Elan Corporation (ELN) Problems with one of the company’s major drugs. Falls to $9.55 from 52-week high of $37.45.
Gatehouse (GHS) More poor newspaper earnings raise issue of whether company is viable. Falls to $.48 from 52-week high of $17.43.
Gold Fields (GFI) Tough earnings and COO out. Off to $9.98 from 52-week high of $19.92
In an editorial in The Wall Street Journal, UCLA law professor Lynn A. Stout argues that activist investors like Carl Icahn "rob average investors of better returns."
She writes that "They push for strategies that raise the stock price of the few companies they own but may lower the stocks of other companies, or that raise prices in the short term while harming companies’ long-term prospects."
GM’s (GM) poor earnings were matched by its July sales. US light vehicle deliveries dropped 26.1% to 233,340 units from a year ago. Total truck deliveries declining 35.4% to 129,849 units. The company is still rapidly losing its most profitable business–SUVs and pick-ups.
Ford (F) announced a 14.9% drop in US vehicle sales to 161,530 cars and trucks from 189,920 a year ago. Truck sales fell 22.1% to 99,229 vehicles. The flagship F-Series pick-up continued its steady decline, with sales off 20.6% to 44,829.
Even Toyota did poorly, a sign that the trouble in the domestic market is no longer selective. The large Japanese car company saw sales fall 11.9% to 197,424 units from a year ago. Toyota truck sales fell to 69,325 units from 95,150 a year ago.
In related news, Fitch Ratings downgraded the issuer default rating of Ford and Ford Motor Credit Co. LLC to B- from B.
Douglas A. McIntyre
Next week we may have the FOMC meeting, but analysts and economists are looking for no change in rates with the language growing more hawkish on inflation and more cautious on the economy. But what will rule the roost for potentially many sectors is earnings out of key companies like Cisco Systems Inc. (NASDAQ: CSCO), Procter & Gamble Co. (NYSE: PG), Freddie Mac (NYSE: FRE), Sprint Nextel Corp. (NYSE: S), Time Warner Inc. (NYSE: TWX), and Sirius XM Radio (NASDAQ: SIRI). These may not all spill over into macro-economic events but these are some of the most important earnings announcements on deck for traders next week.
This has been a very unusual week over at Kraft Foods Inc. (NYSE: KFT). Interestingly enough, this may be irrelevant from the company’s significant earnings win at the start of the week. We noticed highly unusual options trading at VSinvestor this week and you can see on yesterday’s post just how much the interest has grown. This is also for the current expiration month rather than on farther outlying month expiration dates. If you look below, you’ll see that the activity is continuing this week for the AUGUST contracts:
CardioNet, Inc. (NASDAQ: BEAT) is holding up rather well considering the discount pricing of a secondary offering. The company sold 5 million shares at a price of $26.50 per share. All shares were being sold by selling shareholders and the company itself will realize no proceeds from the sale of these shares.
This morning’s share price reaction seen in Biogen-Idec Inc. (NASDAQ: BIIB) and Elan Corp. plc (NYSE: ELN) is severe. We do not want to try to sound as though this TYSABRI news is something that isn’t of consequence and don’t want to make it sound like it is a non-event. Last night after the close the companies released the bad news that two more PML cases had been discovered in TYSABRI patients using the drug for the treatment of Multiple Sclerosis.
The employment data for June was far from good, but also was not as bad as many estimates. You can gleam some good news if you want but the "less bad" stance sure seems more appropriate.
The nominal unemployment rate came in at 5.7% versus 5.6% estimates, which is the highest level since early 2004. The report on non-Farm payrolls shrunk by 51,000 jobs, but estimates were for a drop of 75,000 jobs. Average hourly earnings rose 0.3% to $18.06 per hour, which is about as far behind inflation as you could imagine. Another piece of data showed that total employment fell by about 72,000 jobs and unemployment rose by 285,000. That is what accounted for the gain in unemployment.
Sun Microsystems (JAVA) announced a $1 billion share buy-back. It was not much of a beard to put on its particularly poor earnings.
These are some of the key downgrades or negative calls we are seeing from analysts this Friday morning with more than two hours to the open:
Jon C. Ogg
August 1, 2008
These are not all of the analyst calls by far, but these are some ofthe calls that appear as impact calls this Friday morning witth morethan two-hours to the open:
Jon C. Ogg
August 1, 2008
GM posted a massive net loss was $15.5 billion or $27.33 per share for the second quarter, including these charges and special items, compared with net income from continuing operations of $784 million or $1.37 per share in the second quarter of 2007. With the one-time items taken out, the loss was $6.3 billion or $11.21 per share
Revenue from continuing operations fell to $38.2 billion from $46.7 billion.
Mathematics and statistics were almost certainly created to support spurious thinking, although the school systems later developed other uses for them.
The headlines across the business media belted out in town crier fashion that oil had dropped a record $20 in July to sit at about $125 a barrel. The prices of corns and wheat also fell at paces not seen in over two decades.
All of this was presented as almost unprecedented good news.
There has been plenty of forecasting and anecdotal evidence that US money center banks will have more write-downs in coming quarters. Most of this data is deductive. The IMF has said the mortgage write-downs will top out at $1 trillion. Experts believe that credit card and auto loan defaults will spread to bank earnings.
A more solid indication of bank trouble is the rate at which they are borrowing money from the Fed.
The plague of falling US vehicle sales is reaching the earnings of big car companies abroad. BMW "reported second-quarter earnings that trailed analysts’ estimates and abandoned its profit forecast on falling U.S. sales, the dollar’s decline and rising costs for plastics, steel and oil", according to Bloomberg
The strength of BMW’s balance sheet means that the downturn is not a long-term threat to the company, but it could do harm to earnings for a number of quarters to come.
Wal-Mart (WMT) defenders of the faith of "every day low pricing" is warning its management and supervisors that if Democrats win the election in the Fall, it will be easier for workers at the world’s largest retailer to create unions.
Most Wal-Mart shareholders believe that keeping organized labor out improves margins.
Former Bear Stearns CEO Alan Schwartz is leaving JPMorgan Chase (JPM) following the $10-per share deal that ended Bear’s 85 years as a stand-alone company. Schwartz joined in 1976, and climbed the corporate ladder, becoming CEO in January of 2008 when the stock was at just over $75 per share.
Altria Group Inc. (MO) spooked shareholders today when it said cigarette shipments this year may plunge as much as 3.5 percent. The stock fell to a three-month low as investors wondered whether the Marlboro maker’s days as a growth company are behind it.
The company reported quarterly results that beat Wall Street expectations by a penny and affirmed guidance. It should not be regulated to the ash heap just yet. As Bloomberg News notes, "Chief Executive Officer Michael Szymanczyk trimmed discounts and raised prices to counter costs from the spinoff of its international division."
According to Reuters, GM (GM) is expected to post a huge loss.
Reuters reports that oil company profits rose, but Exxon (XOM) missed its numbers.
Reuters reported that stressed banks borrowed a record amount from the Fed last week.
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