AXT Inc. (NASDAQ: AXTI) beat earnings and revenues and guided in-line as well.  Shares were up 8.3% at $7.79 on about 75,000 after-hours shares.

BTU International Inc. (NASDAQ: BTUI) was up over 10% ahead of earnings and the street was right that it would beat earnings. Unfortunately, guidance was lackluster and the stock is sliding by 21% to $9.77 in after-hours trading on thin volume.

First Solar, Inc. (NASDAQ: FSLR) was trying to hold up with in-line guidance and after revenues were soft, but that was then… shares are now down over 7.6% at $124.40 in active trading in the after-hours session.

Glu Mobile Inc. (NASDAQ: GLUU) also beat on earnings and shares are higher.  We have the stock trading up 10% at $4.21 on nearly 300,000 after-hours shares.

Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) isn’t feeling the sting from the high coffee prices as it both beat earnings estimates and raised guidance.  A probable short squeeze is only adding fuel to the fire. Shares are up 18.8% at $76.12 on more than 1.4 million shares in the after-hours.

Las Vegas Sands Corporation (NYSE: LVS) is playing a card game after earnings and is losing.  The casino resort operation earnings rose to $0.37 or $299.4 million, but this was short of estimates and we know how much this was up from its lows.

Myriad Genetics, Inc. (NASDAQ: MYGN) beat earnings and shares are higher on thin volume. The stock rose 6.5% to $22.73 on over 17,000 shares in the after-hours.

OpenTable, Inc. (NASDAQ: OPEN) closed down over 7% today at $105.00 and then reported earnings, but it also sent its CEO up to the top board position as Chairman of the Board.  Shares are down almost 8% at $96.95 on about 395,000 share sin the after-hours session.

Quest Software, Inc. (NASDAQ: QSFT) missed earnings and revenue expectations as costs rose on the operating side.  Shares were down 1% in regular trading but the stock is down about 16.5% at $21.05 on close to 250,000 shares in the after-hours session.

Silicon Graphics International Corporation (NASDAQ: SGI) is up after earnings and after reaffirming guidance.  The shares are up 7.2% at $17.67 on only about 27,000 shares.

THQ Inc. (NASDAQ: THQI) managed to beat earnings but its revenue was soft.  Shares were down about 9% at $3.75 on more than 60,000 shares in the after-hours session.

Web.com Group, Inc. (NASDAQ: WWWW) was down 4% today ahead of earnings and now shares are down over 9% at $13.61 on under 20,000 shares.

JON C. OGG

For the quarter ended in December, Activision posted an EPS loss of -$0.20 on revenues of $1.43 billion. On a non-GAAP basis, the company posted EPS of $0.53 on revenue of $2.55 billion. Analysts were expecting EPS of $0.51 on $2.35 billion in revenue. Smaller competitors like Take-Two Interactive Software Inc. (NASDAQ: TTWO) and THQ Inc. (NASDAQ: THQI) handily beat expectations for the December quarter, while Electronic Arts Inc. (NASDAQ: ERTS) came in with a beat similar to Activision’s.

Like EA, Activision is getting a larger share of its revenue from high-margin digital distribution. As if to emphasize that point, the company announced that it was killing the once wildly popular Guitar Hero. On the conference call, the company said that “demand for peripheral-based music games has declined at a dramatic pace.”

At the same time, Activision expects the installed base of online-enabled game consoles like the Xbox from Microsoft Corp. (NASDAQ: MSFT) and the PS3 from Sony Corp. (NYSE: SNE) to grow by 24% in 2011, to 92 million units.

For the current quarter, Activision expects non-GAAP net revenue of $640 million and non-GAAP EPS of $0.07. Analysts had been expecting EPS of $0.10 on revenue of about $735 million. For the full-year, the company expects non-GAAP EPS of $0.70 and non-GAAP net revenue of $3.9 billion. Analysts had been looking forward to non-GAAP EPS of $0.78 on revenue of $4.69 billion.

Activision clearly expects its distribution of packaged sales to fall. In addition to snuffing Guitar Hero, the company is stopping development of another game, and will not issue a new skateboarding game in 2011. And the company’s Blizzard division, makers of “World of Warcraft,” will not release a new game in 2011, but would issue two Blizzard games in 2012.

Activision said essentially nothing about developing games for mobile devices. Unlike EA, which has developed games for smartphones from both Apple Inc. (NASDAQ: AAPL) and Research in Motion Ltd. (NASDAQ: RIMM), Activision hasn’t made a serious move into the mobile space, perhaps because there’s not a lot of money there, as we noted in our piece about EA’s earnings.

