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Daily Archives: August 6, 2008
SIRIUS First Post-XM Merger Earnings On Deck (SIRI)
VeriSign Earnings Neither ScarySign Nor VeriBuy (VRSN)
We have just seen earnings out of VeriSign Inc. (NASDAQ: VRSN). The web versions of "General Eclectic" has a very difficult to compare earnings report because of "total operations" and its core operations. Its "total revenues was $303.2 million, which looks very high on the surface. But its core revenues were $233 million and core non-GAAP EPS was $0.25. First Call had estimates at $0.23 EPS on $231.39M in revenues.
True Religion, An Earnings Nirvana (TRLG)
True Religion Apparel, Inc. (NASDAQ: TRLG) juust reported Q2 revenues in a gain of 78.9% year/year of $64.2 million and EPS of $0.39 on net income of $9.3 million. The estimates from First Call were $50.17M in revenues and $0.32 on EPS.
The 52-Week Low Club (WFMI)(INAP)
Acco Brands (ABD) Quartlerly loss. Down to $6.90 from 52-week high of $26.09.
Bristow Group (BRS) Lower earnings last quarter. Off to $36.01 from 52-week high of $58.98.
Internap Network (INAP) Awful quarter. Sells down to $2.65 from 52-week high of $17.18.
Whole Foods (WFMI) Misses all the numbers. Drops to $18.26 from 52-week high of $53.65.
Douglas A. McIntyre
The Airline’s Recent –Death Defying Actions–(AA)(UAL)(DAL)(CAL)
Not long ago daily media stories were predicting which major airline would be the first in line to fail. Las Vegas type odds were given to a list of inevitable airline bankruptcies.
There should be no argument the US airline industry is facing unprecedented challenges as they restructure their business models to survive with record high fuel costs and a questionable forward looking Global economy.
Can VeriSign Live Up To Expectations? (VRSN)
VeriSign Inc. (NASDAQ: VRSN) is set report earnings after the close today, and First Call has estimates at $0.23 EPS on $231.39M in revenues. Estimates for next quarter are $0.26 EPS on $240.59M in revenues, and fiscal Dec-2008 estimates are $1.00 EPS on $947.36M in revenues.
Microsoft (MSFT): The Big Share Buy-Back In The Sky
Microsoft (MSFT) is going to buy back $20 billion of its shares. Take that to the bank. Maybe.
UBS says that investors should expect the move by the world’s largest software company soon. UBS says MSFT won’t even tell anyone until the purchases are over.
EMC Loses on Lack of Cisco Interest (EMC, CSCO, VMW)
EMC Corporation (NYSE: EMC) is having a rough day, yet it is on no news of its own. The blame lies with Cisco Systems Inc. (NASDAQ: CSCO) after its earnings. Is it competition? Is it industry comments? Is it fears of a rift growing? No. It is because John Chambers of Cisco said that he is not really in favor of very large acquisitions at this time and that he’d rather focus on smaller mergers.
Controlling Expenses is the Name of the Game (FWLT, RIG)
This morning, Foster Wheeler Ltd. (NASDAQ:FWLT) and Transocean Inc. (NYSE:RIG) both reported earnings before the market opened. Both reported good earnings, but there are some warning signs to note in each.
Verenium Scores on BP Cellulosic Ethanol Pact (VRNM, BP)
We noticed Verenium Corp. (NASDAQ: VRNM) over at our "price/volume spike" this morning and realized what the cause was. The company’s stock is gapping up significantly after announcing that it has secured a biofuel production pact with BP plc (NYSE: BP). The pact will lead to cellulosic ethanol development and commercial production using non-food stocks and Verenium will receive $90 Million in funding from BP over the next 18 months.
Sprint (S) Screws Up Big
Sprint (S) did about as much damage to itself last quarter as was possible. For starters, the company will sell $3 billion in cumulative perpetual convertible preferred stock. That is a long way of saying shareholders face substantial dilution.
Sprint’s revenue actually fell, which has to be hard to do in the cellular carrier business, since the market is growing everywhere. Revenue for the last quarter was down from $10.1 billion to $9.1 billion. The company had a net loss of $344 million.
