Daily Archives: May 17, 2007

Cramer’s “Sell Block” is All Solar Stocks, No More Green

Cramer is saying that his SELL BLOCK is a sell for all solar-related stocks: SunPower (SPWR) and as of today a huge lock-up is expiring in First Solar (FSLR) and insiders can sell 40 million shares.  Evergreen Solar (ESLR) is selling 15 million shares and Trina Solar (TSL) sold shares.  There are too many IPO’s coming out like China Solar, GT Solar, Ying Lee, and others.  Cramer just thinks that the flood of solar companies is going to lead to a huge oversupply that will overwhelm the entire sector. 

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 17, 2007 – 5:28 pm in Alternative Energy, Cramer

Cramer’s Third and Fourth Transformational CEO’s (WWY, HON)

On Wednesday evening, the third installment of Cramer’s "Top Transformational CEO’s" on Mad Money on CNBC is Dave Cote of Honeywell (HON).  When he came in things were horrible.  They had asbestos issues and there was no integration between Allied Signal.  Morale was low and it didn’t know what sort of company it was, and was rocked by the GE takeover attempt.  It is now up almost 75% since he took over.   

This CEO has definitely helped Honeywell.  No one talks about them being takeover bait any longer because the stock has done well and its valuations are not as dirt cheap as in the past.  Other than that, we’ll have to trust Cramer on this.

The fourth member of Cramer’s "Transformational CEO’s List" is William Perez of Wrigley (WWY-NYSE) is led by a transformational CEO.  He had to figure out how to grow, but not so uch ruffling the chairman of the founding family.  Now they have added more products that are turning out to be wins with added aisle space.  The stock is up roughly 27% and he had run teh private SC Johnson beforehand.  Cramer thinks Wrigley is going to beat estimates from here on out.

Wrigley is a bit of an odd-bird and it was surpising that this one was really chosen.  Hardly anyone ever dicsusses the name even though it is a $15.7 Billion market cap company.  Sometimes there is more safety and more quality in companies like this.  This one is also up roughly 64% in the last year.

Previously Cramer named H-P’s (HPQ) Mark Hurd as one of the transformational CEO’s.  Before Hurd, he also backed Fred Hassan of Schering-Plough (SGP) as the first transformational CEO.

Posted on: May 17, 2007 – 5:20 pm in Cramer, , , ,

Intuit Thinks Its Key Quarter Will Keep Going (INTU)

Intuit (INTU-NASDAQ) is a true odd-bird in technology and software, particularly since its last quarter is the crux of its entire year EPS year in and year out.  The company fell 8% in march on weak TurboTax sales although it stuck by guidance. Then it gave reiterated guidance again in April.  Mysteriously today, the company beat and suddenly "guided higher."  It sure sounds like these guys get overly pumped each year right after the first tax season rush.  Shares were less than 10% above the 52-week lows, yet all of a sudden shares are up 8% in after-hours up at $30.00.

INTU posted earnings of $1.13 non-GAAP EPS vs $1.08 estimates and revenues of $1.15 billion versus $1.12 billion estimates.  It also raised fiscal July-07 guidance: Revenue prior guidance: $2.625 billion to $2.675 billion, representing annual growth of 12-14%. New guidance: $2.685 billion to $2.7 billion, representing annual growth of approximately 15%. GAAP diluted earnings per share – Former guidance: $1.10 to $1.14. New guidance: $1.15 to $1.17.  Non-GAAP diluted earnings per share – Former guidance: $1.33 to $1.37. New guidance: $1.38 to $1.40. The new guidance represents annual EPS growth of 14-16%.

Intuit also announced today a new stock repurchase program for up to $800 million over the next three years. Intuit used all remaining funds in its last $500 million repurchase program, authorized in May 2006, during its third-quarter 2007, which ended on April 30. Since authorizing its first stock repurchase program in May 2001, Intuit has spent approximately $3.7 billion to repurchase approximately 159 million shares of its stock.

