STOCKS TO WATCH: Alloy Online, Legato Systems, MCI WorldCom, NetSilicon, Newbridge Networks and Portal Software

Alloy Online should see some action Friday after meeting analysts' estimates in its third quarter.

The online portal operator and retailer posted a loss $4.9 million, or 34 cents a share, on sales of $9.1 million.

The $9.1 million in sales represents a 180 percent improvement compared to the year-ago quarter when it lost $3.4 million, or 21 cents a share.

Gross profit margin of 54.8 percent was strong enough to let Alloy increase its holiday marketing, Diamond said.

Alloy had 1.3 million registered users at the end of the third quarter, compared to 850,000 in July. The company's name database held almost 3 million names at the end of October.

Its shares closed up 5/8 to 18 3/4 Thursday.

The maker of data storage software agreed to buy Ontrack Data International Inc., which makes software to recover information, for $132.7 million in stock and cash. Legato fell 27/32 to 75 15/16 at Thursday's close.

MCI WorldCom will take off Friday after it approved a 3-for-2 stock split after the bell Thursday.

Its shares closed up 2 15/16 to 91 7/16 ahead of the announcement.

Company officials said the stock would take affect Dec. 30 for all shareholders of record on Dec. 15. Following the split, MCI WorldCom will have 2.85 billion shares outstanding.

Earlier Thursday, Sanford Bernstein analyst Tod Jacobs said the company made "compelling" arguments that its proposed $115 billion merger with Sprint Corp. (NYSE: FON) would not harm competition.

Last quarter, MCI WorldCom beat Street estimates by 2 cents a share, earning $1.1 billion, or 56 cents a share, on sales of $8.5 billion.

NetSilicon hurdled analysts' estimates in its third quarter Thursday, raking in $905,000, or 7 cents a share, on sales of $10.1 million.

Its shares closed up 9/16 to 16 ahead of the earnings report.

First Call consensus expected it to earn 2 cents a share in the quarter.

The $10.1 million in sales was more than triple the $3 million it recorded in the year-ago period when it lost $1.7 million, or 17 cents a share.

"This rapid increase in orders was attributable in part to one-time orders related to Y2K. We expect to return to more normal growth rates in ensuing quarters," said CEO Pete Peterson in a prepared release.

Company officials said its backlog was approximately $7 million at the end of the quarter compared with $11 million at the close of the second quarter.

Its shares rallied up to 17 1/2 in September before falling to a low of 9 in October.

Both analysts following the stock maintain either a "buy" or "strong buy" recommendation.

Flip a coin on this one. On the surface, one might expect a collapse in Newbridge shares after it missed analysts' reduced estimates in its second quarter and announced it would layoff 720 employees.

But, it might rally on word that the company might be snapped up by another company that knows how to execute a business model.

In the quarter, Newbridge earned 8 cents a share, on sales of C$481 million.

First Call consensus expected it to earn 9 cents a share after lowering its estimates from 20 cents a share after the company issued yet another profit warning.

This latest warning was the company's sixth in the past 10 quarters.

Ahead of the earnings report, Newbridge shares rallied up 1 15/16 to 20 7/8 on speculation that European telephone equipment makers Ericsson or Alcatel might buy the company.

The maker of customer support and billing software for ISPs and communications companies lost far less than analysts expected in the third quarter.

After market close Thursday, the company reported a third quarter loss of $1.7 million, or 2 cents per share. First Call's survey of 10 analysts predicted a loss of 11 cents per share for the quarter ended Oct. 31.

Third quarter revenue rose to $28.1 million, a 288 percent gain year-over-year. CEO John Little credited market share gains among high-speed Internet providers for boosting growth. "Our financial results exceeded our expectations," he said, adding that Portal won contracts with the three largest DSL providers among competitive local exchange carriers.