Daily Archives: July 9, 2008

Wachovia (WB) Names CEO, Still In Deep Trouble

Wachovia (WB) named a former Treasury official as its CEO. Robert Steel most recently served as undersecretary for domestic finance for the U.S. Department of the Treasury according to Reuters. He has also been a vice chairman at Goldman Sachs (GS).

The bank’s announcements did not end with that. The company said credit, mortgage and legal problems will result in a $2.6 billion to $2.8 billion second-quarter loss.Wall St. expected the numbers to be better.

WB trades at $14.29, well below its 52-week low of $53.10.

Douglas A. McIntyre

Posted on: July 9, 2008 – 5:43 pm in Banking,

The 52-Week Low Club (FRE)(WB)(MER)(TSO)

Freddie Mac (FRE) sells down 25% to $9.88 on concerns raising capital will wipe out shareholders. The company’s 52-week high is $67.20.

Wachovia (WB) Panic selling in financial shares knocks this down to $14.28 from 52-week high of $53.10.

Merrill Lynch (MER) falls on concerns the company may have to raise over $5 billion. Down to $29.44 from 52-week high of $89.23.

Tesoro  (TSO) Refining companies seeing margins squeezed. Drops to $17.24 from 52-week high of $65.98.

Douglas A. McIntyre

Posted on: July 9, 2008 – 2:55 pm in HI/LOW, , , ,

Despite Upgrade, VeriSign Problems May Only Be Starting (VRSN, WWWW, ENTU)

VeriSign inc. (NASDAQ: VRSN) has had more than a tough week.  Shares are seeing a winning day so far as it was upgraded this morning over at R.W.Baird to an Outperform rating.  While we did expect someone to upgrade the stock based upon price/valuation, we are genuinely concerned here that VeriSign’s problems may still have more life in the legs. 

Just two weeks ago, we issued a SPECIAL SITUATION alert to our newsletter subscribers with a short sell or put option strategy based upon many current and recent concerns we have.  We sent out an alert on Monday night asking for holders to cover HALF of the position.  This gain on Tuesday morning would have been approximately 20% on the stock, but the options trade (DEC08 $32.50 PUTS) would have generated more than a 100% gain.  You can see the actual report sample document here now that this is off of embargo.

Right before the long weekend, the company announced that its CEO was vacating the top spot. While that was the catalyst that prompted our profitable call to bet against it, that is likely the second shoe to drop among many.  Yes, the second.  The first shoe to drop was the April resignation of its CFO and of its Controller simultaneously.  Sorry, but that is more than a flag and cannot just be a coincidence.

So what else is there to not believing the current value of this stock?  Competitors such as Website Pros (NASDAQ: WWWW) (or Web.com), Entrust (NASDAQ: ENTU), Register.com, GoDaddy, 1and1, and others offer far cheaper services, and while we argue that VeriSign is the Rolls Royce of the web we believe that the small business migration growth from the waves of "accidental entrepreneurs" will have to seek lower priced services at shops that offer turnkey solutions.  There is some political risk here after 2009 depending on the US Presidential election, and there are many new domain extensions coming online. 

We also believe that its divesting strategy is taking far too long and is going to generate far less than was initially spent on some of these businesses.  Another isue is teh share buyback, which we believe Wall Street gave the benefit of the doubt over on the entire amount and then some all up front without considering the risks.  The company’s recent expansions may also not pan out for VeriSign as quickly as it hopes.

Lastly, we believe that this last departure puts the bias for a real miss to earnings as a very likely scenario.  That is pure speculation though, as the company didn’t change its May guidance recently on the CEO departure.  We also believe that its operating costs are going to grow, and we also believe that it will have a hard time passing down additional price hikes for domain registration.

There are many risks to staying negative after such a sharp and fast drop.  Butthat is why we believe that only a half position should be maintained in a bet against the company. We have continued to favor Website Pros, Inc. (NASDAQ: WWWW) for our "10 Stocks Under $10" newsletter and just issued a new alert on that one this last weekend.

Risks in staying negative in VeriSign here revolve around the company suddenly selling units that have been on the block, accelerated share repurchases, accelerated and above expectations new orders and expanded orders from key customers, domain growth, and more.

