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Thursday's Small-Cap Winners & Losers

The check printer raises guidance. Also, Heartland is downgraded, and Internap buys VitalStream.

Deluxe

(DLX) - Get Deluxe Corporation Report

was on of Thursday's small-cap winners when the Shoreview, Minn.-based check printer raised its third-quarter and full-year guidance.

For the quarter ended Sept. 30, the company now expects earnings to range from 59 cents to 61 cents a share, up from earlier guidance of 41 cents to 45 cents a share. Revenue is expected to be about $398 million. Analysts polled by Thomson First Call are calling for earnings of 44 cents a share on revenue of $399.15 million.

Deluxe said the updated guidance reflects the impact of better-than-expected operating performance in each of the company's three business segments, due primarily to lower manufacturing costs and selling, general and administrative expenses. Also, the company expects a lower tax rate to contribute 6 cents a share more in the quarter.

For the full year, Deluxe now expects earnings of at least $1.60 a share, up from earlier guidance of $1.41 to $1.51 a share. Analysts, on average, predict earnings of $1.45 a share. Deluxe is scheduled to report its quarterly earnings on Oct. 26. Shares were trading up $3.29, or 18.1%, to $21.50.

Heartland Payment Systems

(HPY)

lost ground after the Princeton, N.J.-based company, which provides card payment processing services to merchants, was downgraded by Robert W. Baird to neutral from outperform. Shares were falling $1.77, or 6.52%, to $25.36.

VitalStream Holdings

(VSTH)

soared on news that the Irvine, Calif.-based company, which provides audio and video streaming services, agreed to be acquired by

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Internap Network Services

(INAP) - Get Internap Corporation Report

for about $217 million.

Internap will issue about 11.9 million shares of common stock for outstanding VitalStream common shares, which will represent about 26% of the combined company's shares. This is an exchange ratio of 0.5132 Internap shares for every VitalStream share. Atlanta-based Internap will also assume VitalStream's currently outstanding stock-option plans.

The deal is expected to close by the first quarter of 2007. The transaction is expected to be slightly dilutive to Internap's 2007 EBITDA but to be accretive in 2008 and beyond. Shares of VitalStream were trading up $1.50, or 23.4%, to $7.90. Internap was slipping $1.10, or 6.5%, or $15.95.

Buckeye Technologies

(BKI) - Get Black Knight, Inc. Report

gained after the Memphis, Tenn.-based specialty fibers company said it expects to report earnings of 10 cents a share for the July-September quarter. Wall Street is looking for income of 5 cents a share.

The company said first-quarter net sales rose 16% from a year ago, citing a combination of good volume, higher prices and better mix. Demand for specialty wood and cotton products, nonwoven materials and fluff pulp were all strong during the quarter, the company said. Buckeye plans to announce its quarterly results on Oct. 24. Shares were trading up 94 cents, or 10.2%, to $10.19.

Tuesday Morning

(TUES) - Get Tuesday Morning Corporation Report

gained after the Dallas-based discount retailer reported a gain in total third-quarter sales. Comparable-store sales slipped 4.6% for the quarter, while total sales increased 1.1% to $194.4 million.

On the basis of the third-quarter sales results, Tuesday Morning currently expects earnings in the range of 7 cents to 8 cents a share, or 9 cents to 10 cents a share, excluding stock-option compensation expense. Wall Street is looking for earnings of 8 cents a share. Tuesday Morning was trading up $1.43, or 9.8%, to $16.01.