Daily Archives: August 7, 2007

Heelys…The Wheels Are Falling Off (HLYS)

After Heelys, Inc. (NASDAQ:HLYS) had already been cut almost in half, the roller shoe maker is feeling even more pain.  The company posted $0.45 EPS on revenues of $74.3 million.  This was more than a 100% EPS gain and over 130% in revenue gains year over year, and estimates from First Call were $0.42 EPS & $73.3 million in revenues.  But then came the guidance….

Heelys now only sees $0.28 to $0.30 EPS on revenues of $55 to $58 million.  First Call estimates are $0.38 and $68+ million.  It also expects an implied $207 to $216 million in revenues, but analysts are looking for more than $272 million in revenues.  That isn’t just a miss, that is a total wiff. 

It sounds sort of like all Heelys has to look forward to tomorrow at this point is all of that 4+ million shares in the short interest that hadn’t covered their positions that might want to declare victory.  It’s being hit hard enough you’d think they hired Barry Bonds as the role model.  Shares had traded up almost 10% a day after hitting new lows, but shares are reeling in after-hours trading with shares down 30% to new post-IPO lows down under $16.00.

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 5:48 pm in Apparel, Earnings, Earnings Warning, ,

Did Cramer Call For an October Fed Rate Cut?

On tonight’s MAD MONEY on CNBC, Jim Cramer said the FOMC meeting today was good after he considers it and was actually reassuring for 3 reasons: It is good to hear the economy hasn’t fallen apart, good to hear no new news, and the statement today showed that the Fed has at least gotten out of the clueless phase.  Cramer said this let’s the FOMC look at a potential rate cut potentially in October rather than the Fed keeping the bias the way they had toward inflationary risks. 

At the next meeting he thinks inflation will be on the back-burner in September and then it could even consider a rate cut in October.  But Cramer said he thinks the financial lenders and the homebuilders may actually sell off again.  He’d use the strength today and yesterday to sell those before they go back down.  Cramer said to buy aerospace and defense, but he thinks that tech will be great from here after Cisco Systems (NASDAQ:CSCO) rocking good earnings conference call.

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 5:12 pm in Cramer, , ,

Leap Wireless Guidance Doesn’t Cut It Today (LEAP)

Leap Wireless International, Inc. (NASDAQ:LEAP) posted earnings that are being viewed with disappointment initially.  It posted $0.05 EPS on revenues of $393.2 million, and that looks light on the top-line.  First Call estimates were $0.04 EPS on revenues of $408 milllion, although there was a very wide range of estimates.  The wireless operator added 127,000 net customer adds, barely above the low-end of the previuous range offered of 125,000 to 175,000.  Its churn rate was 4.3% and it had previously offered 4.1% to 4.4% estimates.

For next quarter it sees 40,000 to 120,000 net susbcriber adds and a churn rate of 4.9% to 5.4%, so subscriber growth slowed and churn is expected to grow. For 2007 it sees Adjusted OIBDA of $430 to $460 million, which is higher on the low-end and lower than the high-end previously offered for fiscal guidance.  First Call has estimates of $429 million revenues next quarter and Fiscal 2007 is expected at $0.22 EPS and $1.67 Billion revenues.  The company is offering some initial 2008 targets: now targets 73 to 81 million POPs by end of 2008; adjusted OIBDA of $550 to $650 million and sees cap-ex $650 to $850 million.

Shares are now down 13% in immediate after-hours reactions.  Unfortunately, the trends it is seeing are not exactly defining the company as a cheap stock on its current growth potential.  At least that is the case from what it had telegraphed and where Wall Street estimates are.  Shares are down some 13% around $70.00 in after-hours, and that took out the lower-end of that chart support band. 

