In this week's (November 9) Preview Section of Barron's (subscription required) I was surprised to find that on Wednesday (11/9) it is noted that Computer Sciences (CSC), Applied Materials (AMAT), and Macy's (M) reported "profits." How do they know this?

On other days they refer to the "earnings" of various companies reporting. Perhaps I am splitting hairs, perhaps it is editorial haste (like you might find on our site), or perhaps there is no difference in some people's minds? From my perspective there is a difference between earnings and profits. Every quarter, public companies report their earnings. They do not always report a profit.

Analyst upgrades:

• Kaufman Bros. upgraded Computer Sciences (NYSE: CSC) and Cognizant (NASDAQ: CTSH) to Buy from Hold on better demand trends as it believes overall enterprise IT spending is turning more positive. The firm raised its target on Computer Sciences to $62 from $54 and on Cognizant to $45 from $42.
• Citigroup upgraded E-Trade (NASDAQ: ETFC) to Buy from Hold as it believes loan less trends have improved and the company could potentially be acquired. Citi raised its target on shares to $2.30 from $1.50.
• Auriga upgraded Microsoft (NASDAQ: MSFT) to Buy from Hold as it believes consensus expectations for 2010 are too low, but admits the company's Q1 results could be fairly weak. Auriga believes Microsoft is coming up to its "most powerful product cycle in many years" and raised its price target on shares to $30 from $24.
• Motorola (NYSE: MOT) was upgraded to Buy from Neutral at UBS.
• Fidelity Southern (NASDAQ: LION) was upgraded to Neutral from Reduce at SunTrust.
• Sonoco Products (NYSE: SON) was upgraded to Buy from Neutral at BofA/Merrill.

Analyst upgrades:

• Goldman upgraded shares of Daimler (NYSE: DAI) to Buy from Neutral as it believes the company's restructuring and greater visibility on its outlook could be positive for the stock.
  
• JP Morgan upgraded shares of Goodyear Tire (NYSE: GT) and Cooper Tire (NYSE: CTB) to Overweight from Neutral on expectations that industry volumes will improve in the coming quarters.
  
• Friedman Billings upgraded Websense (NASDAQ: WBSN) following the company's better than expected preliminary Q1 results. The firm maintains a $17 target on shares.
• Ruby Tuesday (NYSE: RT) was upgraded to Buy from Hold at KeyBanc.
  
• Portfolio Recovery (NASDAQ: PRAA) was raised to Buy from Neutral at SunTrust.

Analyst upgrades:

• JP Morgan upgraded Alcoa (NYSE: AA) to Overweight from Neutral and added shares to its Focus List. The analyst said the equity offering and dividend cut provide enough "liquidity insurance" to make it through 2009 and now views risk/reward as attractive.
  
• Deutsche Bank upgraded Asbury Automotive (NYSE: ABG) to Buy from Hold as it finds the current valuation attractive and thinks the company's cost savings will drive upside in a recovery. The firm raised its target price to $7 from $5.50.
  
• Barclays upgraded Beckman Coulter (NYSE: BEC) to Overweight from Equal Weight. Following their healthcare conference and management meetings, the firm sees increased visibility into revenues.
• Waddell & Reed (NYSE: WDR) was raised to Buy from Neutral at Goldman.
  
• Nokia (NYSE: NOK) was upgraded to Outperform from Neutral at Credit Suisse.
  
• Brocade (NASDAQ: BRCD) was lifted to Outperform from Sector Perform at RBC Capital.

Best Buy Inc. (NYSE: BBY) shares are down after the company said it sees softer consumer spending and lowered fiscal 2009 EPS guidance.

American Express Co. (NYSE: AXP) -- The Wall Street Journal reported that according to its sources, AmEx is seeking about $3.5 billion from the U.S. government to help boost its balance sheet. This follows Monday's Federal approval for AmEx to become a bank holding company.

General Motors Corp. (NYSE: GM) -- House Speaker Nancy Pelosi thinks GM is too big to fail and wants Congress to support a financial assistance for the troubled U.S. auto industry. This follows Obama urging Bush to support aid for struggling automakers and Democrats in Congress passing legislation that would give GM, Ford Motor Co. (NYSE: F) and Chrysler access to $25 billion in government-backed loans. But automakers need more. GM shares are trading higher.

