Wednesday Stocks to Watch

These stocks are worth watching from MarketWatch:

Advancers

Agile Software (AGIL) shares jumped after the company agreed to be acquired by Oracle (ORCL) for $495 million.

AMR Corp. (AMR), the parent company of American Airlines, was upgraded to buy from hold at Soleil Securities.

Barnes & Noble Inc., (BKS) the New York book retailer, added as much as $400 million to its buyback plan. Some $27 million remains from the previous authorization.

Bausch & Lomb (BOL) agreed to be acquired for $65 a share by the private-equity firm Warburg Pincus. The deal is valued at $4.5 billion, including Warburg Pincus's assumption of $850 million of Bausch & Lomb debt.

Citigroup (C) shares rose after ESL Investments, a hedge fund run by Edward Lampert, said it secured a big stake -- 10.9 million shares valued at more than $605 million -- in the banking giant earlier this year, according to a Securities and Exchange Commission filing. The stake was filed with the SEC on Feb. 14 but was confidential. That confidentiality expired on Tuesday.

CommVault Systems Inc.'s (CVLT) fiscal fourth-quarter net income surged to $1.16 a share, reflecting a tax benefit, from 13 cents in the year-earlier period. The adjusted latest earnings were 14 cents a share. The Oceanport, N.J., provider of storage and data management software said revenue for the quarter ended March 31 increased 32% to $42.6 million.

Compuware Corp. (CPWR) reported fiscal fourth-quarter earnings of $67.5 million, or 21 cents a share, up 20% from the year-ago period. The Detroit software company's revenue in the three months ended March 31 rose to $313 million from $309.5 million.

Continental Airlines (CAL) was upgraded to hold from sell at Soleil Securities.

Copa Holdings (CPA) reported first-quarter earnings of $48.6 million, or $1.12 a share, up from a year-ago profit of $32.3 million, or 75 cents a share. The Panama City-based parent company of Copa Airlines and Aero Republica said its revenue rose 26.7% in the quarter to $242.7 million.

East Penn Financial Corp. (EPEN) shares rose after the company agreed to be acquired by Harleysville National Corp. (HNBC) for $92.7 million. The deal values East Penn shares at roughly $14.50 each.

H&E Equipment Services Inc. (HEES) agreed to acquire J.W. Burress Inc., which distributes construction equipment, for about $108.7 million and debt assumption of about $400,000. The Baton Rouge, La., equipment services company said Wednesday it could pay $12.9 million more over three years if Burress remains a Hitachi distributor. H&E doesn't expect Burress will continue to represent Hitachi. H&E added it expects the transaction will add to 2007 earnings. It also expects to complete the acquisition no later than July 31, subject to the completion of Burress' 2006 audit and other customary closing conditions.

International Assets Holding Corp. (IAAC) shares surged after the New York-based financial services company reported fiscal second-quarter net earnings of $681,000, or 8 cents a share, vs. $1.09 million, or 13 cents a share, in the year-ago period. Adjusted earning before interest, taxes, depreciation and amortization rose to $4.49 million from $3.26 million last year. Revenue climbed to $14.8 million from $9.02 million a year ago.

Jack in the Box Inc. (JBX) second-quarter profit rose 25% to $27.2 million, or 80 cents a share, as revenue grew 6.8% to $660.7 million. Analysts polled by Thomson Financial were expecting 70 cents on revenue of $663 million. Same-store sales rose 6.4% and its operating-profit margin improved to 18.3% from 17.6%, helped by lower utility costs. The restaurant group also raised its earnings estimates for 2007.

O'Charley's Inc.'s (CHUX) fiscal first-quarter profit rose 9.6% to $7.9 million, or 33 cents a share, from a year earlier. Excluding charges related to manufacturing equipment, the Nashville restaurant company earned 36 cents a share in the latest period. Revenue for the quarter ended April 22 climbed 2.1% to $312.9 million. Analysts polled by Thomson Financial expected earnings of 31 cents on revenue of $314 million.

Quanex Corp. (NX) said its board plans to review the strategic alternatives for its Building Products Group. The company said the options could include a tax-free spin-off to shareholders, a sale or joint venture. Houston-based Quanex said the business generated sales of about $1.1 billion and operating income of about $135 million in the year ended Oct. 31. The company has hired Lazard Freres & Co. to serve as its financial advisor.

Tecumseh Products Co. (TECUA) shares rallied after the maker of hermetic compressors reported a first-quarter net loss of $16.8 million, or 91 cents a share, vs. a net loss of $12.6 million, or 68 cents a share, in the year-ago period. Revenue rose to $460.5 million from $446.1 million. Tecumseh expects the operating results of all three of its business segments to improve in the second quarter of 2007 when compared to prior-year results.