It’s always amazing how some companies that have major seasonal operations like a tax software company are able to be so optimistic after their key quarter.  Oh well, it’s America and everyone is happier when they receive a one-time check.  This one is even more dependent upon your "trust of a company" than most, so skeptics may view this one with more questions even if it does actually all look good. 

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 17, 2007 – 4:06 pm in Earnings, Software,

JetBlue’s (JBLU) Blues

Moody’s decided today would be as good as any other to downgrade debt in JetBlue (JBLU). Moody’s, as quoted at MarketWatch said:  "continued high level of financial leverage following several years of rapid, largely debt-financed growth of its aircraft fleet, and continued weak financial results … during a relatively good operating environment for the airlines."

Moody’s could have said that all of the JetBlue shareholders are nervous has hell after customers staged a revolt over poor service during a storm last February. Or, that pushing the CEO out made the airline feel a little unstable. Or, they could have said that Wall St. doesn’t understand why JetBlue’s stock cannot outperform that of a big carrier with huge legacy expenses like American (AMR).

Never mind.

Douglas A. McIntyre

Posted on: May 17, 2007 – 3:49 pm in Uncategorized

Autodesk Must Run on Auto-Pilot (ADSK)

Autodesk (ADSK-NASDAQ) posted revenues of $509 million versus $499.9 million estimates.

GUIDANCE: Net revenues for the second quarter of fiscal 2008 are expected to be in the range of $520 million to $530 million. Non-GAAP operating margins for the second quarter of fiscal 2008 are expected to be in the range of 24.5 to 25.4 percent.  The current revenue estimate is $512.8 million, so that is 1.75-3.75% higher.

For fiscal year 2008, net revenues are expected to be between $2.115 billion and $2.150 billion. Non-GAAP operating margins for fiscal year 2008 are expected to be in the range of 27 to 27.5 percent.  The consensus estimate is $2.12 billion, so this actually within the range if the company isn’t just trying to be conservative.

The company ended with a $186 million cash increase to $964 million, channel inventory was below the normal 4 to 4 weeks, and days sales outstanding fell to 47 days.  Its results were driven by strong increases in revenue from model-based 3D design products, maintenance revenue from subscription, revenue in the emerging economies, and revenue from new seats.

The company is not showing formal EPS and EPS guidance because of their stock options review, but at least they showed the bulk of the other data and showed that business is growing.  Shares closed down 1% at $43.30, but shares are back up 3% from the close to $44.60 in after-hours trading.  Its 52-week trading range is $29.56 to $45.19.  Shares are within about 10% of most Buy targets, so we’ll have to see how the analysts rate the stock in the morning for a last direction.

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 17, 2007 – 3:44 pm in Earnings, Software,

Marvell Gives Limited Results, Very Limited (MRVL)

Marvell Technology (MRVL-NASDAQ) has posted revenues of $635.1 million versus $646 million estimates.  The company is also is late "yet again" on SEC filings and said that revenue growth in the quarter was limited due to weak demand.  Naturally there is no guidance before the conference call.  They didn’t even comment an iota on assets or liabilities.  If they comment about ‘weak demand’ and gave no hint at guidance, is there any way to think that this gives the warm fuzzy feeling?  Not here.  These companies need to get their acts together and the NASD needs to start forcing a "D" on the end of the tickers like they used to.  This is all part of why the company is scraping close to year lows again.

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 17, 2007 – 3:28 pm in Earnings, Semiconductor, Technology Companies, WiMAX, Wireless,

Discovery’s Store Closure Doesn’t Sound Like a Buyout is Coming

Discovery Communications (DISCA-NASDAQ) is announcing that it is closing the rest of its mall based stores to focus more on its own e-commerce branding and to focus on ‘other retailer’ distribution channels.  This will cut off 25% of its workforce or about 1,000 workers.  It also is increasing its Animal Planet brands with Toys R Us and will look for more television sales.  So it is closing 103 mall-based Discovery stores.  It claims that it has 12 million unique visitors to its DiscoveryStore,com e-commerce site and has relationships through Amazon.com and eBay.  The 2006 e-commerc growth was a record growth and sales are up 144% year-to-date.  This is part of the strategic review that was led by J.P.Morgan, and it is hiring Gordon Brothers Group as an advisory and restructuring to help with the closures and liquidations. 