Jon C. Ogg
July 9, 2008

Posted on: July 9, 2008 – 2:30 pm in Internet, , ,

New Research: Apple (AAPL) iPhone Will Wreck RIM (RIMM)

The Apple (AAPL) iPhone may do more damage to RIM (RIMM) more quickly than most analysts think.

According to Changewave’s most recent survey of 3,567 consumers, 55% of those who plan to get a new smartphone in the next 90 days will get an iPhone. That is up 21% points from the last survey.

RIM’s share of planned consumer purchases fell 6 points to 23%.

Changewave also found that "In another positive for the new 3G iPhone, better than one-in-two current iPhone owners (55%) say they’re Very Likely to buy the 3G iPhone for themselves or someone else in the future"

The research does say that RIM is working on new snartphone products to target the consumer market and that it has not been beaten to death. Yet.

Douglas A. McIntyre

Posted on: July 9, 2008 – 2:29 pm in Wireless, ,

Shaw Group Digs In Ahead of Earnings (SGR)

Shaw Group Inc. (NYSE: SGR) is set to report earnings today after the close.  We have First Call estimates as being $0.63 EPS on $1.89 Billion in revenues.  Estimates for next quarter are $0.73 EPS on $1.94 Billion revenues, which also marks the company’s year-end.  If the company dares to offer any Fiscal August 2009 targets, First Call has estimates at $3.27 EPS on $8.49 Billion (represents expected growth of 42% on EPS and 18% on revenues).

Shaw is in an interesting position with such a pullback that has been witnessed.  This company is the true vertical winner for any and all energy plant infrastructure on a global basis whether you want to build or retool plants from top to bottom in fossil fuels or nuclear plants.  At $55.83, shares are down literally 30% from their 52-week highs.

Options are a bit hard to use because the strike prices are so wide, but options traders appear to only be pricing in a move of $2.35 to $2.90 in either direction.  Interestingly enough, some options speculation has take place this afternoon in the JUL08 $60.00 Calls that expire at the end of next week.

Analysts have an average price target in the mid-$60’s and there really hasn’t been any meaningful analyst shift in quite some time as analysts did most of their downgrades in 2007.

One of Shaw’s key issues is that its past has never entirely been forgiven  despite an exponential rise over the last five years.  This is partly because of a sporadic history of late when it comes to earnings, which makes it a wonder that options traders are only looking for a 5% or 6% max move.  As of the second reading in June, Shaw had 4.19 million shares listed in the short interest, which is about 2.2 days-to-cover.

Jon C. Ogg
July 9, 2008

Posted on: July 9, 2008 – 1:55 pm in Earnings, Infrastructure,

Sun (JAVA) Surrenders, Breaks Below $10

The shares of Sun Microsystems (JAVA) have finally slipped into the briny deep. The stocked moved under $10. The last time JAVA was that low was in 2002. Back then it traded under the symbol SUNW. So much for changing the call letters. Or reverse-splitting the shares. 24/7 Wall Street mentioned that Sun would probably go below $10 in the July 7 issue of its weekly newsletter.

Sun now trades at below 60% of annual revenue, which is extraordinary since the company has no debt to speak of. HP (HPQ) trades at about 1x sales and IBM (IBM) trades even higher by that measurement.

There is no new from Sun. That is extraordinary, since the company PR department likes to put out at least one meaningless announcement a day. With sentiment about the company as poor as it is, they may have gone to ground or were laid off in the last series of job cuts.

The market is now fairly clear on one thing. It does not expect any recovery at Sun, perhaps ever. The firm’s future as an independent company is doubtful. It simply does not have the market share in the server business. In the last quarter, its sales were flat and Sun lost money. Management wants to "cost cut" its way to success. Not likely.

Sun’s next quarterly report may be a watershed. It is hard to see the board keeping on CEO Jonathan Schwartz if the numbers are bad. They will have to find an investment bank to shop the company.

The company does not have a future. The best thing the board can do it find it a home.

Douglas A. McIntyre

Posted on: July 9, 2008 – 11:53 am in Technology Companies, , ,

Yahoo! Inc. Denies Yang Resignation Rumors (YHOO)

There have been light rumors floating around that Jerry Yang was going to resign from Yahoo! Inc. (NASDAQ: YHOO).

We just put in a call to the company and this is a strong denial of any such rumor.  We spoke with Brad Williams in investor relations who said in response to "Is this a false rumor?" and he responded "Definitely! There’s no basis."  He also said they have no idea where the rumor came from.

