BP ended the day down 63 cents, or 1.3%, to $47.31.
  • Conoco (COC.B) : strong buy from accumulate. The stock closed up 56 cents, or 2.2%, to $26.56.
  • Phillips (P) : strong buy from hold. Phillips closed up 50 cents, or 0.95%, to $53.
  • Texaco (TX) - Get Report: strong buy from accumulate. Texaco closed up 19 cents, or 0.3%, to $57.31.
  • Royal Dutch (RD) : accumulate from hold. Royal Dutch ended the day up 75 cents, or 1.4%, to $55.88.
  • Exxon Mobil (XOM) - Get Report: accumulate from hold. Exxon Mobil closed down $1.38, or 1.6%, to $84.13.

ING Barings initiated coverage on the airline industry:

  • AirTran (AAI) NEW buy. AirTran closed up 38 cents, or 5.8%, to $6.81.
  • AmSurg (AMSGA) NEW strong buy. AmSurg closed up 38 cents, or 1.9%, to $19.88.
  • Atlantic Coast Airlines (ACAI) NEW buy. Atlantic Coast Airlines ended the day up $1.94, or 4.8%, to $42.63.
  • SkyWest Airlines (SKYW) - Get Report NEW strong buy. SkyWest closed up $2.30, or 4.8%, to $50.48.

Lehman Brothers initiated coverage on a half-dozen stocks in the personal care sector, all with neutral ratings. Here are the companies affected:

  • Clorox (CLX) - Get Report. Clorox took the green out today, closing down $3.94, or 11.6%, to $30.06.
  • Colgate (CL) - Get Report. Colgate closed down 60 cents, or 1%, to $57.06.
  • Dial (DL) - Get Report. Dial closed down 13 cents, or 1.2%, to $10.44.
  • Gillette (GL) - Get Report. Gillette closed down 25 cents, or 1.5%, to $16.50.
  • Playtex (PTX) - Get Report. Playtex closed down 25 cents, or 2.7%, to $9.13.
  • Procter & Gamble (PG) - Get Report. P&G ended the day down $2.13, or 2.9%, to $71.38.

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Offerings and stock actions

Asset manager

SEI Investments

(SEIC) - Get Report

will be giving its shareholders a little more equity. The company announced a 2-for-1 stock split, which will be in effect Feb. 28. And it said it would pay a cash dividend of 8 cents a share on Jan. 25. SEI closed down $1.13, or 1.1%, to $98.88.

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Miscellany

Quentra Networks

(QTRA)

said it filed for Chapter 11 bankruptcy protection, becoming yet another dot-com statistic. Here's the spin from CEO Bruce Ballenger: "We have taken this step as part of an ongoing effort to restructure, and ultimately strengthen, the company's financial condition. Our goal is the rapid development and execution of plans that will deliver value to our stakeholders." Quentra closed flat at 22 cents. Better execute those plans pretty quick!

After Thursday's Close

Television station owner

Liberty

(LC) - Get Report

just named its first CFO. Drum roll, please. The lucky CFO is Howard Schott, who previously worked at

Wink Communications

(WINK)

. Previously, the CFO position was handled by the company's vice president of finance. Liberty closed up 25 cents or 0.7%, to $37.88; Wink was down 44 cents, or 5.8%, to $7.13.

Teledyne Technologies

(TDY) - Get Report

announced that Robert Mehrabian will be the new CEO, replacing Thomas Corcoran, who resigned last week. Teledyne closed down 94 cents, or 3.9%, to $22.94.

Out with the old, in with the new. It's a brand new day over at

TRW

(TRW)

, which named David Cote new chief executive. TRW closed up $1.38, or 4.6%, to $31.25.

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By the Numbers

The data on NYSE and Nasdaq percent winners and losers are filtered to exclude stocks whose previous day's volume was less than 25,000 shares; whose last price was less than 5; and whose net change was less than 1/2.

Dow point gain and loss data are based on New York closing prices and do not reflect late composite trading.

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