The Andersons, Inc. (NASDAQ: ANDE) Maintained Buy as Value at Zacks.
Apollo Investment Corporation (NASDAQ: AINV) Cut to Neutral at JPMorgan.
Applied Materials Inc. (NASDAQ: AMAT) Started as Perform at Oppenheimer.
Bank of America Corporation (NYSE: BAC) Cut to Market Perform at Wells Fargo.
Boyd Gaming Corp. (NYSE: BYD) Raised to Neutral at Goldman Sachs.
Coinstar Inc. (NASDAQ: CSTR) Raised to Neutral at JPMorgan.
Exterran Holdings, Inc. (NYSE: EXH) Cut to Neutral at Credit Suisse.
First Solar Inc. (NASDAQ: FSLR) Cut to Hold at ThinkEquity.
Health Management Associates Inc. (NYSE: HMA) Cut to Hold at Argus.
KLA-Tencor Corporation (NASDAQ: KLAC) Started as Outperform at Oppenheimer.
LinkedIn Corporation (NYSE: LNKD) Cut to Equal Weight at Morgan Stanley.
Micron Technology Inc. (NASDAQ: MU) Started as Perform at Oppenheimer.
Potash Corp. of Saskatchewan (NYSE: POT) Raised to Outperform at Bull of the Day at Zacks.
Petrohawk Energy Corporation (NYSE: HK) Cut to Neutral at Credit Suisse.
Royal Caribbean Cruises (NYSE: RCL) Maintained Underperform as Bear of the Day at Zacks.
SanDisk Corporation (NASDAQ: SNDK) Started as Outperform at Oppenheimer.
Salesforce.com (NYSE: CRM) Raised to Outperform at Wells Fargo.
Symantec Corporation (NASDAQ: SYMC) Raised to Outperform at FBR.
VMware Inc. (NYSE: VMW) Raised to Outperform at Wells Fargo.

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JON C. OGG

We have shown a brief news summary and the implied stock price changes on each after the 4:00 PM EST closing bell.

Activision Blizzard, Inc. (NASDAQ: ATVI) closed higher by 1.1% ahead of earnings and its earnings report was given a boost by digital sales this last quarter.  Shares are up 3.6% at $12.25, but it will have to rise another 3% before it is outside of a longer-term trading range.

The Andersons, Inc. (NASDAQ: ANDE) beat earnings with $2.42 EPS versus $1.72 estimates as revenues grew 65%… Plant nutrients rule!  Shares closed down 1.5% at $38.49 but the stock is up over 7% in the after-hours at $41.25 versus a year range of $32.01 to $51.23.

Clearwire Corporation (NASDAQ: CLWR) rose handily today by 10% but is giving some back after a deeper loss in the quarter and after planning to add LTE Advanced-ready technology to its 4G network.  Shares are down 2% at $2.42 in the after-hours session.

comScore, Inc. (NASDAQ: SCOR) announced the acquisition of AdXpose for $22 million in stock, but the earnings are taking the stock south despite 38% revenue growth and 23% EBITDA growth.  Shares are down 14.5% at $18.00 after closing at $21.07 today.  Keep in mind that the 52-week range is $17.18 to $31.28.

Entropic Communications, Inc. (NASDAQ: ENTR) is down after a 14% drop in sales sequentially, even if it was a gain of 51% from the year ago period.  Earnings were down sequentially too.  This was not expected and shares are down a whopping 25% at $5.00 in the after-hours session.  Shares had already hit a 52-week low of $6.36 today.

GT Solar International, Inc. (NASDAQ: SOLR) is catching a bounce as the solar equipment maker beat earnings estimates and reiterated annual guidance.  GT shares fell 3.7% today but the stock is up 5.6% at $13.98 today in the after-hours session.  The 52-week range is $6.63 to $17.50.

Leap Wireless International, Inc. (NASDAQ: LEAP) was already weak after MetroPCS stunk up Wall Street this week with earnings.  Misery loves company in pre-paid cellular as it saw a drop in subscriber additions.  Leap Wireless fell 2.2% to $10.04 today and the stock is down 6.3% at $9.40.  That is under the 52-week low of $9.51 by the way.

MercadoLibre, Inc. (NASDAQ: MELI) had sales in line with targets but earnings were light for Q2; shares of the online payment and e-commerce platform in Latin America fell 2.7% but are down 4.4% more at $69.11 in the after-hours.