Shares of WCI Communities Inc. (WCI) rose after the Bonita Springs, Fla., builder said it sent a letter to shareholders seeking support to ensure a fair sale process. The letter said the company has entered into a number of confidentiality agreements with entities that have expressed an interest in acquiring WCI. The letter said the election at an upcoming June 15 annual shareholder meeting of a slate of directors backed by financier Carl Icahn, who has made a $22-a-share offer for WCI, "could jeopardize the sale process or make the process less than fair and open." The company said it continues to believe it could get a better alternative to Icahn's offer that could provide shareholders with greater value than $22 a share

Decliners

Air France-KLM (AKH) was downgraded to neutral from buy at UBS. "With the results on May 24, we prefer to wait and see how it has fared in the fourth quarter, after which we will readdress our view," the broker said. It's predicting operating profit of 1.22 billion euros, which it said was slightly above consensus.

Applied Materials Inc. (AMAT) second-quarter net income was flat with a year earlier, while its sales of chip-equipment rose on demand from makers of consumer electronics. See full story.

Arcelor Mittal, (MT) the world's largest steelmaker, reported that first-quarter net income rose 40% on 17% higher sales. The company also sees higher second-quarter earnings, driven by higher prices.

Deere & Co.'s (DE) fiscal second-quarter earnings fell 16% to $623.6 million, or $2.72 a share, from a year earlier, when results were boosted by $227.6 million from discontinued healthcare operations. Earnings from continuing operations were $2.72 a share, up from $2.17. The Moline, Ill., farm-machinery maker said its revenue for the quarter ended April 30 rose 5% to $6.88 billion. Analysts polled by Thomson Financial expected revenue of $6.46 billion.

Dolby Laboratories Inc. (DLB) said it has filed a shelf registration covering the sale of as many as 8 million Class A common shares by an affiliate of founder and Chairman Ray Dolby. The selling holder has commenced an offering of 7 million shares, and the underwriters have an option to purchase as many as 1 million more shares.

DTS Inc. (DTSI) swung to a first-quarter net loss of 4 cents a share from a year-earlier profit of 38 cents. The latest earnings from continuing operations came in at 11 cents a share. The Agoura Hills, Calif., digital-technology company's revenue fell to $12.6 million from $20.7 million.

Federated Department Stores (FD) swung to first-quarter profit of 8 cents a share from a year-earlier loss of 9 cents. The latest earnings from continuing operations were 11 cents. Sales were about flat at $5.92 billion. The retailer cut the bottom end of its estimate of second-quarter adjusted earnings. It now expects 35 to 45 cents, compared with its prior estimate of 40 to 45 cents.

Gaming Partners International Corp. (GPIC) shares slid after the Las Vegas-based maker of gambling products reported fourth-quarter net earnings of $115,000, or a penny a share, vs. net earnings of $2.1 million, or 26 cents a share, in the year-ago period. Revenue in the quarter ended Dec. 31 fell to $16.1 million from $16.2 million in the same period last year. Analysts polled by Thomson Financial were expecting, on average, a per-share profit of 18 cents.

GoAmerica Inc. (GOAM) shares slumped after the Hackensack, N.J.-based provider of relay and wireless communications for the hearing impaired reported a first-quarter net loss of $765,000, or 35 cents a share, vs. a net loss of $1.08 million, or 51 cents a share, in the year-ago period. Revenue rose to $4.31 million from $1.64 million last year.

Kinder Morgan Management LLC (KMR) priced a public offering of 5.7 million shares, representing limited liability company interests. The underwriter, Citi, has an option on as many as 855,000 more shares if demand for the offering is sufficient.

Limited Brands, (LTD), the owner of Bath and Body Works and Victoria's Secret, was cut to hold from buy at Citigroup, which cited deteriorating fundamentals at Victoria's Secret, compounded by difficult same-store-sales comparisons in the second half of the year. The downgraded follows news from the company after Tuesday's closing bell that its earnings won't meet previous expectations and that i plans to sell part of its Express Stores division and consider options for its namesake stores.

Navios Maritime Holdings Inc. (NM) first-quarter net income available to common-share holders rose to 13 cents a share from 11 cents a year earlier. The shipping company's revenue more than doubled to $101.8 million.

Photronics Inc.'s (PLAB) fiscal second-quarter net more than doubled to 30 cents a share from 12 cents a year earlier. The most recent quarter ended April 29 includes a net benefit of 16 cents as the Brookfield, Conn., semiconductor-equipment company resolved and settled U.S. and foreign tax liabilities. Sales fell 8.2% to $109.6 million.

Salary.com Inc. (SLRY) reported fiscal a fourth-quarter net loss attributable to common-stock holders widened to 44 cents a share from 31 cents in the year-earlier period. Excluding items, the loss was flat at 11 cents. The Waltham, Mass., provider of compensation-management services said revenue in the three months ended March 31 rose 42% to $6.4 million.

Wireless Ronin Technologies' (RNIN) shares tumbled after the Minneapolis-based company announced that it has filed a registration statement covering an offering of 4 million shares of common stock. Of the total, Ronin plans to offer 3 million shares and a selling shareholder plans to offer 1 million shares.