There is good news here and bad news here.  If Carl Icahn gets his way, Yang (and current friends) won’t have to worry about whether or not he (or they) intend to resign or not.  It could happen for them against their wishes.  It also shows that Yang is going to fight for his agenda, whether some shareholders like it or not.

Yahoo! shares are down 1% at $24.39 today, and there is not even abnormal trading volume.

Jon C. Ogg
July 9, 2008

Posted on: July 9, 2008 – 11:26 am in Internet, Management Change, Rumors,

TransCanada Proceeds With Maine Wind Power Project (TRP)

TransCanada Corporation (NYSE: TRP) has announced that its Kibby Wind Power Project has received a final and unanimous approval for its development plans from Maine’s Land Use Regulation Commission.

The company has said that construction plans are now underway for the 132MW wind project located in Kibby and Skinner Townships in northwestern Franklin County, Maine.

While wind is the new hot thing for anyone involved, we’d note that this energy infrastructure company has an implied US market cap of nearly $20 Billion and this company generated some $7.7 Billion in 2007 revenues.

This project is for 44 wind turbine generators of 3MW each and is expected to take 12 months to 18 months to complete.  The capital cost of the project is listed as $320 million and is expected to provide enough energy to run about 50,000 homes in New England.

Jon C. Ogg
July 9, 2008

Posted on: July 9, 2008 – 10:51 am in Alternative Energy,

Basic Energy Reports on June Operations; Gets Flak/Props on Grey Wolf Merger (BAS, GW, PDS, RMG)

Oilfield services company Basic Energy Services (NYSE:BAS) released its June operations report this morning. The company has increased its rig count by one over May, and thirty since a year ago. Rig utilization stands at 79%, and drilling utilization is down a few points from May, but up from 63% to 83% over June 2007. These are solid numbers, and the company’s president and CEO expects improvements in pricing to offset higher fuel and labor costs.

The interesting news is behind the numbers (as usual). In April, Basic announced a "merger of equals" with Grey Wolf (NYSE:GW), a well driller. The surviving entity will retain the Grey Wolf name and NYSE ticker. Grey Wolf shareholders will receive $1.82 in cash plus one share of stock in the new company in exchange for four shares of existing Grey Wolf stock. Basic stockholders receive $6.70 in cash and 0.91975 shares of stock in the new company for each share of Basic stock. Then, in early June, Canada’s Precision Drilling Trust (NYSE:PDS) made an unsolicited offer of $9.00/share in cash and stock for Grey Wolf. Precision has bumped its offer twice, and it now stands at $10.00/share. Precision, like Grey Wolf, is a drilling company, and the conventional wisdom seems to be that the deal between Precision and Grey Wolf makes more sense than the Grey Wolf/Basic deal because there is little chance for cost-cutting in the Basic merger.

On Monday, RiskMetrics (NYSE:RMG) weighed in with a report questioning the Basic/Grey Wolf merger, and raising questions of conflict of interest on Grey Wolf’s Board. Yesterday, Egan-Jones Proxy Services recommended that Grey Wolf stockholders approve the Basic merger at the special meeting called for July 15th. Grey Wolf issued a press release citing Egan-Jones’ recommendation.

The combination of Precision Drilling and Grey Wolf yields a larger drilling company, but it’s hard to see how there will be significant cost savings. The Basic/Grey Wolf merger gives Grey Wolf some additional drilling capability, plus services such as completion, workovers, and abandonment. Strategically, the latter deal seems to position the merged company better, but it won’t pay off in a quarter or two. To some shareholders, that quick payoff trumps everything else.   

Paul Ausick
July 9, 2008

Posted on: July 9, 2008 – 10:08 am in Mergers and Buy Outs, Oil & Gas, , , ,

Boeing’s (BA) Foolish Forecast: Airline Industry Awful, Aircraft Sales OK

It would make sense that with airlines canceling flights left and right due to high oil prices that Boeing would be looking a a grim year or two. Not so.

Boeing (BA) forecasts a $3.2 trillion market for new commercial airplanes over the next two decades, driven by an increasing demand for airplanes to replace older, less efficient aircraft. More than 30% of these orders are already on backlog.