To sweeten the bitterness of its earnings report, Activision announced a new stock buyback program of up to $1.5 billion. The company purchased $966 million of its own stock under a $1 billion buyback program that ended in December. Activision also increased its dividend by 10%, to $0.165 for the March quarter.

Activision’s shares are off nearly -10% this morning, to $10.58, on very heavy volume.

Paul Ausick

Our review for the best video game sector pick includes reviews of GameStop Corp. (NYSE: GME), ActiVision Blizzard, Inc. (NASDAQ: ATVI), Electronic Arts Inc. (NASDAQ: ERTS), THQ Inc. (NASDAQ: THQI), and Take-Two Interactive Software Inc. (NASDAQ: TTWO).  We have also had to focus on some key issues surrounding Microsoft Corporation (NASDAQ: MSFT) and Apple Inc. (NASDAQ: AAPL), along with Nintendo (NTDOY).

We have provided a basic table below.  After the table comes the company by company review, with our top video game pick of 2011.

Based upon the delay the company now expects to report its fiscal-2011 revenues of $800 to $825 million and it expects a non-GAAP loss of -$0.10 to -$0.20 EPS.  Thomson Reuters had estimates already at a loss and the consensus was -$0.03 EPS and nearly $845.5 million in revenues.  The big wild card for many investors is how this will affect the Fiscal-2012 (March-end) where Thomson Reuters has estimates of $0.31 EPS and $923.7 million in revenues.

THQ also gave its line-up for next year via its fiscal 2012 schedule: Warhammer® 40,000® Space Marine® in Summer-2011, MX vs. ATV® Alive™ in Spring-2011, the latest edition of Saints Row® in Fall-2011, a fighting game based on the World Wrestling Entertainment® in Fall-2011, and a fighting games based on the Ultimate Fighting Championship® in Winter-2012.

THQ has suffered alongside an industry that was supposed to be at least a quasi-winner of the recession that ended up being a loser.  It turned out that laid-off couch potato video game addicts either did not buy more new titles or they opted for used games.  GameStop Corp. (NYSE: GME) trades at the lowest forward P/E ratios we have seen with a ratio of under 7-times blended 2011 and 2012 (Jan-end) estimates.  Best Buy Co. (NYSE: BBY) and Amazon.com Inc. (NASDAQ: AMZN) are large enough and now competing enough in the used-game markets that Wall Street is scared that GameStop could get gored.  And new game console sales are very slow, which in-turn generally limits demand for endless new game titles.

Electronic Arts inc. (NASDAQ: ERTS) has been a dead stock since the end of 2008, in part because of its warnings that seem to come with each earnings release.  EA has also lost its pole-position as the largest video game seller is now Activision Blizzard, Inc. (NASDAQ: ATVI) with its World of WarCraft, Call of Duty, Guitar Hero, DJ Hero, and more.  Activision Blizzard has not exactly set any gang-buster stock performance, but it has ‘only’ lost about one-third of its value from the peak versus Electronic Arts which has lost more than two-thirds of its value from the peak.  As far as how THQ fits in on performance, this was a $35 stock in mid-2007.  Shares are now close to $3.70 and its 52-week trading range is $3.33 to $8.29.  Take-Two Interactive Software Inc. (NASDAQ: TTWO) recently managed to raise guidance as expectations were so low and Take-Two has been a takeover candidate itself before.  When THQ is back and delivering, it is feasible that the same scenario could come there.

Is there at least some added disappointment in this morning’s warning from THQ?  Sure.  It is also mostly baked into the cake if you look through the books.  As noted, a loss was already expected.  Now the market cap is a mere $251 million, which means that if any video game sector consolidation comes back that THQ would likely find itself as prey rather than predator.  Its June 30 balance sheet listed more than $225 million in cash and short-term investments versus long-term debt of $100 million and $78.7 million in ‘other’ longer-term liabilities.  Shareholder equity was $292 million and even its net tangible assets came to $182.3 million.  In short, there is what could easily be an implied valuation floor in the stock.

THQI is not one of those endless growth stocks.  The catalysts are not likely immediate other than the notion that it is a “cheap stock” if value investors want to consider video games, but its coming video game line-up, its low valuations, and even its new upcoming uDraw peripheral system for Nintendo’s Wii in time for the holiday season should all help offer share support here for those investors who can look beyond the headlines of just a few days or weeks.   The company did maintain that it expects to “grow net sales and generate significant earnings and cash flow in fiscal 2012.”  If today’s news was so bad, the drop of less than 1% at $3.70 would have likely taken shares closer to a 52-week low rather than just a marginal drop.

