John Rice, chief executive of GE’s technology infrastructure division, told Reuters that he expects results at his business to be weak in 2010. “We’re not expecting a significant growth rate next year,” he said.
A quick look at GE’s third quarter results shows how damaging trouble in the technology infrastructure business could be. Read More
Macy’s Inc. (NYSE: M) is showing just how much of a conundrum there is between today’s retail stock valuations and the reality of what to expect from earnings ahead. Macy’s had a narrower loss in the last quarter of $35 million, or -$0.08 EPS; but outside of items its earnings were -$0.03 EPS. Revenues were down over 3% to $5.28 billion. Thomson Reuters had estimates at -$0.07 EPS and $5.25 billion in revenues. The company did manage solid inventory management controls and its ongoing localized merchandise by region was part of why it raised its sales and earnings guidance for the year.
Still, there are issues between today’s share price versus valuations and where it came up from. This also highlights issues that lie ahead for Nordstrom Inc. (NYSE: JWN) and Kohl’s Corp. (NYSE: KSS) ahead of their earnings this week.
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The great growth mystery of True Religion Apparel Inc. (NASDAQ: TRLG) might be coming in too light. After the close of trading, the high-end, or at least high-priced, jean and apparel maker posted earnings of $0.58 EPS on $82.4 million in revenues. While that is still growth in revenues, this is under the Thomson Reuters estimates of $0.59 EPS and $84.62 million in revenues. There is “raised guidance” from the company, but there are issues despite revenues being up almost 4% from a year ago.
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Baidu (NASDAQ:BIDU), China’s No.1 search engine based on market share, had the same problem Google (NASDAQ:GOOG) does. Its revenue is not growing as fast as it was last year. The critical difference is that Internet use and the size of the Chinese population should be driving rapid improvements in Baidu’s sales, and they are not.
Baidu revenue in the third quarter of 2009 was $187.3 million, a 39.1% increase from the corresponding period in 2008. Net income in the third quarter of 2009 was $72.2 million, a 41.7% increase from the same period a year ago.
Going forward, the picture as not as good. Read More
Financial results and news out of Boeing (NYSE:BAC) has been getting worse by the month as the company delay its new 787 and a revamped version of the 747.
Today Boeing released results for the third quarter and sharply cuts it forecasts.
While revenue rose 9% to $16.7 billion, the company lost $2.2 billion compared to a profit of $1.1 billion in the same period last year. EPS for the third quarter were ($2.23) compared to $.96 last years. Last year’s strike and supplier production problems reduced year-ago revenue by an estimated $2.1 billion and earnings by an estimated $0.60 per share. The current quarter’s revenue growth was not what it seemed. Read More
Zoltek Companies, Inc. (NASDAQ:ZOLT) was a great success story during the boom of energy and alternative energy. But since that bubble popped, its bubble has burst as well. Its shares are getting hammered again after it reported results for the third quarter of its fiscal 2009. Zoltek’s revenues were down essentially by one-third from a year ago and came to $30.3 million. It also saw a drop of 32.6% in operating income and was almost break-even. It was actually a loss of $200,000.00, down from operating income of $7.3 million a year ago.
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The United States Postal Service is out with its quarterly filing of earnings, and it is not pretty. In fact it is uglier than a head-on collision. The quarterly report dated today shows a loss of $2.382 billion. That compares to last year’s same quarter loss of $1.105 billion. Revenues were $16.339 billion, down from $17.91 billion a year earlier. Here is the sad case, this is going to essentially need another tax hike equivalent via another postal rate hike.
Huron Consulting Group Inc. (NASDAQ: HURN) was a stock we screened early this morning in pre-market hours for its active trading at VSInvestor.com. We noted that this one was getting destroyed, but the company may have just become one of the worst stocks on NASDAQ.
Huron disclosed that it is restating financial statements for the fiscal years 2006, 2007 and 2008 and Q1 2009. The restatements pertain to non-cash charges relating to how payments received by the sellers of certain acquired businesses were subsequently redistributed among themselves and to other select Huron employees. The total estimated impact on net income and EBITDA might not sound that bad on the surface for all restated periods at $57 million, particularly when there is said to be no impact on cash, cash flows from operations or adjusted EBITDA. Things go from bad to worse after that.
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Dell (DELL) delivered a pessimistic forecast about it recent sales and the short-term period ahead, indicating that the PC market is still in trouble. A number of industry analysts expect global computer shipments to drop 5% or more this year.
About 24 hours after Dell’s unpleasant news, Intel (INTC) was remarkably sanguine. “While the global economic environment is still recovering, our customers signaled increased confidence for a seasonal second half with their ordering patterns,” Intel Chief Executive Paul Otellini said in the company’s earnings call after releasing better-than-expected numbers. “From a consumption perspective, consumer purchases led the way.” Read More
The good news for Sun Microsystems, Inc. (NASDAQ: JAVA) shareholders is that the vote for the Oracle Corporation (NASDAQ: ORCL) buyout is still set for this week. The bad news is that Sun Microsystems is lowering quarterly guidance, so Oracle is getting less than what was forecast in the deal.