Of course, Boeing could be wrong. It has had trouble estimating delivery times for its Dreamliner. It may not be any better at looking out two decades.

The greatest risk to the company’s estimates is that large airlines may not have the capital to lease or buy a huge number of planes, even if they are more efficient to operate. If several of the largest carriers go into Chapter 11, it is by no means guaranteed that they can support the market for new planes. New financing coming into bankrupt carriers might opt to get newer aircraft which cost less to operate. But, it is not clear how much capital there will be to go around if the current downturn gets worse. Having several carriers in line for financing at the same time might break the bank.

Counting on the Boeing forecast is a fool’s game.

Douglas A. McIntyre

Posted on: July 9, 2008 – 9:58 am in Aerospace,

Did Ken Heebner Go Mega-Bullish? (PBR, SLB)

Today we got to see Ken Heebner of CGM Funds for a quick interview on CNBC.  For those of you who follow Mr. Heebner, you already know that he is deemed by most as a far better trend spotter and far more nimble than Warren Buffett.

He recently came out with a strong defense of Petrobras or Petroleo Brasileiro (NYSE: PBR).  This morning he kept his bullish stance on the stock with 14 Billion barrels of oil in proven reserves, although he did note some political developments that could ultimately mean less profits for drilling in an area (which he doesn’t seem to believe will be the case).

Another name Heeber came out positively on this morning was Schlumberger (NYSE: SLB).  He believes this is the winner in exploration and services and is cheap at 17-times forward earnings because he thinks we’ll see accelerated earnings growth because of higher prices later in 2008. 

On a broader basis, it really seems like Heebner is turning mega-bullish.  It isn’t that he made any major predictions, but he noted how certain oversold and sentiment readings are at levels not seen since 1974 and not since right before the Iraq war.  He also noted how there is a record number of shorts (short selling) and things just aren’t as bad as they think.  In fact, Heebner said he thinks the economy will look significantly better a year from now and the market is supposed to discount up to a year out.

On overall commodities, he’s still bullish but didn’t give any names.  He said the global growth story is still there and commodity prices might be a problem in the future.  Unfortunately, we got no word on whether or not he thinks the pullback specific to agriculture stocks is an opportunity or not.

He isn’t immune from making wrong decisions if you look at his call on Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) where he called a bottom very prematurely in August 2007.

Jon C. Ogg
July 9, 2008

Posted on: July 9, 2008 – 9:41 am in Commodities, Oil & Gas, ,

Vonage & Comcast Work On Standards (VG, CMCSA, CMCSK)

Comcast Corporation (NASDAQ: CMCSA) (NASDAQ: CMCSK) and Vonage Holdings Corporation (NYSE: VG) have announced a collaborative agreement this morning to address "the reasonable network
management of Internet services."

Comcast committed to work together with Vonage to ensure that network management techniques are chosen that effectively balance the need to avoid network congestion with the need to ensure that over-the-top VoIP services like Vonage work well for consumers.

Keep in mind that this is more of a protocol working arrangement for open standards or "platform-neutral" rather than a contract collaboration.  It might be more of confederacy than anything solid.  Comcast has announced other collaborations with BitTorrent, Inc. and Pando Networks, as well as participation in the P4P Working Group and elsewhere.

This isn’t even helping Vonage stock today.  Shares are down 3% at $1.55 right after the open.

Jon C. Ogg
July 9, 2008

Posted on: July 9, 2008 – 8:42 am in Internet, Telecom, , ,

Explaining the Cisco Drop (CSCO)

There have been many inquires around on Cisco Systems (NASDAQ: CSCO) this morning.  There are two issues moving the stock, of which one is real and one is conjecture.

CEO John Chambers gave an interview to Reuters yesterday calling the future CEO as more of a head of a group rather than a command and control CEO, which some are taking as the first hints that Chambers may be looking for the door.  This appears to not be the case, or at least it doesn’t appear to be inconsistent with past indications of recent years.  We wouldn’t even grace this one as a rumor.

But there is a research note this morning from UBS (which would have started making its ways around the institutions yesterday at the close or after the close.  UBS has maintained a NEUTRAL rating on the stock, but lowered its price target to $25.50 from a prior target of $27.00.  This is based on its channel checks suggesting that enterprise spending remains challenging with a further slowing in the U.S. markets (particularly West Coast)) and an expected slowing in Europe from last quarter.  UBS also noted that channel checks in emerging markets show an improvement from the low 10% year over year order growth in Q3-2008, but it doesn’t expect to see a recovery to the 30%+ levels.