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 4:11 pm in Earnings, Earnings Warning, Telecom, Wireless, , ,

Cisco Multi-Year Stock Highs On Guidance (CSCO)

Cisco Systems, Inc. (NASDAQ:CSCO) has boosted its longer-term growth expectations, and shares are now up 6% in after-hours as Chambers is finishing up his comments.  Obviously the company can make other comments, but this stock is now above $31.00.  That is a multi-year high and may put part of that $30.00 in the past if the market allows it.  This may play into the scanrio that we felt could take this to a $34.00 summer target, and this is showing why Jim Cramer named it his #3 growth Pick out of his Top Picks for 2007.  The networking behemoth posted $0.36 EPS on $9.43 Billion in revenues.  First Call estimates were $0.35 EPS and $9.29 Billion revenues.

Opening Commentary (partial) from Chairman & CEO John Chambers: to maintain a strong growth rate is the initial comments, and stock ticked up there… strongest quarter in balanced sales in products, record quarter in sales and EPS… book to bill was above 1… repurchased $1.5 Billion in stock… Year over Year revenues growth: routing grew 14%, switching 18%, total advance technology grew 24%…. competition is robust but they believe they are taking market share in all areas… 17 of top 20 product families grew at 15% or better, services is 16% of revenues…. Chambers said the US business was strong and balanced despite perceived slowdown in technology… service provider business was very strong… saw acceleration in video and these will need continual network upgrades and grow that exponentially… wants to lead Web 2.0 technologies (he went on and on talking up Telepresence)… Best indication is order growth in high-end routers, and it saw accelerated growth of almost 30% in Q4 in high-end routers… believes it can continue growth… network is becoming the platform… convergence is winning… continues on acquisitions and partnerships… understands where industry is going over 12-18 months and then 3-5 year strategy… Growth over next decade will be second major phase of Internet from Web 2.0 and unified communications… says this can be instant replay of what happened for Cisco in early 1990’s.

The company said it is increasing expectations for next year but not focusing on short-term.  Chambers raised longer-term guidance to 12-17% from 10-15% range previously given.  Sees 2008 now 13-16% and revenue guidance for next quarter is 9.45 to $9.55 Billion (versus $9.38 Billion estimates). 

This was also the fiscal year-end, so at $1.34 non-GAAP EPS and a $29.69 close the stock has a trailing P/E ratio (non-GAAP of course) of 22.15.  With a GAAP EPS of $1.17 for the fiscal 2007 report, this has a trailing P/E of 25.3 for those who wish to be technical and use this on a comparable basis to many of the S&P 500 companies.

As a reminder, the company can always make some comments that change gains in after-hours.  But the initial reaction is not showing this.

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 3:56 pm in Earnings, Technology Companies, Telecom, WiMAX, Wireless, , ,

Dendreon Shows Lower Expenses (DNDN)

Dendreon (NASDAQ:DNDN) has posted its results.  The actual EPS and revenues don’t matter because of the stage of the company.  But the company did lower its total expenses to $23.4 million.  That compares to $26.3 million from Q2 2006 and roughly $28 million last quarter.  Those expenses included options costs of $1.3 million and $2.9 million, respectively.

So the company slowed its cash burn rate, and that is what we wanted to see.  Unfortunately the company made no new developments in the "highlights" or "disclosures."  Unless the company announces some unexpected FDA developments or unless it announces a surprise partner, this one sounds like there could be a continued news vacuum.

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 3:33 pm in Biotech, Earnings, ,

Cisco Systems Down Modestly Ahead of Conference Call (CSCO)

The networking behemoth posted $0.36 EPS on $9.43 Billion in revenues.  First Call estimates were $0.35 EPS and $9.29 Billion revenues.  Unfortunately we don’t get guidance out of Chambers & Co. until the conference call, so until then this is just an incomplete earnings release.  Shares are currently down close to 1% in immediate after-hours trading, but again we are waiting until we have guidance before declaring a win or loss.

FOR CONFERENCE CALL COMPARISONS:  next quarter estimates are $0.36 EPS and $9.38 Billion in revenues.  If we get any fiscal July-2008 targets from the company, estimates are currently $1.55 EPS and $39.7 Billion in revenues.  If the company only gives guidance in percentages for fiscal 2008 you would get a static 2008 to 2007 implied 16.5% gain in EPS and a 14% gain in revenues.  Even after the recent drop shares are up almost 10% over the last quarter. 