Jim Cramer on a May 8, 2007 Mad Money episode said this could be a buyout target, but it sure doesn’t sound and act like a buyout target here.  There is also a financial structure that is more complicated than elsewhere.  The company sin’t specific on charges but this is going to blow-out cash flows and lower profit hopes farther out.  That is not the sort of issue that sounds like a buyout candidate in a flood of other "value companies" that can be acquired for cash flows.  Maybe a deal is possible, but this doesn’t sound like that great of takeover material on the surface.

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 17, 2007 – 3:19 pm in Cramer, Entertainment, Media, Mergers and Buy Outs, Retail,

The 52-Week Low Club

Doral Financial (DRL) Bear Stearns buying 90% of firm. Doral will use the proceeds, together with other transactions, to repay at maturity its $625 million floating rate senior notes due July 20 and to pay for a class action shareholder lawsuit settlement. Stock down to $.91 from 52-week high of $7.83.

Newmont Mining (NEM) Moody’s gives it a downgrade to negative from stable, citing higher operating costs and significant capital expenditures. Shares fall to $38.85 from 52-week high of $56.50.

Worldgate Communications (WGAT) Provider of personal video phones had a bad first quarter, and does not have a ton of cash left. Shares fall to $.45 from 52-week high of $2.16.

Opnext (OPXT) Company invovled in the design and manufacturing of optical modules and components has good quarter but bad guidance. Recent IPO down to $11.20 from high of $19.95.

Source Interlink (SORC) Market still unhappy about magazine, CD and DVD distributor buying part of Primedia magazine operations. Down to $5.49 from 52-week high of $12.89.

Douglas A. McIntyre

Posted on: May 17, 2007 – 3:02 pm in Uncategorized

Starbucks: A Buy At What Price?

There have been a slew of articles the past week about the price of Starbucks (SBUX) shares and whether or not now is the time to buy them.  Let’s look closer.  Currently Starbucks shares trade at $28 for a PE ratio of 31 times this years 89 cents a share earnings estimate.  Many people consider this a bargain saying "Starbucks shares have not  traded at this level since Oct. 2005."  But is Starbucks situation now the same as then?
Sbuxescher_4 In a word, no.  If they hit their EPS growth goal, Starbucks will grow earning this years 18% vs the 30% they grew them in 2005 and as each day goes by, that "if" becomes larger and larger. A closer look at last quarters earning shed some light on upcoming difficulties.  Earning were met chiefly due to an unusually large $500 million share buyback and enabled Starbucks to gloss over the fact that margins continue to deteriorate. This buyback become larger when you consider in all of 2006 only $695 million worth of shares were repurchased. 
What has not been discussed is the dairy and coffee situation. Both are going to experience an explosion in prices this year and Starbucks did disclose in the recent earnings call that they are not able to "substantially" hedge against these increases because a buyer for the hedge on the other side is not available. Translation?

Everyone knows these prices are going up these, so other than additional prices increases to their customers, Starbucks has no way of avoiding these cost increases going directly to the bottom line.  Add the fact that they only served 1% more people, you now have a recipe for accelerating margin decreases.
This will increase the already deteriorating margin picture and may now begin to effect growth plans.  When margins continue to decline, in order for Starbucks to retain it’s over ambitious growth plans, it will need to rely increasingly on debt.  Note that in the recent quarter $488 million net in debt was issued which was more than twice the sum total of the past 6 years.
So what price then?  Shares have to fall substantially from here before anyone should consider them.  Starbucks has traditionally sold at a slight premium PE (1.25 to 1.5 times) to it’s growth rate.  With that rate at this year at MAYBE 18%, its current 31 PE is grossly over valued.   A price range of $22 to $27 put us in a historic PE to Earnings Growth range. Now, that also assumes they hit the 18% EPS growth which I am doubting more and more as each day passes. 
With all the uncertainty surrounding the company at this point, I could not even begin to consider shares at any price other than the lowest end of the range, $22 or another 21% lower than currently. 
Disclaimer: I have no nor have I ever had any position in Starbucks
Todd Sullivan
5/17/207   
Posted on: May 17, 2007 – 1:12 pm in Uncategorized

