STOCKS TO WATCH: Activision, FreeMarkets, National Semi and SGI

Activision should be on the move Tuesday after it easily topped analysts' estimates in its second quarter, raking in $4.3 million, or 17 cents a share, on sales of $144.4 million.

Analysts expected the video game developer to earn 9 cents a share in the quarter.

Activision shares closed up 0.50 cents to 14.94 ahead of the earnings report.

CEO Robert Kotick said the company now expects to earn 63 cents a share in the quarter, 7 cents above current analyst estimates.

"Our competitive position domestically and internationally remains stronger than ever," Kotick said in a prepared release. "With U.S. debut of the PlayStation2 just three days away and the upcoming holiday season, we are optimistic about our continued market momentum."

FreeMarkets pulled off a rare double Monday, beating the Street in its third quarter and bumping up its timetable for profitability.

In the quarter, it lost $12.3 million, or 33 cents a share, on sales of $26.6 million.

Its shares closed up 2.47 to 49.97 ahead of the earnings report before moving up to 50.63 in after-hours trading.

First Call Corp. consensus expected the online business-to-business auctioneer to lose 42 cents a share in the quarter.

In the year-ago quarter, FreeMarkets posted a loss of $4.9 million, or 35 cents a share, on sales of $5.3 million.

"Our third quarter results demonstrate the strength of our business and our continued ability to execute and scale our model," said CEO Glen Meakem in a prepared release. "Given the strength and momentum of our business, we believe that we will break even from an operating standpoint by the first quarter of 2002, which is two full quarters earlier than analysts had previously predicted."

National Semiconductor might take a beating Tuesday after it warned that its second- and third-quarter sales and earnings will fall short of analysts' estimates.

Its shares closed up 0.81 cents to 36.94 ahead of the profit warning.

Company officials said it now expects second-quarter sales to fall between 6 percent to 8 percent from the $640.8 million it recorded in the first quarter.

It also warned that the sluggish sales would clip gross profit margins by approximately 2.5 percent from the 53 percent margins it had in the first quarter.

First Call Corp. consensus was expecting a profit of 77 cents a share in the second quarter.

"Shipments in the current quarter will be impacted by inventory corrections being made by some of our customers in the mobile phone market," it said in a prepared release. "Bookings for personal computer products have strengthened, but at a lower rate than seasonally expected."

Last quarter, National topped analysts' estimates, earning $149.4 million, or 76 cents a share, on sales of $640.8 million.

SGI should be interesting to watch Tuesday after it beat analysts' reduced estimates in its first quarter but still lost $49 million, or 26 cents a share, on sales of $426 million.

First Call Corp. consensus expected the computer workstation maker to lose 46 cents a share in the quarter.

Its shares inched up 0.13 to 4.50 ahead of the earnings report.

In the year-ago quarter, SGI lost $225 million, or $1.24 a share, on sales of $514 million.

Earlier this quarter, SGI warned that component shortages would result in lower-than-expected sales in the quarter.

First Call Corp. consensus originally predicted it would lose 14 cents a share in the quarter.