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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The market was disappointed by Hewlett-Packard’s (HPQ) forecast for the next quarter. The technology company’s results for the past quarter were in line with Wall St. estimates.
Analysts look to H-P as a proxy for the sales of computer hardware such as printers, PCs, and servers. But, the company is in many other businesses and they are operations that have high margins that fuel the firm’s earnings. Shareholders should be more concerned with the forecasts for those divisions more than the immediate future of PC sales. Read More
Reuters: The Treasury is keeping banks guessing about when they can repay TARP funds.
Reuters: Bank of America (BAC) has raised more than $13 billion in share sales.
Reuters: Hewlett-Packard’s (HPQ) financial outlook disappointed the market.
Reuters: Terminated Chrysler dealers will challenge the sale of the company’s assets.
Reuters: Obama is considering an agency to protect consumer’s financial interests.
Reuters: Microsoft (MSFT) may unveil a new search engine.
Reuters: Facebook’s CEO said an IPO is several years away. Read More
Sir Howard Stringer is the first non-Japanese to run Sony (SNE) and putting him into the job was probably a mistake. He was promoted to “re-invent” the company. Instead, he has done what most chief executives without imagination do by cutting thousands of jobs.
The cost reductions did not keep Sony from losing $1 billion in the fiscal year that ended on March 31. Sony forecast another loss for this year. Read More
GT Solar International, Inc. (NASDAQ:SOLR) makes the equipment that other companies use to manufacture photovoltaic solar panels. Thus, when the solar panel makers are suffering, so is GT Solar. The company is suffering and expects to keep suffering.
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According to Reuters, Bank of America (BAC) shareholders voted to separate the chairman and CEO roles and Ken Lewis was replaced as chairman.
Reuters reports that talks to keep Chrysler out of Chapter 11 are on the rocks.
Reuters reports that the Fed sees the economic downturn easing. Read More
Caterpillar’s (CAT) first quarter results are a pretty good sign that no one wants big earth movers or machines that can move a small city from one state to another overnight.
Revenue at CAT was down 22% to $9.2 billion. The company lost $.19 a share contrasted by a profit of $922 million a year ago. CAT said “redundancy” costs could be backed out and this would move EPS to a positive $.39. Not much comfort in that.
CAT said its machinery sales, the largest part of its business suffered a 29% decline.
CAT’s new guidance signaled that no one should expect construction or infrastructure spending to rebound soon. This should be an indicator that companies like GE (GE) which depend on large infrastructure programs could struggle later this year.
The company expects 2009 sales and revenues to be in a range of plus or minus 10 percent around a midpoint of $35 billion.
No recovery signal here.
Douglas A. McIntyre
Merck released earnings, and cut its forecasts. No wonder. Its Q1 numbers were atrocious.
Revenue for the first quarter of 2009 was $5.4 billion, a decrease of 8%compared to the first quarter of 2008. Net income for the period was $1.4 Billion, compared with $3.3 billion in the first quarter of 2008.
Merck is showing the effects of being part of the Big Pharma world where nothing is likely to go right over the next few years, as drugs go off patent and have to compete with generics. Recent R&D efforts have not yielding results to offset that. Read More
DuPont ((DD) had nothing good to say about its earnings other than that they were in line with its expectations.
The firm announced that net income for the first quarter 2009 was $488 million versus $1,191 million in the prior year. Consolidated net sales in the first quarter of $6.9 billion were 20% lower than prior year. Read More
A long weekend is always a good time to send bad news over the wires, hoping that either nobody will see it or that they’ll forget they saw it by the next business day. MEMC Electronic Materials Inc. (NYSE: WFR) tried it by announcing preliminary results for its first quarter 2009. Traders did not exactly let it go unnoticed.
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Many people who fly on airplanes do not like it one bit. Some of these are claustrophobic while others object to the fact that they are not allowed to smoke at 37,000 feet anymore. But, the majority of nervous flyers have anxiety based on their belief that nothing that weighs any number of tons should be able to operate off of the ground at all. To their way of thinking, flying is a physical impossibility which they tolerate because driving from New York to Los Angeles takes five or six days.
The tens of millions of people who do not want to ride on airplanes are getting their way. The recession has hit the airline industry with a rapidly growing attrition of customers. As a reaction, carriers are taking planes out of service as quickly as possible and letting go as many pilots, stewardesses, and mechanics as they can. People who do not want to fly can join those who do in not being able to afford it. Read More
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