Daily Archives: February 4, 2009

A Chance For Big Oil To Become A Hero

Tx00338coilwellgusherodessatexasposAs John David Rockefeller discovered at the end of the 19th Century, there is not much money in refining crude if the supply is not abundant.

The US has been a net importer of oil for decades. There are very few places left in America where drilling below dry land is profitable.

Last summer, several politicians and business leaders including the President pushed for the end to a federal moratorium for drilling in many offshore areas adjacent to the US coast.

One of the obstacles to increasing oil supply by drilling in the deep ocean is that getting permissions and permits can take years.

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Posted on: February 4, 2009 – 8:41 pm in Oil & Gas,

Visa, Safe Harbor For Financial Tsunami (V, MA)

Cammonopoly_wideweb__430x3250_2Visa, Inc. (NYSE: V) has posted very pleasing earnings, one of the few bits of good news in the financial sector.  The credit card processing giant earned $0.78 EPS on an adjusted basis, beating estimates of $0.66 EPS.  Its revenues were $1.7 billion, ahead of estimates of $1.68 billion.  This report is strong enough that it is even boosting shares of MasterCard Inc. (NYSE: MA).

Processed transaction growth, the strength of debit transactions, and the global diversity of its business are why it is doing well, according to Visa.

The company also said that revenue growth is likely in the low single digits, but the company remains steadfast in its ability to meet its own 2009 EPS guidance. Full-year 2009 annual net revenue growth is in the high single-digits.

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Posted on: February 4, 2009 – 6:57 pm in Earnings, ,

BMC’s Bright Outlook (BMC)

BMC Software Inc. (NYSE: BMC) is doing something that many software and technology companies might consider heresy.  It grew earnings, and is raising guidance.  Doen’t the company know there is a recession?

It posted flat Q3 net income flat of $83.8 million.  This translates to $0.64 non-GAAP EPS. Revenue rose more than 6% to $488.4 million.  Thomson Reuters estimates were $0.59 EPS and $487.6 million in revenue.

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Posted on: February 4, 2009 – 6:49 pm in Uncategorized,

Cisco Rewards The Bulls (CSCO, VMW)

Cisco_logo_2Cisco Systems Inc. (NASDAQ: CSCO) reported earnings of $0.32 non-GAAP EPS and $9.09 billion in revenue.  First Call estimates were $0.30 EPS and $9 billion in revenue.  What is more important here than the past is the future.

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Posted on: February 4, 2009 – 4:19 pm in Earnings, Technology Companies, ,

The 52-Week Low Club (BAC)(GE)(TXT)(FITB)(HBAN)

Sad_clownBank of America (BAC) Falls to $4.72 on concerns that government might take over firm. Down from 52-week high of $43.81.

GE (GE) Drops to $11.19 on concerns about recession and the balance sheet of its financial unit. The 52-week high is $38.52.

Textron (TXT) Draws down $3 billion on credit line. Sells down to $5.68 from 52-week high of $65.52.

Fifth Third Bancorp (FITB) Drops on rising concerns about regional bank liquidity. Down to $1.47 from 52-week high of $27.10.

Huntington (HBAN) Another regional bank. Cuts jobs. Drops to $1.37 from 52-week high of $13.58.

Douglas A. McIntyre

Posted on: February 4, 2009 – 3:53 pm in HI/LOW, , , , ,

Traders Betting On Decent Cisco Earnings (CSCO)

Cisco_logoCisco Systems Inc. (NASDAQ: CSCO) is set to report earnings after the close.  What is interesting here besides the belief that John Chambers will be more than just cautious is that traders have been buying up Cisco ahead of the earnings report.  Shares had been up more today before the market sell-off, and if Cisco stock stays in positive territory it will mark the third day that the stock is up.