Napster (NAPS) gets a lesson in reality, say hello to Amazon.com’s MP3 store

NNapsterapster Inc. (NAPS) is down 8% today after reporting a weak Q1 guidance yesterday. Napster missed revenue estimates in the April to June quarter by $3.5 million, still they are expecting $31 million for the time period. Net revenues for the Q4 06 were $29.1 million, up 9% from $26.8 million in the prior year quarter. Shares of Napster are trading around $3.70 and considering the 52-week range of $2.55 to $4.92, that’s not so bad.

So what did the analysts think after the call?        

ThinkEquity Partners felt more "upbeat" after the earnings call,   and reiterated a "Buy" rating with a $6 target price.

Kaufman Bros.  rates the stock a "Buy," and expects Napster’s revenue to exceed $32 million in its fiscal first quarter. Kaufman has a $7 price target for the stock, which they think will happen in the next year.         

So, what could possibly stop Napster from reaching $6 to $7 a share? Try Amazon.com (AMZN).

Amazon.com just announced it will launch a digital music store later this year offering millions of songs in the DRM-free MP3 format from more than 12,000 record labels.      
EMI Music’s digital catalog is the latest addition to the store. Every song and album in the Amazon.com digital music store will be available exclusively in the MP3 format without digital rights management (DRM) software. Amazon’s DRM-free MP3s will free customers to play their music on virtually any of their personal devices — including PCs, Macs, iPods, Zunes, Zens — and to burn songs to CDs for personal use.

That’s right people, no need to worry if you bought that song at iTunes or through Microsoft Windows Media, with their own special format – MP3 is universal, it will play on any device. If you buy a tunes using Napster, they won’t play on your iPod. A Microsoft Zune can’t play tunes bought on iTunes. But every single MP3 player on earth, including the iPod, Zune, or any SanDisk player, can play a tune bought from the future Amazon.com MP3 store.

BezosI’m not telling you to go out and by Amazon (AMZN) shares because of this new MP3 store that is supposed to be out later this year (besides at $62 a share, they are spendy). Just be aware that iTunes (AAPL), Napster, Microsoft (MSFT), Rhapsody, are all going to be pushed around and watch their market share disappear thanks to Jeff Bezos and his gang at Amazon. Bezos has the right idea, he is giving the consumer want it wants, and that’s what always wins in the end.

So if Napster has to compete with a future Amazon MP3 store, how in the heck will it ever hit $6 to $7 a share? The answer – it won’t.

Frank Lara Jr.         

Frank Lara Jr.  can be reached at franklara@247wallst.com; he does not own securities in   the companies he covers.

Posted on: May 17, 2007 – 12:27 pm in Uncategorized

Cramer Says Retail Is It

Stock Tickers: JCP, KSS, JCP, SHLD, RL, SKS, CROX

Cramer’s retail rovery is the topic of his video (thestreet.com video section) and noted these aren’t all blow-ups.  He thinks retail will have a couple day run and that he thinks gasoline prices are peaked.  So he thinks summer will be ok for retail, except for outdoor and furniture. Here are his picks: "Stick with JC Penney (JCP)" is what he said, as I figured he would.  Kohl’s (KSS) and Sears (SHLD) he still likes, but said Saks (SKS) is the go-to name ahead of next week’s earnings. Cramer also digs Ralph Lauren (RL) at $93.00 going higher.  Crocs (CROX) is one he thinks more good analyst calls will drive it up, but after that he’d say to go out.