This was also the fiscal year-end, so at $1.34 non-GAAP EPS and a $29.69 close the stock has a trailing P/E ratio (non-GAAP of course) of 22.15.  With a GAAP EPS of $1.17 for the fiscal 2007 report, this has a trailing P/E of 25.3 for those who wish to be technical and use this on a comparable basis to many of the S&P 500 companies.

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 3:19 pm in Earnings, Technology Companies, , ,

Priceline (PCLN) Earnings: Higher Than William Shatner

Priceline (PCLN) took a big run ahead of earnings. The stock rose 5.5% to $65.09.

Analysts polled by Thomson Financial expect pro forma income of $.89 on sales of $354.3 million.

The numbers were stronger than expected. Priceline.com had GAAP revenues in the 2nd quarter of $355.9 million, a 15.7% increase over a year ago. The company had Priceline.com had GAAP net income of $34.6 million or $0.79 per diluted share, which compares to a $12.5 million or $0.28 per diluted share in the same period a year ago.

"Priceline.com’s earnings performance in the second quarter exceeded our previous expectations for both the international and domestic businesses," said priceline.com President and Chief Executive Officer Jeffery H. Boyd.

Priceline.com said it was targeting the following for 3rd quarter 2007:

  • Year-over-year increases in overall gross travel bookings of approximately 43% to 46%.
  • Year-over-year increases in gross travel bookings from Booking.com of approximately 85% to 90%.
  • Year-over-year increase in pro forma revenue of approximately 20% to 25%.
  • Year-over-year increase in pro forma gross profit of approximately 50% to 54%.
  • Pro forma net income of between $1.21 and $1.31 per diluted share.

In view of the company’s stronger than expected performance in the 2nd quarter 2007, priceline.com revised its full year guidance as follows:

  • Consolidated gross travel bookings of $4.50 to $4.65 billion
  • International gross travel bookings of $2.45 to $2.55 billion
  • Pro forma net income of between $3.50 and $3.65 per diluted share

The shares rose 11% after hours to $72.10 which is above the 52-week high.

God bless William Shatner

Douglas A. McIntyre

Posted on: August 7, 2007 – 3:18 pm in Uncategorized,

FOMC Acknowledges Concerns, But No Real Rescue Feelings

The FOMC has spoken, and as expected rates were left unchanged at 5.25%.  Here were they key phrases we looked at:

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent. Economic growth was moderate during the first half of the year.  Financial markets have been volatile in recent weeks, credit conditionshave become tighter for some households and businesses, and the housingcorrection is ongoing. Nevertheless, the economy seems likely tocontinue to expand at a moderate pace over coming quarters, supportedby solid growth in employment and incomes and a robust global economy.

Readings on core inflation have improved modestly in recent months.However, a sustained moderation in inflation pressures has yet to beconvincingly demonstrated. Moreover, the high level of resourceutilization has the potential to sustain those pressures.

Although the downside risks to growth have increased somewhat, theCommittee’s predominant policy concern remains the risk that inflationwill fail to moderate as expected. Future policy adjustments willdepend on the outlook for both inflation and economic growth, asimplied by incoming information.

The Statement from the June 28, 2007 meeting still noted moderate growth despite the ongoing adjustment in the housing sector.  The FOMC needed to address this housing to include serious recent changes in lending markets.  It also previously said it expected the economy to continue to expand at a moderate pace over coming quarters.  The FOMC also stated on June 28: In these circumstances, the Committee’s predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

CONCLUSION……

No one was expecting a rate cut today.  What was expected was more accomodative and easier language that showed concern about the credit markets.  The FOMC isn’t showing any real concern over the market malaise in housing and the liquidity crunch seen in the credit markets.  This is not going to be viewed a Federal Reserve that is nervous nor one that is going to come to the rescue any time soon.  So far the DJIA, S&P 500, and NASDAQ have dropped well into negative territory since Bernanke & Co. have spoken.  The market probably won’t think these guys are completely asleep at the wheel, but there definitely isn’t any sense of this FOMC wanting to be a guardian angel.

