Monthly Archives: February 2008

Microsoft (MSFT): Vista Price Cuts

No one in Redmond wants to admit this, but Apple’s (NASDAQ: AAPL) new Leopard OS may be getting the better of Vista, at least in enough cases to make it hurt. Almost all evidence points to the fact that Mac sales, although still a modest part of the overall market, are growing faster than PC sales.

Word has also leaked out the the specs for Vista were set in a way that lead users to believe that it would work well on low-end machines with weak processing power. Microsoft (NASDAQ: MSFT) knew that, but went ahead with its marketing, perhaps to gain additional sales. The standard may have been dropped to help Intel (NASDAQ: INTC) to hit sales targets

The world’s largest software company has decided to drop the prices on the consumer version of Vista. Some of this may be due to pressure from PC companies. As the prices of their machines come down, Vista becomes a bigger portion of the total cost of owning a computer. Firms like Dell (NYSE: DELL) and HP NYSE: HPQ) would like to see that changed so that they can keep unit sales as high as possible.

The net effect of Microsoft’s move may be bad for its earnings. It is rare that a drop in price, especially software, does not hurt gross margins. The company may want to help its PC and processor partners, but Vista may simply be lemon.

The best way to get rid of a lemon is to drop the price.

Douglas A. McIntyre

Posted on: February 29, 2008 – 5:57 am in Software, , , , ,

Media Digest 2/29/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, Paulson believes that the current proposal to help homeowners is too broad and may help speculators.

Reuters writes that Microsoft (NASDAQ:MSFT) has cut the price of Vista to encourage upgrades.

Reuters writes that AIG (AIG) posted a $5.3 billion loss.

Reuters reports that ad company WPP believes that 2008 will be a better year than 2007.

Reuters writes that the Sony (SNE) PS3 should have a strong year due to lower retail prices and new games for the console.

The Wall Street Journal writes that the net at Dell (DELL) slipped as the company tries to deal with costs.

The Wall Street Journal says that Microsoft knew that lowering the requirements on PCs that run Vista was a mistake.

The Wall Street Journal reports that Bain will resubmit its offer to buy 3COM (COMS).

The Wall Street Journal writes that Ebay (EBAY) has settled a major patent dispute.

The Wall Street Journal reports that "the Financial Accounting Standards Board will re-examine rules that allow banks to keep assets in special financing vehicles, off the books."

The Wall Street Journal writes that Providence Equity has sued Wachovia (WB) over closing a deal to by TV stations from Clear Channel (CCU)

The Wall Street Journal writes that the surge in oil makes it more likely that OPEC will hold production steady.

The New York Times writes that Viacom (VIA) profits rose on the strength of it studio results.

The FT reports that private equity firms are raising tens of billion of dollars despite a tough economy.

Bloomberg reports that auction-rate bond failures have lead to the worst month for munis since 2003.

Douglas A.McIntyre

Read More »

Posted on: February 29, 2008 – 4:15 am in Press Digest, , , , , , , , ,

Asia Markets 2/29/2008 (HMC)(CHU)(PTR)

Markets in Asia were mixed.

The Nikkei fell 2.3% to 13,603. Casio fell 3.6% to 137. Honda (HMC) fell 3% to 3260.

The Hang Seng fell 1.1% to 24,332. China Unicom (CHU) fell 4.3% to 17.14. PetroChina (PTR) fell 1.8% to 11.84.

The Shanghai Composite rose 1.1% to 4,385.

Data from Reuters

Douglas A. McIntyre

Posted on: February 29, 2008 – 3:49 am in International Markets, , ,

Cramer On Agriculture, Interviews Deere CEO (DE)

On tonight’s MAD MONEY on CNBC, Jim Cramer wanted to feature agriculture by interviewing Deere & Co. (NYSE: DE).  If you want to own a company that wins off of food for fuel and the that wins off of agricultural machinery, Cramer said you want Deere & Co. (NYSE: DE).  He noted that this is up 149% since he started recommending it in 2005, and the company outperformed on last earnings.  Last night he discussed some of this in a Hillary Clinton interview, and he also gave his five favorites earlier this week to profit off of agriculture.  He interviewed Bob Lane, CEO of Deere, and here are the paraphrased answers:

Why is there sustainability this time in a boom and bust historical business?
People around the world are doing better and when they do better they eat better.

As far as emerging markets?
The company can help improve and can deliver ag equipment to many, and there is a secular change of people wanting to eat better.  There will be ups and downs, but the change is here to stay.

