Here are some highlights from last week's earnings coverage from BloggingStocks:

• Activision Blizzard Inc. (NASDAQ: ATVI) said its Q3 profit declined despite the popularity of Guitar Hero.
• Blackboard Inc. (NASDAQ: BBBB) said Q3 revenue surged and its offered impressive cash flow numbers.
• Boston Beer Co. Inc. (NYSE: SAM) easily beat Q3 earnings estimates and raised its full-year guidance.
• Cisco Systems Inc. (NASDAQ: CSCO) lower Q1 results topped estimates and sent shares higher.
• Cognizant Technology Solutions Inc. (NASDAQ: CTSH) was upgraded following its strong Q3 results.
• Corporate Executive Board (NASDAQ: EXBD) received an analyst's upgrade following the Q3 results.

No doubt, the internet is transforming the education market. After all, schools need to find ways to cut costs as well as improve instruction. And, the dominant player in providing digital solutions for education is Blackboard (NASDAQ: BBBB).

In Q3, the company posted an 18% increase in revenues to $98.4 million, with net income of $4.3 million or $0.13 per share. The big growth drivers came from professional services and managed hosting solutions (there are 834 such clients).

MOST NOTEWORTHY: Blackboard, Starwood Hotels and ACE Ltd were today's noteworthy upgrades:

• Baird upgraded Blackboard (NASDAQ:BBBB) to Outperform from Neutral based on two new state-wide deals with New Mexico and North Carolina, K-12 growth, and up-selling and cross-selling opportunities. The firm raised Blackboard's target to $45 from $38.
  
• Wachovia raised Starwood Hotels (NYSE:HOT) to Outperform from Market Perform citing valuation, high international exposure, and secure capital structure and dividend.
  
• Citigroup upgraded shares of ACE Ltd (NYSE:ACE) to Buy from Neutral on valuation, as they believe additional selling from the company's redomestication to Switzerland will be offset by short covering. They view the recent weakness as an attractive buying opportunity and raised their target to $63 from $58.

OTHER UPGRADES:

• UBS upgraded Microchip (NASDAQ:MCHP) and Linear Tech (NASDAQ:LLTC) to Buy from Neutral.
  
• Marshall & Ilsley (NYSE:MI) was raised to Market Perform from Underperform at Keefe Bruyette.
  
• Comcast (NASDAQ:CMCSA) was upgraded to Buy from Neutral at Goldman.

With the Virginia Tech massacre last year, universities certainly understand the extreme importance of security. As a result, notification systems – which can deal with things like cell phones, SMS, email and so on – are top-of-mind for chief information officers in universities.

The leading provider of notification services for educational institutions is NTI Group. This week NTI Group agreed to sell itself to Blackboard (NASDAQ: BBBB), a leading provider of learning management systems for universities. The deal amounts to about $182 million (there is also an earnout for $17 million).

With Blackboard's large customer base, there should be a large cross-selling opportunity. Besides, it will help the company's mobile efforts (after all, students are big-time users of cell phones and PDAs).

According to a report from the Yankee Group, the notification and alert market is expected to reach about $1.2 billion by 2011 (which translates into a 30% annual growth rate). Although, in the case of NTI, the company's growth rate is more than 50% per annum (the revenues last year were about $30 million).

Interestingly enough, NTI has a strong presence in the K12 market. This should be a nice boost for Blackboard, which is targeting this category.

In other words, this deal looks like a great fit -- and could help continue the nice growth ramp for Blackboard.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

MOST NOTEWORTHY: General Communications, Glu Mobile, Town Sports, Blackboard and Lance were today's noteworthy downgrades:

• Jefferies downgraded shares of General Communications (NASDAQ: GNCMA) to Hold from Buy after the company's mixed quarter to reflect increased uncertainty from the recent weakness in its network access and commercial business.
  
• Glu Mobile (NASDAQ: GLUU) was downgraded to Hold from Buy at Deutsche Bank and to Neutral from Buy at Goldman Sachs following its Q3 report. Cantor downgraded shares after the company issued reduced growth expectations.
  
• William Blair downgraded shares of Town Sports (NASDAQ: CLUB) to Market Perform from Outperform to reflect the recent slowdown in new membership additions at mature clubs which they believe creates enhanced risk of operating margin contraction and decelerating EPS growth in 2008.
  
• Baird downgraded Blackboard (NASDAQ: BBBB) to Neutral from Outperform on valuation and expectations for only modest margin expansion.
  
• Lance (NASDAQ: LNCE) was downgraded at Oppenheimer to Neutral from Buy, as they expect higher wheat costs to significantly impact Q4 and 2008 EPS.

OTHER DOWNGRADES:

• Citigroup downgraded Pepsi Bottling Group (NYSE: PBG) to Hold from Buy.
  
• eBay (NASDAQ: EBAY) was downgraded to Peer Perform from Outperform at Bear Stearns.
  
• DaVita (NYSE: DVA) was downgraded to Underperform from Market Perform at Piper Jaffray and to Outperform from Strong Buy at Raymond James.
  
• UBS lowered its rating on YUM! Brands (NYSE: YUM) to Neutral from Buy.

MOST NOTEWORTHY: MRU Holdings (UNCL), CVS/Caremark (CVS), Medco Health (MHS) and Blackboard (BBBB) were today's noteworthy initiations:

• Kaufman Bros. expects MRU Holdings (NADAQ: UNCL) to post a profit in Q4 for the first time due to its first student loan securitization and started shares with a Buy rating and $9 target.

• Thomas Weisel believes shares of CVS/Caremark (NYSE: CVS) represent a compelling risk/reward at these levels, initiating shares with an Overweight rating and $51 target, given the positive trends in the market and the likelihood of successful merger integration.

• Thomas Weisel believes Medco Health (NYSE: MHS) is well positioned to capitalize on continued generic conversions, starting shares with an Overweight rating and $100 target.

• Banc of America would be buyers of Blackboard (NASDAQ: BBBB) current levels, initiating shares with a Buy rating and $50 target, given the company's defensible business model and market leadership position.

OTHER INITIATIONS:

• UBS started Gaylord Entertainment (NYSE: GET) with a Neutral rating.

• Leerink Swann initiated Phase Forward (NASDAQ: PFWD) with a Market Perform rating and $19-$20 valuation range.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

More and more folks these days are snagging education credits via the Web. A leading developer of the software that allows for such non-corpus participation is headquartered in Washington, DC.

Blackboard (NASDAQ: BBBB) develops Internet software that connects teachers and students for classes, assignments and online collaboration. The programs also include transaction, community and payment management tools that enable students to use their school IDs for meals, event admissions and tuition payments. Blackboard serves the K-12 and postsecondary education markets.

The firm surprised the Street last week, when it reported Q1 EPS of seven cents and revenues of $55.3 million. Analysts had been expecting five cents and $53.6 million. Management also guided Q2 EPS to 8-10 cents (7 cent consensus), Q2 revenues to $58-$59 million ($57.20M consensus), FY07 EPS to 35-41 cents (39 cent consensus) and FY07 revenues to $233-$236 million ($234.32M consensus). First Albany and Wedbush Morgan subsequently reiterated "buy" ratings on the stock. Shares popped above 30-day/50-day moving average support on the news and began consolidating the gain in a bullish "pennant" pattern. Equities frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Altogether, brokers recommend the issue with five "strong buys," four "buys" and two "holds." Analysts see a 39% growth rate, through the next year. The BBBB Sales Growth rate (46.63%) and EPS Growth rate (1700%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 89% of the outstanding shares. Over the past 12 months, the stock has traded between $22.78 and $40.06. A stop-loss of $33.75 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.