Many of these initial post-FOMC market reactions are rapidly reversed, and the Fed-Speak language here is always open to at least some ongoing interpretation.

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 1:23 pm in Economy, , , , , ,

Earnings Preview: Leap Wireless (LEAP)

Leap Wireless International, Inc. (NASDAQ:LEAP) is set to report earnings after the close today.  First Call is looking for $0.04 EPS on revenues of $408 million.  Please be advised that estimates are all over the place and some expect a loss.  It is expected to see $0.16 EPS and $429 million revenues next quarter and Fiscal 2007 is expected at $0.22 EPS and $1.67 Billion revenues.  It also looks like expectations have come down since its last quarterly report.

The recent market slide has bitten into its chart quite a bit.  Shares are off almost 25% with this latest slide.  Depending upon your pivot points, that longer-term trend line has either been violated or is at risk.  Fundamental analysts are still positive on the stock and average targets are close to $100.00.  Options traders do not appear to be expecting much, at least not more than a 3% price change in either direction.  Shares also took a drumming after the recent drop at the recent IPO and competitor (and some speculate a merger partner), MetroPCS.

It added a $350 million debt offering in June, so its balance sheet will look a bit different this quarter.  At its analyst meeting June the company gave some key metrics.  It is building out on its latest FCC Spectrum auction wins for its markets this year and next and its analyst slide presentation did hint at acquisitions possible in certain markets.  Leap gave previous guidance saying its expects 125,000 to 175,000 net subscriber adds, with customer churn rates of 4.1% to 4.4%.  Its adjust OIBDA for the quarter was telegraphed at $105 to $115 million.  For fiscal 2007 it last forecast OIBDA of $400 to $470 million.

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 12:45 pm in Earnings, Telecom, Wireless, , , ,

Sun’s (SUNW) Shares Don’t React To Job Cuts

Sun (SUNW) filed a document with the SEC that indicated that it would make more job cuts. About a year ago, Sun fired almost 5,000 people, about 12% of its work force.

Sun’s shares were flat on the news The company said that it intends to take charges of $100 million ot $150 million for the cuts.

The company’s shares might have gone up on the filing. In the last quarter, sales for the server company were flat, but the company had a small net income, mostly due to cost savings. Further work force reductions might drive better margins.

But, Wall St. seems to have seen through that smoke. If Sun’s revenue is going to recover, it cannot continue to lay off staff. At some point it will have to get down to a core level of personnel if it plans to sustain growth.

More departures often mean that a company doesn’t believe that it can expand in future quarters.

Douglas A. Mcntyre

Posted on: August 7, 2007 – 12:20 pm in Uncategorized,

Recent Market Malaise Extra Painful For Cult Stocks (CMGI, SFE, HOKU, LOCM, OMEX)

When you see close to a 10% drop in the broad market, you just automatically assume it punishes the speculative names even worse.  Being Hi-Beta has a price.  That wasn’t any different in the last mini-tank.  Many of these companies essentially have not had any real official change to their underlying stories.  But we all know that the ’story’ is dependent upon good times lasting for many quarters or longer. 

This last drop has been extremely tough on many of these speculative and ‘cult stocks’ over the last couple of weeks.  Here are a just a few of the instances in some of the more cult stock names we cover from time to time:

CMGI Inc. (NASDAQ:CMGI) is actually less than 10% above its 52-week lows of $1.20 now.  At $1.36 it is down almost 50% from the $2.60 highs.  This was a major cult stock for the first half of the year.  If the capital markets are closing it may crimp its wave of investing into recent alternative energy companies.  That argument seems flawed, and the ModusLink story has still been receiving coverage.  Here was what we The story didn’t seem like it has changed at all, but it is obviously not at all immune to a market tank nor to a softening economy and any tightening liquidity crunch isn’t going to be well received by CMGI speculators.

Safeguard Scientifics (NYSE:SFE) traded as high as $3.28 at the end of April, and shares sit at $2.00 mid-day.  Safeguard traded up after such a large move earlier this year at CMGI.  We interviewed the CEO at the end of June.  Maybe their own capital hasn’t dried up for investing, but partners may have a harder time pulling the trigger now.