As far as alternatives and the price of grain, are you concerned that prices can only go down?
There will be changes in price, many down, but one-quarter of the world is doing significantly better and demand will stay strong.

As far as twin tailwinds from ethanol and worldwide rising up of people who want better food, which is more important?
The growing demand for food is more important, but biodiesel and other food for fuel matter.

As far as candidates not liking NAFTA, are you not concerned that NAFTA could change?
The large combine in Illinois ships one-quarter of the units outside of the U.S., and without global markets many customers are not prospering any more.

Cramer said you have his blessing to BUY Deere stock anywhere below $100.00, because you’ll keep making money with this one long after the show.  Deere shares closed up 0.8% today at $86.97, and shares were up marginally at $87.40 after the interview.  Its 52-week trading range is $51.59 to $94.77.

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 6:20 pm in Agriculture, Cramer,

Gap’s ‘Less-Bad’ News Not All Bad (GPS)

Gap, Inc. (NYSE: GPS) is seeing a 5% rise after the ailing casual apparel retailer reported earnings.  The company posted $0.25 EPS with a 5% revenue drop to $4.67 Billion, and First Call estimate was $0.35 EPS on $4.7 Billion in revenues.  For fiscal targets a year out it gave a range of $1.20 to $1.27 EPS, and First Call has estimates of $1.23 EPS.  It looks like the worst part of plummeting earnings may be behind the company, even if the news is not yet great.

Perhaps the driving force rather than the real earnings results was more of the company’s keeping costs down, a dividend hike, and a share buyback.  Gap gave word it would repurchase up to another $1 Billion, with about 16% of that coming from Fisher founding family members.  Its annual dividend was also being raised from $0.32 to $0.34.

We still think that the company’s best shot here is to divest Old Navy as its worst image brand.  We have noted how it needs to get rid of this pig.  The company’s market cap at the close today was $14.6 Billion, and that is one of the few initiatives it can take that would actually make an immediate dent. 

Shares are up 5% at almost $20.50 on relief that things are no longer looking like they just continue to get worse and worse and worse.  This one still has a lot to prove before "it’s back" as far as Wall Street and main Street are concerned.  The 52-week trading range is $15.20 to $22.02, and the highs in the late-1990’s and early in 2000 were north of $40.00.

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 5:50 pm in Apparel, Earnings, Retail,

Dell’s Turnaround Is A Slow Turn, H-P Stays Much Stronger (DELL, HPQ)

Dell Inc. (NASDAQ: DELL) posted earnings of $0.34 EPS outside of charges on revenues of $15.99 Billion, while First Call had estimates at $0.36 EPS on revenues of $16.27 Billion. After items, Dell’s net was $0.31 EPS. Those numbers had already come in come in slightly by since its last earnings report, but that was too low to please Wall Street after a different message from Hewlett-Packard.

We didn’t get formal guidance, although the hints all pointed to the PC-giant being more cautious. Estimates for next quarter are $0.35 EPS and $15.8 Billion in revenues.  The company said it was returning to growth, but the company noted a slowing US-Customer and a slowdown in financial firms.  The company also noted that the retail in-store push came too late to add enough to past results.

The stock closed at $20.87, up 0.5% today, and the 52-week Trading range is $18.87 to $30.77.  Dell shares had been down almost 4% in after-hours trading, but shares are currently down 1.5% at $20.55.

Wall Street really wanted more than this, particularly in light of much stronger comments from H-P with its earnings.  Dell’s turnaround might be taking hold, but it’s not yet back to beating H-P.

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 5:30 pm in Earnings, PC Companies, ,

The 52-Week Low Club (S)(NT)(GCI)

Nortel (NT) Nine-to-one this dog never hits bottom. Down to $9.05 from 52-week high of $30.

Mylan (MYL) Market unhappy about quartery results. Sells off to $12 from 52-week high of $22.90.

Gannett (GCI) Newspaper companies in flat spin. Drops to $30.26 from 52-week high of $61.68.

Sprint (S) drops dividend and loses a ton of money. Dips to $7.75 from 52-week $23.42.

Journal Register (JRC) Another newspaper down for the count. Sell down to $1.07 from 52-week high of $7.23.

EpiCept (EPTC) Europe drug authority turns down product. Drops to $.87 from 52-week high of $4.89.

Neurogesx (NGSX) Bad trial data. Falls to $3.62 from 52-week high of $10.99.

Borland Software (BORL) Rough earnings. Down to $1.93 from 52-week high of $6.22.

