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THE DAY AHEAD: We interrupt this profit warning...

In response to reader e-mails asking why we have to report nothing but bad news these days, we interrupt your regularly scheduled profit warning to bring you a few items that may be construed as positive developments.

A little M&A activity
In recent weeks, two tech companies have stepped up to the plate with sizeable acquisitions. Are these strategic deals the first wave of things to come?

Merger and acquisition action was light in the first quarter for good reason. Potential targets weren't pleased with their stock prices and wanted to fetch better premiums. Potential acquirers weren't confident enough in their own stock prices to do a deal either.

That situation could be changing. Chipmaker LSI Logic (NYSE: LSI) spent $878 million to acquire C-Cube (Nasdaq: CUBE) in a stock swap. The acquisition enables LSI to expand into the broadband entertainment market.

LSI makes communications and storage semiconductors for data, voice and video. C-Cube makes chips for DVD, set-top boxes and other consumer broadband devices. Put the two companies together and you have a boost to earnings and a diversified product line.

When the deal was announced last week, LSI was paying a 93 percent premium for C-Cube. And why not? LSI bought C-Cube for roughly $17 a share, well below the company's 52-week high of $31.

Electronic Data Systems (NYSE: EDS), a computer services company, on Monday also announced its second recent acquisition. EDS bought German peer Systematics AG in a stock-and-cash deal valued at about $570 million. The move will double EDS' presence in Germany and boost its position in Europe. Last month, EDS forked over $670 million for airline data centers and other technology assets from Sabre Holdings.

What? You're going to meet estimates?!?!?!?!
Yes folks, a few companies will hit their earnings estimates. Actually, most tech companies will meet estimates--if only because they delivered profit warnings already. (Oops, there I go being negative again.)

Priceline (Nasdaq: PCLN) said Monday it will meet targets for the first and second quarters. The company issued its outlook when it reported fourth-quarter results Feb. 15. That means Priceline went more than a month without the business falling apart amid impaired visibility.

Break out the rally caps!

For the first quarter, the name-your-own-price online service said it should lose from 5 cents to 7 cents a share, on a pro forma basis.

For the second quarter, Priceline said it expects sequential revenue to grow by 15 percent to 20 percent and that it will report a pro forma operating profit, which would not include restructuring and special charges. According to First Call, Priceline was expected to lose 5 cents a share in the first quarter and a penny a share in the second quarter.

Buybacks are still happening
Investors may be giving up on downtrodden stocks, but there are signs that at least some executives see their companies as bargains. These buybacks boost earnings per share as companies repurchase shares on the open market when prices fall.

• Applied Materials (Nasdaq: AMAT) will repurchase $2 billion in shares.

• Nokia (NYSE: NOK) said it will repurchase 50 million shares on the open market. It'll get a good price since Nokia shares have been hammered of late.

•  Autodesk (Nasdaq: ADSK) plans to buy back an additional 6 million shares.

WebMD clears up case of 'too-many-execs-itis'
Online health company WebMD (Nasdaq: HLTH) has nearly completed its extermination of those former Healtheon executives. Of the nine top execs at WebMD, only one remains from the Healtheon days.

WebMD, the company formerly known as Healtheon/WebMD, was formed by a series of acquisitions that left too many cooks in the kitchen. It acquired Envoy in May, and just last September got final shareholder approval for the acquisitions of Medical Manager and its CareInSite subsidiary, as well as OnHealth Network. Needless to say, there were way too many execs sharing roles.

Jeffrey T. Arnold, the previous CEO of Healtheon, left shortly after WebMD closed its Medical Manager merger. Arnold did a short stint as co-CEO with Marty Wygod, who had been CEO of Medical Manager. Wygod, well liked on Wall Street, soon had full control once Arnold split.

Now Wygod is chairman too, as was Mike Long, who served as Healtheon chairman. Long was chairman until Monday when he resigned. He's just the latest Healtheon alum to split.

Are we reaching with these alleged positive developments? Sure we are. Every columnist needs a dose of good news once in a while. We now return you to your regularly scheduled profit warning.

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