Analyst upgrades:

• FBR Capital upgraded M&T Bank (NYSE: MTB) to Market Perform from Underperform following the Q3 results to reflect the company's improved earnings outlook and better credit trends. The firm has a $70 price target on shares.
• Kaufman Bros. upgraded Autodesk (NASDAQ: ADSK) to Buy from Hold as it believes a bottom has been reached in the manufacturing and construction industries. The firm raised its target on shares to $30 from $26.
• Goldman upgraded Caterpillar (NYSE: CAT) to Neutral from Sell and raised its target to $64 from $48 citing improved cost controls and construction outlook.
• Pentair (NYSE: PNR) was upgraded to Buy from Hold at KeyBanc.
• Lexmark (NYSE: LXK) was upgraded to Neutral from Underweight at JPMorgan.
• Stryker (NYSE: SYK) was upgraded to Neutral from Underperform at BofA/Merrill.

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

• Alcoa Inc. (NYSE: AA) kicked off the new season with a larger-than-expected loss due to the economic slump.
• Allscripts-Misys Healthcare Solutions (NASDAQ: MDRX) reported better-than-expected Q2 earnings.
• Apollo Group Inc. (NASDAQ: APOL) share price soared after its strong Q1 earnings and guidance.
• Apple Inc. (NASDAQ: AAPL) earnings prospects without CEO Steve Jobs led to an analyst's downgrade.
• Autodesk Inc. (NASDAQ: ADSK) lowered its guidance as business slows at an unprcedented rate.
• Bank of America Corp. (NYSE: BAC) reported terrible Q4 results and receivbed additional TARP money.
• Bunge Ltd. (NYSE: BG) lowered its 2008 earnings estimate due to soft soybean commodity markets.
• Citigroup Inc. (NYSE: C) posted a much bigger-than-expected loss and said it would split in two.
• Coventry Health Care Inc. (NYSE: CVH) offered full-year guidance that was less than analysts expectations.
• CSX Corp. (NYSE: CSX) forecast Q4 earnings would come in below analysts' expectations.
• CVS Caremark Corp. (NYSE: CVS) increased its quarterly dividend despite the recent lowered guidance.
• Deutsche Bank (NYSE: DB) reported a net loss for Q4 and the full year, dragging down the sector.
• Genentech Inc. (NASDAQ: DNA) revenue and earnings surged but were lower than analysts estimated.
• Intel Corp. (NASDAQ: INTC) Q4 results were in line with low expectations as the gross margin declined.
• JPMorgan Chase & Co. (NYSE: JPM) reported a huge drop in Q4 earnings but it stayed in the black.
• Lexmark International Inc. (NYSE: LXK) slashed its Q4 outlook and announced job cuts.
• Pentair Inc. (NYSE: PNR) efforts to limit an earnings decline led to a buy recommendation.
• Precision Cast Corp. (NYSE: PCP) earnings prospects following the recent rally led to an analyst's downgrade.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

Rochester, New York-based Eastman Kodak Co. (NYSE: EK) was founded in 1892, and is well known for its wide range of photographic film products; it remains to this day the largest supplier of photographic films in the world. The company played a vital role in the invention and development of the motion picture industry, setting the standard of 35 mm film.

But times change. In 1999, Kodak entered into the consumer inkjet photo printers market in a joint venture with manufacturer Lexmark (NYSE: LXK). In 2004, Kodak announced it would stop producing traditional film cameras, beginning a multiyear struggle to refocus on digital photography and printing. Some of the results of that effort include the Kodak Smart Picture Frame, into which digital files are downloadable via a network connection. The Kodak Gallery is a website where users can upload photos into albums, print them out, and create mouse pads, calendars, and the like. And in 2006 Kodak announced that Flextronics (NASDAQ: FLEX) would manufacture and help design its digital cameras. Kodak also has long-term plans to sell ink jet printers and flat-panel displays.

Lexmark (NYSE: LXK) is trading up 13% on good earnings.

VMWare (NYSE: VMW) is down 25% on a weak forecast.

Zoran (NASDAQ:Z RAN) is off almost 20% on a poor outlook for Q1.