Douglas A. McIntyre

Posted on: February 28, 2008 – 4:17 pm in HI/LOW, , , , , , ,

Leveraged Gold ETN/ETF Launches (DZZ, DGP, DGZ, GLD, GDX, DGL, DB)

Deutsche Bank AG (NYSE: DB) has launched three new Exchange Traded Notes (ETN’s) that will track the performance of certain index moves inside the Deutsche Bank Liquid Commodity Index – Optimum Yield Gold ™.  What is great is that these three ETN’s can be used in IRA’s for long or short trading styles because of some immediate inverse in the ETN’s.  Investors can also make leveraged strategies based on the ETN’s.

The ETN’s listed by Deutsche Bank will now trade on NYSE Arca under the following ticker symbols:

  • DB Gold Double Short ETN (NYSE: DZZ)
  • DB Gold Double Long ETN (NYSE: DGP)
  • DB Gold Short ETN (NYSE: DGZ)

Prior to this, the normal gold ETF from the Deutsche Bank index was PowerShares DB Gold (AMEX: DGL).

Investors will now have more select exchange traded vehicles outside of the streetTRACKS Gold Shares (NYSE: GLD) ETN that tracks the raw price of gold on a 1:10 price ratio, and outside of the ETF called the Van Eck’s Market Vectors Gold Miners ETF (AMEX: GDX) that tracks some of the major gold mining stocks rather than the commodity.   

"Thar’s gold ETN’s in them thar hills."

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 2:35 pm in ETF, Metals, , , , , , , , ,

eBay Gets Rid of MercExchange Patent Suit (EBAY)

eBay Inc. (NASDAQ:EBAY) has agreed to a settlement with MercExchange, L.L.C. to dismiss all claims and appeals in the patent lawsuit filed by MercExchange in September of 2001.

These two companies had been involved in litigation over MercExchange’s patents and eBay’s online auctions and fixed price-related e-commerce operations.  eBay is purchasing all three patents involved in the lawsuit, and it is also buying some additional related technology and inventions and a license to another search-related patent portfolio.  These other items were not a part of the long-standing lawsuit.Buy_it_now

The full financial terms of the settlement were not disclosed, although eBay noted that it does not expect the settlement to affect its 2007 results or its 2008 financial guidance issued on January 23, 2008.

This is good news in the sense that eBay won’t have an NTP type issue like we saw over the BlackBerry, but might have gotten off scott-free if it decided to fight.  Sometimes it is just cheaper to move on down the road.  Shares are down about 1.5% with the overall market today to $27.17.  This is still very close to its 52-week lows of $25.64.

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 2:14 pm in Internet, Law, ,

SPAC IPO FILING: United Services Management Corporation

We have yet another blank check company or SPAC (special purpose acquisition company) that has filed to come public via an IPO.  United Services Management has filed for an initial public offering of up to 16 million units, or a total of 18.4 million units if overallotment is taken, at the traditional $10.00 unit price.  Each unit will consist of one share of common stock and a warrant with a strike price of $7.50.

United Services Management Corporation is a newly organized blank check company formed for the purpose of acquiring (or merging, etc.) with one or more businesses or assets.  It noted that prospective target businesses will not be limited to a particular industry or to any geographic location, although it intends to focus initial efforts to a company that provides services to the government and commercial markets, with a particular emphasis on communications, information technology, or IT, and consulting.

No stock ticker has been taken, although Citigroup is listed as the underwriter for the IPO.

Its chairman and CEO is Joseph Wright, who is Chairman of Board of Intelsat Ltd.  He was CEO of PanAmSat from 2001 until selling that business in 2004.  In 2005, he led the company with its IPO and it noted that this combined of Intelsat/PanAmSat operation was acquired by BC Partners for some $16.5 Billion this month.  Other officers are listed as follows:

  • Mr. Bernikow was Deputy Chief Executive Officer at Deloitte & Touche;
  • Peter A. Cohen, founded Ramius Capital Group, LLC, a privately owned investment management firm that manages approximately $12 billion of assets;
  • James A. Mitarotonda, is Chairman of the Board, President and Chief Executive Officer of Barington Capital Group, L.P., an investment firm that he co-founded in November 1991;
  • Jerry Markowitz, is currently a partner in Conifer Securities, a supplier of infrastructure for investment managers.

