Besides competing with smaller national rivals like RadioShack Corp. (NYSE: RSH) and GameStop Corp. (NYSE: GME), Best Buy has to slug it out with retailers Amazon.com Inc. (NASDAQ: AMZN), Wal-Mart Stores Inc. (NYSE: WMT), and direct sellers like Apple Inc. (NASDAQ: AAPL).

And while Best Buy touts its increases in sales of mobile phones and other portable devices, it also notes:

Areas of comparable store sales growth in the Domestic segment included tablets and mobile phones within the Computing & Mobile Phones revenue category, eReaders within the Consumer Electronics revenue category and Appliances. These increases were more than offset by comparable store sales declines primarily in notebooks within the Computing and Mobile Phones revenue category, gaming within the Entertainment revenue category, and digital imaging and televisions within the Consumer Electronics revenue category. The Domestic segment online channel revenue grew 20 percent compared to the prior-year period.

Selling more cheaper devices does not make up for lost sales in pricier items, unless a retailer can sell an enormous number. Best Buy can’t do that because there’s simply too much competition from wireless carriers, other retailers, and direct sales.

The company reiterated its full-year adjusted EPS guidance of $3.50-$3.80, in-line with the consensus estimate of $3.59. But weak international sales and declining same-store sales mean that Best Buy will be forced to close more stores, which will hurt revenues and ultimately profits unless the company can really figure out a way to boost its online sales. The outlook is probably not as rosy as the company would like us to think.

Shares are up about 1.6% in the pre-market, but were up as much as 6% at one point. Current price is $18.43 in a 52-week range of $17.53-$32.85. The 52-week low was set yesterday.

Paul Ausick

A report at Reuters names South Korea’s SK Hynix and US chip maker GlobalFoundries as two firms the unhappy bondholders have begun discussions with. At the time that Micron was declared the winning bidder, the only other competitor was a combined bid from two Japanese private equity firms.

If a couple of private equity firms think that Elpida is worth less than Micron thinks it’s worth, then it doesn’t make a lot of sense to believe that either Hynix or GlobalFoundries will think Elpida is worth more. Elpida’s debt is more than double the price Micron has offered to pay, so it’s no surprise that the bondholders want to smoke out a higher bid. At best they’re probably hoping to get another bid that is slightly better than Micron’s in the hope that Micron will bid again. Another possibility is that one of the private equity firms will take part with one of the chip makers, lowering the amount of capital at risk, but likely to muddy the waters over who’s in charge and what the strategy should be going forward.

Micron’s shares are up 0.8% in the pre-market, at $5.67 in a 52-week range of $3.97-$10.23.

Paul Ausick

The NASDAQ pre-market trading at 8:18 AM EST has shares trading at $37.30 on last look with 1.89 million shares having traded hands.  The pre-market high is listed as $38.50 and the pre-market low on the NASDAQ print system is $37.02.  If this holds, then the stock will be down 2.4% and the Facebook IPO will be called a BUSTED IPO.

Morgan Stanley offered significant support for this offering with a huge bidding wave at $38.00 per share on Friday.  If the firm is going to support the offering today then it better gets its checkbook out now that investors have had a weekend to digest the notion that they are valuing this company at just over $100 billion in market value.

The media hyped this thing up endlessly last week and before the deal came to market as the greatest thing since sliced bread.  It will be interesting to see how the media treats this company and its management team now that the public’s dollars are involved in playing the greatest internet growth story of the last decade.

JON C. OGG

Much smaller competitors Lumber Liquidators Holdings Inc. (NYSE: LL) topped both EPS and revenue estimates when it reported earnings a couple of weeks ago, as did Builders FirstSource Inc. (NASDAQ: BLDR). Lowe’s Companies (NYSE: LOW) reports earnings next week, and consensus estimates call for EPS of $0.42 on revenue of $12.98 billion.

With both Lumber Liquidators and Builders FirstSource coming in handily better than expected, estimates for Home Depot rose by a penny in the last week and were actually up $0.05 over the past 90 days. That’s why the disappointment today — a low bar had been raised and Home Depot couldn’t quite clear it.

The home fix-it stores could be in for more competition from home sales, particularly new home sales if the economy continues to improve. Sales of bank-owned homes rose in February and March though the inventory of these homes has been in decline.

New home sales rose sharply in February, but dropped again in March. Home sales are about half what analysts expect in a healthy home-buying market. Home prices continue to slide slightly in many parts of the country, which encourages buyers able to find financing and cash buyers. If home buying picks up a bit during the summer, the home remodeling stores may feel the crunch again.