MEMC Electronic Materials, Inc. (NYSE: WFR) is trading up after beating earnings, even if the year is looking light on guidance.  The wafer producer for chip and solar companies was down 0.4% today but the stock is up 5.7% at $7.39 after hitting a 52-week low of $6.82 today.

Solarwinds, Inc. (NYSE: SWI), which is about as far as being out of the solar business as it can be, beat earnings and revenues, guided its third quarter in line with estimates, and guided 2011 in line with estimates.  Shares rose over 2% today and is up another 8% at $23.00 after the close.

Walter Energy, Inc. (NYSE: WLT) shares were down 2.5% today ahead of results and the company’s miss on earnings has shares down another 5.5% at $104.45.  That is a combined $9.00 move or so from yesterday’s close.

Web.com Group, Inc. (NASDAQ: WWWW) is surging after beating earnings expectations.  The big boost is coming as it is acquiring to acquire Network Solutions for $405 million in cash in a deal that is said to be at least 20% accretive to the $1.22 EPS figure for 2012 and with even higher accretion in 2013.  This is a coup, and the stock rose over 6% today to $8.66 and is up almost 30% at $11.00 in the after-hours.

Zipcar, Inc. (NASDAQ: ZIP) is surging after the company’s earnings report. The company raised full year guidance and shares are up 16% att $26.70 in the after-hours session.  Not bad at all for a freshly public company.

Zumiez Inc. (NASDAQ: ZUMZ) was significantly lower than expected in same-store sales gains of only 4.9%.  This one rose 6% to $27.10 today but the stock is down 13% at $23.50 in the after-hours session.

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JON C. OGG

AEGON (NYSE: AEG) Raised to Buy at BofA/ML.
AFLAC Inc. (NYSE: AFL) Cut to Equal Weight at Morgan Stanley.
The Andersons, Inc. (NASDAQ: ANDE) Reiterated Buy as Value at Zacks.
Blue Coat Systems, Inc. (NASDAQ: BCSI) Reiterated Underperform and cut target to $20 at BofA/ML.
Broadcom Corporation (NASDAQ: BRCM) Raised to Top Pick at FBR Capital Markets.
Computer Sciences Corp. (NYSE: CSC) Reiterated Underperform as Bear of the Day at Zacks.
Dendreon Corporation (NASDAQ: DNDN) Maintained Underperform with $29 target at Credit Suisse.
Entergy Corporation (NYSE: ETR) Raised to Outperform at Wells Fargo.
Itron, Inc. (NASDAQ: ITRI) Cut to Underperform at Baird.
Red Robin Gourmet Burgers (NASDAQ: RRGB) Raised to Outperform as Bull of the Day at Zacks.
UIL Holdings Corp. (NYSE: UIL) Cut to Hold at Argus.
Weyerhaeuser Co. (NYSE: WY) Cut to Sell at Deutsche Bank.

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JON C. OGG

ADM got solid profit help from its bioproducts group, which is where the company counts its revenue from ethanol sales. Bioproducts swung from a -$6 million loss in the third quarter of 2009 to a $195 million profit this year. This is substantially better than ethanol profit from either Valero Energy Corp. (NYSE: VLO), which posted a profit of $47 million from its ethanol operations, or The Andersons, Inc. (NASDAQ: ANDE), which posted profit from its ethanol group of $30 million in the second quarter of 2010. The Andersons report third quarter earnings later this week.

ADM took a -$124 million after-tax charge against earnings for “changing LIFO inventory valuations.” Oilseeds processing rose $24 million year-over-year, and crushing and origination grew $41 million. The company also noted improving business in its South American biodiesel business.

Corn processing profits, which includes the ethanol business, rose $153 million year-over-year, reflecting increased capacity in the company’s new mills. That profit also includes $32 million in costs for starting up the new plants.

Corn processing has overtaken ADM’s oilseed business as the largest profit contributor. That’s either good news or bad news, depending on how one views corn ethanol as a transportation fuel.

The good news is that as demand grows for ethanol, ADM will sell more. Because it already buys its own grain, and the subsidy payments for ethanol are still in force, the company is somewhat insulated from corn prices rises and still benefits for the $0.45/gallon federal ethanol subsidy.