This note also states, "we would not be surprised to see Cisco guide flat to down sequentially for 4Q08 given historical seasonality in challenging times. The Street is currently up 1.2% q/q at $10.436B, vs. UBS estimate at $10.230B."

The company also has a technology webcast later today, which you can access here.

Cisco shares are down 2.5% at $22.30 after closing up about 1.5% yesterday at $22.88.  Yesterday we saw over 2 million shares trade in the after-hours session and this morning we have seen almost 600,000 shares trade hands in the pre-market venue.

Jon C. Ogg
July 9, 2008

Posted on: July 9, 2008 – 8:33 am in Analyst Calls, Rumors, Technology Companies,

QLogic Shows Some Still Win In Tech (QLGC)

QLogic Corp. (NASDAQ: QLGC) is seeing a surge of interest this morning after the company raised its guidance. 

On a non-GAAP basis, QLogic expects $0.30 to $0.31 EPS, compared to the previously forecast range of $0.26 to $0.28.  The company now sees revenues in the range of $166 million to $168 million for the first quarter (Q1-2009). The company’s prior guidance was $154 million to $158 million.  First Call has estimates at $0.27 EPS on $156.4 million in revenues.

The company identified stronger sequential growth of approximately 9% for Host Products and approximately 8% for Network Products.

Shares of QLogic are up almost 14% at $15.90 on over 270,000 shares in pre-market trading.  The 52-week trading range is $11.46 to $17.97.

Jon C. Ogg
July 9, 2008

Posted on: July 9, 2008 – 8:14 am in Earnings, Technology Companies,

Lazard Clarifies Evergreen Solar Capital Raise, Maintains Buy Rating (ESLR)

Evergreen Solar (NASDAQ: ESLR) is a stock that has been under pressure after the company announced huge orders but then immediately turned around with a huge convertible note offering.  The offering wasn’t a damning one because it was being used for factory expansion to increase its capacity, but it did come after a large move that left many shareholders feeling like they were suckered in.

This morning Lazard Capital Markets’ Sanjay Shrestha has maintained his BUY rating and his $15.00 price target on Evergreen Solar.  What is perhaps more interesting than anything is that he is clarifying some of the uncertainties from that "capped Call" issue in this.  While these can be good, they frequently confuse shareholders. 

The $325 million in gross proceeds is after the inclusion of additional funds from that over-allotment option which was exercised.  The 4% convertible notes are said to have a $12.11 conversion price, but because the capped call is in place Shrestha notes that this technically is not dilutive to current shares until an effective $19.00 price.

Shrestha’s $15.00 price target reflects 20-times earnings of $0.85 EPS for ESTIMATES 2010 Earnings, discounted back 15%.  Shrestha concludes, "With near-term capital raise overhang behind the company, strong sales pipeline ($1.7 billion supplied by Evergreen and $850 million supplied by EverQ), excellent silicon position, and improved visibility on path to profitability, we believe ESLR represents a solid medium-term investment opportunity for small-cap investors, with an attractive risk/reward.

Jon Ogg
July 9, 2008

Posted on: July 9, 2008 – 7:55 am in Alternative Energy, Analyst Calls,

Top 10 Pre-Market Analyst Upgrades (CCJ, EDS, GENZ, GU, QCOM, STLD, RIG, VRSN, WB, XNPT)

These are not all of the upgrades we have seen so far this morning, but here are ten of the top positive analyst calls we have seen so far early this Tuesday morning:

  • Cameco (NYSE: CCJ) raised to Outperform at FBR.
  • Electronic Data Systems (NYSE: EDS) Raised to Neutral from Sell at Goldman Sachs.
  • Genzyme (NASDAQ: GENZ) started as Buy at UBS.
  • Gushan Environmental (NYSE: GU) Raised to Buy at Piper Jaffray.
  • Qualcomm (NASDAQ: QCOM) Started as Buy at Citigroup.
  • Steel Dynamics (NASDAQ: STLD) Raised to Buy from Neutral at UBS.
  • Transocean (NYSE: RIG) Raised to Overweight from Neutral at JPMorgan.
  • VeriSign (NASSDAQ: VRSN) Raised to Outperform from Neutral at Baird.
  • Wachovia (NYSE: WB) Raised to Neutral from Underperform at Merrill Lynch.
  • XenoPort (NASDAQ: XNPT) Raised to Outperform from Market Perform at FBR.