Home Depot also said that it expects sales to rise 4.6% for the full year, which calculates out to full-year sales of about $73.6 billion versus the current estimate of $74.11. The company raised its full-year EPS guidance from $2.79 to $2.90, which includes the $0.03 one-time benefit from the first quarter. The consensus estimate had called for $2.91, so the company is still lagging here.

Shares in Home Depot are trading down about -4.5% in the pre-market, at $47.66 in a 52-week range of $28.13-$52.88.

Paul Ausick

The company’s CEO could barely contain his enthusiasm:

Kepler GPUs [graphics processing units] are accelerating our business. Our newly launched desktop products are winning some of the best reviews we’ve ever had. Notebook GPUs had a record quarter. And Tegra is on a growth track again, driven by great mobile device wins and the upcoming Windows on ARM launch.

Nvidia, which licenses designs from ARM Holdings plc (NASDAQ: ARMH), may be getting back on track following a couple of weak quarters. Like other ARM licensees such as Qualcomm Corp. (NASDAQ: QCOM), Apple Inc. (NASDAQ: AAPL), and Texas Instruments Inc. (NASDAQ: TXN), Nvidia is profiting from the explosive demand for mobile devices like smartphones and tablets.

The company’s growth prospects are further enhanced by a decision from Microsoft Corp. (NASDAQ: MSFT) to release a version of is Windows 8 operating system for ARM-based processors, the company’s first foray from the x86-designs of Intel Corp. (NASDAQ: INTC) and Advanced Micro Devices Inc. (NYSE: AMD).

Nvidia forecast second quarter revenue of $990 million to $1.05 billion, significantly above the current consensus estimate of $976.2 million. Non-GAAP gross margins are also expected to rise from 50.1% in the first quarter to 51.5% in the second quarter.

The company’s share price is down about -45% since the beginning of 2011. Nvidia’s forward P/E ratio in February of 2011 was north of 63. That has fallen to 13.65 today, indicating an abundance of enthusiasm from investors that the company simply couldn’t deliver on. The situation is changing now, and Nvidia might actually be set to deliver the goods.

Shares are up 9.5% in the pre-market this morning, at $13.58 in a 52-week range of $11.47-$20.52.

Paul Ausick

When the company reported fourth quarter earnings in March, it set expectations for the first quarter fairly low: shipments of 400-420 megawatts of modules and wafers and revenues of $180-$190 million. Now it might be that Renesola was managing expectations, but based on today’s results and the fourth quarter’s report, the company appears to have won its first battle with managing costs. That solution has so far eluded First Solar Inc. (NASDAQ: FSLR), SunPower Corp. (NASDAQ: SPWR), LDK Solar Co. Ltd. (NYSE: LDK), Suntech Power Holdings Co. Ltd. (NYSE: STP), Yingli Green Energy Holding Co. Ltd. (NYSE: YGE), and JA Solar Holdings Co. Ltd. (NASDAQ: JASO). Jinkosolar Holding Co. Ltd. (NYSE: JKS) is scheduled to report earnings later today and analysts expect an EPS loss of -$1.07 on revenue of just $158.9 million, about half the revenue of a year ago.

In March, Renesola’s CEO said this about his company’s cost structure:

Although we achieved our year-end cost-reduction targets, which placed our cost structure among the lowest in the industry, it was not enough to offset extremely low solar wafer and module prices.

In the first quarter the company’s module manufacturing cost fell to $0.74/watt and Renesola expects to lower that to $0.70/watt in the second quarter. Half the cost savings will come from lower wafer costs and the rest from lower pricing for polysilicon. The company is vertically integrated and makes its own wafers and polysilicon, which helps keep its costs down.

For the first quarter Renesola had positive gross margin of 9% on its solar modules while its overall gross margin was negative, -3.8%. That’s not good, but it’s a lot better than the negative gross margin of -28.1% the company posted in the fourth quarter. In the first quarter of 2011 gross margin rang in at 21%. Those were the days.

Shares in Renesola are up nearly 12% in pre-market trading, at $2.00, in a 52-week range of $1.45-$8.83.

Paul Ausick

FedEx has noted before that it plans to grow organically and to make small acquisitions, such as this one, to complement that internal growth. United Parcel Service Inc. (NYSE: UPS) took a different route to growth, acquiring Dutch firm TNT Express NV for $6.8 billion.