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Posted on: February 4, 2009 – 2:13 pm in Earnings, Technology Companies,

A Danger In Pay Caps: Business Failure (GS, JPM, MS, C, AIG, BAC)

Burning_money_pic_3Money_stack_pic_2Pendulums often swing too far in either direction.  It has been shown that complete deregulation or total self-regulation leads to "Big Business Gone Wild."  And now the pendulum in regulation over executive pay caps is on the verge of going too far in the other direction.  The Obama administration is set to release executive pay caps at institutions which are highly dependent upon financial assistance from Uncle Sam.  President Obama called for $500,000 salary caps in a speech, but more formal details of the rescue will not be out until next week.  We agree that more "governance" and more "limitations" are needed, and more importantly are coming any way.  But if these become too stringent, then these businesses will be killed.

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Posted on: February 4, 2009 – 1:07 pm in Economy, Labor & Unions, , , , , ,

Anadarko Hits Pay Dirt Again (APC, DVN, XOM)

Anadarko Petroleum Company (NYSE:APC) announced another significant Gulf of Mexico discovery this morning. The new discovery offers 300 feet of net oil pay, in addition to Anadarko’s other Gulf of Mexico find announced a couple of days ago. The company is definitely on a roll.

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Posted on: February 4, 2009 – 12:43 pm in Oil & Gas, , ,

Devon Results Hit by Big Drop in Asset Values (DVN)

Devon Energy Corp. (NYSE:DVN) reported a net loss for its fourth quarter of $6.8 billion (EPS of -$15.42), and a net loss for the year of $2.1 billion (EPS of -$4.85). Anyone who is surprised by these numbers hasn’t been paying attention.

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Posted on: February 4, 2009 – 10:28 am in Earnings, Oil & Gas,

Non-Manufacturing Horrible, Just Not AS Horrible

Burning_money_pic_2The Institute for Supply Management has released its January non-manufacturing data.  The services economy isn’t pretty.  But it also isn’t as bad as many expected.

The ISM showed that the non-manufacturing index was 42.9 for January.  December was 40.1, and economists were expectingthat the data would hit 39.0.  This is still atrocious.  Just not as atrocious as itwas expected to be.

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Posted on: February 4, 2009 – 10:19 am in Economy

T. Boone Pickens Hits the Road (AN)

Pickens_picIf you’re anywhere near Ft. Lauderdale on February 17th, you might want to check out the town hall meeting featuring T. Boone Pickens and Mike Jackson, who is CEO of AutoNation Inc. (NYQ:AN). The two are hosting the meeting "to discuss America’s current and future energy situation."

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Posted on: February 4, 2009 – 10:02 am in Alternative Energy, Oil & Gas, Politics

Russian Debt Moves Toward “Junk” Rating

RussiaFitch has downgraded Russia’s sovereign debt and says it may have to do so again.

The new rating is only two levels above "junk". With income from crude dropping sharply, the Russian economy is probably already in a deep recession.

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Posted on: February 4, 2009 – 9:26 am in International Markets

KeyBanc Downgrades Wynn Resorts (WYNN) to Underweight

KeyBanc downgrades Wynn Resorts (NASDAQ: WYNN) from Hold to Underweight with a price target target of $21, after announcing substantial labor cost cutting initiatives for its Las Vegas properties.

KeyBanc analyst says, "After the close WYNN announced substantial labor cost cutting initiatives for its Las Vegas properties. This is the first time we can ever remember this management team taking such drastic measures. In addition, on a conference call Steve Wynn commented that spending (labor, marketing, promotions, etc.) on the Encore opening was of a magnitude consistent with a boom time economy.

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Posted on: February 4, 2009 – 9:16 am in Uncategorized,

Good News in Oil Field Services Continues (NOV, HAL, WFT, SLB)

Oil_well_imageNational Oilwell Varco Inc. (NYSE:NOV) reported a solid beat of analysts’ estimates for the fourth quarter. After last week’s surprising earnings from Halliburton Co. (NYSE:HAL) and Weatherford International Limited (NYSE:WFT), National Oil Well Varco’s results were not entirely unexpected.

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Posted on: February 4, 2009 – 9:11 am in Earnings, Oil & Gas, , , ,

ADP “Apprentice” Prediction: “You’re All Fired”

Jobless_lines_picADP released its own "pre-unemployment number" again for January, and the jobs lost aren’t expected to be pretty.  The payroll company estimates that the US private sector lost some 522,000 jobs in January.  So far, economists expect Friday’s unemployment data to show a loss of 500,000 jobs in the non-farm payrolls.  Economists also expect that unemployment will have risen to 7.5% in January from 7.2% in December.

