STOCKS TO WATCH: AMD, AOL, Apple, IBM, i2 Technologies and Redback Networks

AMD shares will be on the rise Thursday after the chipmaker finally came through for its investors, posting a fourth quarter profit of $65 million, or 43 cents a share, on sales of $969 million.

First Call consensus expected the chipmaker to earn 1 cent a share in the quarter.

The $969 million in sales marks a 23 percent improvement compared to the year-ago quarter when it earned $22.3 million, or 15 cents a share, on sales of $788.8 million.

AMD shares have been on a torrid run of late, surging from a 52-week low of 14 9/16 in April to Wednesday's close of 39 3/4.

Most of the optimism has been based on AMD's high-performance Athlon chip, surging demand for PCs and the inability of chief rival Intel Corp. (Nasdaq: INTC) to keep up with the tremendous demand for microprocessors, motherboards and components.

For the year, AMD lost $88.9 million, or 60 cents a share, on sales of $2.86 billion compared to a loss of $104 million, or 72 cents a share, on sales of $2.5 billion in fiscal 1998.

AMD officials said the upside surprise was a product of strong demand from all its major product units.

AOL shares will be interesting to watch Thursday after it topped Street estimates by a penny a share in its second quarter.

AOL earned $224 million, or 9 cents a share, on sales of $1.6 billion.

First Call consensus expected AOL to earn 8 cents a share in the quarter.

Its shares closed up 3 5/8 to 64 7/8 ahead of the earnings report.

Including a pre-tax gain of $111 million from an investment in Sandpiper Networks, a $30 million charge for buying Gateway.net's subscribers, and a $5 million expense related to the purchase of Tegic Communications, AOL earned $271 million, or 10 cents per share.

Subscription revenue gained 36 percent year-over-year to almost $1.1 billion. America Online ended the second quarter with 23.8 million subscribers.

The AOL service added 1.8 million new members during the quarter, ending December with 20.5 million subscribers. Compuserve 2000 picked up 440,000 members; Compuserve's total membership now stands at 2.5 million, compared to 2.2 million in the first quarter. AOL also recorded more than 740,000 subscribers through Gateway.net.

Advertising, commerce and other revenues rose 79 percent over the same period to $437 million. AOL members spent $2.5 billion online during the 1999 holiday season, more than double the comparable period a year earlier. The average AOL buyer spent $300 online, a 50 percent gain from 1998.

At the end of December, AOL's advertising and commerce backlog totaled $2.4 billion.

Apple figures to keep rising Thursday after it easily topped analysts' estimates in its first quarter, earning $183 million, or $1.03 a share, on sales of $2.34 billion.

First Call consensus expected the PC maker to earn 90 cents a share in the quarter.

Ahead of the earnings report, Apple shares closed up 2 5/8 to 106 9/16.

Including a variety of one-time charges and gains, Apple pocketed $178 million, or $1 a share, in the quarter.

The $2.34 billion in sales represents a 37 percent improvement compared to the year-ago quarter when it earned $123 million, or 78 cents a share, on sales of $1.7 billion.

In the quarter, Apple sold more than 1.37 million units, including more than 700,000 iMacs and 235,000 iBook computers. The 1.37 million units represent a 46 percent improvement from the year-ago quarter.

"We are delighted that Apple is delivering strong growth on every front -- revenues, profits and units -- and in particular that our unit growth last quarter was 2.5 times higher than the industry average, which leads directly to market share growth," said CEO Steve Jobs in a prepared release. "Apple also continues to deliver the best asset management in the industry, ending the quarter with less than one day of inventory."

Apple exited the first quarter with positive cash flow from operations of $373 million.

IBM appears to be hitting on all cylinders after fighting through a series of Y2K-related snafus.

On Wednesday, it posted a fourth quarter profit of $2.1 billion, or $1.12 a share, on sales of $24.2 billion.

Analysts were looking for earnings of $1.06 a share in the quarter.

The $24.2 billion in sales represented a 4 percent slide year-over-year, with gross margins falling to 36.4 percent from 39 percent. IBM had previously warned Y2K fears would hurt sales.

"However, the Y2K issue should not overshadow the fact that 1999 was a good year for IBM," said Louis Gerstner, chairman and CEO.

For the full year, IBM earned $7.7 billion, or $4.12 per share, on revenue of $87.5 billion.

Its shares closed off 1/4 to 115 1/2 ahead of the earnings report.

i2 plowed past analysts' estimates in its fourth quarter Wednesday, raking in $17.1 million, or 19 cents a share, on sales of $175.3 million. It also announced a 2-for-1 stock split.

First Call consensus expected the maker of supply chain management software to earn 16 cents a share in the quarter.

i2 shares rallied up 25 1/4 to 215 ahead of the earnings report before gaining another $7 as share in after-hours trading.

In the year-ago quarter, it made $4.1 million, or 5 cents a share, on sales of $113.6 million.

For the year, i2 earned $30.1 million, or 36 cents a share, on sales of $571 million compared to a profit of $12.8 million, or 16 cents a share, on sales of $369.2 million in fiscal 1998.

In the quarter, licensing revenue increased 50 percent to $110.5 million up from $73.8 million in the year-ago quarter. Total services and maintenance for the fourth quarter increased to $64.7 million compared to $39.8 million in the fourth quarter of 1998.

Company officials said the stock split will take effect on Feb. 17 for all shareholders of record on Feb. 3.

i2 shares hit a 52-week high of 218 in December after falling to a low of 17 3/4 in April.

Redback posted its first profitable quarter in company history Wednesday, earning $2 million, or 4 cents a share, on sales of $26.1 million.

First Call consensus expected the network-equipment maker to earn 1 cent a share in its fourth quarter.

Redback shares closed off 4 3/8 to 206 ahead of the earnings report.

In the year-ago quarter, Redback lost $2.6 million, or 9 cents a share, on sales of $4.5 million.

Its shares peaked at 214 earlier this month after falling to a low of 32 1/2 in June.

First Call consensus expects Redback to earn 25 cents a share in fiscal 2000.

Ten of the 11 analysts tracking the stock rate it either a "buy" or "strong buy."