STOCKS TO WATCH: Bottomline Technologies, Fairchild Semiconductor and 3Com

Bottomline on Tuesday warned that will post a loss of up to 10 cents a share in its first quarter due to Y2K spending by its corporate clients.

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

Company officials said the developer of Internet payment and commerce software will post sales of between $8.2 million to $8.5 million, slightly ahead of the $8.1 million it recorded in the year-ago quarter.

"We have recently confirmed that the Y2K issue has started to impact customer buying decisions," said CEO Dan McGurl in a prepared release. "We now expect the Y2K issue to impact both the September and December quarter-end revenues and earnings.

Bottomline shares closed off 11/16 to 25 ahead of the profit warning.

Fairchild handily topped its underwriters' expectations for its first quarter as a publicly traded company.

In fiscal first quarter results released after market close Tuesday, the South Portland, Maine-based chip maker reported net income of $16 million, or 21 cents per share, not including acquisition-related writedowns and one-time events.

Two investment banks -- CS First Boston and BancBoston Robertson Stephens, both underwriters of Fairchild's recent IPO -- had published estimates, producing a consensus forecast of 14 cents a share for the quarter ended Aug. 30, according to Zack's Investment Research.

Including non-recurring items, Fairchild saw a first quarter loss of $8 million, or 15 cents a share.

Revenues for the first quarter -- the first full quarter to include results from the Power Device Products unit acquired from Samsung -- rose to $324.5 million. That was a 35.2 percent gain from the companies' combined revenues of a year earlier, and a 4.3 percent increase from their sales in the fourth quarter.

Analog revenues picked up 36.6 percent year-over-year on a pro forma basis. Discrete revenues increased 41.7 percent over the same period, and logic sales increased 20 percent. Total analog and discrete revenue generated almost 70 percent of the company's first quarter trade revenues.

Gross margins rose to 29.4 percent in the first quarter, up from 24.1 percent in the fourth quarter, and up from 20.1 percent in last year's first quarter.

3Com easily hurdled analysts' estimates in its first quarter Tuesday, pocketing $119.3 million, or 33 cents a share, on sales of $1.38 billion.

First Call consensus expected the network-equipment maker to earn 24 cents a share.

Its shares closed off 7/16 to 27 5/16 ahead of the earnings report.

Most analysts expected 3Com to report sales in the neighborhood of $1.34 billion. In the year-ago quarter, it made $93.7 million, or 26 cents a share, on sales of $1.4 billion.

Including a $23.6 million gain from stock sales and another $2.1 million credit related to its merger with U.S. Robotics, 3Com reported net income of $137.5 million, or 38 cents a share.

In the quarter, 3Com's network systems products improved 9 percent from the $674.2 million it posted in the year-ago period. Its personal connectivity products, which include network interface cards and modems, fell to $539 million, a 19 percent decline from the same period last year.

Sales of its handheld computing products shot up 50 percent to $174.2 million.

Last week, 3Com announced it would spin off its Palm Computing subsidiary next year.

Last quarter, 3Com topped
analysts' estimates, earning $87.5 million, or 24 cents a share, on sales of $1.41 billion.

The stock peaked at 51 1/8 in December before falling to a 52-week low of 20 in April.