STOCKS TO WATCH: AT&T, Micron, Rambus and 3dfx

AT&T should be active after claiming victory in a battle over high-speed Internet access Thursday when a federal appeals court ruled that local authorities cannot require it to open broadband access to rivals.

In a unanimous decision, the 9th Circuit Court of Appeals concluded that Portland, Oregon could not regulate AT&T's ExciteAtHome cable broadband infrastructure using laws designed to govern traditional cable services.

The decision was seen as a setback for Internet service providers such as America Online (NYSE: AOL) and others, which had argued that AT&T must give rivals access to its high-speed connections just as local telephone companies must open their telephone networks to competitors.

AT&T's general counsel Jim Cicconi said the decision clarified decisively ``the limits of local authority when it comes to the provision of high-speed Internet access over cable.''

"Now that the court has made clear Congress' intent to bar ordinances like the one enacted by Portland, AT&T and other cable companies will be able to get on with investments that will bring advanced services to millions of Americans,'' he said in a statement.

AT&T shares closed up 1 1/8 to 36 1/8 Thursday.

Micron shares should take off Friday after it shattered analysts' estimates by 13 cents a share in its third quarter.

In the quarter, Micron posted a profit of $275 million, or 47 cents a share, on sales of $1.8 billion.

Analysts surveyed by First Call Corp. predicted it would earn 34 cents a share in the quarter.

Its shares closed off 5 9/16 to 85 3/16 ahead of the earnings report.

The $1.8 billion in sales marks a stunning 108 percent improvement from the year-ago quarter when it lost $27.7 million, or 5 cents a share, on sales of $864 million.

The chipmaker will be plenty busy Friday after its shares rocketed up more than 40 points in after-trading Thursday after announcing it had settled its patent lawsuits against Japanese electronic machinery maker Hitachi Ltd.

Rambus shares closed up 4 1/2 to 97 1/8 in regular trading but rose as high as 140 as more than 3.6 million shares changed hands after the bell.

Under the settlement, Hitachi agreed to pay Rambus a licensing fee to use the technology, which deals with high-speed memory interfaces used in semiconductors. Further details were not disclosed.

Rambus claimed that Hitachi and Hitachi Semiconductor had infringed on its patents and filed suit in U.S. District Court.

Hitachi, which denied the Rambus allegations, has been granted a worldwide license under certain Rambus patents and patent applications for dynamic random access memory devices and the interfacing controllers. Other terms of the agreement weren’t divulged.

Hitachi agreed to pay Rambus a settlement fee as well as quarterly royalty payments.

3dfx could experience some rough trading Friday after warning its second quarter sales would fall below analysts' expectations due to what it called a temporary component shortfall. It expects the shortage to clip at least 1 cent a share from its earnings this quarter.

"This shortfall is extremely frustrating, as the company has been on course for returning to operating profitability," CEO Alex Leupp in a prepared release. "We believe this temporary component shortfall will result in deferred rather than lost revenues, and, therefore, we remain confident about our third quarter."

A survey of analysts by First Call Corp. predicted 3dfx would post a loss of 4 cents a share in the second quarter.

Last quarter, 3dfx posted a loss of $12.4 million, or 51 cents a share, on sales of $108.6 million.