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 17, 2007 – 11:58 am in Uncategorized, , , , , ,

Marvell Technology Earnings Preview (May 17, 2007)

Marvell Technology Group Ltd. (MRVL-NASDAQ) reports earnings after the close today.  This is a coin toss going in because the company has been deliquent in its SEC filings for 3 quarters.  So the "EPS" is still an "if" but estimates are $0.09 EPS and $646 million revenues.  The July quarter is estimated at $0.11 EPS and $682.7 million revenues and the Fiscal Jan-08 estimates are ‘roughly’ $0.55 EPS and $2.86 Billion.

The truth is that companies that are this delinquent in filings are a total guessing game for an outsider now.   Marvell is a fabless chip designer that has many technology design wins geared toward WiMAX and Wi-Fi initiatives being rolled out now and those in planning stages.

Because of warnings and filing delays and mixed analyst coverage and a choppy chip sector, Marvell stock is barely above its yearly lows.  The stock closed Wednesday at $17.04, and the 52-week trading range is $15.91 to $28.27.  Options traders appear braced for up to a $0.35 to $0.45 move in either direction; but keep in mind that options expire tomorrow and that number roughly doubles if you go out to June expirations.  Marvell’s short interest last month was fairly steady from the month before at 18.2+ million shares, or about 2 days trading volume.

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 17, 2007 – 11:12 am in Earnings, Restatements, Semiconductor, Technology Companies, Telecom, WiMAX, Wireless,

Does Dusa (DUSA) Run Too Hard?

Dusa Pharmaceuticals (DUSA) received "orphan drug status" for its for Levulan photodynamic therapy for the treatment of esophageal dysplasia, a disease that occurs in some patients with Barrett’s esophagus, a leading cause of esophageal cancer. Orphan diseases are defined as diseases affecting fewer than 200,000 people in the United States or low prevalence is taken as prevalence of less than 5 per 10,000 in the community. Because it is hard to get back the investment in new drugs, the status may grant longer patent times or outside funding for research.

The news from Dusa pushed its stock up 60% to $4.40. The drug in question can be used in treatment for a disease that may be contracted by about 700,000 people in the US. There are other treatments, but the company indicates that they are more invasive.

Of course, the problem with a stock run-up like this is that it is impossible to justify. Should the stock be up 100%? Or 50%? Last quarter, DUSA had revenue of $6.7 million and a loss of $3.6 million. In the last quarter of 2006, revenue was $8.2 million and the company’s operating loss was $18.5 million.

The bump is nice for the shareholders, but there is no way to tell whether it will last.

Douglas A.McIntyre

Posted on: May 17, 2007 – 10:44 am in Uncategorized

Microsoft on a Post-Bill Gates Era (MSFT)

Craig Mundie of Microsoft (MSFT-NASDAQ) gave an interview discussing the software and products giant’s future on a post-Gates basis this week at the Windows Hardware and Engineering Conference in Los Angeles.  CNET news has a great article on their interview, and it is definitely worth a full read.

Essentially the company is trying to figure the best way of getting some form of PC’s to the next billion users, and goes into issues such as tablet PC’s and web devices.  There is some obvious frustration on the part of company in how long things take to come from the fruition of an idea and the full fledged roll-out; in some cases 14 years or so.  It also discusses the swings from the server to the client.  Interestingly enough, they are admitting that many people’s phones will essentially be their first computers and that many will be using shared access to the web.  Would you believe an admission that software is having a hard time keeping up with computing power in more and more processor cores?  It’s also no surprise that that Mundie (and Ray Ozzie) expect Bill Gates to be somewhat available to the company, but it will be harder and harder for him to deal with the day-to-day issues.

These are some good questions and some good answers, but the truth is that the goals and directions of this post-Gates Microsoft will be an enormous task.  Actually, it will be an enorous set of tasks.  The company will undoubetdly continue printing money, but this is such a large series of moving parts that there are so many battles to be fought that the actual goal of the war will be hard to see.  The company is first and foremost an operating system designer, it is next a web services and ancillary software beast, and then a physical hard technology designer, a video game systems and games designer, and even a quiet techology and internet mutual fund with several billions of dollars worth of stock in public and private technology and communications companies. 