EMC (NYSE: EMC) is down 8% on VWWare results. EMC owns a large piece of VMW.

Trading in the pre-market may be different than trading in the regular session.

Douglas A. McIntyre is an editor at 247wallst.com.

The earnings crunch continues to roll along, and here are a some highlights of this past week's earnings coverage from BloggingStocks:

• Aetna Inc. (NYSE: AET) beat expectations and raised its full-year guidance.
• Amazon.com Inc. (NASDAQ: AMZN) beat estimates by a penny and offered a poor outlook.
• American Express Co. (NYSE: AXP) delivered a positive surprise, with profits up 10%.
• Amgen Inc. (NASDAQ: AMGN) beat estimates, but revenue was flat.
• Anheuser-Busch Cos. (NYSE: BUD) beat expectations on strength of international sales and partner brands.
• Apple Inc. (NASDAQ: AAPL) blew past expectations. See our conference call live blog.
• Avery Dennison Corp.'s (NYSE: AVY) net sales up, EPS down, both due to the Paxar acquisition.
• Baidu.com Inc. (NASDAQ: BIDU) beat expectations, but wariness about its growth potential lingers.
• Boeing Co. (NYSE: BA) beat expectations but lowered its guidance.
• Bristol-Myers Squibb (NYSE: BMY) beat expectations on the strength of Plavix sales.
• CNH Global's (NYSE: CNH) profit nearly doubled, beating estimates by 15%.
• Coach Inc. (NYSE: COH) beat estimates by a penny, but offered a conservative outlook for the holidays.
• Comcast Corp. (NASDAQ: CMCSA) met EPS expectations but cut its cash flow forecast.
• Countrywide Financial Corp. (NYSE: CFC) reported a $1.2 billion loss, but predicts a profit in the next quarter.

Shares of printer maker Lexmark (NYSE: LXK) have been taking a hit today after the company reported its third quarter earnings this morning. The stock has traded down 7.8 percent in early morning trading.

The company blamed the weak quarter on poor printer sales, which contributed to a 47% decline in quarterly profit for the quarter. Lexmark sold fewer printers in the quarter than it had anticipated, with laser printer shipments dropping 7 percent.

Net income was reported to be $45.2 million, or 48 cents for the quarter. This is well below the $85.6 million, or 85 cents that the company reported during the same period last year. Revenue was down 3 percent to $1.195 billion.

Lexmark also discussed a restructuring plan that it estimates will cost around $90 million between now and the end of 2008.

Looking ahead to the fourth quarter, the company expects to see revenue in the low-single-digit range, with earnings of 42 cents per share.

[Photo: cpchannel]

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer

Visit AOL Money & Finance for more earnings coverage

The M&A rumor mill hyping a buyout of Lexmark International Group (NYSE: LXK) by Xerox Corp. (NYSE: XRX) has been silenced. On Friday, when Xerox reported a 53% drop in third-quarter earnings, company CEO Anne Mulcahy commented on a suggestion that her firm might be looking to buy rival printing concern LXK.

She quickly put these allegations to rest, noting: "I don't think Lexmark is an ideal candidate . . . there is nothing [it] would bring to the table that would be really value-creating for us."

But Mulcahy certainly is not acquisition-averse; she has overseen Xerox's purchase of four companies in the past 15 months. She noted that Xerox hasn't ruled out deals with smaller companies that would help bulk up her company's software offerings.

Hewlett-Packard (NYSE: HPQ) has introduced another technology that demonstrates why the company often out-flanks rivals. The new product, which is free, allows mobile PC users to print documents on almost any printer. According to The New York Times, the system is called "Cloudprint".

The feature uses server-based software run on hardware owned and operated by HP. The Times writes that :"The service requires users to first "print" their documents to H.P. servers connected to the Internet. The system then assigns them a document code, and transmits that code to a cellphone, making it possible to retrieve and print the documents from any location." HP hopes the service will drive printer and ink sales.