Prudential Financial Inc. (NYSE: PRU) said late Tuesday it will pay a dividend of 58 cents per share on Dec. 19 to shareholders of record at the close of business on Nov. 24. This 2008 annual dividend is roughly half of the $1.15 per share it paid out to shareholders last year.

Office Depot (NYSE: ODP) closed at $13.81 Thursday, near a six-year low.

ODP has a market cap of $3.7 billion. ODP has long term debt of $581 million. ODP reported total September 2007 revenue of $3.9 billion. ODP has been frequently mentioned buyout candidate over the last two years.

ODP overall option implied volatility of 59 is above its 26-week average of 49 according to Track Data, suggesting larger risk.

Computer Sciences (NYSE: CSC) closed at$39.20 Thursday.

CSC is scheduled to report EPS on February 4. CSC

February option implied volatility of 44 is above its 26-week average of 33 according to Track Data, suggesting larger price fluctuations.

Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

MOST NOTEWORTHY: Bear Stearns, Omnicare, Kforce.com and Wyeth were today's noteworthy downgrades:

• Bear Stearns Companies (NYSE: BSC) was downgraded to Neutral from Buy at Banc of America to reflect weaker fixed income trends, challenges in prime-brokerage and asset management, and no positive catalysts. They feel the stock is "dead money" for the next 6-12 months.
  
• Morgan Stanley lowered Omnicare Inc's (NYSE: OCR) rating to Underweight from Equal Weight citing the Department of Justice's inquiry into the company's business practices.
• Suntrust believes Street expectations for Kforce Inc (NASDAQ: KFRC) may be too optimistic given a potential slowdown in finance and accounting temporary staffing volumes and downgraded shares to Neutral from Buy.
• Wyeth (NYSE: WYE) was downgraded to Hold from Buy at Citigroup to reflect a more negative industry outlook, recent pipeline setbacks and the negative court ruling related to the Protonix litigation.

OTHER DOWNGRADES:

• EMC Corporation (NYSE: EMC) was removed from Goldman's Conviction Buy List.
• Stanford downgraded shares of Alabama National Bancorp (NASDAQ: ALAB) to Hold from Buy.
• Computer Sciences Corporation (NYSE: CSC) was downgraded to Hold from Buy at Sandler.

MOST NOTEWORTHY: Cisco Systems (CSCO), Finisar Corp (FNSR), Tenet Healthcare (THC), Best Buy (BBY) and Cascade Corp (CAE) were today's noteworthy upgrades:

• Bear Stearns upgraded shares of Cisco Systems (NASDAQ: CSCO) to Outperform from Peer Perform, with a $36 target, after the quarterly results as they believe revenue growth is sustainable and diversified. Bear expects Cisco to benefit from significant new product cycles over the next two years and believes investments in emerging markets are beginning to pay off.
  

• Merriman upgraded Finisar (NASDAQ: FNSR) to Buy from Neutral to reflect the improved outlook at their top customer, Cisco.

• Tenet Healthcare (NYSE: THC) was upgraded to Hold from Sell at Stifel, as the firm expects shares to remain range bound.

• Pali Capital raised shares of Best Buy (NYSE: BBY) to Buy from Neutral with a $55 target on valuation as they believe the bad news is already priced in.

• Cascade (NYSE: CAE) was upgraded to Market Perform from Underperform at Rodman & Renshaw on valuation.

OTHER UPGRADES:

• Warner Music (NYSE: WMG) was upgraded to Buy from Sell with a $13 target at Citigroup.

• Citigroup also upgraded shares of Copa Holdings (NYSE: CPA) to Buy from Hold with a $71 target.

• Baird upgraded shares of Parkway Properties (NYSE: PKY) to Outperform from Neutral on valuation.

• Computer Sciences (NYSE: CSC) was raised to Hold from Underperform at Jefferies on valuation and improvement in bookings.

• Morgan Stanley upgraded ABB Ltd (NYSE: ABB) to Overweight from Equal Weight.

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

Computer Sciences(NYSE:CSC) call volume and volatility spikes on renewed speculation. CSC is recently up .97 to $61.27 on unconfirmed deal chatter Blackstone(NYSE:BX) or Hewlett Packard (NYSE:HPQ) will make a bid. CSC is frequently chatted as being sold to IBM (NYSE:IBM), Lockheed Martin(NYSE:LMT), United Technologies (NYSE:UTX) or private equity after Apollo Managements' bid for the CSC failed in the spring of 2006. CSC July 62.5 calls have traded 126 times on transaction volume of 3,459 contracts above its open interest of 2,356 contracts. CSC August option implied volatility of 36 is above its 26-week average of 25 according to Track Data, suggesting larger price fluctuations.