JON C. OGG

ARM Holdings, plc (NASDAQ: ARMH) is trading lower by 6.1% at $17.62 on over 140,000 shares in pre-market trading after overseas trading.

Arena Pharmaceuticals Inc. (NASDAQ: ARNA) is lower after Barclays cut the biotech cut to “underweight” over concerns that Arena’s lorcaserin will be approved by the FDA.  Shares are down 3.6% at $6.60 on more than 100,000 shares.

Best Buy Co.Inc.(NYSE: BBY) managed a stellar earnings report and shares are now indicated up 9% at $37.86 after a $34.65 close on Monday.  The 52-week trading range was $30.90 to $48.83.

Campbell Soup Co. (NYSE: CPB) is trading down 2.6% at $35.11 after Goldman Sachs reportedly cut its rating to SELL.

ICAgen Inc. (NASDAQ: ICGN) is getting hit after it stopped its epilepsy trial enrollment on adverse event; shares are down 26% at $0.17 versus a prior 52-week range of $0.23 to $1.33…

Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD) is trading higher on positive results from its irritable bowel syndrom treatment.  To think that this is not an E.D. treatment company is amazing considering the name.  Shares closed at $9.75 and are up almost 21% at $11.75 on over 20,000 shares.

Level 3 Communications Inc. (NASDAQ: LVLT) is getting hit by almost 11% at $1.03 after the company plans to raise up to $175 million.

Microsoft Corporation (NASDAQ: MSFT) is one to watch after yesterday’s late-day surge to $25.11 on word that it will fund a large debt offering for a share buyback or a dividend.  Shares are down 0.5% at $24.97 in the pre-market trading but shares were up around $24.50 before that report came out at the end of trading yesterday.

SPDR Gold Shares (NYSE: GLD) is up over 1.15 at $123.01 on nearly 1 million shares already and the market has not even opened.  The gold bugs are at it again….

THQ Inc. (NASDAQ: THQI) reduced its guidance, a surprise considering the news flow, and it said its Red Faction game will be out in May-2011.  Shares are down 3.75% at $3.59 pre-market.  This guidance is still not a huge issue if you consider its cash and where the company has been.

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JON C. OGG

JON C. OGG

We have compiled information on the catalyst for each stock, an outlook where applicable, added in color for traders where applicable and given specific news and background data on each situation.

Barnes & Noble, Inc. (NYSE: BKS) is turning into a nasty proxy fight as billionaire Ron Burkle is appealing a poison pill anti-takeover measure from the company as his 18.8% stake (second highest behind Riggio) as he is trying to install 3 directors next month.  Here is the obvious… Burkle needs to either cry uncle or he needs to go split a fifth of scotch after a round of golf with Riggio and they can work out a fair price.  Being an activist in a closely held company is not the smartest of targets, even for billionaires.  Friday’s CALL options trading was “off the charts.”

Brocade Communications Systems, Inc. (NASDAQ: BRCD) was one of this week’s “stocks that could double” that we prepared for InvestorPlace.com.  The current catalyst is the post-3PAR interest after HP beat out Dell as the companies fight for more unified offerings between networking and storage now that Cisco has declared war on that lineup of billions in revenues.  This highlights Brocade now that it has merged with Foundry and sets this up t be the low-cost provider or “the poor man’s Cisco” for Dell, HP, IBM, or a whole host of other companies that need to fend off the Cisco threat.  With a $2.5 billion market cap, its market cap is now only 25% more than 3PAR and it is expected to have about 9-times the equivalent revenues (almost $2.1 billion) for the year as a standalone player.  If the tech consolidation continues, this is a highly viable candidate for a buyer to compete against Cisco on price.  The company’s big problem is that on a standalone basis it just can’t stand up to much of the larger competition and that gives it very choppy results.

