Over the last two years, in the PC business Michael Dell has been beaten like a rented mule. His company continues to lose market share particularly in the US.
Industry analysts would say that Dell has done a poor jobs of bringing out innovative and attractive products. Apple (AAPL) Mac sales keep rising. HP (HPQ), Sony (SNE), and Lenovo have launched new product lines which have had warm receptions.
There is a scene in the film classic "Casablanca" when Captain Renault, the head of the local police, finds out that there is gambling going on in the cafe owned by Humphrey Bogart’s character. Renault’s reaction was to say that "I’m shocked, shocked to find that gambling is going on in here!" Of course, Renault knew about the activity and was taking a few dollars on the side.
President Barack Obama blasted Wall Street for shameful and irresponsible behavior after reports that Wall Street paid $18.4 billion in bonuses in 2008. These numbers were from New York State where payouts were 44% below last year. The common man, the government, and the press felt that no bonuses were the only right thing.
Investment banks have been paying out bonuses for decades and in many years those sums were astronomical. Certainly Mr. Paulson, who ran Goldman Sachs before going into public service, knew about it as did everyone in the New York Federal Reserve. Paulson had, after all, had his years of big bonus payments.
According to Reuters, Republican may keep fighting Obama on the stimulus package.
Reuters reports that Roche dropped its bid on Genentech (DNA) to $42 billion.
Reuters writes that the Administration will release its plans to fix banks next week.
Reuters reports that NYS Attorney General Cuomo may try to get back $4 billion in Merrill Lynch bonuses.
Markets in Asia were mixed.
The Nikkei fell 3.1% to 7,994.
The Heng Seng rose 1.8% to 13,385. Shanghai was closed.
At the open in Europe, the FTSE was down .1% to 4,188, The Dax was up .3% to 4,442. The CAC 40 rose ,2% to 3,915.
Data from MarketWatch and Reuters.
Douglas A. McIntyre
Jeff Bezos, the founder and CEO of Amazon (AMZN), looks a bit mad. Stick thin and without a hair on his head he is both bug-eyed and frenetic. He has the look of a man who has never slept.
Bezos founded Amazon in 1994, which makes him one of the internet’s few elder statesmen. While the other old guard tech companies like Microsoft (MSFT), Ebay (EBAY), and Yahoo! (YHOO) have not aged well, Amazon is in the midst of the best period in its history.
It looks like we have more offerings coming to market, or at least more and more are being contemplated. Whiting Petroleum Corporation (NYSE: WLL) announced that its secondary offering for 8 million shares of common stock was priced at $29.00 per share.
Traders and investors alike look for defensive stocks with certainty of earnings in hard times like these. Tomorrow we will get earnings from Procter & Gamble Co. (NYSE: PG), and the consumer products giant is definitely among those defensive companies. Its competitor Colgate-Palmolive Co. (NYSE: CL reported record results this morning. Investors want to know if the larger rival will be a repeat performance.
Geron Corporation (NASDAQ: GERN) had a filing to sell shares that hit after teh close today. Normally this would be a cause for concern since it had a huge run recently. But this turns out to be only "related parties" and for a small amount.
Broadcom Corp. (NASDAQ: BRCM) has posted earnings, which may not be shocking if you have read the reports from its peers. There was a net loss of -$0.32 on items including impairments, but we are focusing on the non-GAAP earnings like most analysts who cover the stock. The communications chip provider said items affected earnings by $0.40 EPS, so we would assign a face value non-GAAP EPS at $0.08. It did show a 13% drop in revenues to $1.127 billion. First Call had estimates at $0.27 EPS and $1.07 billion in revenues.
Amazon.com Inc. (NASDAQ: AMZN) posted earnings after already saying that this holiday season was a record. Earnings for the Internet retailer were $0.52 EPS on $6.7 billion in revenue. Thomson Reuters (First Call) had estimates pegged at $0.39 in non-GAAP EPS and $6.44 billion in revenues. Amazon’s guidance was $145 million to $305 million in net income on revenue of $6 billion to $7 billion.
Textron (TXT) Weak earnings outlook. Drops to $8.83 from 52-week high of $65.52.
Eastman Kodak (EK) Poor earnings and layoffs. Down to $5.01 from 52-week high of $20.91.
Black & Decker (BDK) Cuts jobs. Cuts outlooks. Sells off to $31.02 from 52-week high of $74.24.
Dow Chemical Company (DOW) More concerns about finances and Rohm & Haas (ROH) buyout.
Websense (WBSN) Poor fourth quarter results. Dips to $11.38 from 52-week high of $24.60.
Douglas A. McIntyre
Continuing jobless claims rose by 159,000 in the week ended Jan. 17 to a seasonally adjusted 4.78 million, the most since the government’s records began in 1967. The number of unemployed people in the US could rise by one million this month, almost twice the figure for December.
Where are the job losses coming? Only thirty firms account for over 173,000 of the firings so far this month.
You do not see too many upgrades in corporate credit ratings during this part of the business cycle, let alone in technology and software. But Red Hat, Inc. (NYSE: RHT) was just raised by Standard & Poor’s ratings today. You might even wonder if S&P is almost endorsing Linux after all these years after you look through the notes.
For those who have felt that this earnings season was one of the more dismal moments for technology, today should mostly mark the end for the semiconductor companies and related stocks. Not entirely, but mostly. On deck after the close are Broadcom Corp. (NASDAQ: BRCM), Integrated Device Technology Inc. (NASDAQ: IDTI), KLA-Tencor Corporation (NASDAQ: KLAC), Maxim Integrated Products Inc. (NASDAQ: MXIM), Microchip Technology Inc. (NASDAQ: MCHP), PMC-Sierra Inc. (NASDAQ: PMCS), Rambus Inc. (NASDAQ: RMBS), and Varian Semiconductor Equipment Associates Inc. (NASDAQ: VSEA).
Most investors have never heard of DryShips (DRYS), and almost no one knows what the company does. Its market cap is only $325 million.
The firm operates drybulk carriers and has a fleet of 46. DryShips is based in Athens.
Recently the company faced being in breach of its debt convenants. DryShips is trying to sell $500 million in shares. When that news came out, several brokers, including Credit Suisse, dwongraded that stock.
Bloomberg’s poll of economists shows that the experts think US GDP contracted 5.5% in the fourth quarter. A drop of that magnitude would be the greatest since 1982, a year when the recession took joblessness to 10%.
Analysts are now trying to forecast what will happen as the economy moves into the first quarter and first half of this year.
Amazon.com Inc. (NASDAQ: AMZN) is set to report earnings after the close of trading. Jeff Bezos and friends at the online retailing giant have already said that the Q4-2008 holiday season was a record for the company, but the company was not clear on what that meant.
More and more companies are either suspending or killing their share repurchases and stock buyback plans. Some are doing it to conserve cash in a much harder operating environment. But many companies have figured out that shrinking their floats by a marginal amount does little to support their stocks. We have given some detailed data below on the "no more buybacks" status of Altria Group Inc. (NYSE: MO), 3M Co. (NYSE: MMM), Eastman Kodak Company (NYSE: EK), AT&T, Inc. (NYSE: T), and Royal Philips Electronics (NYSE: PHG).
Dominion Resources Inc. (NYSE:D) reported fourth quarter and full year results this morning, and the news was mixed. For the quarter, EPS hit $0.60 on $348 million in income, compared with EPS of $0.52 last year on income of $299 million. Revenue was $4.17 billion. Analysts expected EPS of $0.68 on revenue of $3.51 billion.
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