There is virtually no chance that FedEx can make enough acquisitions and integrate the companies acquired fast enough to challenge UPS or market leader DHL in Europe. Of course UPS has its own problems digesting the acquisition of TNT Express.

And both FedEx and UPS were probably counting on a bump in US business following the closure of thousands of post offices. Now that the USPS has come up with a plan to cut services without closing any of the offices, the two giant private carriers are probably re-calibrating 2012 forecasts.

Neither FedEx nor UPS shares are active in pre-market trading this morning.

Paul Ausick

Agrium attributed its increased sales to higher volumes and higher prices for nitrogen. Last week, CF Industries Holdings Inc. (NYSE: CF) also blasted through estimates, but the company’s best seller was also its nitrogen products. Potash Corp. of Saskatchewan Inc. (NYSE: POT) missed earnings estimates on lower potash sales and margins (gross margins fell -56% year-over-year). The Mosaic Co. (NYSE: MOS) also missed on earnings as potash volumes fell and phosphate costs rose. Monsanto Co. (NYSE: MON) pounded EPS estimates, but analysts believe that sales were all pulled forward due to the warm weather.

Agrium and CF are less dependent on potash and phosphates than are the others, and the rise in nitrogen is directly related to its ability to boost yields on the same amount of acreage. Potash fertilizer is needed to ensure healthy plants, but its contribution yields is less important.

Whether demand for nitrogen will continue through the Northern Hemisphere’s growing season remains to be seen, but as more people demand more food on the same amount of acreage, sales and margins on nitrogen are likely to keep pace.

The catch in Agrium’s results is that the company’s first half adjusted EPS guidance is a relatively weak $5.50-$6.10. Analysts had been expecting $5.67 before today’s blowout number. Investors are likely to interpret the lowish guidance as an indication that Agrium’s sales were also pulled forward into the first quarter.

Shares of Agrium are trading up about 0.13% at $84.68 in a 52-week range of $60.15-$93.49.

Paul Ausick

Competitors McDonald’s Corp. (NYSE: MCD), Yum! Brands Inc. (NYSE: YUM), and Chipotle Mexican Grill Inc. (NYSE: CMG) have already reported quarterly results, with Yum and Chipotle Mexican Grill raising their outlooks rather than lowering them. Jack in the Box Inc. (NASDAQ: JACK), which reports later this month, is expected to post higher profit on slightly lower sales.

Wendy’s saw its margins drop from 13.4% a year ago to 11.8% this year, “due primarily to the impact from higher commodity costs — especially for fresh beef — and the impact from unfavorable product mix.” Commodity costs are what they are, and every restaurant faces the same issue, but having the wrong products is a management issue.

The company plans to fix that by remodeling its stores:

We are allocating substantial resources toward restaurant development, marketing, product innovation and customer service initiatives that we believe will ultimately accelerate sales growth, enhance the quality of our store base and grow our worldwide presence over time.

The key word there is “ultimately.” Will investors give the company the time it will need to make all those changes? And will the changes actually deliver on the promises?

The company closed a net 13 stores in the first quarter, bringing its worldwide total of locations to 6,581, only 354 of which are outside North America. Wendy’s also said that it “continues to target more than 8,000 locations outside North America.” The question is whether or not the company waited too long to look for growth overseas.

In the pre-market this morning, Wendy’s shares are down about -2.5% at $4.75 in a 52-week range of $4.29-$5.62.

Paul Ausick

Avis made both its forecast numbers this morning, and reaffirmed last week’s full-year EPS guidance for EPS of $2.35-2.65. Analysts didn’t believe that number either, and the consensus EPS estimate rose only to $2.11.

The lack of respect for Avis’s forecast may have been due in part to an announcement from Hertz Global Holdings Inc. (NYSE: HTZ) last Thursday that it had reached an agreement with a potential buyer of the company’s Advantage rent-a-car brand, which could clear the way for Hertz’s acquisition of Dollar Thrifty Automotive Group Inc. (NYSE: DTG). That deal has been on-again, off-again for about two years, and at one time both Avis and Hertz were bidding on Dollar Thrifty.

Like Hertz, Avis revised its fleet costs downward by 3%-8%, based on the lower depreciation rates for its fleet. Used car values have risen and that has helped both companies. Dollar Thrifty reports quarterly results next week and is expected to post EPS of $1.30, up from $1.28 just a week ago, on revenue of $355.53 million.

Shares of Avis closed down -1.3% on Friday at $15.90 in a 52-week range of $8.45-$19.24. There has been no change in the share price in the pre-market so far this morning.

Paul Ausick