STOCKS TO WATCH: Autoweb.com, Compaq, Gateway, Sun and VerticalNet

Autoweb.com Inc. posted a smaller-than-expected loss in its second quarter Thursday, losing $3 million, or 12 cents a share, on sales of $7 million.

First Call consensus expected it to lose 20 cents a share in the quarter.

The $3 million in sales represents a 157 percent improvement versus the year-ago quarter when it lost $2.3 million, or 12 cents a share.

"We are extremely pleased with the second quarter's record revenues, the continued growth in our dealer network and the substantial increase in traffic, which reached a record 10.2 million visitors,'' said CEO Dean DeBiase in a prepared release. "We also made significant progress in building our brand."

Last quarter, Autoweb.com lost $2.4 million, or 10 cents a share, on sales of $5.7 million.

The stock peaked at 50 shortly after its initial public offering in March before falling to a low of 10 _ in June.

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

Compaq named Michael Capellas as president and chief executive officer, ending months of speculation about who would lead the world's largest personal computer maker.

Capellas joined Compaq in August 1998 as chief information officer and has been chief operating officer since June 2.

In April, Compaq's then President and CEO Eckhard Pfeiffer and CFO Earl Mason left the company amid financial turmoil.

Capellas previously worked at software companies Oracle and SAP AG's SAP America, and before that for 15 years at oilfield services giant Schlumberger Ltd.

Compaq said it decided to disband the Office of Chief Executive, a three-person committee that ran the company during the search. That committee included Benjamin Rosen, who will remain chairman and Frank Doyle and Robert Ted Enloe III who will stay as directors.

Rosen, in a statement, said that Capellas was uniquely qualified to understand where information technology was headed and that he has a clear vision for the company.

The stock closed off 1 to 25 Thursday.

Gateway topped analysts' estimates by a penny a share in its second quarter Thursday, raking in $89 million, or 56 cents a share, on sales of $1.9 billion.

First Call consensus pegged the PC maker for a profit of 55 cents a share in the quarter.

The $1.9 billion in sales represents an 18 percent jump versus the year-ago quarter when it made $60.7 million, or 38 cents a share, on sales of $1.6 billion.

In the quarter, Gateway shipped more than 1 million units, a 36 percent increase from the year-ago quarter.

Gateway CEO Ted Waitt credited the robust earnings report to strong demand from consumer PC market, strong demand in Asia and improved sales from its non-PC units.

Gateway's consumer Internet service provider business, Gateway.net, saw its subscriber base double in the quarter to more than 400,000 users.

Sixteen of the 22 analysts following the stock maintain either a "buy" or "strong buy" recommendation.

First Call consensus expects Gateway to earn $2.80 a share in the fiscal year.

Redback showed considerable progress in its second quarter Thursday, reporting a loss of $2.6 million, or 16 cents a share, on sales of $11.1 million.

First Call consensus expected it to lose 19 cents a share in the quarter.

The $11.1 million in sales represents a staggering 753 percent jump versus the year-ago quarter when it lost $2.1 million, or 18 cents a share, on sales of $1.3 million.

Company officials also announced a 2-for-1 stock split. Not a bad investment considering the company held its initial public offering in early June.

Its shares closed off 6 ? to 148 ahead of the earnings report.

Sun Microsystems beat Street estimates by a couple cents a share Thursday, earning $395 million, or 48 cents a share, on sales of $3.515 billion.

First Call consensus expected it to return a profit of 46 cents a share in the quarter.

Fourth quarter revenue increased 22 percent year-over-year, in line with what most analysts expected. Sun earned $288 million, or 37 cents a share in the year earlier period. The company boosted its share of the Unix server market, to 28 percent of total factory revenue for the industry, according to International Data Corp.

The company bulked up the balance sheet in the fourth quarter. Sun now has almost $2.6 billion in cash, more than double a year ago.

Sun shares closed off 3 ? to 67 3/16 Thursday.

VerticalNet will be an interesting stock to keep an eye on Friday after it missed analysts' estimates in its second quarter Thursday, losing $6.7 million, or 40 cents a share, on sales of $3.5 million.

First Call consensus was expecting a loss of only 37 cents a share.

In the year-ago quarter, it lost $2.8 million, or 28 cents a share, on sales of $587,000.

However, it did announce a 2-for-1 stock split.

Its shares yo-yoed from a low of 34 3/4 in June to more than 114 in early July.

On Thursday, the stock closed up 3/4 to 96 3/8.