24/7 Wall St. will name its annual CEO of the Year next week. The executive will be picked from a field of ten which we will profile this week
The CEOs are chosen on the basis of their company’s stock market and financial performances compared with their own industry groups and all large companies traded on US markets. Only firms with market caps of more than $5 billion were considered. 24/7 reviewed revenue growth, operating margins, balance sheets, return on assets, and return on equity
It takes all kinds to make a world. Trip Chowdhry of Global Equities Research may not be very bright, but he is intrepid.
According to an account in Barron’s, the analyst thinks Google’s (GOOG) revenue will drop for each of the next two years. "He sees the company posting revenues of $15.71 billion this year, $15.23 billion next year and $14.57 billion in 2010, with profits of $19.44 a share this year, $19.24 next year and $17.98 for 2010."
Chowdhry says his analysis is based on talking to his "contacts". In other words, he’s got nothing but the ability to take a little bit of data and turn it into a sketchy research report. The simpleton’s approach.
Douglas A. McIntyre
GM (GM) distributed its turnaround plan to Congress. It was almost exactly what the market expected, but it fudges one key issue, which is what happens to the company’s finances if it loses a great deal more market share.
According to the firm, "GM is seeking a term bridge loan facility from the Federal government of $12 billion to cover operating requirements under a baseline forecast of 12 million U.S. industry vehicle sales for 2009."
"Once GM has completed the restructuring actions laid out in the plan, the company will be able to operate profitably at industry volumes between 12.5 and 13 million vehicles."
Most of the cost cutting and debt plans make sense:
Excel Maritime (EXM) Bad period for shipping business. Falls to $3.25 from 52-week high of $60.99.
Xenoport (XNPT) New drug fails in study. Drops to $17.90 from 52-week high of $66.34.
Sierra Wireless (SWIR) Will be buying Wavecom. Wall St. hates deal. Falls to $5,42 from 52-week high of $21.18.
Palm (PALM) Smartphone also-ran revised quarter down. Falls to $1.14 from 52-week high of $8.94.
Douglas A. McIntyre
Picking out a CEO to go in technology right now might seem pointless. The argument could be almost any of them if you count share price only. That is doubly true if you look at just DRAM and flash memory makers. But the one stand-out company which could use a new CEO is SanDisk Corp. (NASDAQ: SNDK). Dr. Eli Harari is a co-founder of the company, and he sits as Chairman, CEO, and as a member of the Special Option Committee.
If GM (GM) needed dramatic news to help explain why it needs a bailout from Washington, the car firm got it.
Sales at the company were off 41% in November. Year-to-date unit sales dropped 22%. The stock was pushed down 3% on the news but quickly recovered.
Total vehicles sold moved down to 153,000 from 261, 000 in November 2007.
Douglas A. McIntyre
UnitedHealth Group Inc. (NYSE: UNH) has made some rather bold predictions for 2009. What is interesting here is that these projections are not showing continued growth nor showing total dominance. But the possible surprise here is that this depends upon the state of just how bad things get in the economy and also upon several factors which might be outside of its control.
Citigroup, Inc. (NYSE: C) is still in a pinch despite more than a 100% bounce from recent lows, and its still-relatively new CEO is caught right in the middle of a storm he might not escape. This call comes with some mixed emotions because what is obvious is that Vikram Pandit has been trying to make this horrible banking year and this horrible environment as painless for the company’s employees and to the corporate environment as he could. Making the decision to layoff the same amount of jobs as many small cities have in their entirety is no easy task. We have also heard after asking around how Pandit is not a slash and burn CEO. Whether anyone agrees that the financial supermarket model works or not is now irrelevant since every other "in the club" government-backed banks now mirrors the Citi model that was criticized for years.
Yahoo! (YHOO) has become a "rumor an hour" company. Over the weekend, the Times of London said the portal had a deal with Microsoft (MSFT) for its search business. As part of that arrangement former AOL CEO would be brought in as the new chief.
AllThingsDigital wrote that the Times piece was junk.
Several times a day there are bits of news about who will replace Jerry Yang as Yahoo! CEO and whether Time Warner (TWX) will hand AOL over to Yahoo! in exchange for a piece of the new company.
