Stocks to Watch: Microsoft, Ariba, Bank of America

Microsoft says it will appeal federal judge's antitrust ruling.
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A federal judge ruled that Microsoft (MSFT) - Get Report broke federal antitrust law by abusing its monopoly in PC operating systems. Judge Thomas Penfield Jackson said the software maker violated key parts of the Sherman Antitrust Act. The finding will lead to consideration of penalties, including a possible breakup of the company.

Microsoft said it would eventually appeal the judge's ruling and expressed confidence that it would prevail in the case. Yesterday, the stock fell sharply on news that settlement talks in the antitrust case had

ended this past weekend.

For more details on the decision, see separate

coverage from the

TheStreet.com/NYTimes.com

joint newsroom.

Ariba

(ARBA)

said that it would post second-quarter revenue of between $36 million and $38 million, edging out the analyst consensus estimates by 25% to 30%. The 22-analyst estimate sees the company reporting a loss of 8 cents a share. The company attributed the solid revenue outlook to B2B platform demand.

Separately,

Bank of America

(BAC) - Get Report

and Ariba said they entered a business-to-business e-commerce pact.

Mergers, acquisitions and joint ventures

Italian airliner

Alitalia

stated today that a merger with its strategic partner

KLM Royal Dutch Airlines

(KLM)

was only one of the issues currently under discussion between the two. The Italian financial daily

Il Sole 24

reported earlier that Alitalia and KLM had stepped up talks to consider a full merger.

Bell Atlantic

(BEL)

and

Vodafone AirTouch

(VOD) - Get Report

said it would spin off a part of their U.S. wireless joint venture,

Verizon Wireless

in an IPO. The companies said Verizon would put $3 billion towards developing its network.

Cable & Wireless

(CWP)

said it entered a three-year, $91 million online hosting agreement with

Microcast

. The deal calls for Cable & Wireless to supply the video streaming provider with Web connectivity that would link Microcast's video server installations to Cable & Wireless' Internet protocol network.

JDS Uniphase

(JDSU)

, which specializes in fiber-optic equipment, said it has agreed to

acquire privately held

Cronos Integrated Microsystems

in a stock deal valued at $750 million. Cronos develops micro-electromechanical systems that are incorporated into optical communication switches.

The

European Commission

said it has postponed its deadline to render a decision on the

MCI WorldCom

(WCOM)

and

Sprint

(FON)

merger until July 11. According to the EU, the initial July 4 deadline was extended by a week to allow the agency to gather additional information from the company.

Earnings/revenue reports and previews

(Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.)

Fairchild Semiconductor

(FCS)

said first-quarter sales would increase 10% from the fourth quarter. Fairchild also said it expects first-quarter earnings to beat the four-analyst estimate of 38 cents a share. The company said it is aiming to double its revenue by 2002 and hit a 10% market share.

Federated Department Stores

(FD)

said its March same-store sales fell 0.6%.

Kaiser Aluminum

(KLU)

announced that its financial results for the first quarter of 2000 will include a pretax gain of approximately $14 million, or 11 cents a share after tax, to reflect "market-to-market adjustments" on certain aluminum hedging contract positions.

PictureTel

(PCTL)

cautioned investors that its first-quarter revenue and earnings would fall short of previous forecasts. The company said it expects to post a first-quarter loss of 55 cents to 60 cents a share, wider than the four-analyst estimate of a 34-cent loss. PictureTel blamed the weak results on customer order deferrals.

Unisys

(UIS) - Get Report

warned investors that it would report first-quarter revenue of between $1.66 billion and $1.69 billion, falling below prior forecasts. The company said it remains on track to post first-quarter earnings within the 11-analyst estimate range of 33 cents to 34 cents a share. The company blamed its revenue shortfall on a softer-than-expected sales recovery after Y2K.

Miscellany

The Heard on the Street column in

The Wall Street Journal

discusses investors' shift to Old Economy stocks in the wake of the carnage in Microsoft and the

Nasdaq's

nose dive yesterday.

For analysis of the market's preopen tone and trends, see the Wake-Up Call, published separately.