China Sky One Medical, Inc. (NASDAQ: CSKI) got crushed after lowering guidance due to: “Management’s reduced guidance reflects the termination of relationships with certain private distributors, who after several rounds of discussions, chose to end their cooperation with the Company after learning that their business information was disclosed in the Company’s public SEC filings and would continue to be disclosed in such documents as required by SEC regulations… has led to increased scrutiny of their financial performance by government authorities within China. “  The integrated Chinese pharma player lowered 2010 revenue guidance to $128 to $136 million versus a prior target of $160 to $164 million; lowered 2010 adjusted net income guidance to $26 to $31 million from $40 to $41 million.  China Sky One became China Die One as shares fell a sharp 27.76% to $7.00 in the after-hours session on a sharp 187,000 shares after the 4PM bell.  This marks a 52-week low under the prior range of $8.82 to $25.45. Ouch.

CIENA Corp. (NASDAQ: CIEN) is on deck for earnings on Wednesday morning.  The communications equipment and systems company is at $13.29 and the 52-week range is $10.53 to $19.48.  A portfolio manager just labeled it as a new technology providing long-term value for investors.  Thomson Reuters has estimates of -$0.33 EPS and $387.04 million in revenues.

First Niagara Financial Group Inc. (NASDAQ: FNFG) is something that just does not make sense at the current time.  The bank is acquiring New Alliance Bancshares Inc. (NYSE: NAL) and this will set it up to be the next potential super-regional bank.  Shares hit yet another 52-week low of $11.23 this last week before closing out the week at $11.80 versus a 52-week range of $11.23 to $14.88.  On a forward earnings basis, its multiples are neither dirt cheap nor excessive.  What is a mystery is that the Attorney General from Connecticut is probing this merger.  New Alliance trades at an implied discount to the 1.1 shares, but the arbitrage is harder to play because the merger may be stock or it could be cash and stock.  Our angle here is on First Niagra, as it has been a safer bank that does not have all of the same baggage as many of the other big boys.  Even with the concern of CT-state charters versus Federal charters, the AG probe just doesn’t make much real sense.

Genzyme Corporation (NASDAQ: GENZ) closed down 0.44% at $70.49 and is still above the $69.00 implied buyout price from Sanofi-Aventis (NYSE: SNY).  Reports from both Bloomberg and IBD indicate that CEO Henri Termeer may be close to capitulating and accepting a buyout.  Our guess is that Termeer is probably telling them, “Please just offer $1 or $2 more so we look good to our holders who are stuck in Genzyme at slightly higher prices.”  This saga may soon come to an end.  After all, Sanofi has bragged over and over that it has the cash.  It can afford another buck, or two, if it wants.

THQ has announced uDraw™ GameTablet™.  This is the first product of the sort for drawing for gaming systems and this is a Wii™ exclusive for Ninetnedo (NTDOY).  In short, those digital artist pads that designers and recreational users have for their PCs will now have a junior version for the Wii gaming system.  It looks like it is for kids, but this will have a melt-up to mom and dad too.

The GameTablet launch is scheduled to hit retail store shelves for the holiday season with a suggested retail price of $69.99.  The tablet will come bundled with a drawing, coloring and art-based video game called uDraw Studio.

The other boost here is that two titles, Pictionary™ and Dood’s Big Adventure™, will also launch at the same time for $29.99 each.

The uDraw GameTablet will not be available to Europe and other international markets until early in 2011. THQ noted additionally that future waves of new video game titles are planned for next year and beyond.

The Tablet is approximately 9″ by 7″ and is 1″ thick.  It holds the Wii remote and art and drawings created in uDraw Studio can be saved to an SD card and emailed or printed out.

What is most surprising than anything here is that Wii did not launch this on its own.  It could have been free money.  Our last count on Wii consoles was more than 73 million units shipped worldwide, with about 35 million of those being from the Americas.

Wedbush Morgan research has been quoted around the web with this product being able to sell 1 million units without any real marketing efforts.  Our guess… there is a much larger opportunity here than 1 million units.  The Wii looked like a game terminal for kids when it launched.  It turned out that adults loved it too.

Thomson Reuters has estimates for fiscal-February 2011 estimates at -$0.04 EPS on more than $845 million in revenues and fiscal February 2012 estimates are $0.32 EPS and almost $923 million in revenues.  This will drive those estimates higher.

THQ shares are trading up over 7% up at $3.93 today on this launch.  Keep in mind that its 52-week trading range is $3.33 to $8.29.  It seems like the only real risk here is that the company either doesn’t spend a penny on marketing or if there are performance issues with the device.

This is one of those instances where demand is going to be created in a market that previously did not exist.  Sounds a lot like a mini-market that has an iPad comparison.  A page out of Apple’s playbook.