Whatever happens in the onslaught of the post-Gates Microsoft, this one is going to be one of the more interesting stories to follow.

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 17, 2007 – 9:35 am in Conglomerates, Consumer Electronics, Internet, Media, Software, Technology Companies,

J.C.Penney Shows Not All Retail Is Weaker

J.C.Penney Company, Inc. (JCP-NYSE) is proving that the retail environment isn’t all bad in all areas.  The company posted $1.04 EPS vs. $1.03 estimates, although revenues were $4.35 billion vs. $4.39 billion estimates.

Its same store sales were up 2.2% and gross margin improved 0.7% to 41.5%.  It’s putting next quarter guidance at $0.80 EPS (before $0.03 for debt retirement) versus estimates of $0.79; and it has raised fiscal guidance by about 1% from $5.44 EPS to a new number of $5.49.

The company has been doing well with its new lingere sales, but it’s new Ralph Lauren concepts are seeming to help as well.  Shares are up 3% to $78.00 in early trading.  Obviously Joe Q. Public isn’t tapped out everywhere.

This is why Jim Cramer named Mike Ullman as one of his Top 9 Retail CEO’s earlier, and it’s probably a safe bet that Cramer will be out saying great things about JC Penney today.  The ‘Penney’ may be spelled differently, but since this stock is up 4-fold in the last five years maybe the company should change their name to JC Dollars.

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 17, 2007 – 8:55 am in Apparel, Earnings, Retail,

The New York Times (NYT): No Rescue From Internet

The New York Times Company (NYT) reported April revenue today, and things are getting worse. The company’s media group which includes its newspapers and their websites saw a 5% decline, or about $9 million. The company’s small internet division, About.com had an increase of 27% in its revenue, but that represents less than $2 million.

Surprisingly, the internet revenue improvement from the companies three newspaper division was anemic.  Internet ad revenues included in the three media groups above rose 15.6% in April. Most large web properties are doing much better than that.

To make matters worse, The New York Times Company has a huge web presence. In April, The New York Times Company had the 11th largest presence on the Web, with 42.9 million unique visitors in the United States. Wall St. would think that the company could squeeze more advertising out of such a large, and probably affluent, internet audience.

But, it is not working out that way.

Douglas A. McIntyre

Posted on: May 17, 2007 – 7:54 am in Uncategorized

24/7 Real Media Buyout: Is $11.75 High Enough?

Stock Tickers: TFSM, GOOG, MSFT, WPPGY, YHOO, AQNT, VCLK, TWX, IACI

24/7 Real Media Inc. (TFSM-NASDAQ) is trading up 3.5% this morning on news that it has agreed to be acquired by WPP Group for $11.75 per share.  The deal is being tallied up as a $649 million buyout net of cash received.  It says it is a 30% premium over the 60 trading average, which is irrelevant if you have been following this online advertising segment since before Google (GOOG) acquired DoubleClick.  Both boards have approved the deal but there are no go-shop or break-up fees that were made public.  The stock has recently traded as high as $13.00 because of rumors of another bidder.

We have covered this one since the stock was far lower.  On May 1, there were reports that Microsoft might pay up for it.  They were also noted in "Who’s next?" on April 13.  On May 10 we looked at what the company could fetch and came up with what would likely be an $11.81 starting price and one that could reach $15.00 or higher under the right circumstances.

The other two online ad firms are trading up this morning: ValueClick (VCLK) is trading up 2.5% at $28.00 and aQuantive (AQNT) is trading up 1.5% at $34.95.

This is one that could conceivable end up trading higher than the $11.75 price if the break-up fees or go-shop penalties aren’t insurmountable.  Microsoft (MSFT) and Yahoo! (YHOO) were supposedly in consideration here and you never know if Time Warner’s (TWX) AOL or IAC/Interactive (IACI) would consider jumping in before letting this one entirely go away.