Be advised that ADP is still a new number, and far from perfect.  It has been very far off of estimates in more months than it has not. It is hard to know when there will be some "good news" on the jobs front, but by the sound of the Labor Department, the ADP report, and by the large companies making the public layoffs, it is probably later rather than sooner.

Jon C. Ogg
February 4, 2009

Posted on: February 4, 2009 – 8:27 am in Economy, Labor & Unions

Top Pre-Market Analyst Upgrades (EE, LRY, NEM, RSYS, RVBD, RYAAY, STAR, UPS)

Money_stack_picThese are some of the top analyst upgrades and positive research calls we have seen from Wall Street this Wednesday morning:

  • El Paso Electric (EE) Raised to Hold at Jefferies.
  • Liberty Property (LRY) Raised to Hold at Citigroup.
  • Newmont Mining (NEM) Raised to Buy at UBS.
  • Radisys (RSYS) Raised to Buy at Cantor Fotzgerald.
  • Riverbed Tech (RVBD) Raised to Buy at Merriman Curhan.
  • Ryanair (RYAAY) Raised to Hold at Deutsche Bank.
  • Starent (STAR) Started as Buy at Cantor Fitzgerald.
  • UPS (UPS) Raised to Outperform at Morgan Keegan.

Jon C. Ogg
February 4, 2009

Posted on: February 4, 2009 – 8:00 am in Analyst Calls, , , , , , , ,

Top Pre-Market Analyst Downgrades (ADM, CPX, DLTR, NOC, OKE, SQNM, STI, WINN, WYNN)

Burning_money_picThese are some of the top analyst downgrades and negative calls we are seeing from Wall Street this Wednesday morning:

  • Archer Daniels Midland (ADM) Cut to Neutral at JPMorgan.
  • Complete Production (CPX) Cut to Perform at Oppenheimer.
  • Dollar Tree (DLTR) Cut to Neutral at JPMorgan.
  • Northrup Grumman (NOC) Cut to Hold at Societe Generale.
  • ONEOK (OKE) Cut to Underperform at RBC.
  • Sequenom (SQNM) Cut to Perform at Oppenheimer.
  • SunTrust (STI) Cut to Neutral at Baird.
  • Winn-Dixie Stores (WINN) Started as Underperform at Jefferies.
  • Wynn Resorts (WYNN) Cut to Underweight at KeyBanc.

Jon C. Ogg
February 4, 2009

Posted on: February 4, 2009 – 7:57 am in Analyst Calls, , , , , , , , ,

Will Jeff Bewkes survive Time Warner’s disastrous quarter?

Time Warner Inc. (TWX) reported earnings that were so dreadful that they defy the imagination.
The largest media conglomerate lost $16 billion in period ended Dec. 31 as it wrote down the value of the assets its overpaid for and coped with plunging advertising sales. Baring an economic miracle, it’s hard to see how things will improve this year. I don’t see how Chief Executive Jeffrey Bewkes can survive following Time Warner’s first loss in 14 quarters.

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Posted on: February 4, 2009 – 7:02 am in Media

Outsourcing Investment Banking To Please Congress

95129cThe Congress and the Administration seem fixated on cutting the pay of financial company executives and, perhaps, the people who work for them.

The idea is a nearly perfect way to lower banking firm costs and to make sure that TARP money, money that belongs to taxpayers, does not go to out-sized bonuses.

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Posted on: February 4, 2009 – 6:21 am in Banking

As Big Companies Fire Overseas, US Recession Will Deepen

R218533_855025Panasonic will lose $4.2 billion for its fiscal which ends in March. The company says its troubles will cause it to fire 15,000 people. This is the latest in a string of layoffs by big Japanese companies including Sony (SNE).

It is clear that a number of Chinese manufacturing operations are also letting people go although the businesses in that nation are not always forthcoming about their actions.

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Posted on: February 4, 2009 – 5:51 am in International Markets,