The bad news is that the ethanol subsidy expires in December, and it remains to be seen whether it is renewed by Congress. Because the subsidy is primarily a benefit to agriculture, it is a good bet that it will be extended. But if it is not, ADM could face some serious profit pressure.

ADM stock is trading down about 7% at noon today, on more than double normal volume.

Paul Ausick

Abercrombie & Fitch Co. (NYSE: ANF) Cut to Sell at Brean Murray.
Apple Inc. (NASDAQ: AAPL) raised target to $390 at Susquehanna.
Brinker International (NYSE: EAT) Cut to Neutral at Susquehanna.
Cree Inc. (NASDAQ: CREE) Started as Equal-Weight at Barclays.
Dollar Tree, Inc. (NASDAQ: DLTR) Raised to Neutral at JPMorgan.
Aixtron AG (NASDAQ: AIXG) Started as Equal-Weight at Barclays.
Fluor Inc. (NYSE: FLR) Cut to Neutral at Goldman Sachs.
Hecla Mining (NYSE: HL) Cut to Neutral at UBS.
Intel Corporation (NASDAQ: INTC) Cut to Market Perform at First Global.
Quest Diagnostics Inc. (NYSE: DGX) Cut to Market Perform at William Blair.
The Andersons, Inc. (NASDAQ: ANDE) Cut to Hold at BB&T.
Veeco Instruments Inc. (NASDAQ: VECO) Started as Overweight at Barclays.
VMware Inc. (NYSE: VMW) Cut to Market Perform at William Blair.

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JON C. OGG

Agrium Inc. (NYSE: AGU) Raised target to $85 from $80 at Canaccord.
BCE Inc. (NYSE: BCE) Cut to Sector Perform at National Bank.
Cerner Corp. (NASDAQ: CERN) Raised to Buy at ThinkEquity.
Lululemon Athletica Inc. (NASDAQ: LULU) Cut to Underperform at Jefferies.
Texas Instruments Inc. (NYSE: TXN) Cut to Neutral at Susquehanna.
The Andersons, Inc. (NASDAQ: ANDE) Started as Buy at Morgan Joseph.
Zoltek Companies Inc. (NASDAQ: ZOLT) Started as Hold at Needham.

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JON C. OGG

The Congressional Budget Office released a report in July on the effects of tax credits to achieve energy and environmental goals. The report highlighted three reasons for subsidizing not only corn ethanol, but other biofuels as well. First, the fuels will reduce dependence on imports. Second, biofuels help meet environmental policy issues. Third, biofuel subsidies raise incomes in the agricultural sector.

In the US, most ethanol is blended with gasoline in a 10% mix known as E10. This blend can be used in any gasoline-burning car on the road today. By itself, this blend should reduce gasoline consumption, and therefore demand for imports, by 10%. That’s not the way it works out. A gallon of corn ethanol contains about one-third less energy than a gallon of gasoline, reducing the 10% gain to about 6.5%.

The second objective, reducing CO2 emissions, generates a lot of debate about the exact amount of CO2 reductions one can attribute to ethanol. Burning ethanol reduces CO2 emissions by about 21% compared with gasoline. Ethanol is primarily shipped from refiners by truck, and if the CO2 emitted by those trucks is added to the total CO2 emitted by burning ethanol and by burning other fossil fuels to grow the corn and get it to market, CO2 emissions do not fall by 21%.

Finally, corn ethanol receives a $0.45/gallon credit known as the Volumetric Ethanol Excise Tax Credit, VEETC, or more commonly, the blender’s credit. The credit was established in 2004 at $0.51/gallon and was reduced to its current rate in 2008. The cash goes to refiners who blend corn ethanol with gasoline. By the time the blender’s credit is scheduled to end in December 2010, taxpayers will have kicked in $22 billion to pay for this credit.

The name blender’s credit is almost a misnomer. Even though the money is paid to refiners like Archer-Daniels-Midland Co. (NYSE:ADM), The Andersons, Inc. (NASDAQ:ANDE), and Valero Energy Corp. (NYSE:VLO), the benefit goes to corn growers and ethanol producers. On the issue of the blender’s credit, the CBO said, “Although the credit is provided to blenders, most of it ultimately flows to producers of ethanol and to the farmers who grow the corn—in the form of higher prices received for their products.”