Option volume leaders today are: Novastar Financial (NASDAQ:NFI) and Apple Computer (NASDAQ:AAPL).

Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Next week's highlights include Covansys' shareholders meeting, where the Computer Sciences Corp acquistion will be discussed.


Monday June 25

• Target Corporation (NYSE: TGT) to hold mid-June sales call at 4:30pm.

Tuesday June 26

• PDUFA date for Sanofi-Aventis SA's (NYSE: SNY) Acomplia for weight loss.
• Nike Inc (NYSE: NKE) to report Q4 earnings; conference call at 5pm.
• Oracle Corporation (NASDAQ: ORCL) to report Q4 earnings; conference call at 5pm.

Wednesday June 27

• Covansys Corporation (NASDAQ: CVNS) to hold a special shareholder meeting at 9am in Detroit on the acquisition by Computer Sciences Corporation (NYSE: CSC).
• Sierra Health Services Inc (NYSE: SIE) to hold special shareholder meeting at 4pm in Las Vegas on proposed acquisition by UnitedHealth Group Incorporated (NYSE: UNH).
• Bed Bath & Beyond Inc (NASDAQ: BBBY) to report Q1 earnings; conference call at 5pm.

Thursday June 28

• Palm Inc (NASDAQ: PALM) to report Q4 earnings; conference call at 4:30pm.
• Research in Motion Limited (NASDAQ: RIMM) to report Q1 earnings; conference call at 5pm.

Friday June 29

• Finish Line Inc (NASDAQ: FINL) to report Q1 earnings; conference call at 8:30am.

With the market being propelled upward due to private equity and corporate acquisitions, investors should not stay on the sidelines. Rather, they should target private equity's next frontier -- IT services. Of the companies in this sector, Unisys Corp. (NYSE: UIS), Perot Systems Corp. (NYSE: PER) and Ingram Micro, Inc. (NYSE: IM) may be worth examining.

A few months ago, I suggested several sectors and companies that private equity could target next. On Friday, TheStreet.com reiterated one of those sectors -- IT services. Here's how much seven such companies have gone up or down since my March 29th post along with their market capitalizations ranked by their Price/Earnings to Earnings Growth (PEG) ratios:

Just as in the corporate world, government agencies seem to have "go to" consultants. So far as the defense community is concerned, there is an outfit headquartered in San Diego, California that is on the list.

SAIC, Inc. (NYSE: SAI) provides scientific, engineering, systems integration and technical services to all branches of the U.S. military, agencies of the Department of Defense, the intelligence community, the U.S. Department of Homeland Security and other U.S. Government civil agencies. The firm also offers technology-driven consulting services to the oil & gas, utility and pharmaceutical industries. SAIC employs more than 44,000 people, in over 150 cities worldwide. Major competitors include Lockheed Martin (NYSE: LMT) and Computer Sciences Corporation (NYSE: CSC).

The firm pleased investors last week, when it reported Q4 EPS of 20 cents and revenues of $2.15 billion. Street analysts had been looking for 17 cents and $2.07 billion. Management also guided FY08 EPS to 83-88 cents (85 cent consensus) and FY08 revenues to $8.7-9.0 billion ($8.77B consensus).

Brent Bracelin, an analyst with Pacific Crest Securities, is warming up to Dell Inc. (NASDAQ: DELL). He notched his rating from "Sector perform" to "outperform."

And with $12.5 billion in the bank, Dell might start shopping for buyout prey. Why? He thinks the company will want to expand aggressively into the services space -- which would certainly be an extension of its PC business.

Here are some of Bracelin's picks:

Computer Sciences (NYSE: CSC)
Perot Systems Corp. (NYSE: PER)
Unisys Corp. (NYSE: UIS)
TechTeam Global Inc. (NASDAQ: TEAM)

Bracelin thinks Dell might also look at companies with proprietary technology. An interesting target is actually Sun Microsystems (NASDAQ: SUNW).

Although, it's mostly a yawn for the Street. Dell's stock is up $0.25 to $23.76.

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