Daily Archives: September 3, 2007

A Shotgun Wedding For Starbucks

Starbucks (SBUX) is not doing very well selling convincing investors that coffee sales in its stores are rising at an acceptable rate. The company’s stock is down 22% this year.

So, the coffee retailer has begin to flog its sales in grocery stores hoping that this will give a boost to overall revenue.

That program just got a big push. Kraft (KFT) will start to sell Starbucks coffee as part of the line of products that can be brewed in its "Tassimo" home brewing machines. According to the FT: "This is the first time that Starbucks, which has contracted Kraft to distribute its packaged coffee in supermarkets, has sold coffee under the Starbucks brand name for use in home coffee machines."

Starbucks may not be able to kept competitors like McDonald’s (MCS) and Dunkin Donuts from stealing their retail foot traffic. But, at least those companies are not selling prepackaged products. Yet.

Douglas A. McIntyre

Posted on: September 3, 2007 – 7:19 pm in Food, , ,

Gannett And The New York Times: Newspaper Revenue Drop Quickens

Newspapers companies have hoped against hope that the rapid fall of their print advertising would level out or at least decelerate. But, for the large companies like Gannett (GCI) and The New York Times (NYT), the hope continues to go unrealized.

New numbers from the Newspaper Association of America show that online advertising at newspapers moved up 19% in the second quarter of the year and hit $796 million. This was of little help as "Total advertising expenditures at newspaper companies were $11.3 billion for the second quarter of 2007, an 8.6 percent decrease from the same period a year earlier. Spending for print ads in newspapers totaled $10.5 billion, down 10.2 percent versus the same period a year earlier.", according to the NAA

Key classified ad categories including real estate, automotive, and jobs fell by 20% as the business moved to only classified sites from Craiglist to Realtor.com to Monster (MNST).

And, the industry has no solutions.

Douglas A. McIntyre

Posted on: September 3, 2007 – 6:10 pm in Media, , ,

China Mobile And China Unicom Sit At 52-Week Highes

Shares of both China Mobile (CHL), the largest Chinese cell company, and No.2 China Unicom (CHU) both sit at 52-week highs. And, no wonder. China Unicom now has almost 151 million subscribers, up from 142 million at the end of last year. It shares are at $19, up from a 52-week low of $8.84. The company has a market cap of $24 billion.

China Mobile has 338 million subscribers. And it is moving aggressively into internet service. According to The Wall Street Journal "the number of people who access the Internet through their cellphone surged to 44 million in the first half from 17 million at the end of last year."

China Mobile shares now trade at $68.34, up from a 52-week low of $32.41. The company has a market cap of $271 billion. By way of contrast’s AT&T’s (T) is $243 billion.

The most impressive thing about the two stocks should continue to rise. The penetration of cell use in rurual areas of China is still much lower than in the big cities, so there are still several hundred potential subscribers.

Douglas A. McIntyre

Posted on: September 3, 2007 – 4:19 pm in Wireless, , ,

Microsoft Changes It World View

Microsoft (MSFT) is finally getting serious about connecting its Windows product to other software using the internet. Google (GOOG) has been doing this with its spreadsheet and document products for some time.

According to The New York Times: "Microsoft will try to outmaneuver its challengers by becoming the dominant digital curator of all a user’s information, whether it is stored on a PC, a mobile device or on the Internet, industry executives and analysts said."

If Microsoft does this well, it may take the Google competitive threat and dispatch it fairly fast. MSFT has over one billion Windows users and 300 million customers for its Hotmail and Messenger products.

Google is not even in the league, so, if Microsoft wants to make sure that it keeps a huge lead, now is the time to exploit the advantages of server-side computing.

Douglas A. McIntyre

Posted on: September 3, 2007 – 9:46 am in Software, ,

Ford, GM, Toyota: August Auto Summary

However badly the big car companies bled sales this summer, it appears that August brought no hope for better days.

Bloomberg speculates that Toyota (TM) sold more cars that Ford (F). The news service writes that "Toyota post a 2 percent gain this month to displace Ford as the second-biggest automaker in U.S. sales so far this year, according to research firm Global Insight Inc. Ford’s sales fell 12 percent, the average estimate of six analysts surveyed by Bloomberg."

As credit companies become concerned about lending quality, the low end of the car sales business could be hurt as few buyers can get easy loans. Bloomberg gives that view a little bit of color: "ubprime buyers accounted for 19 percent of U.S. new-vehicle purchases last year, including 22 percent of loans at the U.S.- based automakers, J.D. Power & Associates said in a study released in April."

And, double digit decreases in sales may be repeated for some of the domestic car companies:

The SAAR average is based on forecasts from seven analysts and a survey of 22 economists. The analysts’ estimates are based on daily rates for August’s 27 sales days. 