HP's printing and imaging group is critical to the company's success. According to the HP 10-Q, the division represents 27% of the company's annual revenue and will do almost $30 billion this year. The operation competes with Lexmark (NYSE: LXK), Canon (NYSE: CAJ), and Kodak (NYSE: EK) for market share in the huge global printer market.

The HP initiative is an example of how the company's innovation prowess is keeping it ahead of its competition, but it is also a sign that server-based applications are growing in importance. Google (NASDAQ: GOOG) is offering several server-based products including its document and spreadsheet products. The move is seen as a challenge to Microsoft (NASDAQ: MSFT) which creates software the works primarily on individual PCs.

HPQ shares are up 80% over the last two years. but the company is not waiting for the competition to catch its breath.

Douglas A. McIntyre is a partner at 24/7 Wall St.

MOST NOTEWORTHY: Websence (WBSN), RF Micro Devices (RFMD), Fiserv (FISV), Qwest (Q), and OSI Pharma (OSIP) were today's noteworthy upgrades:

• JP Morgan upgraded shares of Websence (NASDAQ: WBSN) to Overweight from Underweight ahead of the renewal period starting in the December quarter and expects this momentum to drive shares higher.

• RF Micro Devices (NASDAQ: RFMD) was raised to Buy from Hold at Citigroup, who said the Sirenza Microdevices (SMDI) deal gives the company its first real prospect for gross margin expansion in years.

• Matrix USA upgraded Fiserv (NASDAQ: FISV) to Buy from Sell, and expects the company to benefit from the Checkfree (CKFR) acquisition.

• Lehman upgraded shares of Qwest (NYSE: Q) to Overweight from Equal Weight, citing the hiring of industry veteran Ed Mueller as CEO. The firm believes the new CEO removes an overhang and could lead to a change in strategic direction and significantly increase capital spending.

• JP Morgan upgraded OSI Pharma (NASDAQ: OSIP) to Overweight from Underweight based on valuation and upcoming catalysts for Tarceva that should be seen in the next year...

OTHER UPGRADES:

• UBS upgraded Allstate (NYSE: ALL) to Neutral from Sell.

• ThinkEquity raised Hansen Medical (NASDAQ: HNSN) to Buy from Accumulate.

• Stanford upgraded Leap Wireless (NASDAQ: LEAP) to Buy from Hold.

• FTN Midwest upgraded shares of Lexmark (NYSE: LXK) to Neutral from Sell.

• Hambrecht upgraded NetGear (NASDAQ: NTGR) to Buy from Hold.

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

Hewlett-Packard Co. (NYSE: HPQ) opened at $45.30. So far today the stock has hit a low of $45.12 and a high of $45.44. As of 11:00, HPQ is trading at 45.29, down 0.07 (-0.1%).

After hitting a one-year high of 46.29 a month ago, the stock has been flat with resistance at 46 over the past four weeks. Jim Cramer thinks the stock is having a great quarter, based on printer sales, and is gaining market share on Lexmark (NYSE: LXK). In his blog today, Cramer reiterated that he thinks there are lots of good buys right now in tech. Recent technical indicators for HPQ have been bullish but deteriorating, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $37.50 range. HPQ hasn't been below $37.50 since September and has shown support around $44.50 recently. This trade could be risky if the company's earnings (due out August 16) disappoint, but even if that happens, it looks like this stock could find support right near $40, plus it could be propped up by its 200-day moving average, which is around $41 and rising.

Brent Archer is an options analyst and writer at Investors Observer. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You When To Dump A Stock.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions HPQ.

Main market news here.

Lexmark International Inc. (NYSE: LXK) lowered its outlook for the second quarter, saying consumer inkjet supply sales will hurt results in the second quarter. Analysts had been expecting Lexmark to earn 86 cents per share on revenue of $1.21 billion according to Thomson. The company now expects to earn 62 cents to 67 cents per share excluding restructuring-related benefits on revenues of about $1.2 billion. LXK shares down nearly 12.6% in pre-market trading (8:16 a.m.).

Ford Motor Co. (NYSE: F) and power utility Southern California Edison will team up to test rechargeable hybrid vehicles. This unusual cooperation should be announced today as the companies test the plug-in hybrid vehicle technology.

