22 – October – 2008 – 24/7 Wall St.

Daily Archives: October 22, 2008

The Recession Turns To Baidu (BIDU)

Baidu.com Inc. (NASDAQ: BIDU) has posted earnings after the close which were not very indicative of problems inside the company. In dollar-adjusted terms, the company posted and operating profit of $54.2 million and earnings of $1.47 EPS net and $1.54 non-GAAP EPS. Revenue gained 85% to $135.4 million. First Call had non-GAAP EPS at $1.28 and revenues at $134.72 million. Unfortunately, there is a lot more to consider than just its earnings.

Posted on: October 22, 2008 – 4:55 pm in China, Earnings, Internet, BIDU, GOOG

Seagate, From Growth to Value to Warning (STX, WDC)

Seagate Technology (NASDAQ: STX) has just reported earnings after the close, and the stock has gradually gone from a growth stock to a value stock. The maker of drives and storage devices posted $0.12 EPS and $3.03 billion in revenue, while First Call estimates were $0.22 EPS and $3.16 billion in revenue. The company said that it had an impact for items against earnings of roughly $0.14 against its EPS.

Posted on: October 22, 2008 – 4:25 pm in Earnings, Earnings Warning, PC Companies, Technology Companies, STX, WDC

Boston Scientific Co-Founders Hit By Margin Calls (BSX)

Today after the close, SEC Filings have shown that Boston Scientific Corp. (NYSE: BSX) co-founders have been forced to sell more common stock to meet margin calls. Unfortunately this isn’t the first pony ride on margin calls, and if the market continues on this path it is hard to imagine that more calls won’t result in forced share sales.

Posted on: October 22, 2008 – 4:01 pm in Insider Activity, Medical, BSX

ADC Telecom Goes To Confession (ADCT)

ADC Telecom (NASDAQ: ADCT) is trimming its fiscal revenue guidance and throwing out almost every other bit of key restructuring and financial data to offer some stability to the situation. The telecom infrastructure equipment provider now sees sales from continuing operations for its 2008 fiscal year to be $1.47 to $1.495 billion rather than guidance offered on September 4, 2008 in a range of $1.5 to $1.52 billion. the company said it is also now planning for lower revenues in 2009.

Posted on: October 22, 2008 – 3:29 pm in Earnings Warning, Telecom, ADCT

Amgen Becomes A Biotech Safety Stock (AMGN)

Amgen Inc. (NASDAQ: AMGN) has just posted earnings. The biotech giant for anemia treatments posted $1.09 GAAP EPS and adjusted earnings of $1.23 non-GAAP EPS and $3.875 billion in revenues. First Call had estimates pegged at $1.08 EPS on revenues of $3.7 billion.

Posted on: October 22, 2008 – 3:15 pm in Biotech, Earnings, AMGN

Amazon.com Far From Immune To Consumer Slowdown (AMZN)

Amazon.com Inc. (NASDAQ: AMZN) today posted earnings of $0.27 per share and $4.26 billion in revenue. First Call had estimates were $0.25 EPS and $4.27 billion in revenue. When the company last reported earnings 90 days ago, it gave guidance of $4.2 billion to $4.425 billion in revenue. But there are many more important issues rather than just what happened this last quarter.

Posted on: October 22, 2008 – 3:08 pm in Earnings, Earnings Warning, Internet, Retail, AMZN

MetroCorp Bancshares Files To Raise Cash (MCBI)

MetroCorp Bancshares, Inc. (NASDAQ: MCBI) has filed a mixed shelf securities offering that will allow the company to sell up to $100 million in securities. The securities are listed as any combination of debt securities, preferred stock, depositary shares, common stock, warrants, and units.

Posted on: October 22, 2008 – 2:40 pm in Banking, Secondary Offering, MCBI

Moody’s (MCO): “We Sold Our Souls”: Yes, You Did

This speaks for itself.

According to Bloomberg, Employees at Moody’s Investors Service told executives that issuing dubious creditworthy ratings to mortgage-backed securities made it appear they were incompetent or “sold our soul to the devil for revenue,” according to e-mails obtained by U.S. House investigators.

Douglas A. McIntyre

Posted on: October 22, 2008 – 2:13 pm in Research

Can Amazon.com See The Ghost Of Christmas Past? (AMZN)

Online retail giant Amazon.com Inc. (NASDAQ: AMZN) is set to report earnings after today’s close. Despite the fact that Amazon.com is now a fully profitable industry leader is probably not going to be enough for CEO Jeff Bezos to come out with his "Bezos Laugh" all over the media outlets. The company is not going to lose its leadership position any time soon, but it is also impossible to believe that the current economic woes aren’t being seen by the company.

Posted on: October 22, 2008 – 12:08 pm in Earnings, Internet, Retail, AMZN

Bank Bailout: Is The Market Better Off Than It Used To Be? (C)(JPM)

Perhaps it is because this is an election year, but everyone is going around asking "Are we better off than we used to be?" It is not just the baby-kissing politicians. People are being polled to death, The CNN poll. The ABC poll. Gallup. The New York Times. The Wall Street Journal.

The recession makes the questioning more frequent as well. Are people afraid they will lose their jobs? Lose their homes? Their cars?

The reason behind the Paulson bailout was that the credit system, the financial system, the banking system were supposed to get better off.

