The Administration seems to be counting on a partnership between Chrysler and Fiat before providing federal funds to the No.3 US car company. Most observers would agree that Chrysler is the weaker of the two firms, but maybe not.
The car czar patrol may have gotten a little surprise as S&P cut Fiat to “junk.” Read More
Credit card processing fee legislation appears to be coming back. Whether it becomes law is another matter, but merchants are going after credit card processing fees via a fight in Washington D.C. That puts the likes of Visa, Inc. (NYSE: V) and MasterCard Incorporated (NYSE: MA) front and center due to roughly an 80% market share. It could also pose a serious risk to a portion of revenue in their business models. It seems that merchants are banding together again to fight the amount of money they have to pay for processing transaction payments on credit cards.
Read More
A US-based subsidiary of Hoku Scientific, Inc. (NASDAQ:HOKU) and a Hong Kong-based subsidiary of Solarfun Power Holdings Co., Ltd. (NASDAQ:SOLF) have renegotiated a polysilicon supply contract between Hoku and Solarfun. The renegotiation affects only the timing of payments and deliveries, not the price, volume or other material items in the agreement.
Read More
By Mark Gimein of The Big Money
Does anyone still remember Roger and Me? Michael Moore’s 1989 film chronicled the filmmaker’s attempts to interview GM Chairman Roger Smith, whose efforts to streamline and downsize had shattered GM’s hometown of Flint, Mich. Back then, shutting down plants, cutting benefits, and throwing workers on the proverbial street was depicted as the epitome of corporate heartlessness and greed.
Now it is the policy of the Obama administration. Twenty years after Roger and Me, we are all heartless capitalists. We want efficiency, viability, and fast results, and we’re not going to fritter away tens of billions of taxpayers dollars waiting for them. We’ve agreed that keeping dying companies on life support isn’t the solution. But when it comes to creating a plan for what happens next to the workers displaced in the process, we are every bit as lacking in ideas as Roger Smith ever was.
Rio Tinto plc (NYSE: RTP) owns a majority stake in a diamond mine in Canada’s Northwest Territories, and apparently has no intention of selling that stake to Kinross Gold Corp. (NYSE:KGC), as rumors had it. That seems a bit odd given Rio’s efforts to raise capital. It’s hard to see what Rio thinks it is holding on to.
Read More
We got another dose of bad-tasting medicine on the economic front. After the dreaded report came from Case-Shiller on January housing data, we saw awful figures from the Conference Board’s Consumer Confidence Index and then from the Institute for Supply Management’s Chicago Purchasing Managers Index.
Read More
Acorda Therapeutics, Inc. (NASDAQ: ACOR) is taking it right on the chin this morning. The company announced that it has received a “refuse to file letter” from the FDA regarding its New Drug Application for Fampridine-SR. Unfortunately, this is supposed to be for a novel therapy being developed to improve walking ability in people with multiple sclerosis.
Read More
Hyundai has become a very successful auto company in the US if you consider the state of the auto industry and the current economy. It’s “lose your job, we take the car back” plan has been a huge draw. Ford Motor Co. (NYSE: F) has decided to adopt a similar strategy. This is a variation of the Hyundai offer, but it might prove to be just as good.
Read More
Chinese oil producer CNOOC Ltd. (NYSE:CEO) reported annual profits for 2008 of $6.5 billion, up 42% from 2007. EPS was about $0.15. Production was up 14%, to 195.4 million barrels of oil equivalent. CNOOC noted that it’s all-in per barrel costs for 2008 equaled $19.78, and that the company’s average selling price for crude was $89.39/barrel.
Back in January a federal three-judge panel ruled that Anadarko Petroleum Corporation (NYSE:APC) was entitled to royalty relief on production from certain Gulf of Mexico leases, even though the government had made an error when it wrote the contracts. According to Platts, now, the US Department of Justice has filed an appeal, saying that if the ruling is allowed to stand, the government could lose more than $38 billion in royalty payments over the next 25 years. Anadarko is the industry’s stalking horse here. Many other oil majors, including BP plc (NYSE:BP), Chevron Corporation (NYSE:CVX), and Exxon Mobil Corporation (NYSE:XOM) have leases in the Gulf that could be affected by the court’s ruling.