Following Sony Corp.'s (NYSE: SNE) announcement that it would slash the prices of the PlayStation 3 gaming console by $100 in Japan, Microsoft Corp. (NASDAQ: MSFT) said it has no plans to cut the Japanese prices of its Xbox 360.

As the lineups for the Apple Inc.'s (NASDAQ: AAPL) iPhone wind down and those who didn't buy one can actually play with one for half an hour at an Apple store and appreciate how slick and sexy it is, the rest of the world prepares for it. The Guardian wrote on Friday that European mobile phone companies aren't all that happy with Apple's demands to "hand over a a significant proportion of revenues generated by the iPhone and restrict the content that users can access."

Google Inc. (NASDAQ: GOOG) announced it agreed to buy Postini, a electronic communications (e-mail, instant messaging etc.) security software provider, for $625 million in cash.

More problems with the Airbus caused the parent, EADS, to agree to streamline its management structure (management shakeup in short). Airbus is facing stiff competition from Boeing's (NYSE: BA) new 787 Dreamliner, while its own A380 superjumbo jet is facing production and other problems. In addition, there's an escalating dispute between Airbus and its jet-engine supplier General Electric Co. (NYSE: GE). BA shares are up 2.6% in pre-market trading (8:14 a.m.) after the company unveiled a fully assembled 787 jet yesterday.

Back in the early 1990s, Clayton, Dubilier, and Rice bought Lexmark International (NYSE: LXK). It was a notable deal because private equity firms were mostly hands-off with tech companies.

Yet it turned out to be a strong performer for Clayton.

Interestingly enough, there's scuttlebutt that Lexmark will go private again. This is based on the analysis of Toni Sacconaghi, who is an analyst with Bernstein Research.

Crunching the numbers, Lexmark sports an enterprise-to-EBITDA ratio of about 6X or so (the shares have lost almost a third this year). This is pretty cheap when you look at other tech buyouts, such as First Data Corp (NYSE: FDC) and Alltel (NYSE: AT).

Then again, there may be a good reason for the relatively low valuation. That is, Lexmark is in a highly cyclical business (printers). In fact, it does look like information technology (IT) spending is slowing down in North America.

Also, Lexmark's licensing deals with Hewlett-Packard (NYSE: HPQ) and Canon could pose a problem. In other words, they could possibly be canceled if there is an acquisition from a strategic buyer.

In today's trading, Lexmark's shares rose 1.61% to $51.65.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

MOST NOTEWORTHY: Today's more noteworthy downgrades included L-1 Identity Solutions, Inc (ID), THQ Inc (THQI), JetBlue Airways Corp (JBLU), Brinker International, Inc (EAT) and Lexmark International, Inc (LXK):

• JP Morgan downgraded L-1 Identity Solutions (NYSE: ID) to Underweight from Neutral based on valuation.

• THQ Inc (NASDAQ: THQI) was cut to Neutral from Buy at Banc of America, as the firm believes further upside to estimates is limited.

• JetBlue Airways (NASDAQ: JBLU) was cut to Neutral from Add at Calyon and to Peer Perform from Outperform at Bear Stearns following reduced guidance and higher fuel costs.

• JP Morgan downgraded Brinker International (NYSE: EAT) to Neutral from Overweight citing challenging fundamentals after the restructuring announcement. Stephens cut Brinker International to Equal Weight from Overweight.

• Elsewhere, Citigroup cut Lexmark Int'l (NYSE: LXK) to Hold from Buy with a $58 target based on valuation...

OTHER DOWNGRADES:

• Hutichinson Technology Inc (NASDAQ: HTCH) was cut to Underweight from Overweight at JP Morgan.
  

• Punk, Ziegel & Co downgraded KeyCorp (NYSE: KEY) to Sell from Market Perform.

• WR Hambrecht downgraded shares of Silicon Storage Technology, Inc (NASDAQ: SSTI) to Sell from Hold to reflect negative fundamentals in the NOR Flash memory market.

• CIBC downgraded Ipsco Inc (NYSE: IPS) to Sector Underperformer from Sector Performer on valuation.

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