Updated from 12:50 p.m. EDT

Tellabs

( TLAB) traded heavily Thursday after the company agreed to buy

Advanced Fibre

( AFCI) for $1.9 billion in cash and stock.

Under the terms of the deal, Advanced Fibre shareholders will receive 1.55 shares of Tellabs and $7 in cash for each Advanced Fibre share they own, which translates into $21.24 a share.

Upon completion of the deal, Tellabs shareholders will own about 75% of the combined company; Advanced Fibre shareholders will own the rest. The combined company will have some 4,100 employees working in 29 countries.

Shares of Tellabs traded down $1.24, or 13.5%, to $7.95 on volume of 67.6 million shares, while shares of Advanced Fibre traded up $2.13, or 12.7%, to $18.96 on volume of 35.1 million shares.

Brocade Communications Systems

(BRCD)

traded actively after the company reported second-quarter earnings results and announced it would lay off 9% of its workforce.

During the second quarter, Brocade

reported a loss of 1 cent a share on sales of $145.6 million. Excluding restructuring charges and other items, it would have earned 3 cents a share. Analysts polled by Thomson First Call were looking for the company to earn 3 cents a share on sales of $145.1 million.

The new round of layoffs affected 110 employees and resulted in a charge of about $10.5 million during the second quarter, the company said. The workforce reduction is part of what the company calls its business model optimization plan.

Shares of Brocade traded up 35 cents, or 6.8%, to $5.48, on volume of about 21.4 million shares.

Navistar

(NAV) - Get Report

, one of the largest truck makers in the U.S., moved lower Thursday on heavy volume, after the company reported a second-quarter profit and warned that third-quarter earnings would fall short of expectations.

Navistar earned 54 cents a share in the second quarter on revenue of $2.3 billion. Unfavorable currency translation affected earnings by 6 cents, the company said. Analysts were looking for the company to earn 59 cents a share on revenue of $2.06 billion, which Navistar easily surpassed. Looking ahead, however, Navistar warned that its third-quarter earnings would come in at 60 cents to 70 cents a share, well below Wall Street expectations of 99 cents a share.

Shares of Navistar traded down $6.25, or 15.5%, to $33.96 on volume of 12.4 million shares.

In addition to Navistar,

NYSE

high-volume leaders included

Nortel

( NT),

Lucent

( LU) and

Ford

(F) - Get Report

.

Joining Tellabs and Brocade,

Nasdaq

companies on the high-volume list included

Intel

(INTC) - Get Report

,

Microsoft

(MSFT) - Get Report

,

Cisco

(CSCO) - Get Report

and

Sirius Satellite Radio

(SIRI) - Get Report

.

Pharmion on Fire, Kirkland's Cools

Among notable Nasdaq price movers,

Pharmion

( PHRM) soared after the

Food and Drug Administration

approved its Vidaza drug. The drug is used to treat a group of bone-marrow disorders called myelodysplastic syndromes. To this point, there have been no other drugs approved for these disorders, the company said. Pharmion is expected to market the drug within the next month.

Shares of Pharmion traded up $12.91, or 47.8%, to $39.91.

Blue Nile

(NILE)

sailed on its first day as a public company. The online jewelry retailer priced 3.74 million shares at $20.50. The company said 1.74 million shares of the 3.74 million shares being offered would be sold by existing stockholders. Blue Nile, the firm said in a press release, will not receive any proceeds from the sale of shares offered by those shareholders.

Shares of Blue Nile were recently trading up $7.90, or 38.5%, to $28.40.

Shares of

Eidos

( EIDSY) slumped after the company said that one of its game titles is being affected by softness in the U.S. video game market.

Hitman: Contracts

has sold about 1.5 million units to date, but "recent and unexpected" softness, particularly in the U.S., was having a negative impact on sales, the company said.

This negative effect on sales will have a material adverse effect on the company's financial performance for the fiscal year ending June 30.