Sun now expects revenues for the fiscal fourth quarter (June-end) to be between $2.58 to $2.68 billion. This is down from $3.780 billion a year ago and down under the $3.03 billion estimate from Thomson Reuters.
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Reuters: Riots in China show the nation is in flux.
Reuters: The US is considering mortgage aid for the unemployed.
Reuters: The June budget gap was $94 billion.
Reuters: Rattner stepped down from the auto task force.
Reuters: The spy probe of Rio Tinto (RTP) workers in China grew.
Reuters: A new consumer agency won’t cause bank fee hikes. Read More
Shares of Take-Two (TTWO) Interactive fell 14% after hours as the company cuts its forecasts of earnings and sales for its fiscal 2009. The major reason for the change was the delay of the launch of the BioShock 2 game from the fourth quarter of fiscal 2009 to fiscal 2010.
This is one in a long series of failures by the management of Take-Two which is headed by CEO Ben Feder. The shares are down almost 60% since he joined the company, and has not only turned down a generous buyout offer from Electronic Arts (ERTS), but has also missed forecasts on more than one occasion.
Douglas A. McIntyre
Warren Buffett of Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) has been out on just about every media outlet that he can reach people on to discuss the notion of a second stimulus package. He has said this week and before how there is no recovery and there are no green shoots out there in his investment companies. When your time frame for investing is forever, this continues as a clear deviation from what the Oracle of Omaha has taken as a stance in the past. There is a simple take here… The old guy must be preparing the world for a poor earnings report and another quarter of poor performance.
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Reuters: Pandit bought time at Citigroup (C) with a management reshuffle.
Reuters: Obama’s healthcare and climate plans are running into resistance.
Reuters: AIG (AIG) will pay more executive bonuses in July.
Reuters: The new GM will exit Chapter 11 today. Read More
Hot Topic, Inc. (NASDAQ: HOTT) is continuing to lose its momentum. The company had been a huge winner for being tied to the apparel from the Twilight teen vampire movie. But apparently vampire envy in apparel can get a stake through the heart too. The company’s same store sales are shrinking again, and now we have an earnings warning.
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Hansen Medical Inc. (NASDAQ: HNSN) is becoming the Boulevard of Broken Dreams in the land of speculative medical instrument stocks. We gave a volume spike alert at VSInvestor.com on this one, but this situation goes much deeper now. The maker of The Sensei® robotic catheter systems guided second-quarter revenues lower and withdrew previous system placements guidance. While the company cited delays in purchases by customers, it is becoming a serious question (actually, it has been a serious question for a while) as to whether or not this is a real company with a solid future or if its basis is hype around its founders and nothing more.
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Potash Corporation of Saskatchewan Inc. (NYSE: POT) did last night what most traders already feared was coming. The Canadian potash supply giant said that weak demand for its products and lower prices were going to take earnings for the quarter down to about $0.70 EPS versus a previous forecast of $1.10 to $1.50 EPS. This is hitting other potash and fertilizer companies including Mosaic Co. (NYSE: MOS), Agrium Inc. (NYSE: AGU), CF Industries Holdings, Inc. (NYSE: CF), Terra Industries Inc. (NYSE: TRA), Terra Nitrogen Company, L.P. (NYSE: TNH), and Intrepid Potash, Inc. (NYSE: IPI). Even the Market Vectors Agribusiness ETF (NYSE: MOO) is indicated to open lower this morning.
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Rambus Inc. (NASDAQ: RMBS) is tempering some of its guidance, which may lend at least some additional credence that investors need to keep justifying higher prices on news that is only so-so or only supports green shoots. Rambus revised its June quarter guidance for revenue to be between $26.7 million and $27.2 million . Rambus had initially provided revenue guidance for the quarter of between $27 million and $30 million.
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If you thought European stock news from companies doesn’t matter, this morning is proof against that notion. A German company called K+S warned of weak potash demand and announced price cuts and a drop in sales expectations. It is calling Q2 demand very weak ahead of the fall fertilization. This news has not yet been issued by US and Canadian fertilizer and potash players, but shares of Mosaic Co. (NYSE: MOS), Potash Corp. of Saskatchewan, Inc. (NYSE: POT), Monsanto Co. (NYSE: MON), Agrium Inc. (NYSE: AGU), CF Industries Holdings, Inc. (NYSE: CF), and Intrepid Potash, Inc. (NYSE: IPI) are getting hammered. Even the agriculture ETF such as the Market Vectors Agribusiness ETF (NYSE: MOO) is getting hit along with Syngenta AG (NYSE: SYT).
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Many investors use companies such as Cintas Corp. (NASDAQ: CTAS) as a bogey of the economy, particularly for the employment sector. There is a simple reason here: it provides corporate uniforms and related business services. It is a direct tell on what is going on in the employment sector at major services and manufacturing companies where employees wear uniforms. The earnings warning that Cintas gave this morning is not indicative of anything like a recovery coming yet in employment trends.
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