STOCKS TO WATCH: Adobe Systems, Net2Phone, Palm and Verio

The desktop-publishing software developer will be active Thursday after making a couple of significant announcements.

First, the company said it expects to report "solid" sales and earnings in its first quarter.

Also, San Jose, Calif. company said CFO Harold Covert will step down to pursue other opportunities.

Murray Demo, currently the firm's corporate controller, will serve as interim CFO while the company searches for a permanent replacement.

First Call consensus expects Adobe to post a profit of 43 cents a share in its first quarter.

Last quarter, it beat Street estimates, earning 46 cents a share on sales of $281.8 million.

Net2Phone will be on the rise Thursday after it topped analysts' estimates in its second quarter, posting a loss of $8.7 million, or 17 cents a share, on sales of $15.5 million.

First Call consensus expected the Internet telephony firm to lose 18 cents a share.

Gross margins were 46 percent, compared to 48 percent in the first quarter and 47 percent a year ago.

During the second quarter, Net2Phone recorded $1.1 million in depreciation and amortization, and took a $4.4 million charge related to stock options issued.

Total minutes of use for Net2Phone in the second quarter rose 94 percent year-over-year, to 103 million minutes from 53 million. The company's active customer grew to 575,000, a 47 percent improvement from 390,l000 in the first quarter.

Its shares closed off 1 3/4 to 56 1/8 ahead of the earnings report.

Palm priced shares of its initial public offering at $38 a share, above its increased price range of $30 to $32 a share. Palm will trade on Thursday.

The buzz around the Palm IPO has been deafening. The maker of the Palm Pilot hand-held computer devices on Monday raised the projected price range for its IPO to $30 to $32 per share from $14 to $16 a share.

Shares of parent 3Com (Nasdaq: COMS) have also soared as the Palm IPO gets ready for lift-off. After the IPO, 3Com will own about 93 percent of Palm. 3Com plans to distribute its Palm shares to 3Com shareholders within six months.

Palm plans to offer 23 million shares. Goldman Sachs is the lead underwriter with Morgan Stanley, Merrill Lynch and Robertson Stephens assisting.

"Palm has been one of the most widely anticipated IPOs since it first came into the system," said David Menlow, analyst with IPOfinancial.com.

Supercomputer maker Tera Computer Co. (Nasdaq:TERA) is buying Cray Research from Silicon Graphics Inc. (NYSE: SGI) for around $100 million, in a bid to rebuild the flagging industry, according to sources cited in Thursday's Wall Street Journal.

People familiar with the matter told the Journal that the deal is valued at less than $100 million, a fraction of the $740 million Silicon Graphics paid for Cray in 1996.Terms of the cash, stock and notes deal were not disclosed, the Journal said.

Seattle-based Tera said it would buy the business and brand name from Silicon Graphics and change its own name to Cray Inc.

Verio should see some heavy action Thursday after it topped analysts' estimates in its fourth quarter, posting a loss of $55.2 million, or 71 cents a share, on sales of $73 million.

First Call consensus expected it to lose 75 cents a share in the quarter.

Its shares closed up 4 15/16 to 80 ahead of the earnings report.

In the year-ago quarter, Verio lost $33.7 million, or 51 cents a share, on sales of $37.1 million.

In the quarter, gross profit margins remained flat with the third quarter at 70 percent.

Company officials said it increased its number of Web sites hosted by more than 40,000, to 340,000. In addition, parked domain names increased by over 40,000 to 210,000.