Shares of Eidos traded down 99 cents, or 30.2%, to $2.29.

Shares of

Back Yard Burgers

( BYBI) got charred Thursday after the company announced the termination of discussions about doing future business with

Yum Brands

(YUM) - Get Report

.

The company had originally entered into a development agreement with Yum in January 2002, whereby Back Yard Burgers licensed the Back Yard trademark to Yum in connection with the establishment and operation of 10 Back Yard Burger outlets as part of multibrand units with Taco Bell, Pizza Hut and KFC operations.

Yum and Back Yard's recent discussions pertained to an expansion of their relationship, whereby Yum would license and sublicense the Back Yard concept and name in connection with the establishment of 500 stand-alone and multibrand outlets, Back Yard said.

Shares of Back Yard traded down $1.39, or 19.4%, to $5.76.

Kirkland's

(KIRK) - Get Report

fell after the company announced first-quarter results and warned that earnings would be below expectations in the second quarter. The company earned 4 cents a share on revenue of $82.6 million during the first quarter, results that were in line with analysts' expectations.

Looking ahead, Kirkland's expects to report a loss of 3 cents to 7 cents a share during the second quarter. Sales are expected to be $85 million to $87 million. Analysts were expecting the company to earn 5 cents a share on revenue of $90.8 million. Based on the company's second-quarter warning, Kirkland's now expects to earn 90 cents to $1 for 2004, on sales of $417 million to $427 million. Analysts were expecting the company to earn $1.07 a share on revenue of $422.8 million.

Shares of Kirkland's traded down $3.48, or 23.9%, to $11.11.

Delta Flies, Sola Slumps

Over on the Big Board, shares of

Delta

(DAL) - Get Report

rose after an analyst upgrade. Lehman Brothers

analyst Gary Chase upgraded Delta to overweight from equal-weight, citing his belief that Delta can avoid bankruptcy and further reduce costs.

Shares of Delta traded up 82 cents, or 15.9%, to $5.99.

Shares of

Stewart & Stevenson

( SVC) climbed for a second-straight day on Thursday, after the company reported solid first-quarter financial results.

On Wednesday the company announced earnings of 19 cents a share on revenue of $304.3 million, easily surpassing EPS expectations of 9 cents and the sales estimate of $279.1 million by the lone analyst covering the stock.

Shares of Stewart & Stevenson traded up $1.31, or 8.4%, to $16.97.

Phillips-Van Heusen

(PVH) - Get Report

rose after it reported first-quarter earnings ahead of its previous guidance. In the most recent period, the company reported a loss of 12 cents a share on revenue of $381.3 million. Excluding restructuring charges, the company earned 18 cents a share, which was 5 cents ahead of the company's earlier forecast.

Looking ahead, Phillips said that it expects to earn 24 cents to 25 cents a share during the second quarter vs. analysts' expectations of 25 cents a share. For the full year, it expects to earn $1.13 to $1.18 vs. analysts' estimates of $1.13 a share.

Shares of Phillips-Van Heusen traded up 95 cents, or 5.7%, to $17.56.

The Bombay Company

( BBA) fell after the company reported first-quarter earnings results and soft same-stores sales. Bombay reported a loss of 16 cents a share on revenue of $123.6 million. Analysts were looking for the company to lose 16 cents a share on revenue of $122.2 million. Same-store sales, meanwhile, fell 9% during the quarter vs. a 25% increase a year ago.

Shares of Bombay traded down 39 cents, or 7.4%, to $4.90.

Sola International

(SOL) - Get Report

slumped after the company delayed its fourth-quarter and full-year earnings results.

The San Diego, Calif.-based company said that it, along with its independent auditors, are reviewing financial statements from earlier periods to figure out whether a material adjustment is necessary. These matters, the company said, relate to a computational error in the 2003 tax provision. The company will release its financial results upon the completion of the review.

Shares of Sola traded down $1.23, or 6.4%, to $17.92.