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 17, 2007 – 7:18 am in Bait Shop, Internet, Mergers and Buy Outs, , , , , , , , ,

BEA Systems Still in Hide & Seek Mode (BEAS)

Investors have to wonder about BEA Systems Inc. (BEAS) after yesterday’s earnings announcement.  The company slightly exceeded revenue targets with $345.8 million, but its ongoing options review has yet again prevented it from wanting to report earnings. 

To top it all off the company announced it was expanding its share buyback plan by $500 million to a new total of approximately $620 million.  Either the SEC or the NASDAQ should step in and tell these guys they can’t do one single thing until they get their financials in order and get caught up.  This was either he third or fourth "no earnings today because of our options review" and in a real world this stock should have to change its stock ticker to a "BEASD."  That would make them get current.  The obvious fact is that they are buying more and more time to let all the options issues with the SEC blow over so they don’t get caught up with penalties that would be worse than a slap on the wrist.

Things don’t sound that great either.  Alfred Chuang, BEA’s founder and Chairman/CEO started out his quotes as follows: ""In the first quarter, we saw a tough selling environment in the Americas, and we made several changes to the Americas field organization. We aligned the organization correctly for the SOA opportunity; however, the changes impacted us in the short-run beyond our expectations……" 

The total cash is currently listed as $1.286 Billion, up about 16 million from the same quarter last year.  The problem is that they do not disclose liabilities or other assets because they are so delinquent in filings.  The days sales outstanding is now 79 days, up from 68 days outstanding last year.

BEA Systems is one we have noted as one that a buyer would look at depending on the price and depending upon the company’s willingness to do it.  This buyback will deplete cash if it goes through, and what is becoming more and more obvious is that the charges from the options review are not going to be large.  They are probably huge and who knows what sort of fines might be involved.

Here is the older data with the notation that even after a drop, it still might not be any closer to getting a bid.

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 17, 2007 – 7:03 am in Earnings, Software, Technology Companies,

Pre-Market Stock News (May 17, 2007)

(AAP) Advanced Auto Parts $0.71 EPS vs $0.71e; guides next quarter $0.65-0.69 EPS vs. $0.68e.
(ACXM) Acxiom agreed to be acquired by ValueAct and Silver Lake Partner for $27.10 cash, or a $2.25 Billion deal.
(BEAS) BEA Systems reported revenues of $345.8M vs $344.5M estimates; also expanded its share buyback program by $500M.
(CBI) Chicago Bridge & Iron received a $500M contract for an LNG terminal expansion in the UK.
(CTIC) Cell Therapeutics received an FDA ‘special protocol assessment’ on the design of Phase III Trial of Pixantrone in relapsed indolent NHL.
(GIVN) Given Imaging announced that it has received FDA marketing clearance for its PillCam SB 2 video capsule and RAPID 5 Software.
(HPQ) H-P traded up over 1% after beating earnings and guidance.
(KBH) KB Home entered into exclusivity period over the sale of its French homebuilding operations.
(PDC) Pioneer Drilling $0.34 EPS vs $0.40e.
(PETM) PETsMART $0.34 EPS vs $0.33e; Guides next quarter $0.29-0.32 EPS vs $0.31e.
(SUNW) Sun Microsystems announced up to a $3 Billion buyback plan.
(TTGT) TechTarget priced a 7.7 million share IPO at $13.00 per share.

Jon C. Ogg
May 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: May 17, 2007 – 6:35 am in Pre-Market Activity

BP Rises, Europe Market Report 5/17/2007

Markets in Europe were up modestly.

BT (BT) fell 1.8% to 309.5. BP (BP) was up 1.5% to 565.5. Siemens (SI) was up .5% to 88.88. Alcatel-Lucent (ALU) rose 1.6% to 9.91.

Data from Reuters

Douglas A. McIntyre

Posted on: May 17, 2007 – 6:32 am in Uncategorized