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 1:05 pm in IPOs, , , , ,

Previewing Dell’s Turnaround Earnings (DELL, HPQ, IBM)

Dell Inc. (NASDAQ: DELL) is set to report quarterly and fiscal earnings after the close of trading today.  on last look, First Call had estimates at $0.36 EPS on revenues of $16.27 Billion. Those numbers have come in slightly since its last earnings report.  Estimates for next quarter are $0.35 EPS and $15.8 Billion in revenues, and Fiscal Jan-2009 estimates are $1.56 EPS on $65.26 Billion.  This translates to an estimated roughly 13% EPS growth on roughly 6% revenue growth.

For starters, this will mark the one-year return as far as quarterly earnings reports are concerned with the return of Michael Dell.  We have seen the company get its SEC filings in order, and we have seen a more retail oriented offering of Dell PC’s in-store at many major retailers.  So far, the turnaround has not grabbed Wall Street and shares are lower than upon the return of Michael Dell. The company is still growing and the new initiatives are still in an infancy stage.  Bloomberg has noted how computers are not selling well at Wal-Mart and Best Buy already guided sales lower for 2008.

At $20.70 in late morning trading, shares are at the bottom-end of a trading range of $18.87 to $30.77 over the last 52-weeks.  Analysts still have an average target of roughly $29.00 per share.  The stock has recovered off of a double-bottom around $19.00.  We’d note that the 50-day moving average is only $21.32, and the stock has traded under that moving target since early November.  Options traders appear to be braced for a move of up to $1.00 to $1.11 today in either direction.

We’ll also get to see how much stock the company has retired in that recent $10 Billion share buyback plan.  We’d also note that Dell had roughly 52.3 million shares listed in its most recent short interest.

With shares down one-third, this one has fared far worse than Hewlett-Packard Co. (NYSE: HPQ) that is only about 10% lower than its 52-week highs.  H-P also set the bar far higher for the company after it posted earnings and slightly raised guidance last week. The same can be said for the freshly hiked guidance from IBM (NYSE: IBM), which was essentially really a net "reaffirmed guidance" as a result of the new fresh giant share buyback plan.  Despite the sell-off being worse at Dell than elsewhere, Wall Street likely will demand good news.

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 12:46 pm in Earnings, PC Companies, , ,

The Business Day In Global Warming (BP, GE, RZ, CCTC, SAI, ASTI, TTEK)

BP plc (NYSE: BP) announced that it has moved into full construction of Phase One of the Sherbino Wind Farm, a 150 megawatt renewable wind energy project that is roughly 30 miles east of Ft. Stockton, Texas.  BP also valued its green businesses in wind, hydrogen, bio-mass, and solar as being worth $5 to $7 Billion, and said it will look at how best to realize that growing value for shareholders. This may be a sale or spin-off, if not look for joint-ventures or partnerships.

General Electric (NYSE: GE) disclosed that it entered into a more than $700 million supply pact for more than 500 megawatts of renewable wind energy with Renewable Energy Systems Americas Inc., an Austin, Texas, wind developer, with wind turbines for projects in 2009 and 2010.

We’d also note that last night Jim Cramer interviewed presidential candidate Hillary Clinton, and they briefly discussed "all renewables" as a solution to dependence upon foreign oil.  No mention was made of nuclear though.

We saw some key downgrades in the solar sector yesterday out of Banc of America.

Raser Technologies, Inc. (NYSE Arca: RZ) signed a memorandum of understanding with Tecstar, LP and Wheel to Wheel, LLC, outlining their intent to work together with Raser to manufacture plug-in hybrid electric vehicles (PHEV) for utility, government, and other fleets.

Clean Coal Technologies, Inc. (Pink Sheets:CCTC) signed an agreement with The Benham Companies, LLC, a subsidiary of Science Applications International Corporation or SAIC, inc. (NYSE: SAI) to support commercialization of CCTI’s coal cleaning plants in China.

Ascent Solar Technologies Inc. (NASDAQ: ASTI) and ITOCHU Corporation of Japan announced that the companies will begin work toward the development of one or more strategic cooperation relationship in machinery for Ascent Solar’s planned 100 MW manufacturing facility, raw materials for solar modules, future distribution of Ascent Solar products in Japan, and more.

Tetra Tech, Inc. (NASDAQ:TTEK) was awarded three wind energy projects for engineering, procurement, and construction services totaling about $150 million by western utility PacifiCorp. Work on the three projects will begin immediately and is expected to end in December 2008.

As a reminder, whether you prefer the term "Global Warming" or "Climate Change" is not the issue as far as 247WallSt.com covers it. Green business has become big business, and this affects many public companies today.