Read More
These are some of the top analyst downgrades or cautious research calls we have seen this Tuesday morning before the market opens:
Accenture (ACN) Cut to Hold at Argus.
Freeport-McMoRan (FCX) Cut to Sell at Deutsche Bank.
Metabasis (MBRX) Cut to Perform at Oppenheimer.
Nexen (NXY) Cut to Market Perform at Raymond James.
Principal Financial (PFG) Cut to Underperform at FBR.
Ritchie Brothers (RBA) Cut to Market Perform at Raymond James.
JON C. OGG
These are some of the top analyst upgrades and positive research calls from Wall Street this Tuesday morning. As you will see, many of the upgrades are not exactly the most positive calls:
Alcoa (AA) Raised to Hold from Sell at Deutsche Bank.
Autodesk (ADSK) Raised to Neutral from Sell at UBS.
Google (GOOG) Raised to Buy at Merriman Curhan Ford.
Guess (GES) Started as Buy at Jefferies.
Telefonos de Mexico (TMX) Raised to Neutral from Underperform at Credit Suisse.
JON C. OGG
KLA-Tencor Corporation (NASDAQ: KLAC) is the second largest US-based semiconductor cap-ex stock by market cap, or at least out of the go-to universe we track with Applied Materials (NASDAQ: AMAT) ahead of it and Lam Research (NASDAQ: LRCX) behind it. Last night, the company killed any hopes of a v-bottom recovery in orders for the sector revolving around capital expenditures in the semiconductor sector. It also confirmed industry data from last week that further slowdowns were seen in orders. The process control and yield management systems for semiconductor companies announced that it was further cutting 10% of its workforce.
The company said it is continuing in its efforts to control costs and to respond to depressed market conditions. This round of cuts is in addition to a workforce reduction that was announced in November 2008. KLA is looking to eliminate quarterly non-GAAP operating expenses of $140-145 million by the end of calendar year 2009, adjusted from the company’s previously announced target of $165-170 million.
Despite prior cuts in operating costs, KLA said it must further cut operating expenses “in order to respond to the current demand environment.” The translation there is simple: semiconductor companies are not spending on more cap-ex. Other cost-cutting actions facilities consolidation (i.e. factory closings or lease terminations), additional forced time off (unpaid vacation) and a reduction in employee stock purchase plan benefits (lower benefits).
KLA-Tencor estimates charges of approximately $20 million to $30 million, including $18 to $22 million related to estimated severance costs.
Here is the sad thing… Analysts were already looking for a loss in this year (June-end). They are now looking for losses next year. It is possible that these job cuts will help to increase the bottom-line a year out after the charges have been absorbed. But over the last 90-day period we have seen a drastic reduction in earnings expectations from analysts. You can bet that the analysts take note this week with a recognition that companies never really announce another round of layoffs if they are expecting a rapid return of strong orders in a quarter or two. If KLA-Tencor was expecting a sharp recovery it might furlough workers for a month or two, but that is not what KLA-Tencor signaled last night.
Shares closed down 6.5% Monday and have yet to offer any solid indications. Its 52-week range is $14.81 to $47.07.
Jon C. Ogg
March 31, 2009
The Asia Development Bank issued its new 2009 economic forecast.
In the report the organization said the People’s Republic of China is expected to expand by 7% in 2009 on the back of massive fiscal stimulus measures rolled out by the Government, three economies in the subregion – Hong Kong, China; the Republic of Korea; and Taipei,China – are likely to contract as their economies are hit hard by a sharp drop in demand for exports. The China number is a cut from an 8.7% figure in the ADB’s last report.
The analysis also projected that Southeast Asia’s growth is projected to dwindle to just 0.7% in 2009, down from 4.3% in 2008, and the three most export-orientated economies in the subregion – Malaysia, Singapore and Thailand – will also contract, with the most open of these economies, Singapore, likely to shrink by 5%.
Douglas A. McIntyre
Rick Wagoner, former CEO of GM (GM), is not old enough to retire. He has an incredible CV which includes running a huge but troubled car company for eight years. Another firm in the same industry may want to tap that experience by making his head man.
