Expect the following technology stocks to be among Wednesday's most actively traded issues: AOL, Apple, Global Crossing, Network Solutions, USWeb and VTEL.
AOL shares closed up 8 3/4, or 9 percent, to 109 7/8 Tuesday and might be headed for another monster run-up after BancBoston Robertson Stephens reiterated its "strong buy" recommendation.
BancBoston Robertson Stephens analysts said late Tuesday that AOL has seen some resolution over the last few days over concerns about market share and subscriber growth as well as international competition and pricing and free services issues.
In a research report, BBRS also noted a significant upside potential for AOL as Shop@AOL's first eCommerce holiday shopping season approaches.
AOL shares had fallen below $85 a share last week.
Last week, EarthLink (Nasdaq: ELNK) and MindSpring (Nasdaq: MSPG) announced they would merge this week, creating an even larger independent competitor for AOL to battle.
Whatever the reasons, most analysts contend this stock has been ridiculously oversold.
For its part, AOL said it's on pace to set a record in terms of net subscribers added. That's saying something for a company that already had, at last count, more than 17.6 million registered subscribers.
Most analysts were expecting AOL to add another 850,000 subscribers this quarter. But AOL is now saying it will exceed the 950,000 subscribers it added in the year-ago quarter. In addition, CompuServe has already added more than 300,000 subscribers this quarter.
First Call consensus expects AOL to earn 13 cents a share in its first quarter and 61 cents a share in the fiscal year.
Of the 45 analysts watching the stock, 41 maintain either a "buy" or "strong buy" recommendation.
Apple got some bad news late Tuesday when CS First Boston analyst Michael Kwatinetz said he expects a slight shortfall in sales of its portable products, due to a manufacturing disruption caused by the recent earthquake in Taiwan.
Kwatinetz said in comments to his sales force earlier that due to last week's major earthquake, Apple's manufacturing lines in Taiwan were halted, due to the limited power supply.
He also believes Apple will have a shortfall of about 10,000 units of its new iBook notebook and about 15,000 units of its Powerbooks in its September quarter.
Apple shares closed off 1 11/16 to 59 5/8.
Global Crossing on Tuesday closed its $10.01 billion purchase of Frontier Corp., gaining a North American foothold and a million local and long-distance telephone customers for its intercontinental fiber optic network.
The acquisition gives Hamilton, Bermuda-based Global Crossing a further piece of its network, which is planned to span five continents and compete in markets addressing 80 percent of the world's international communications traffic.
Rochester, N.Y.-based Frontier operates local and long-distance telephone services and business services including Web hosting, or running Internet sites for corporate customers, which yields higher profit margins.
Global Crossing said the Frontier purchase would add immediately to its operating cash flow. Although the combined companies will have a $2 billion backlog of combined contracts, Global Crossing has thus far lost money as it invests heavily in building its high-capacity network.
Its shares closed up 1 5/8 to 26 1/4.
A deal that lets the company retain control of its database of Internet addresses but requires it to sell addresses to competitors at a steep discount has settled a long-running dispute between Network Solutions and the Commerce Department, according to Wednesday's Wall Street Journal.
As part of the deal, Network Solutions agreed to pay a set of annual registration fees that will help provide funds for the Internet Corp. for Assigned Names and Numbers. Upon signing of the contract, Network Solutions will pay Icann $1.25 million to cover next year's fees.
Though a contract hasn't been signed, Network Solutions has agreed to allow competing firms to register Internet addresses for $6 a year, a sort of wholesale price that is much cheaper than the $35 a year it charges consumers. The four-year deal also calls for competing domain-name sellers to pay Network Solutions an annual $10,000 fee for access to its database.
Network Solutions surged 17%, to close at 85 1/2 Tuesday.
The technology consulting firm, said it received $67.5 million in funding from No. 1 software maker Microsoft Corp. (MSFT) to develop a standardized set of technologies to help companies do business on the Internet. USWeb rose 15/32 to 30 19/32 at Tuesday's close.
VTEL met analysts' estimates in its fourth quarter Tuesday, earning $392,000, or 2 cents a share, on sales of $40.8 million. Its shares closed up 7/16, or 11 percent, to 4 1/4 ahead of the earnings report.
First Call consensus expected the maker of visual communications products and services to earn 2 cents a share in the quarter.
Despite meeting the Street number, VTEL's total sales and earnings were significantly lower than the year-ago period when it made $1.4 million, or 6 cents a share, on sales of $47.7 million.
For the year, the Austin, Texas company posted a loss of $15.6 million, or 66 cents a share, on sales of $151.6 million compared to a profit of $2.8 million, or 12 cents a share, on sales of $179.7 million.
Company officials also said the company has restated previously issued financial statements for first, second and third quarters of the fiscal year. The restatements are attributed to non-cash adjustments made to certain depreciation and amortization accounts, inventory accounts, and to the reversal of previously recorded final acceptance revenues for certain Chinese orders in which final cash payment has not yet been received.
VTEL shares hit a 52-week high of 9 1/4 in April after falling to a low of 2 in March.
Two of the four analysts following the stock rate it a "hold" while the other two analysts are calling it a "strong buy."