Posted on: October 22, 2008 – 11:36 am in Economy, C, JPM

Baker Hughes Destroys Four Years Of Gains (BHI)

Lower and lower oil prices are good for the broader economy, but they are bringing pain to the oil patch. Oil services giant Baker Hughes Inc. (NYSE: BHI) is demonstrating this more than any other major player today after earnings. The company’s earnings of $1.29 per share missed analysts’ estimates of $1.35. There are issues here, and the stock is paying the price for it.

Posted on: October 22, 2008 – 11:33 am in Earnings, Oil & Gas, BHI

H-P Joins The Club… Of 52-Week Lows (HPQ, DELL, IBM, LXK)

Hewlett-Packard Co. (NYSE: HPQ) has just joined the list of stocks which hit new 52-week lows, but it gets worse. These were actually the lowest levels seen since late in 2006. This was intra-day, and it was under the lows from October 10 during the peak of stock sales in the market meltdown.

Posted on: October 22, 2008 – 10:20 am in HI/LOW, PC Companies, Technology Companies, DELL, HPQ, IBM, LXK

Biotech Implosion: Dynavax (DVAX)

Dynavax Technologies Corp. (NASDAQ: DVAX) is the latest biotech implosion as shares are down some 75% today. The company gave an update on an FDA clinical hold on its investigational vaccine HEPLISAV with partner Merck & Co. (NYSE: MRK).

Posted on: October 22, 2008 – 9:24 am in Biotech, FDA, DVAX, MRK

SanDisk Comes Under Fire From All Sides (SNDK)

SanDisk Corp. (NASDAQ: SNDK) is now under fire from all sides as the stock is sliding to new 52-week and multi-year lows. The company’s recent losses looked like one of the worst quarterly reports for a former hi-flier that has come out this earnings season. Now, the company has lost its $26.00 per share bid from Samsung in Korea. These issues and other issues are likely to bring a firestorm from multiple fronts into SanDisk’s corporate offices.

Posted on: October 22, 2008 – 9:02 am in Semiconductor, SNDK

The Daily Stock Double: ICO Global Communications (ICOG, BA)

ICO Global Communications (NASDAQ: ICOG) is indicated to open up more than 100% this morning after announcing a major court win. The small cap mobile satellite services company was awarded "at least $371 million" in its litigation with The Boeing Company (NYSE: BA) and Boeing Satellite Systems. This company’s market cap was only $153 million as of yesterday’s close.

Posted on: October 22, 2008 – 8:00 am in Law, Satellite, Small Cap Stocks, BA, ICOG

Knight Capital Out-Jousts Peers (NITE)

Knight Capital Group Inc. (NASDAQ: NITE) is doing what other trading shops aren’t: it is winning in uncertain times. The trading and brokerage firm posted earnings of $0.40 on revenues of $269.9 million, while First Call had estimates pegged at $0.24 EPS and $211.5 million in revenues.

Posted on: October 22, 2008 – 7:48 am in Brokerage Firms, Earnings, NITE

Citigroup (C): Analyst Meredith Whitney Cuts Another Bank’s Throat

Oppenheimer bank analyst Meredith Whitney has taken a dim view of bank earnings for some time. Her research has caused sell-offs in big financial company shares on more than one occasion.

But, with the Treasury putting all of that cash into money center firms, it should have been safe to assume that Whitney would give the industry a little breathing room and spend more time with her husband World Wrestling Federation star John "Bradshaw" Layfield.

It looks like Layfield will be home alone.

Posted on: October 22, 2008 – 7:22 am in Banking, C

More Good News At McDonald’s (MCD)

How the little children love Ronald McDonald. Now investors love him, too.

In the third quarter, global comparable store sales increased 7.1%, which is pretty hard to do when a company is as large as McDonald’s (MCD) and the economy is rough.

Earnings per share from continuing operations were $1.05, a 27% increase over the prior year.

Posted on: October 22, 2008 – 7:06 am in Earnings, MCD

Top Pre-Market Analyst Upgrades (ABC, BRCM, COH, DNA, IILG, LXK, NUAN, STLD, TLAB)

These are some of the top pre-market upgrades from Wall Street analysts this Wednesday morning:

AmerisourceBergen (ABC) Started as Buy at Jefferies.
Broadcom (BRCM) Raised to Outperform at Baird.
Coach (COH) Raised to Buy at Lazard.
Genentech (DNA) Raised to Buy at Jefferies.
Interval Leisure Group (IILG) Started as Outperform at FBR.
Lexmark (LXK) Raised to Buy at Citigroup.
Nuance (NUAN) Raised to Buy at Goldman Sachs.
Steel Dynamics (STLD) Raised to Buy at Goldman Sachs.
Tellabs (TLAB) Raised to Hold at Jefferies.

Jon C. Ogg
October 22, 2008

Posted on: October 22, 2008 – 7:02 am in Analyst Calls, ABC, BRCM, COH, DNA, IILG, LXK, NUAN, STLD, TLAB

Top Pre-Market Analyst Downgrades (AMP, AAPL, DVAX, FCX, GMT, LNC, PCX, X)

These are some of the top pre-market analyst downgrades from Wall Street this Wednesday morning:

Ameriprise Financial (AMP) Cut to Market Perform at KBW.
Apple (AAPL) Cut to Neutral at UBS.
Dynavax (DVAX) Cut to Perform at Oppenheimer.
Freeport-McMoran (FCX) Cut to Market Perform at FBR.
GATX (GMT) Cut to Neutral at Piper Jaffray.
Lincoln National (LNC) Cut to Market Perform at KBW.
Patriot Coal (PCX) Cut to Market Perform at FBR.
US Steel (X) Cut to Sell from Neutral at Goldman Sachs.