STOCKS TO WATCH: Agilent, Intuit, New Era of Networks and VA Linux

The Hewlett-Packard spin-off reported first-quarter earnings that met its target and slightly topped analysts' forecasts, citing cost-cutting moves.

Agilent also became the latest U.S. company to ratchet back growth expectations by slashing its forecast for sales growth. The Palo Alto, Calif., company said it now expects about 10 percent to 15 percent growth for the full fiscal year, not the 19 percent increase analysts had been expecting.

Agilent's operating earnings, before one-time items and amortization of goodwill, rose to $237 million, or 51 cents per diluted share, from $143 million, or 30 cents per share, in the quarter a year ago.

Revenue rose to $2.8 billion from $2.2 billion at the firm, which makes microchips, testing and monitoring equipment for telephone and other networks, and biotechnology equipment.

Keep an eye on Intuit Wednesday after it beat Street estimates in its second quarter and confirmed its guidance for fiscal 2001.

In the quarter, it made $104.2 million, or 48 cents a share, on sales of $457.6 million.

First Call consensus pegged Intuit for a profit of 45 cents a share on sales of $462.6 million.

Its shares closed off $2.13 to $32.69 ahead of the earnings report before rallying up to $35.50 in after-hours trading.

The $457.6 million in sales marks an 8 percent improvement from the year-ago quarter when it earned $91.4 million, or 44 cents a share, on sales of $425.5 million.

Intuit left its fiscal 2001 sales and earnings targets unchanged. For the third quarter, Intuit is projecting operating income of $165 million to $170 million on sales of $455 million to $470 million. Sales for the fiscal year are expected to total $1.32 billion to $1.34 billion. Those figures are in line with forecasts.

New Era of Networks will be interesting to follow Wednesday after Sybase (Nasdaq: SYBS) said it will buy the software developer for $373 million in stock to round out its e-commerce and database software offerings.

Under the terms of deal, which is still subject to regulatory and shareholder approval, NEON common stock would be converted into 0.3878 shares of Sybase common stock.

Based on the Sybase closing price of $24.50 Tuesday, that values NEON shares at $9.50, a premium of about 37 percent over the stock's Tuesday close of $6-15/16.

Sybase shares fell 6 percent in after-hours trading while New Era of Networks shares trimmed 3 percent to $6.75.

Sybase said that it would account for the merger as a purchase on its balance sheet and said the transaction, which it expects to complete in the second-quarter of the current fiscal year, would be accretive to earnings in fiscal 2002.

VA Linux might be in for some rough trading Wednesday after it missed analysts' estimates in its second quarter and announced it would cut 25 percent of its staff.

After closing at $7.25 a share, VA Linux shares fell to $5.63 in after-hours trading.

In the quarter, VA Linux posted a loss of $13.4 million, or 28 cents a share, on sales of 42.5 million.

Analysts were expecting a loss of 26 cents a share after the company warned it would lose between 24 cents and 28 cents a share earlier this quarter.

In the year-ago quarter, it lost $6.3 million, or 20 cents a share, on sales of $20.2 million.

Company executives said it would absorb an undetermined restructuring charge in the third quarter.

Reuters contributed to this report.