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 12:05 pm in Alternative Energy, , , , , , , , , ,

Dell’s (DELL) Retail Hell

Evidence, anecdotal or stronger, is emerging that Dell (NASDAQ: DELL) machines are selling poorly at retailers like Wal-Mart (NYSE: WMT) and Best Buy (NYSE: BBY).

The lines of people looking for a new PC have probably shortened considerably. If PCs ran on gas, they would be even worse. But, Dell’s stuff is also being pushed off the front shelves by products from HP (NYSE: HPQ) and Sony (NYSE: SNE). Walter Price, a portfolio manager who helps oversee $3 billion at RCM Capital Management told Bloomberg “Dell doesn’t have the broad product lineup of H-P. Dell doesn’t have the deep relationships with their partners that H-P has, and Dell’s effort in retail is unsophisticated.”

Michael Dell, founder and CEO-for-life, may be much further from getting the company back on its feet than investors had hoped. Over the last six months, Dell shares are down over 20% while rival HP is up 5% for the period.

Dell made a habit of saying how fabulous his former CEO Kevin Rollins was. At the end of January 2007, he threw Rollins under a bus and offered him no first aid after he had been run over. With the company’s shares well down from that day, the stock market gods have got their revenge.

Douglas A. McIntyre

Posted on: February 28, 2008 – 10:19 am in PC Companies, , , , ,

CardioNet Sets IPO Terms (BEAT, SIVB)

CardioNet, Inc. has set the terms for its IPO in an amended SEC filing.  The systems provider for monitoring real-time patient information intends to sell some 6.6 million shares in a price range of $22 to $24 per share.

3.0 million shares will be from the company while 3.6 million of the shares will be from selling stockholders.  The use of proceeds from the IPO will be to repay a term loan and to pay a fee to Silicon Valley Bank, part of SVB Financial (NASDAQ: SIVB); and the rest to make payments to former stockholders of PDSHeart Inc., a cardiac monitoring company CardioNet bought last March.  The company has raised over $200 million in capital and initial efforts are focused on the diagnosis and monitoring of cardiac arrhythmias that is marketed as the CardioNet System.   Since introduction of the CardioNet System in January 2003, physicians have enrolled over 109,000 patients.

Citigroup is the lead underwriter, with Lrhman, Leerink Swann, and Thomas Weisel also in the underwriting.

CardioNet will trade under the ticker "BEAT" on NASDAQ.

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 9:20 am in IPOs, Medical, , ,

XM Satellite Earnings Less Monitored Than Merger Hopes (XMSR, SIRI)

XM Satellite Radio just posted earnings of a net loss of $239 million on a 20% rise in revenues to $308 million.  The net loss on an EPS basis was -$0.78 EPS, but that included $0.25 for certain merger and settlement related charges.  If we back that out we would get a -$0.53 EPS.  First Call was looking for -$0.63 EPS on $303.1 million in revenues, so this was a narrower loss on slightly better revenues.

XM Surpassed 9 Million total subscribers in 2007 and XM-equipped new car production rose 64% in 2007.  1.4 million of the total net subscriber adds came in the quarter out of the 3.5 million adds for 2007.

As a reminder, Sirius Satellite Radio (NASDAQ: SIRI) said it would provide guidance "after it secures merger approval" earlier this week.

XMSR shares are up almost 1.5% at $12.62 in early pre-market trading, and the 52-week trading range is $9.62 to $16.44.  This one looks like it too is not trading on its earnings.  All eyes are looking for merger approval news. 

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 8:46 am in Earnings, Satellite, ,

CVR To Spin-Off Fertilizer Partners LP Unit in IPO (CVE, CVI)

CVR Partners, LP has filed to come public via an initial public offering, and it will have the proposed ticker of "CVE" on the NYSE.  The prospectus calls for a sale of 5.25 million units, and that is before a 787,500 unit overallotment. 

CVR partners is a limited partnership formed by CVR Energy, Inc. to own and operate a nitrogen fertilizer facility and develop a diversified portfolio of assets that are complementary to its business and CVR Energy’s refining business.  Its nitrogen fertilizer business produces ammonia and urea ammonia nitrate fertilizers.

This is a spin-off of CVR Energy, Inc. (NYSE: CVI), which it is reliant upon for management and for many key areas of operation.  Upon the closing of this offering, CVR Energy will indirectly own approximately 87% of the outstanding units.

The company generated net sales and operating income of $173.5 million and $71.0 million for 2005, $170.0 million and $43 million for 2006, and $187.4 million and $48 million for 2007.