Toyota (TM), Honda (HMC), and Peugeot have already replaced their top managers. Ford’s (F) and Chrysler’s CEOs look safe, for now. The next auto company chief likely to be fired is Carlos Ghosn who has run Nissan and Renault for a number of years. Nissan will post its first fiscal year loss in 10 years. That kind of performance was not tolerated by the boards of Toyota and Honda.
The Nissan alliance with Renault is now a decade old. It is starting to show a lot of wear as the car recession deepens. Like GM, it needs new leadership with a new perspective. Wagoner is the man.
Douglas A. McIntyre
Walt Disney Co. (NYSE: DIS) is joining forces with Google Inc.’s (NASDAQ: GOOG) YouTube video-sharing site.
Under the terms of the deal, YouTube will offer clips from Disney’s ESPN and ABC networks. The ESPN channel will launch mid-April and the ABC in mid-May, according to paidContent.org, which first reported the story.
The agreement is clearly a win for YouTube, which despite generating about $500 million in revenue is not profitable. The Wall Street Journal notes that Disney will share the revenue with YouTube from ads sold against its content. It will also test preroll ads and feature ESPN’s video player on its channel.
One downside from Google is that Disney is hedging its bets. The media company is holding talks with Hulu, a rival video site backed by General Electric Co. (NYSE: GE) among others about broadcasting ABC shows. ESPN is not part of those discussions.
YouTube and Disney had held discussions about showing full-length ABC episodes on the video site but the talks went nowhere, according to the Journal.
In the US, economists may be talking about a recovery. In Europe, they are not.
Aside from attacking the US stimulus package as worthless, organizations based on the Continent are expected a long, dark period for the world economy. Read More
Toyota’s (TM) share of the US light vehicle market is 18% and Honda’s (HMC) is 10%. GM’s (GM) share of its home market is about 22%. Fifty-five years ago, the No.1 US car company had 54% of the US market. By this time next year, GM’s piece of the American car pie could drop another 50%, bringing it closer to Honda’s.
It seems improbable that GM could lose that many customers so fast. But, Rick Wagoner, recently departed CEO of the company told Congress last December that consumers won’t buy vehicles from a bankrupt company. Some of the people at the hearings figured Wagoner was bluffing, trying to convince Washington that a Chapter 11 filing would bring an end to the firm’s ability to market its products because customers could turn to cars made by competitors which were in reasonably good financial shape. But, most research done recently indicates that Wagoner was probably right, at least right enough that GM’s sales could be clobbered by consumers who believe that their warranties will be worthless and that their dealers will disappear. Read More
Last month unemployment hit 8.1%. Of course, the figure was not uniform across the country. Seven states posted double-digit figures. But, in Wyoming, less than 4% of the population is out of work. The February number was based on 651,000 people being pushed out of their jobs during the month. With the March jobs report only a few days away, the debate is whether the rate at which the economy is causing people to lose work will stay on a 600,000 to 700,000 pace or whether the job loss is slowing and whether the US will avoid a nationwide unemployment rate of 10%. Read More
According to Reuters, government talk of auto company bankruptcy may cause creditors and the UAW to renew talks with GM (GM) and Chrysler.
Reuters reports that Obama is talking a hefty agenda with him to the G20.
Reuters writes that the US recession may not have bottomed.
Reuters reports that Obama is pitching an economic recovery to get a budget passed.
Reuters reports that Asia is split over disagreements between the US and China.
Reuters writes that the Chrysler tie-up with Fiat faces tough problems.
Reuters reports that Intel (INTC) rolled out a powerful new server chip.
Reuters reports that Morgan Stanley (MS) is completing a $6 billion property fund.
Reuters writes that Disney (DIS) will launch ad-supported channels on Google’s (GOOG) YouTube. Read More
| Today’s top tickerspy Indexes | |
| Regional Bank Sto... | +1.4% |
| Hospital Stocks | +1.1% |
| Rubber and Plasti... | +1.0% |
| Casino Stocks | +1.0% |
| Hotel Stocks | +0.9% |
 | |
| |
RSS Updates
Email Updates