Local.com (NASDAQ:LOCM) also saw shares skyrocket on a patent award and on other business developments, but even on the 2+% post-earnings gain today shares have fallen more than 50% from highs in July.

Hoku Scientific Inc. (NASDAQ:HOKU) is still up nearly 300% from lows, but it has been shares in recent weeks fall from highs of over $14.00 down to just under $8.00 today.  Its pending contracts have been viewed with less certainty over the future financing of its polysilicon factory under plans in Idaho.  That is the logic behind the slide any way.  We gave a "both sides of the coin" picture on this back in June, and right now it’s on tails.

Odyssey Marine (NASDAQ:OMEX), formerly OMR on AMEX, shares are higher after it filed amended complaints against Spain after Spain wants its treasure back for free that it lost in shipwrecks and after a recent brief company boat seizure and data copied from one of the laptops on board. This was the story that got Odyssey back on the map, no pun intended.

Obviously there are many names out there that have been given a hard market slap.  A 7% drop in the DJIA has equated to a 7% drop in the NASDAQ.  All eyes are on the FOMC today, although with a liquidity and a housing market at serious risk Bernanke & Co. probably have more on their mind besides small cap speculative stocks. 

In really tough times that won’t have major buyouts and times where investors may not be able to count on share buyback plans to add a floor, investors look at defensive stocks.  Here was our revised ‘bulletproof stock list’ from last week.  Just keep in mind that if a market stays tough, even the teflon stocks fall victime to the firing squad.

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 11:58 am in Cult Stock, HI/LOW, , , , , ,

Building A Competitor To Dell (DELL) and HP (HPQ)

The two big Asian PC makers, Acer and Lenovo, are in talks to buy European PC company Packard Bell, according to Reuters. That would give one of them a strong foothold in two regions important to Dell (DELL) and Hewlett-Packard (HPQ).

Dell has about 15% of the global PC market. Lenovo has over 8% of the market, so a purchase could get it above 10%.

And, that much closer to Dell.

Douglas A. McIntyre

Posted on: August 7, 2007 – 11:13 am in Uncategorized, ,

Earnings Preview: Heelys (HLYS)

Heelys, Inc. (NASDAQ:HLYS) has been a like a ride at an amusement park since coming public.  The stock is actually close to its post-IPO lows now.  But all of a sudden shares are up about 5% hours before earnings.  Today is the earnings date and First Call is looking for $0.42 EPS on revenues of $73.3 million.  Be advised that there is still a very thin coverage universe in this stock and the company only has two earnings reports under its belt since coming public.

If it offers guidance, estimates for Q3 are $0.38 EPS & $68.4 million in revenues, and fiscal 2007 estimates are $1.60 EPS & $272.8 million in revenues.  So, assuming the company can hit this target for the year, it currently trades at just over 13-times 2007 earnings estimates.  The reason for the low forward P/E ratio is likely due to it mainly having a one product company, even if it does have apparel now and more accessories on the way.  The reports of wheeled-shoe injuries have been a likely hamper as well.

Its chart is ugly from falling off a cliff since early May and not really participating in the summer rally before the last drop.  The company also had to withdraw a share offering in June.  Most analysts are actually positive on the stock and average price targets still appear to be north of $30.00.  Options traders must be expecting a big jump or a big drop, because on a static basis it appears that options traders as of right now are braced for a move of about 10% in either direction.

We’ll see how the company does.  Post-IPO lows were just put in yesterday.  Its July short interest was up over 10% to more than 4.8 million shares.  Any good news out of the company could cause a pretty large short squeeze, although some of today’s move could probably be attributed to shorts getting out of the way and declaring victory. 

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 10:53 am in Apparel, Earnings, ,

Wal-Mart (WMT): India A China Foil

First, Wal-Mart (WMT) announced a joint venture with India retailer Bharti Enterprises to begin opening stores in India. But, that was not he end of it.