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 8:32 am in Agriculture, IPOs, Oil & Gas, ,

Top 10 Pre-Market Analyst Calls (A, BBBY, BBY, DTV, ECL, EP, IBM, NTAP, LRCX, MOT, CRM)

These are not all of the calls affecting stocks, but these are the top analyst calls that 247WallSt.com is looking at this Thursday morning:

  • Blockbuster (NYSE: BBI) raised to Overweight at JPMorgan.
  • Borg Warner (NYSE: BWA) cut to Neutral at JPMorgan.
  • Boyd Gaming (NYSE: BYD) cut to Underweight at KeyBanc.
  • CDC Corp. (NASDAAQ: CHINA) started as Buy at Cantor Fitzgerald.
  • Chimera (NYSE: CIM) started as Neutral at JPMorgan.
  • Lear (NYSE: LEA) cut to Neutral at JPMorgan.
  • RF Micro Devices (NASDAQ: RFMD) downgraded to Hold at Jefferies.
  • Sotheby’s (NYSE: BID) raised to Outperform at JMP Securities.
  • Western Digital (NYSE: WDC) and Seagate (NYSE: STX) were both cut to Hold from Buy at Citigroup.
  • Varian (NASDAQ: VARI) raised to Buy at UBS.

Jon C. Ogg
February 28, 2008

Posted on: February 28, 2008 – 8:08 am in Analyst Calls, , , , , , , , , ,

Sprint (S) Kills Dividend

Sprint (NYSE: S) announced consolidated net operating revenues in the quarter were $9.8 billion, compared to $10.4 billion in the fourth quarter of 2006. The net loss for the quarter was $29.5 billion or $10.36 diluted loss per share compared to net income of $261 million or 9 cents diluted earnings per share in the fourth quarter a year ago

As previously reported, wireless subscribers declined 108,000 in the fourth quarter

Sprint Nextel is currently assessing a reorganization of its business model, associated sales, distribution and marketing plans, and its financial outlook. The company expects to provide an update when these plans are finalized. In the first quarter of 2008, Sprint Nextel currently expects to report a sequential increase in post-paid churn and a decline in Wireless post-paid subscribers of approximately 1.2 million customers, which is unlikely to improve in the second quarter.

Sprint’s new CEO said "in light of current capital market conditions, we are taking steps to increase our financial flexibility and mitigate refinancing risk by borrowing funds from a revolving credit facility and discontinuing declaring a dividend for the foreseeable future."

Douglas A. McIntyre

Posted on: February 28, 2008 – 7:09 am in Wireless,

Europe Markets 2/28/2008 (VOD)(BAY)(AXA)(SI)

Stocks fell in Europe at 6.55 AM New York time.

The FTSE was off .8% to 6,033. Whitbread rose 7.1% to 1313. Vodafone (VOD) fell 1.1% to 162.4.

The DAXX dropped .8% to 6,941. Bayer (BAY) fell 3.4% to 52.26. Siemens (SI) fell 2.3% to 89.98.

The CAC 40 sold off .8% to 4,929. AXA (AXA) fell 2.5% to 23.25. EADS dropped 2.9% to 18.25.

Data from Reuters

Douglas A. McIntyre

Posted on: February 28, 2008 – 7:01 am in International Markets, , , ,

Sears (SHLD) Customers Hybernate, Buy-Back Eats Cash

Sears (SHLD) spent all of its money on stock buy-backs, which leaves it low on cash.

Sears reported net income of $426 million, or $3.17 per diluted share, for the fourth quarter ended February 2, 2008, compared with net income of $811 million, or $5.27 per diluted share, for the fourth quarter ended February 3, 2007 For the quarter, domestic comparable store sales declined 4.5% in the aggregate, with Sears Domestic comparable store sales declining 4.0% and Kmart comparable store sales declining 5.2%.

For the quarter, total revenues decreased $1.1 billion to $15.1 billion for the 13 weeks ended February 2, 2008, as compared to total revenues of $16.2 billion for the 14 weeks ended February 3, 2007

We had cash and cash equivalents of $1.6 billion at February 2, 2008 (of which $743 million was domestic and $879 million was at Sears Canada) as compared to $3.8 billion at February 3, 2007, a decline of $2.2 billion. For the year, the significant uses of our cash included $2.9 billion for share repurchases.

That does not leave much extra cash to hold the company through another bad year.

Douglas A. McInyre

Posted on: February 28, 2008 – 6:33 am in Retail,