Analyst              GM     Ford    Chrysler    SAARHimanshu Patel       -1%    -13%     -7%        15.9(JPMorgan)Rod Lache            -3%    -11%     -4%        16(Deutsche Bank)Chris Ceraso         -2%*   -11%*    -8%*       16*(Credit Suisse)Richard Kwas         -13%   -12%      1%        15.3(Wachovia)Peter Nesvold        -7%    -16%     -14%       15.7(Bear Stearns)Rebecca Lindland     -9.3   -9.4     -3%        15.8(Global Insight)Paul Ballew          N/A    N/A      N/A        16.2(GM sales analyst)Bloomberg Economists N/A    N/A      N/A        15.7(average estimate)Average:             -5.9%  -12%     -5.8%      15.8

Not good

Douglas A. McIntyre

Posted on: September 3, 2007 – 9:24 am in Autos, , ,

As City-Wide WiFi Fall Apart, An Opening For WiMax

As the municipal WiFi business at Earthlink (ELNK) has come under financial pressure, the future of city-wide wireless projects is in trouble. ELNK shares are down over 20% in the last two year, even after a recent run-up due to cost cuts at the company.

ELNK was willing to bank on a program where it would pay up-front costs to get networks up and running. But, due to its financial difficulties, The Wall Street Journal writes "The Internet service provider now wants cities it’s negotiating with to pay for the networks’ construction."

The change in heart at Earthlink may help demand for the WiMax products that Sprint (S) and Clearwire (CLWR) are rolling out. WiMax offer ultra-high speed broadband connections over the airwaves. Sprint is planning to use the technology for its new 4G cellular network.

With Sprint’s shares down 25% over the last two years, and trailing AT&T (T) and Verizon Wireless in cell subscribers, anything that helps the demand for WiMax is critical to the company’s future.

Douglas A. McIntyre

Posted on: September 3, 2007 – 8:08 am in Wireless, , , ,

Boston Scientific And Johnson & Johnson: Stents Make A Comeback?

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajZ2lVrqeb2I&refer=homeA study out fo Sweden may help the flagging fortunes of the stent businesses at Boston Scientific (BSX) and Johnsohn & Johnson (JNJ). Several pieces of research had indicated that drug-coated stents could cause cloating and health risks.

According to Bloomberg, "The new findings, presented at the European Society of Cardiology meeting in Vienna, show patients getting the drug- coated stents weren’t more likely to die or have a heart attack than those given the older, bare-metal stents." The use of blood thinners may have aided the results.

A number of doctors remain unconvinced.

Share of BSX has been badly hurt by the controversy of stent safety. The company is looking at selling division to save money and some Wall St. analysts think the company may run into cash flow problems while it pays down its huge debt, brought on when it bought medical device company  Guidant.

BSX shares were above $28 in late 2005. Today they trade below $13.

Douglas A. McIntyre

Posted on: September 3, 2007 – 7:56 am in Medical, ,

Google Phone Gets Closer

According to GigaOm, the Google (GOOG) mobile phone is getting closer.

The phone will run mobile Linux and can run Java virtual machines. It will run video clips.

The Google phone also has a browser function.

Douglas A. McIntyre

Posted on: September 3, 2007 – 7:28 am in Wireless,

Media Digest 9/3/2007 Reuters, WSJ, NYTime, FT, Barron’s

According to Reuters, HSBC (HBC) bought 51% of  Korea Exchange Bank $6.3 billion.

Reuters writes GE (GE) bought buy British oilfield services firm Sondex for $583 million.

Reuters reports that oil moved above $74 a barrel as OPEC kept output flat.

The Wall Stree Journal reports that Nasdaq (NDAQ) has given bidders until Friday to make offers on its 31% stake in the London Stock Exchange.

The Wall Street Journal writes that a new study suggests that heart stents may not increase clotting, good news for Boston Scientifc (BSX) and Johnson & Johnson (JNJ).

The New York Times writes that Microsoft (MSFT) will offer software to connect its Windows program with software served over the internet.

The New York Times writes that Bloomberg TV is preparing to compete with CNBC.

The FT writes that a new survey shows that the fragmented movie download business adopted by the film industry is confusing comsumers.

Barron’s writes that shares in Cree (CREE) jumped on takeover speculation.

Douglas A. McIntyre

Posted on: September 3, 2007 – 7:18 am in Press Digest, , , , , , ,

Europe Markets 9/3/2007

Markets in Europe were mixed at 7.40 AM New York time

The FTSE was up .2% to 6,317. Barclays (BCS) was up 3.3% to 633.5. BP (BP) dropped .6% to 554.

The DAXX was up .1% to 7,648. Daimler (DCX) was up 2.9% to 67.07. Deutsche Bank (DB) as up 1.3% to 91.81.

The CAC 40 was down .4% to 5,648. BNP Paribas.was down .2% to 77.25

Data from Reuters

Douglas A. McIntyre

Posted on: September 3, 2007 – 6:49 am in International Markets, , , ,

Asia Markets 9/3/2007

Most markets in Asia were down modestly.

The Nikkei fell .3% to 16,525. Sony (SNE) was up .4% to 5600. Toyota (TM) was up 1.5% to 6860.

The Hang Seng fell .4% to 23,904. China Mobile (CHL) was down 1.4% to 104.5. HSBC (HBC) was up .1% to 139.9.

Data from Reuters

Douglas A. McIntyre

Posted on: September 3, 2007 – 6:38 am in International Markets, , , ,