For the quarter, free cash flow was $11 million compared to $183 million in the second quarter of 2007 and $170 million in the first quarter of 2008. Net debt at the end of the period was $19.5 billion, consisting of total debt of $23 billion, offset by cash and marketable securities of $3.5 billion.
Is it any wonder that the stock sold off almost 10% before the open?
Douglas A. McIntyre
Top Pre-Market Analyst Upgrades & Downgrades (ELN, ESLT, LLNW, RDC, SLW, AIG, EAT, ENTR, HNT, INAP, NVS, OEH, PACR, TI )
Upgrades and Positive Calls:
- Elan (ELN) Raised to Equal-weight at Lehman.
- Elbit Systems (ESLT) Raised to Buy at UBS.
- Limelight Networks (LLNW) Raised to Buy at Jefferies.
- Rowan Cos. (RDC) Raised to Buy at Jefferies.
- Silver Wheaton (SLW) Raised to Outperform at Raymond James.
Downgrades or Cautious Calls:
- American International Group (AIG) Started as Sell at Societe Generale.
- Brinker (EAT) Cut to Neutral at UBS.
- Entropic Communications (ENTR) Cut to Neutral at Merriman Curhan Ford.
- Health Net (HNT) Cut to Hold at Citigroup.
- Internap (INAP) Cut to Perform at Oppenheimer.
- Novartis (NVS) Cut to Neutral at JPMorgan.
- Orient Express (OEH) Cut to Neutral at UBS.
- Pacer International (PACR) Cut To Underweight at JPMorgan.
- Telecom Italia (TI) Cut to Neutral at Goldman Sachs.
Jon C. Ogg
August 6, 2008
Freddie Mac (FRE) Earnings: The Gathering Storm
Freddie Mac’s (FRE) results undercut any hope that things at the quasi-governmental agency would get better soon. Actually, they were an indication that the Treasury will have to get into the act sooner and not later.
The firm posted a net loss of $821 million for the quarter ended June 30, 2008, compared to net income of $729 million in the same period last year.
Freddie Mac said it remain committed to raising $5.5 billion of new capital and will evaluate raising capital beyond that amount depending on the market. That means things will get worse and the $5.5 billion will not be enough.
Morgan Stanley (MS): Stealing Home-Equity Loans
Morgan Stanley (MS) has gone to some of its private clients and told them they cannot borrow more on their home equity lines of credit. The customers thought they had signed up for the deals so that they would have money to access in the future when they needed it for things like college education or a new yacht. The brokerage house reasons that many of the homes belonging to these people are not worth the value of the mortgages. That would make the secondary loans on the properties pretty risky.
Banking’s Next Big Tempest: Auction-Rates
Misery acquaints a man with strange bedfellows.—Shakespeare, “The Tempest”
Auction-rate securities were one of the great inventions of modern banking. By taking long-term bonds and putting them together into a stew, the banks made short-term instruments with better yields than cash. The key to the market for such things is that it was liquid, trading regularly from 1985 until early this year. If some auction-rates were not sold in one exchange, they were held by banks and sold at the next.
Media Digest 8/6/2008 Reuters, WSJ, NYTimes, FT, Bloomberg
According to Reuters, a new tally of votes for the Yahoo! (YHOO) board election shows a high percentage of protest votes.
Reuters reports that the Fed held rates steady and indicated it would not raise rates soon.
Bloomberg writes that Morgan Stanley (MS) has frozen some of its customers’ home equity loans.
Asia Markets 8/6/2008 (HMC)
Markets in Asia were higher with Hong Kong closed due to bad weather.
The Nikkei rose 2.6% to 13,255. Canon was up 5% to 5090. Honda (HMC) was up 3.9% to 3440. Sanyo was up 10.1% to 228. Sharp was up 5.1% to 1358.
The Shanghai Composite was up 1.1% to 2,719.
Data from Reuters.
Douglas A. McIntyre
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Today’s top tickerspy Indexes Home Furnishing R... +14.1% Ethanol and Biofu... +5.1% Electronics Retai... +2.1% Diabetes Stocks +2.0% Memory Chip Stock... +2.0% 
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