STOCKS TO WATCH: CompUSA, Microsoft, Net2Phone, Teligent, Varian and Webvan

CompUSA might get bit after it posted a wider-than-expected loss in its first quarter Thursday, losing $12.1 million, or 13 cents a share, on sales of $1.36 billion. Its shares closed unchanged at 5 7/8.

First Call consensus expected it to lose 11 cents a share in the quarter.

The $1.36 billion in sales represents a 2 percent decline from the year-ago quarter when it earned $8.1 million, or 9 cents a share, on sales of $1.39 billion.

Excluding the costs associated with the its information technology initiatives and other non-recurring and transition costs, CompUSA reported a net loss of $2.6 million, or 3 cents a share in the quarter.

Direct sales in the quarter decreased 19 percent to $410 million compared with the same period a year ago. Company officials said the decrease was primarily a result of reducing or eliminating sales to customers that did not meet certain profitability objectives and the consolidation of the direct sales organization to a regional sales force with centralized sales support.

CompUSA shares were trading at a 52-week high of 16 3/16 last November before falling to a low of 5 5/16 in October.

Ten of the 13 analysts following the stock maintain either a "hold" or "sell" recommendation.

A ruling in the long U.S.A. v. Microsoft Corp. antitrust trial is expected as soon as Friday. Though the market may not care, the outcome of the case will determine business practices for years to come.

Publicity of the trial alone over the past two years of federal scrutiny of Microsoft has dampened some of the agressive competition which the software giant had kindled in the Internet-based economy. One guarantee: Appeals are bound to follow.

Net2Phone will be on the move Friday after filing to sell another 6.3 million shares in a secondary offering.

Of the 6.3 million shares to be sold in the offering, 3.4 million shares are being sold by the Company, and the rest are being sold by selling stockholders, including IDT Corporation (Nasdaq: IDTC) Net2Phone's majority shareholder, who will be selling 2.2 million shares in the offering. The underwriters have been granted an option for a period of 30 days to purchase up to 945,000 additional shares of common stock from other selling stockholders to cover over-allotments, if any.

Net2Phone shares closed off 2 3.8 to 50 1/16 ahead of the announcement.

The telecommunications newcomer that competes against the Bell telephone companies may be about to get a heavy dose of funding. A group led by buyout firm Hicks, Muse, Tate & Furst Inc. and Microsoft Corp. may be about to invest $500 million in Teligent Inc., according to people familiar with the situation cited in Friday's Wall Street Journal.

Hicks Muse also is close to investing $200 million in Teligent, based in, sources reportedly said. Chase Capital Partners, an affiliate of Chase Manhattan Corp., and DB Capital Partners, an affiliate of Deutsche Bank Alex. Brown, and Olympus Partners are close to investing a total of about $100 million.

Varian topped analysts' estimates in its fourth quarter Thursday, earning $16.1 million, or 50 cents a share, on sales of $107.5 million.

Excluding a $22 million gain from nonrecurring royalty income and another $2 million in investment gains, Varian earned only 3 cents a share in the quarter.

However, First Call consensus was expecting a loss of 3 cents a share in the quarter.

Excluding the royalty gains, Varian's sales of $85.5 million represents a 105 percent improvement compared to the year-ago quarter when it lost $14.9 million, or 49 cents a share, on sales of $41.8 million.

For the year, Varian lost $13.2 million, or 43 cents a share, on sales of $271.9 million compared to a profit of $11.4 million, or 37 cents a share, on sales of $342.9 million in fiscal 1998.

"We continued to see a significant rise in demand for our ion implantation equipment during the quarter, and our results confirm industry forecasts that suggest continued improvement," said CEO Richard Aurelio in a prepared release. "Market trends, including interest in sub-0.18 micron, 300 millimeter and single-wafer advantages, are favorable for our new products."

Varian shares moved up to a 52-week high of 24 15/16 earlier this week after bottoming out at 8 in April.

Five of the seven analysts following the stock maintain either a "buy" or "strong buy" recommendation.

First Call consensus expects it to earn 8 cents a share in the first quarter and 71 cents a share in fiscal 2000.

Webvan will launch its initial public offering Friday at $15 a share.

The stock was original price at between $11 to $13 a share.

The IPO originally was delayed last month after news outlets published reports about the IPO road show for prospective institutional buyers.

Webvan, the brainchild of Louis Borders of Borders Books fame, delivers food, non-prescription drug products and general merchandise, with same-day delivery within a customer-selected 30-minute window. The company, which initially planned to go public in early October, agreed to a cooling-off period after the U.S. Securities and Exchange Commission raised concerns about news reports emerging prior to the IPO. "The company has received and may continue to receive a high degree of media coverage," the company said in an amended registration statement recently filed with the SEC. "Prospective investors should not rely on such third-party statements or any information not contained in this prospectus."

The IPO filing points to a column published Oct. 6 in TheStreet.com that discussed the company's upcoming IPO and made claims that company officials gave institutional buyers on a road show conference call information about the company's outlook beyond its registration statement with the SEC.

"While the factual statements about Webvan in the article are disclosed in this prospectus, the article presented these statements in isolation and did not disclose the related risks and uncertainties described in this prospectus," the company filing said.

Webvan's venture investors include Softbank America Inc., Sequoia Capital and Benchmark Capital Partners. Softbank owns 70 percent of Ziff Davis, the parent of ZDNet.