RSS Updates
Email UpdatesQualcomm Inc. (NASDAQ: QCOM) did come out with earnings after all, albeit quite late (very late if you’ve been here since 5:30 AM). The company posted non-GAAP EPS of $0.55 on revenues of $2.76 Billion. We had First Call estimates of $0.55 EPS on $2.71 Billion in revenues. But what mattered tonight much more than earnings was its pending litigation with Nokia (NYSE: NOK) to resolve this never-ending saga. The company will give guidance in its conference call tomorrow.
Daily Archives: July 23, 2008
Cramer Gets Behind General Electric (GE)
On tonight’s MAD MONEY on CNBC, Jim Cramer came out talking up the aspects of General Electric Co. (NYSE: GE).
Cramer discussed how it is winning in financial services while others are failing, noted how it hasn’t rallied with other financial stocks, discussed the consolidation of its enterprise, and more. He also noted how it is winning in energy and alternative energy and noted how the new $8 Billion pact with Mubadala in Abu Dhabi is going to bring in a shareholder who has committed to buy millions of shares of stock in the open market to become one of GE’s largest shareholders.
I recently got an exclusive interview with G.E.’s CFO Keith Sherin after the company got off its earnings call to discuss the growth aspects of the rest of the G.E. you don’t really think of. The day before earnings I had some real concerns because of the break-up announcement timing, but after I heard what was being offered up for targets and for some of the other aspects of G.E. that are often overlooked or not addressed it was rather impressive. That’s even more of the case when you consider the current environment.
If you’d like some supporting data for forward valuations based upon company guidance, we actually established a fair value stock price based upon many issues we are updating for newsletter subscribers right now.
Jon C. Ogg
July 23, 2008
MEMC Meets Friday the 13th, Literally (WFR)
MEMC Electronic Materials Inc. (NYSE: WFR) is a company that just can’t seem to get its act together. The stock is being crushed after its earnings report. It appears that the company "encountered unanticipated events towards the tail end of the quarter."
The silicon wafer leader for semiconductors (and a solar silicon supplier too) posted $0.92 EPS on a 6% rise in revenues to $531.4 million versus $1.00 EPS and $557.9 million estimates from First Call.
Baidu.com Soars (BIDU)
Baidu.com, Inc. (Nasdaq: BIDU) just posted its quarterly earnings report, and our conversions are into US Dollars rather than Chinese RMB.
The Chinese internet search giant said operating income rose about 86% and showed $1.11 net EPS and $1.23 non-GAAP EPS on a 100% gain in revenues to $117.0 million. Estimates were $0.98 EPS on $112.5 million. Baidu noted that Traffic acquisition costs (TAC) were $14.8 million. That TAC weighting is about 12.7% of total revenues, above the 11.2% from last quarter.
Qualcomm (QCOM): Earnings Delayed, But Stock Rallies
The afternoon did not start well for Qualcomm (QCOM) The German Federal Patent Court ruled on Wednesday that the company’s GSM patent asserted in a case against the world’s top cellphone maker, Nokia (NOK), was invalid.
Earnings were delayed until tomorrow, which took that stock up 15%. How does that figure?
Douglas A. McIntyre
Amazon.com Delivers, Wall Street Wanted More Ahead (AMZN)
Shares of Amazon.com Inc. (NASDAQ: AMZN) ar responding favorably to its earnings announcement. The internet retail giant posted $0.37 EPS and $4.06 Billion in revenues versus estimates of $0.26 non-GAAP EPS on $3.96 Billion. The company’s prior guidance for this quarter was $3.875 to $4.075 Billion in revenues, so this was at the very high end of that range.
Guidance is as follows:
The 52-Week Low Club 7/23/2008 (MIR)(CVG)(ADTC)(FORM)
Mirant (MIR) Downgrade from Lehman Brothers. Falls off to $30.90 from 52-week high of $44.61.
Convergy (CVG) Good profits, but cuts forecast. Sells down to $12.69 from 52-week high of $24.30.
A D C Telecommunications (ADTC) Poor outlook with earnings. Drops to $9.70. from 52-week high of $21.
FormFactor (FORM) Oppenheimer downgrade. Dips to $15.56 from 52-week high of $48.48.
Douglas A. McIntyre
Genentech & Roche Merger Coming Under More Fire (DNA)
Genentech Inc. (NYSE: DNA) is running into some issues over the merger with Roche at $89.00 per share. Wall Street DOES expect this merger to close with Genentech becoming a subsidiary again rather than a "majority owned" company by Roche. But it is expected that Genentech will have to fetch over $100.00 per share.
Today the firm is being sued by a law firm over this as being a breach of fiduciary duty and as an offer that is inadequate and that Genentech is worth more than $100.00 per share. We received a direct email copy of the complaint press release titled "COHEN MILSTEIN HAUSFELD & TOLL P.L.L.C. FILES LAWSUIT CONCERNING GENENTECH BUYOUT" which you can see below.