The latest news, this from The Wall Street Journal, is that Jonathan Miller, ex-AOL commander in chief is raising capital to buy all or part of Yahoo!.
Not likely.
Douglas A. McIntyre
Ford Motor Co. (NYSE: F) just released its November auto sales, and it is pretty hard to get excited about the data. The company sold 118,818 units in November, below the 119,000 Edmunds.com predicted. That would represent a drop of 30.6% from November 2007. This is still only about 63% of what Edmunds expects from General Motors (NYSE: GM) where it estimates sales of 188,000 units.
Until today, every drop of ethanol used in transportation fuel has been moved by trucks or train cars. This added to the cost of getting ethanol to market and to the amount of total carbon emitted in the production and use of ethanol. No longer. Kinder Morgan (NYSE:KMP) today announced the start-up of its 16-inchethanol product pipeline on its Central Florida Pipeline between Tampaand Orlando.
Ford Motor Co. (NYSE: F) is submitting its plan to Congress, and interestingly enough it does not sound as dire as some might have guessed based upon the auto company’s prior presentations. Ford has said it is asking for $9 billion in bridge financing, but hopes it does not need to access that. CEO Alan Mulally has said that he will only take a $1 salary if he accesses government funds. The company is also selling its corporate aircraft and will cancel management bonuses in 2009.
OPEC is once more rattling the saber of crude oil production cuts in an effort to prop up the price of the black stuff. Whether the cartel will be successful in its aims is open to question. OPEC has a notoriously bad record when it comes to acting as a single entity. Each of the 13 members has its own agenda, and getting those agendas to mesh is nearly impossible.
What this means for US consumers is also difficult to judge. OPEC supplied about 45% of US oil imports in September 2008, the most recent month for which EIA figures are available (total production figures come from OPEC’s Monthly Oil Market report for October 2008). Here’s the chart for September:
Analysts continue to slash estimates on bank stocks. Today it was Bank of America’s (BAC) turn. Citigroup lowered its estimates and price target on Bank of America due to marks and higher credit costs.
The firm lowered their Q4 EPS estimates by $0.40 to $0.02 per share (consensus is $0.41). The firm lowered the Q4 estimates to reflect $1.5 billion in mark-to-market losses, $2.7 billion of reserve additions for credit card, residential mortgage/home equity and corporate lending in the GCIB
By John Tamny RealClearMarkets
In the days leading up to last week’s Black Friday, the post-Thanksgiving shopping day when many retailers become profitable for the year, Americans were inundated with lots of media commentary about their Christmas-shopping plans. Various accounts suggested that with the economy needing a boost, prodigious spending on Black Friday would stimulate an economy that’s presently not firing on all cylinders.
With oil prices dropping, the cost of jet fuel is down by more than 50%. That makes the rush to merge airlines which accelerated earlier this year look like an idea whose time came and then went.
Given the costs and risks of a consolidation, the endless lines of angry customers, the strikes by unions, and the broken computer systems, Delta (DAL) may rue the decision to buy Northwest.
Now another merger may be in the offing, this one between British Airways and Qantas. It is hard to imagine where the big savings would be. At least both managements speak English.
Douglas A. McIntyre
General Electric Co. (NYSE: GE) is providing its scheduled GE Capital update. GE sees fourth quarter earnings at $0.50 to $0.52 EPS range rather than the $0.50 to $0.56 EPS range previously offered. It also said that it is maintaining its dividend of $1.24 annualized for 2009. There is actually more to this presentation that meets the eye.
When Chevron (NYSE:CVX) swallowed Texaco a few years back, one of the morsels it ingested was a claim for environmental damage to several Texaco drilling sites in Ecuador. Unlike Chevron’s recent exoneration in a US court for complicity in the killing of two Nigerian protesters, the Ecuadorian case is being tried in Ecuador at Chevron’s request.
Just as with natural gas and crude oil, electricity use is off as the economy heads into its second year of recession. The lack of demand for electricity affects the bottom line for generators like Duke Energy (NYSE:DUK), Dynegy Inc. (NYSE:DYN), and American Electric Power (NYSE:AEP).
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