STOCKS TO WATCH: Liberty Digital, Oracle, 3Com and Yahoo!

Liberty Digital shares could slump Wednesday after the company reported wider losses in the fourth quarter even as revenue rose 6 percent year-over-year.

On Tuesday, the media company's continuing operations reported a fourth quarter net loss of $1.63 per share, compared to a loss of a penny per share in the same period a year ago. Revenue increased to $15.8 million from $14.9 million in the fourth quarter of 1998.

Operating income excluding amortization and special charges fell to $3.7 million from $5.5 million a year earlier. Income decreased, the company said, because of higher expenses in the Audio segment and spending on the Interactive Media division, which is still in the developmental stage.

Losses increased because of higher stock compensation costs, Liberty said.

The company's stock price rose 218 percent between September and December. Shares fell 48 percent between December and March, which means the company will reverse much of the accrued compensation expense in its first quarter report.

For the year, Liberty Digital lost $2.38 per share on revenue of $65.2 million.

The semiconductor-products maker said it expects fourth-quarter sales will be above estimates and exceed $140 million, because of record shipments and higher order bookings. The company's earnings are expected to be 37 cents a share, up 50 percent over a year earlier. Microchip rose 2 to 57 15/16.

The database software made another push into the Internet infrastructure market Tuesday, announcing its iCache product will be available next month and will be built into its latest database product called 8i.

"The iCash product came from just studying the largest volume Web sites and (asking) 'How can we eliminate all the customization (required for) caching?''' CEO Larry Ellison told the analysts, referring to Yahoo Amazon and eBay.

In an earlier presentation, Oracle vice president Gary Bloom said: ``We think we're at the early stages of margin improvement.''

Oracle shares took a beating in early trading Tuesday before closing off a modest 15/16 to 75 15/16.

Inktomi (Nasdaq: INKT), Akamai (Nasdaq: AKAM) and CacheFlow (Nasdaq: CFLO) have all watched their stock prices skyrocket in the past six months as business ramp up there caching technology to accommodate massive e-commerce transactions.

When it reported fiscal third quarter earnings two weeks ago, Oracle said its operating margins widened significantly due to ongoing efforts to use its software to transform into an e-business.

3Com announced late Tuesday that it had completed its $90 million acquisition of Call Technologies.

Its shares closed off 5 3/16, or 10 percent, to 44 9/16 ahead of the announcement.

3Com announced the deal March 20.

Call Technologies is a Reston, Va.-based developer of unified messaging systems that allow user to access voice, fax, email and digital messages from their phone or wireless information device.

Excluding a charge for in-process technology in the fourth fiscal quarter, the acquisition is not expected to have a material impact on fiscal 2000 results.

In its latest quarter, 3Com earned $97.4 million, or 27 cents a share, on sales of $1.4 billion.

Its shares climbed as high as 119 3/4 in February ahead of initial public offering for its Palm Inc. (Nasdaq: PALM) spin-off.

Fourteen of the 28 analysts following the stock call it a "hold."

Expect Yahoo! shares to rally ahead of its first-quarter earnings report due out after the bell.

Internet stocks have taken the brunt of this recent selloff and there's no better company to rejuvenate the sector than Yahoo!.

First Call consensus expects it to earn 9 cents a share.

Analysts will be paying close attention to its traffic and subscriber base, but advertising sales will be in the limelight.

In December, Yahoo! reported more than 120 million unique users, doubling the 60 million users it recorded in the year-ago quarter.