Another issue over this is that Roche has taken a corporate debt downgrade and may have more. S&P trimmed its corporate debt rating a notch and both Moody’s and Fitch have each notified that this may warrant downgrades after a review.
Jon C. Ogg
Below is a full copy of the release from the email we received:
Bank of America Jams on Buyback and Dividend (BAC)
Bank of America Corporation (NYSE: BAC) just made key announcements regarding the dividend and the share buyback plans. It has just announced that it declared a regular quarterly dividend on common stock of $0.64 per share. So Ken Lewis meant what he said by announcing that he didn’t see the need to cut the dividend.
Perhaps even more important is thee size of its new buyback plan for common stock. The financial giant has authorized a new buyback plan of up to 75 million shares of its common stock, which takes the plan up to $3.75 billion which is good for the next 12 to 18 months. This new buyback plan replaces the expiring January 2007 repurchase authorization of 200 million shares.
Jon C. Ogg
July 23, 2008
Will Bezos Get Last Laugh on Amazon.com Earnings? (AMZN)
After the close of trading today we’ll get earnings out of Amazon.com Inc.(NASDAQ: AMZN). The internet retail giant’s estimates from First Call are $0.26 non-GAAP EPS on $3.96 Billion. Estimates for next quarter are $0.28 EPS on $4.23 Billion in revenues and estimates for Fiscal Dec-2008 are $1.50 EPS on $19.6 Billion in revenues.
The company already gave guidance of $3.875 to $4.075 Billion in revenues for this quarter and $19.1 to $20.0 Billion in revenues for the year. As far as operating income, it guided $120 to $160 million (including $80 million in options and other GAAP expenses) for this quarter and $740 to $940 million (including $285 million in options and other GAAP expenses) for 2008.
Anheuser-Busch Short Selling Cash? (BUD)
Anheuser-Busch Companies Inc. (NYSE: BUD) reported earnings today, and no one is paying attention because of the InBev merger at $70.00 making this earnings report essentially a non-event. But there are two issues coming down the pipe, one which will matter as a consumer and another which will matter for a very short period of time for shareholders.
Costco’s Biggest Discounted Store Item: Its Stock (COST)
Costco Wholesale Corp. (NASDAQ: COST) is taking a drumming this morning after it earnings warning. What is interesting is that if you overlay the customers of American Express, you essentially get a view of Costco customers. In short, the American Express dismal report and outlook for its customer base should have been a classic "tell" here. The overall fix is here is one that Joe Public isn’t going to like, but public companies cannot afford to sit around and just hope that prices come back down for materials and raw goods.
DJIA Components Post Strong Morning Earnings (T, BA, MCD, PFE, WMT)
This morning we had four different DJIA compomnents report earnings and so far all shares of these are indicated higher.
AT&T (NYSE: T) posted $0.76 non-GAAP EPS vs. $0.76 estimates and generated $8.5 Billion cash from operations and $3.2 Billion in free cash flows. The uVerse broadband TV added 170,000 subscribers to 549,000 with target on track for 1 million subscribers by year-end. Shares are indicated up 1% and could be up more considering the sell-off it has seen.
Boeing Co. (NYSE: BA) posted $1.16 EPS vs. $1.23 estimate; reaffirmed 2008 at $5.70 to $5.85 EPS ($5.86 est.) and put 2009 at $6.80 to $7.00 EPS ($6.96 est.). The company still sees about 5% to 7% revenue growth. In this environment this one looks bullish considering the pullback seen.
McDonalds (NYSE: MCD) $1.04 EPS vs. $0.86 estimates, but $0.94 EPS looks to be the clean number. It saw a 6.1% gain in global comparable store sales (+3.4%% in U.S.). Shares are now indicated up over 2% pre-market at $61.77.
Pfizer Inc. (NYSE: PFE) posted $0.55 non-GAAP EPS vs. $0.54 estimates. It also reaffirmed 2008 revenue at $47 to $49 Billion and non-GAAP EPS $2.35 versus estimates of $48 Billion revenues and $2.35 EPS. Shares are indicated up 2% pre-market coming off of near multi-year lows.
We would note that shares of Wal-Mart (NYSE: WMT) are indicated down close to $1.00 because of the related earnings warning seen out of competitor Costco Wholesale this morning.
Jon C. Ogg
July 23, 2008
DJIA Components Post Strong Morning Earnings (T, BA, MCD, PFE, WMT)
This morning we had four different DJIA components report earnings and so far all shares of these are indicated higher.
AT&T (NYSE: T) posted $0.76 non-GAAP EPS vs. $0.76 estimates and generated $8.5 Billion cash from operations and $3.2 Billion in free cash flows. The uVerse broadband TV added 170,000 subscribers to 549,000 with target on track for 1 million subscribers by year-end. Shares are indicated up 1% and could be up more considering the sell-off it has seen.
Boeing (NYSE: BA) posted $1.16 EPS vs. $1.23 estimate; reaffirmed 2008 at $5.70 to $5.85 EPS ($5.86 est.) and put 2009 at $6.80 to $7.00 EPS ($6.96 est.). The company still sees about 5% to 7% revenue growth. In this environment this one looks bullish considering the pullback seen.
