Shares of

Mercury Computer Systems

(MRCY) - Get Report

were among technology's losers Friday, falling 8% after the digital signal and image-processing systems company posted better-than-expected second-quarter earnings, but warned that third-quarter results would be worse than Wall Street's forecast.

The company earned $1.6 million, or 8 cents a share, on sales of $62.5 million for the December quarter. Excluding items, the company earned $3.9 million, or 18 cents a share. Analysts polled by Thomson First Call expected earnings of 10 cents a share on sales of $62.6 million. During the year-earlier quarter, the company posted adjusted earnings, which excludes items, of $7.3 million, or 30 cents a share, on sales of $59.3 million.

For the third quarter, Mercury Computer expects an adjusted loss of 4 cents to 10 cents a share and sales of $55 million to $58 million. Analysts had projected earnings of 25 cents a share on sales of $69.4 million. For all of fiscal 2006, the company sees an adjusted profit of 50 cents to 70 cents a share. The company predicts sales of $250 million to $260 million, lower than its October forecast of $275 million to $285 million. Mercury blamed the sales shortfall on several defense programs experiencing timing delays. Analysts were projecting earnings of 95 cents a share on sales of $272.8 million. Shares were trading down $1.66 to $19.31.

PortalPlayer

(PLAY) - Get Report

jumped 15% after the chipmaker posted fourth-quarter results that easily surpassed expectations and said the first quarter would be stronger-than-expected as well. The company earned $23.8 million, or 92 cents a share, for the fourth quarter; before items, earnings were $15.9 million, or 62 cents a share. Analysts expected earnings of 48 cents a share, excluding items. PortalPlayer, boosted by strength in business from

Apple's

(AAPL) - Get Report

iPod, recorded sales of $78.2 million, topping Wall Street's estimate of $73.7 million. During the year-earlier quarter, the company reported adjusted earnings of $11.2 million, or 53 cents a share, on sales of $44.7 million.

Looking ahead, PortalPlayer sees first-quarter earnings of 28 cents to 38 cents a share, or 35 cents to 45 cents a share excluding stock-option expense. The company predicts sales of $70 million to $80 million. Analysts project earnings of 36 cents a share on sales of $63.6 million. Shares were up $4.04 to $31.31.

Shares of

Foundry Networks

( FDRY) rose 9% after the data-networking company reported fourth-quarter results that easily topped forecasts. The company earned $20.6 million, or 14 cents a share, on sales of $116.1 million. Analysts expected earnings of 11 cents a share on sales of $110.7 million. During the year-earlier period, the company earned $16.7 million, or 12 cents a share, on sales of $104.8 million. The company said that recent results were fueled by strong U.S. enterprise growth and strength in Japan, which represented about 12% of sales. Shares recently changed hands at $14.99, up $1.25.

Sierra Wireless

(SWIR) - Get Report

rose 5% after the wireless-equipment maker posted a surprise fourth-quarter profit and forecast better-than-expected first-quarter results. The company reported a profit of $900,000, or 4 cents a share, on sales of $37.6 million. Analysts expected a loss of 6 cents a share and sales of $35.7 million. Earlier this month, the company projected it would post a loss on sales of about $37 million. During the year-earlier quarter, the company earned $7.3 million, or 28 cents a share, on sales of $58.8 million.

Sierra Wireless forecast a first-quarter loss of $800,000, or 3 cents a share, on sales of $40 million. Excluding stock-option expense, the company expects earnings ranging from break even to slightly positive. Analysts are projecting a loss of 4 cents a share on sales of $37.3 million. Shares were up 63 cents to $13.

Shares of

Mentor Graphics

(MENT)

fell 7% after the provider of automation software posted a smaller-than-expected fourth-quarter profit. The company earned $15.4 million, or 19 cents a share, on sales of $221.3 million. Excluding one-time items, the company earned $35.6 million, or 42 cents a share. Analysts expected earnings of 45 cents a share on sales of $218.9 million. During the year-earlier quarter, the company earned $15.8 million, or 20 cents a share, on sales of $214.9 million.

Looking ahead, Mentor Graphics sees break-even first-quarter earnings on sales of about $170 million. The forecast excludes one-time items. Analysts are projecting a loss of 6 cents a share on sales of $161.1 million. Shares recently traded down 75 cents to $9.90.

Shares of

Novatel Wireless

(NVTL)

fell 9% after the telecom gear company slashed its fourth-quarter earnings forecast. The company now sees earnings of break even to 1 cent a share, on sales of $48.5 million. In late October, the company predicted it would earn 13 cents to 14 cents a share on sales of $48 million to $50 million. Analysts were projecting earnings of 14 cents a share and sales of $49.1 million. Novatel blamed the earnings shortfall on a change in product mix and on additional expenses. The company will release its fourth-quarter results on Feb. 22. Shares were trading down $1.02 to $10.96.

Other technology movers included

Microsoft

(MSFT) - Get Report

, up $1.10 to $27.60;

Intel

(INTC) - Get Report

, up 30 cents to $21.79;

Lucent Technologies

( LU), up 3 cents to $2.65;

JDSU

(JDSU)

, up 3 cents to $3.18;

Oracle

(ORCL) - Get Report

, up 7 cents to $12.51;

Sirius Satellite Radio

(SIRI) - Get Report

, unchanged at $5.82;

Broadcom

(BRCM)

, up $10.70 to $69.42;

Cisco

(CSCO) - Get Report

, up 32 cents to $18.90;

SanDisk

(SNDK)

, down $7.44 to $63.24;

Apple Computer

(AAPL) - Get Report

, down 32 cents to $72.01;

Sun Microsystems

(SUNW) - Get Report

, down 6 cents to $4.33;

Conexant Systems

(CNXT) - Get Report

, down 13 cents to $3.36;

Applied Materials

(AMAT) - Get Report

, up 11 cents to $19.84; and

Juniper Networks

(JNPR) - Get Report

, up 29 cents to $17.35.