Today, Wal-Mart’s man in India said that the company would start to source more of its goods from the world’s second most populated country. "Today Wal-Mart is sourcing over $600 million of products from India directly , he told Reuters. He said the value of the largest retailer’s purchases there could begin to grow at 3x to 4x. Big numbers.

India may be a good market for WMT, but right now local law does not permit it to compete directly with the many local companies, which make up the country’s $350 billion in retail sales.

Wal-Mart has another reason to be in India. That is China.

The US retailer buys billion of dollars of goods from the Asian country and has a over 850 stores that. That number is growing. But, so is the extent to which the Chinese communist government meddles in WMT’s business. The company has already had to agree to allow its workers to join a union connected to the government and allow a branch of the party to exist within the walls of its stores.

China may represent Wal-Mart’s best growth opportunity, but a counter-balance, especially for sourcing billion of dollars in merchandise each year may keep the Chinese honest.

Douglas A. McIntyre

Posted on: August 7, 2007 – 8:30 am in Uncategorized,

Blank Check IPO Filing: ASIA SPECIAL SITUATION ACQUISITION CORP.

Asia Special Situation Acquisition Corp. has filed to come public via an IPO.  This is a Cayman-based blank check company that has signaled it will sell 11.5 million units at $10.00 per unit.  Each unit fits the classic 1 share and 1 warrant per unit.  By the name you probably figured it isn’t a grovery store in Alabama. 

The company is looking for acquisitions and/or investment opportunities in Asia.  It is not limited to any one area for any focal targets, but it initially intends to focus our efforts on acquiring an operating business in the leisure and hospitality or financial services industries that provides products or services to customers in China.

The offering is being underwritten by Maxim Group, LLC.  The entity will list on the American Stock Exchange, but it doesn’t appear that a ticker has been reserved as of the filing date.

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 7:54 am in IPOs, , ,

Warner Music (WMG) Results Actually Okay: Digital Up 29%

From Silicon Alley Insider

Edgar Bronfman, Tom Lee, Bain Capital and every other Warner Music shareholder will likely want to send a thank you note to EMI Music Group today, for making it look like a winner. Warner’s Q3 wasn’t stellar — revenues down 2% (5% in constant currency), while earnings dropped from $0.12 to $0.10…continued here

Posted on: August 7, 2007 – 7:20 am in Uncategorized,

Pre-Market Stock News (August 7, 2007)

(AAPL) Apple has mac conference today.
(AGN) Allergan noted positively by Jim Cramer on MAD MONEY.
(BHI) Baker Hughes July 2007 rig count was 1,018, up 3 from June and up almost 100 from last July.
(BLTI) Biolase -$0.04 EPS vs. -$0.01 est.
(BMC) BMC Software traded up 4% after beating earnings and slightly raising mid-point of guidance above estimates.
(BMR) Biomed Realty $0.50 FFO vs $0.45 est.
(CIT) CIT Group says will exit home lending operations in quarterly SEC filing.
(CLWR) Clearwire indicated lower after earnings.
(DUK) Duke Energy $0.25 EPS vs. $0.21 est.
(EMC) EMC-VMware employee stock options date tender extended to Aug. 13.
(EMR) Emerson $0.72 EPS vs $0.69 est.
(ESLT) Elbit Systems received orders for $163 million.
(HEM) HemoSense being acquired in stock acquisition by Inverness Medical (IMA) for 0.274192 IMA shares.
(IFF) Int’l Flavors $0.76 EPS vs. $0.76 est.
(IIVI) II-VI $0.37 EPS vs. $0.31 est.
(LOCM) Local.com traded up 2% after narrower losses.
(MEND) Micrus Endovascular -$0.02 EPS vs. -$0.05 est.
(MMS) MAXIMUX $0.65 EPS vs. $0.63 est.
(MSFT) Microsoft’s judgememnt of $1.53 billion it was going to have to pay Lucent-Alcatel has been reversed by a federal judge.
(MSFT) Microsoft is trimming the cost by $50.00 for each Xbox unit to compete against Wii.
(NILE) Blue Nile rose over 4% after-hours aft6er beating expectations and slightly raising estimates.
(QCOM) Qualcomm’s ban on its phones was upheld by the Bush administration.
(SINA) SINA Corp. fell 4% after earnings and guidance failed on any serious upside.
(TYC) Tyco Electronics $0.55 EPS vs $0.47 est.
(URBN) Urban Outfitters revenues $348.5M vs. $338.5M est.; Urban Outfitters core stores saw a -3% comparable store sales drop in the quarter.
(VICL) Vical -$0.21 EPS vs -$0.22 est.
(VITA) Orthovita -$0.05 EPS vs. -$0.06 est.
(VMED) Virgin Media extended the review process for alternatives.
(WMG) Warner Music -$0.20 EPS vs. -$0.14 est.; was -$0.12 net net basis so unsure if comparable.
(WYNN) Wynn Resorts traded up over 10% after handily beating earnings expectations.
(YSI) You-Store-It $0.24 FFO vs $0.26 est.