McDonalds (NYSE: MCD) $1.04 EPS vs. $0.86 estimates, but $0.94 EPS looks to be the clean number. It saw a 6.1% gain in global comparable store sales (+3.4%% in U.S.). Shares are now indicated up over 2% pre-market at $61.77.
Pfizer Inc. (NYSE: PFE) posted $0.55 non-GAAP EPS vs. $0.54 estimates. It also reaffirmed 2008 revenue at $47 to $49 Billion and non-GAAP EPS $2.35 versus estimates of $48 Billion revenues and $2.35 EPS. Shares are indicated up 2% pre-market coming off of near multi-year lows.
We would note that shares of Wal-Mart (NYSE: WMT) are indicated down close to $1.00 because of the related earnings warning seen out of competitor Costco Wholesale this morning.
Jon C. Ogg
July 23, 2008
McDonald’s (MCD): Alms For The Poor
If the result from McDonald’s (MCD) say anything it is that the low end of the consumer market in the US has not died off.
For the second quarter, MCD revenue moved up 4% to $6.1 billion.Earnings per share from continuing operations of $1.04, up 44%. Shares rallied on the news.
Top Pre-Market Analyst Upgrades (AKS, BHI, IPI, NAT, PSYS, SGLP, SNN, SYNA, ULTA)
AKS, BHI, IPI, NAT, PSYS, SGLP, SNN, SYNA, ULTA
These are some of the top upgrades or positive analyst calls we are seeing this Wednesday morning in early pre-market hours:
- AK Steel (AKS) Raised to Overweight at JPMorgan.
- Baker Hughes (BHI) raised to Buy at UBS.
- Intrepid Potash (IPI) Started as Outperform at BMO Capital.
- Nordic American Tanker (NAT) Raised to Overweight at JPMorgan.
- Psychiatric Solutions (PSYS) Started as Buy at Stanford Group.
- Semgroup Energy (SGLP) Raised to Market Perform at Wachovia.
- Smith & Nephew (SNN) Raised to Buy at Piper Jaffray.
- Synaptics (SYNA) Raised to Outperform at Oppenheimer.
- Ulta Salon (ULTA) Started as Outperform at Oppenheimer.
Jon C. Ogg
July 23, 2008
Top Pre-Market Analyst Downgrades (ADCT, ALV, CAT, FORM, GMR, GIII, MIR, SNIC, TGT, TOPS, WM, ZMH)
These are some of the top downgrades or negative analyst calls we are seeing this Wednesday morning in early pre-market hours:
- ADC Telecom (ADCT) Cut to Neutral at Baird; Cut to Market Perform at FBR.
- Autoliv (ALV) Cut to Hold at Deutsche Bank.
- Caterpillar (CAT) Cut to Neutral at JPMorgan.
- FormFactor (FORM) Cut to Perform at Oppenheimer.
- General Maritime (GMR) Cut to Neutral at JPMorgan.
- G-III Apparel Group (GIII) Cut to Market Weight at Thomas Weisel.
- Mirant (MIR) Cut to Equal Weight at Lehman.
- Sonic Solutions (SNIC) Cut to Neutral at JPMorgan.
- Target Corp. (TGT) Cut to Neutral at Credit Suisse.
- Top Ships (TOPS) Cut to Underweight at JPMorgan.
- Washington Mutual (WM) Cut to Sell at Piper Jaffray.
- Zimmer Holdings (ZMH) Cut to Neutral at Piper Jaffray.
Jon C. Ogg
July 23, 2008
All The Important Places The New Apple (AAPL) iPhone Won’t Work
A lot of people waited for months to get a new Apple (AAPL) 3G iPhone. Some even passed up the first version, which ran on AT&T’s (T) slower 2.5G network. A number of customers wanted to match the huge number of iPhone features with the ultra-fast AT&T wireless broadband network.
24/7 Wall St. learned by calling local AT&T Wireless stores and reviewing local AT&T 3G coverage maps across the country that there are a number of important places that the new iPhone can’t access the broadband network.
A Case Against Speculation As Cause Of High Oil Prices
There has been a lot of speculation that speculators have been causing high oil prices.
Perhaps demand in India and China do not do much to the rising cost of crude. Flat supplies from OPEC and political trouble in places like Nigeria were not an important trigger which helped shoot the cost of a barrel close to $150.
The Mayhem In Bank Earnings Is Not Over (WM)(WB)(JPM)(AXP)(V)(MA)
Wall St. cheered what seemed to be withering results from Washington Mutual (WM) and Wachovia (WB). WaMu lost $3.3 billion and reserved $3.7 billion to handle loan losses. Wachovia lost $9 billion and its shares moved up over 20%.
The euphoria apparently came from the fact that things were not worse. Bank analysts seemed especially optimistic. "We think Wachovia’s poor second quarter 2008 should mark a bottom," Deutsche Bank analyst Mike Mayo wrote in a research report after the report, according to MarketWatch.
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