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Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report tonight reported strong second-quarter earnings, beating Wall Street's expectations by a nickel.

For the second quarter ended Dec. 31, the world's leading software company reported net income of $2.44 billion, or 44 cents a diluted share, on revenue of $6.11 billion. For the comparable quarter last year, the company earned $2 billion, or 36 cents a diluted share, on revenue of $5.2 billion. Excluding a charge, Microsoft earned 47 cents a share.

Shares fell slightly to 115 in after-hours trading on


immediately after the announcement, which was made after the stock market closed. Microsoft shares had climbed 3 1/16, or 2.7%, in anticipation of the announcement.

Beating earnings expectations has become old hat for the Redmond, Wash., company, which is the world's most valuable in stock market terms. The company last week named its longtime No. 2 executive,

Steve Ballmer

, to replace founder

Bill Gates

as CEO. Gates will remain as chairman and become chief software architect, a new post.


Michael Brick

In an action that could affect the entire memory chip industry, embattled memory chip designer,


(RMBS) - Get Rambus Inc. Report

went on the offensive Tuesday, by suing memory maker

TheStreet Recommends


for patent infringement. Filed in Federal District Court in Delaware, the suit seeks to stop Hitachi from making or selling a variety of its synchronous-DRAM chips. These include not only next generation double data rate DRAM, which has been seen as an alternative to Rambus, but PC100 SDRAM, which is the most common type of PC memory chip sold today.

Rambus announced the suit shortly after


(INTC) - Get Intel Corporation (INTC) Report

announced it had joined with memory makers

Hyundai Electronics


Infineon Technologies


Micron Technology

(MU) - Get Micron Technology, Inc. (MU) Report





in a new consortium to develop advanced memory technology, which may not include Rambus in future designs.

The news pulled shares of Rambus down 7% Tuesday to close at 83 5/16. Rambus has become a cult stock among both individual investors and short sellers: Of the 23.80 million shares of Rambus outstanding, 37% are shorted -- that's 48% of the company's 18.60 million share float.

Chip analyst Seth Dickson of

Warburg Dillon Read

predicts that investors will applaud Rambus's aggressive action. "There will be more short covering than long buying, because it¿s an offensive on the part of Rambus and says that clearly they have legitimate technology that is being used today." (Dillon Read is not an underwriter of Rambus.)

Avo Kanadjian, vice president of worldwide marketing for Rambus, says his company is currently negotiating with other memory makers over infringement issues, although he declined to name names. It decided to sue Hitachi only after that company broke off negotiations. He says Rambus expects to reach amicable settlements with all the companies.

Rambus CEO Geoff Tate first acknowledged that alternative SDRAM technology might infringe Rambus patents during an

interview with


in August. "Every Rambus DRAM is basically a double-data-rate part," he said at the time. "We transfer data on both edges of the clock and we were the first to do so."

But industry watchers laughed at the notion. Rambus doesn't manufacture or sell its own products, but depends on memory makers adopting its designs and paying royalties for it. Kanadjian says Rambus has no choice. "We carefully evaluated our options but at the end of the day Rambus is in the

intellectual property business and we have to protect our IP," he says.

Spokespersons for Hitachi and Micron would not comment for this story.


Marcy Burstiner

In other post-close news (earnings estimates from

First Call/Thomson Financial

; earnings reported on a diluted basis unless otherwise specified):

Mergers, acquisitions and joint ventures

Harrah's Entertainment


said that one of its divisions entered a preliminary agreement with a California Indian tribe to develop and run a $100 million casino and hotel in the San Diego area. According to Harrah's, the deal with the

Rincon San Luiseno Band of Mission Indians

is the first between a California Indian tribe and a gaming company. The deal is pending voter approval for

California Proposition 1A

, which would permit Indians to run slot machines, card games and possible satellite betting on horse races at casinos on tribal lands.


(VSAT) - Get ViaSat, Inc. Report

said it has agreed to acquire

Scientific Atlanta's


satellite networking unit, in a deal valued at $75 million. ViaSat said the purchase would immediately add to its earnings and expects it to more than double its revenues. With the acquisition, ViaSat said it would receive Scientific Atlanta's satellite network operations center and product lines related to satellite network gateways, telephony and data and space aging.

Earnings/revenue reports and previews


(AVB) - Get AvalonBay Communities, Inc. Report

posted funds from operations of 87 cents a share, in line with the 15-analyst estimate and up from the year-ago 75 cents.



posted fourth-quarter earnings of 31 cents a share, beating the 17-analyst estimate of 27 cents and the year-ago 7 cents. The company also set a 2-for-1 stock split on or about Feb. 11.

Juniper Networks

(JNPR) - Get Juniper Networks, Inc. (JNPR) Report

posted fourth-quarter pro forma net income of 3 cents a share, ahead of the 12-analyst estimate of earnings of a penny a share and ahead of the year-ago pro forma loss of a penny.



posted first-quarter earnings of 44 cents, a penny ahead of the eight-analyst estimate and up from the year-ago loss of 48 cents.


(SANM) - Get Sanmina-SCI Corporation Report

reported first-quarter earnings of 58 cents a share, beating the 18-analyst estimate of 56 cents a share and up from the year-ago 45 cents. Separately, Sanmina said it set a 2-for-1 stock split payable about Feb.22 to shareholders of record Feb 1.

Silicon Graphics


said it expects to post second-quarter results, "just short of breakeven." The 13-analyst estimate has the company pegged to post a second-quarter loss of 11 cents a share.

Sunrise Medical


reported second-quarter earnings of 5 cents a share, missing the three-analyst estimate of 9 cents and down from the year-ago 8 cents. Separately, the company said it tapped Michael Hammes as it new president and CEO. Hammes would replace interim CEO Murray Hutchinson, who will remain Chairman.



posted a fourth-quarter loss of 93 cents a share, narrower than the four-analyst estimated loss of 99 cents but wider than the year-ago 92-cent loss.

Offerings and stock actions


(COMM) - Get CommScope Holding Co., Inc. Report

said it set a 3-for-2 stock split.

Analyst actions


rolled out coverage of



with a strong buy rating.


upped its rating on


(OIL) - Get iPath Series B S&P GSCI Crude Oil ETN Report

to buy from attractive.

For a look into this evening's after-hours trading action, please check out's

The Night Watch.