Jon C. Ogg
July 9, 2008

Posted on: July 9, 2008 – 6:26 am in Analyst Calls, , , , , , , , , ,

Top 10 Pre-Market Analyst Downgrades (ACE, DRIV, EIG, PAC, INTU, NOK, NCX, OMX, VMW)

There are many research calls out this morning. Here are ten downgrades or negative analyst calls we are monitoring this morning:

  • ACE Ltd. (NYSE: ACE) Cut To Hold From Buy By Citigroup.
  • Digital River (NASDAQ: DRIV) Downgraded to Sell from Neutral at Goldman Sachs.
  • Employers Holdings (NYSE: EIG) Downgraded to Market Perform at KBW.
  • Grupo Aeroportuario del Pacifico (NYSE: PAC) Downgraded to Sell at Citigroup.
  • Intuit (NASDAQ: INTU) Downgraded to Sell from Neutral at Goldman Sachs.
  • Nokia (NYSE: NOK) lowered price target but maintained Buy at Merrill Lynch.
  • NOVA Chemicals (NYSE: NCX) Downgraded to Sell at Citigroup.
  • OfficeMax (NYSE: OMX) Downgraded to Neutral from Buy at Piper Jaffray.
  • VMware (NYSE: VMW) Downgraded to Hold at Jefferies (may be yesterday afternoon call).

Jon C. Ogg
July 9, 2008

Posted on: July 9, 2008 – 6:22 am in Analyst Calls, , , , , , , , ,

IMF Does Not Like Economy’s Chances

The IMF seems to think that the global economy is going to go badly this year and worse next.

According to Reuters, "With sky-high food and oil prices adding to the economic pain caused by financial strains, Strauss-Kahn said the IMF was fairly pessimistic about global growth prospects this year and, especially, in 2009."

Concerns are that inflation is the real villain. The head of the agency said, "In developed countries, central banks have taken it into account and have the correct monetary policy stance. In emerging countries and some low-income countries, in some of them at least, inflation is out of control. That means monetary policy probably has to be tightened in coming weeks or coming months."

Douglas A. McIntyre

Posted on: July 9, 2008 – 6:03 am in Economy

Merrill Lynch (MER) To Get $5 Billion For Bloomberg Stake

It looks like Merrill Lynch (MER) is about to get a big lift for its balance sheet.

According to The New York Post, Michael Bloomberg is prepared to pay $5 billion for the minority stake in his company which is owned by Merrill.

But, the newspaper adds "a deal could fall apart as Merrill aims to monetize its minority stake in the privately held company ahead of its second-quarter earnings call set for July 17."

Douglas A. McIntyre

Posted on: July 9, 2008 – 5:46 am in Mergers and Buy Outs,

Alcoa (AA): A Weather Vane For Inflation

Wall St. liked Alcoa’s (AA) earnings. They were down, but no by as much as most analysts had supposed.

Earnings at the metal company dropped 24% to $546 million. Revenue was down 6% to $7.36 billion, but the shares moved up.

The reason for the enthusiasm was simple. Alcoa was able to step on the inflation pedal to keep its margins up. "Higher prices for our products and increased volumes more than offset the increased input costs facing the entire industry," Klaus Kleinfeld, Alcoa chief executive officer, said in a statement.

What Alcoa is saying is not unlike the word coming out the oil and chemical industries. Dow Chemical (DOW) recently raised prices on a number of its products by 20%. The firm did not indicate that it felt these huge increases would badly dent demand. The price of gas and oil are also up, but there is no indication that demand is down sharply.

Part of the strength in Alcoa’s results is due to the fact that is sells much of its product overseas. Customers in Asia are willing to pay higher prices to keep their GDPs moving up. Better to get the building bricks of expansion at a premium than not to get them at all.

Alcoa is the first big US company to report results and those results are telling. The cost of commodities is rising fast, but the amount firms can charge for their refined products is rising faster.

It is textbook inflation.

Douglas A. McIntyre

Posted on: July 9, 2008 – 5:38 am in Earnings,