JON C. OGG

Anadarko Petroleum Corporation (NYSE: APC) Cut to Market Perform at FBR.
Biovail Inc. (NYSE: BVF) Cut to Hold at TD.
JinkoSolar Holding Co., Ltd. (NYSE: JKS) Reiterated Buy at Auriga.
Medtronic Inc. (NYSE: MDT) Cut to Neutral at JPMorgan.
Olympic Steel Inc. (NASDAQ: ZEUS) Cut to Hold at KeyBanc.
Procter & Gamble (NYSE: PG) Raised to Buy at Argus.
Skilled Healthcare Group, Inc. (NYSE: SKH) Raised to Buy at Jefferies.
Tesla Motors, Inc. (NASDAQ: TSLA) Started as Overweight at JPMorgan.
THQ Inc. (NASDAQ: THQI) Cut to Neutral at Stern Agee.
Veeco Instruments (NASDAQ: VECO) Cut to Hold at Canaccord.
Whole Foods Market Inc. (NASDAQ: WFMI) Raised to Buy at Canaccord.

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JON C. OGG

Netlist (NASDAQ: NLST), Jazz Pharmaceuticals (NASDAQ: JAZZ), Hercules Offshore (NASDAQ: HERO), Clearwire (NASDAQ: CLWR), Ericsson (NASDAQ: ERIC), and DryShips (NASDAQ: DRYS)

Moving down:CNB Financial NASDAQ: CCNE), Anaren (NASDAQ: ANEN), and School Specialty (NASDAQ: SCHS).

Most active: Google Inc. (NASDAQ: GOOG), Apple Inc. (NASDAQ: AAPL), Logitech International (NASDAQ: LOGI), ARM Holdings (NASDAQ: ARMH), and THQ Inc (NASDAQ: THQI)

Douglas A. McIntyre

Actel Corporation (NASDAQ: ACTL) is down after it announced that Q2 revenues are expected to come in at the low end of the previous guidance of +8% to +12% sequentially.  Shares are trading down 3.5% at $13.61 on very thin trading volume, and its 52-week range is $10.03 to $17.10.  Average daily volume is only 71K shares.

Blockbuster Inc. (NYSE: BBI) is just about dead if the news is accurate.  It is still reportedly considering bankruptcy.  As the stock has already compressed so much, Blockbuster shares are down 5% at $0.26 and the 52-week range is $0.24 to $1.56.  Hardly a blockbuster.

BP plc (NYSE: BP) is becoming a permanent member of top day trader alerts, probably because they are in the soup over and over.  Shares are lower on talk of a dividend cut, talk of $10 billion or more being demanded to be put in escrow, and the notion that BP said it has some 51,000 claims amounting to $1.6 billion so far.

Cell Therapeutics, Inc. (NASDAQ: CTIC) is one of the top gainers this morning on a press release that the Italian Medicines Agency approved NerPharMa to manufacture Cell Therapeutics’ drug Pixantrone in the European Union.  This was also an UNUSUAL SUSPECT stock over the weekend as we noted “this has a chance for a trader-interest revival after the penny stock imploded earlier this year” due to new news.  Shares are trading up 18% at $0.53 on well over 500K shares, although the stock was up over 20% a few minutes before.

Ceragon Networks Ltd. (NASDAQ: CRNT) is up after getting a $9 million follow-on order from teh Philippines for a 2G/3G backhaul expansion.  While the gain is on thin volume, the shares are up 7.3% at $7.78 versus a 52-week range of $6.14 to $13.29.

Onyx Pharmaceuticals Inc. (NASDAQ: ONXX) is trading lower after it and Bayer’s Nexavar, a potential lung cancer treatment, failed to meet some endpoints in a Phase III trial.  Shares are down 5% at $21.66, which will be a new 52-week low if it holds as the prior range was $21.77 to $36.75.

Rosetta Resources, Inc. (NASDAQ: ROSE) is trading up, albeit a bit smaller than expected in pre-market trading after being featured in our UNUSUAL SUSPECTS.  Barron’s called it a BUY with shares possibly doubling. Monday’s pre-market trading has shares up 3% at $26.00 on close to 20,000 shares.

THQ Inc. (NASDAQ: THQI) is getting clipped after lowering guidance for Q1: it now sees an adjusted loss of -$0.20 to -$0.30 EPS versus a previous outlook of a breakeven with sales of $155 to $165 million versus its prior forecast of $190 to $200 million.  The video game publisher’s shares are down 7.2% at $5.15 on fairly thin volume, and its 52-week range is $4.12 to $8.82.

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JON C. OGG

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