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 7:12 am in Pre-Market Activity

Some EMC-VMware Employees Holding Out On Share & Options Tender? (EMC, VMW)

EMC Corp. (NYSE:EMC) and VMware Inc. (NYSE:VMW) announced early this morning that the exchange offer for certain employee stock options is being extended to 11 AM EST on August 13, 2007.  The prior date had been August 9 at 11 AM EST.  This is extension is to allow employees to switch options from EMC to VMware. 

As of last night, a total of 10,277,000 shares of EMC and 3,197,000 shares of EMC restricted stock were validly tendered and not withdrawn.  That represents 83.6% of the outstanding shares of EMC stock options eligible and 55% of the outstanding restricted EMC shares eligible to be tendered.

What are the other employees thinking?  EMC has made a huge run, and VMware is one of the hottest and most anticipated tech IPO’s in quite some time.  You have to wonder if the employees that haven’t tendered are just unavailable or just haven’t gotten around to tendering shares, or if they are the hold-outs wondering if this is a good deal or not. 

We are waiting to hear back if this will have any meaningful delay on the IPO date for VMware.  Normally the possibility of a few days delay wouldn’t matter. But this one has been quite anticipated and any employee concerns might add detract from some of the buzz.  The other issue is that options speculators are playing EMC via August stock options, and options expiration is Frdiay, August 17. The AUG $19 CALLS have 67,876 contracts in the open interest and the AUG $20 CALLS have 80,340 contracts listed as the open interest.  That represents almost 15 million shares on a fully leveraged basis on those two strike prices alone.

Jon C. Ogg
August 7, 2007

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

Posted on: August 7, 2007 – 6:53 am in IPOs, Options, Software, , , ,

AMD (AMD) Further Price Cuts? Lower Stock

AMD (AMD) came within a few pennies of its 52-week low yesterday. It traded at $12.41. Perhaps traders caught wind of the fact that the x86 processor company will be cutting prices again.

According to The Inquirer, the company will cut prices on several of it Athlon chips as early as next week.

Yesterday’s WSJ identified AMD as one of several companies that might be sold by Wall St. because it will not longer have access to cheap capital due to trouble in the credit markets. As the Journal writes: "Semiconductor maker AMD, for example, had negative free-cash flow of nearly $1.5 billion over the past 12 months and the amount of cash it generates has been extremely volatile over the past five years, according to Morgan Stanley."

That means AMD shares could see $10 before they see $15.

Douglas A. McIntyre

Posted on: August 7, 2007 – 6:49 am in Uncategorized,

Implications of Online Ad Inventory Glut–on AOL, Yahoo, and Start-Ups

From Silicon Alley Insider

The Post’s Holly Sanders notes the trend that scorched AOL, Yahoo, CNET, and other major online display-ad companies this quarter (i.e., everyone but Google): the wide availability of cheaper advertising inventory elsewhere.  The trend is helping MySpace, Facebook, and the ad networks, which don’t have high prices to protect, while putting pressure on the big dogs.  Contined here

Posted on: August 7, 2007 – 6:38 am in Uncategorized