Pure-play ethanol companies have all but disappeared. Pacific Ethanol, Inc. (NASDAQ:PEIX) shares have traded under a dollar/share since mid-May. The company has bounced up from a year-to-date low of $0.41 on the strength of belief in the Congress renewing the ethanol blender’s credit.

The corn ethanol subsidy will become more visible once Congress returns, but probably won’t have much effect on the November elections because there are no national candidates on the ballot. Iowa candidates will all support the corn ethanol subsidy, and New York candidates won’t even notice. The Obama administration is likely to support the continuation of the subsidy.

Corn ethanol is one of those subjects that is an almost endless source of opinion, conjecture, and argument. There will be more of all those in the rest of this year.

Paul Ausick

Affymetrix Inc. (NASDAQ: AFFX) Cut to Underweight at Piper Jaffray.
The Andersons, Inc. (NASDAQ: ANDE) Raised to Buy and $41 target at BB&T.
Charm Communications Inc. (NASDAQ: CHRM) Started as Outperform at Credit Suisse.
FirstEnergy Corp. (NYSE: FE) Cut to Hold at Citigroup.
The Mosaic Company (NYSE: MOS) Maintained Hold but Target cut to $45 from $57 at Soleil.
OpenTable, Inc. (NASDAQ: OPEN) Cut to Hold at Citigroup.
Potash Corp. of Saskatchewan (NYSE: POT) Maintained Hold but Target cut to $89 from $100 at Soleil.
ProLogis (NYSE: PLD) Raised to Market Perform at Wells Fargo.
Public Service Enterprise Group, Inc. (NYSE: PEG) Added to Conviction Buy List at Goldman Sachs.
QuinStreet, Inc. (NASDAQ: QNST) Raised to Overweight at Thomas Weisel.
Wimm-Bill-Dann (NYSE: WBD) Added to Focus Sell List at Goldman Sachs.

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JON C. OGG

The industry attracted a lot of interest and money in the early to mid 2000s, but almost all the pure-play ethanol companies have foundered. Large agricultural players such as Archer Daniels Midland Co. (NYSE: ADM), Valero Energy Corp. (NYSE: VLO), and privately held Cargill now control the bulk of ethanol production with small, cooperatively owned plants mostly in the Midwest. High-fliers like Verasun, Aventine, and now Pacific Ethanol, Inc. (NASDAQ:PEIX) have filed for bankruptcy. The only viable small players remaining are The Andersons, Inc. (NASDAQ: ANDE) and BioFuel Energy Corp. (NASDAQ: BIOF).

As might be expected, the disaster at BP plc’s (NYSE: BP) Gulf of Mexico well has provided fuel for the ethanol makers’ demand for continuing the federal subsidy. This push coincides with a coming decision from the US Environmental Protection Agency on whether or not to raise the blend rate for ethanol from 10% (called E10) to 15% (E15). The EPA has delayed its decision, again, until September. Producers, naturally, support the E15 blend rate.

More impetus for ethanol producers comes from seeing the impact of lost subsidies and tax credits on the production of biodiesel. Since Congress allowed the subsidy for biodiesel to expire last year, biodiesel production in the US has fallen nearly 90%. Congress is considering renewing the biodiesel tax credit of $1/gallon.

The US produced about 11 billion gallons of ethanol in 2009 (about 262 million barrels), which the industry’s main lobbying group, the Renewable Fuels Association, said displaced the need to import 364 million barrels of oil “from places like Venezuela and the Middle East.”

That’s absurd. A barrel of ethanol contains about 40% less energy than a barrel of oil, as measured in BTUs. It is impossible for less ethanol to replace more oil.

Phony arithmetic aside, the largest problem with corn-based ethanol is the cost of its two major inputs: corn and natural gas. For the past year or so, both have been priced very low and ethanol producers have profited. But both prices are rising now, and this will put a crimp in profits. Earlier this week ADM noted a bit of recovery in its ethanol business as corn prices head downward again.

Depending on two volatile commodity inputs and federal subsidy payments for profitability just doesn’t make good sense. If the federal subsidy is not renewed, corn-ethanol production in this country will essentially dry up. That would open up the US to imported sugar cane-based ethanol from Brazil, provided that the $0.54/gal tariff is dropped.

The argument over the ethanol subsidy is sure to be loud and long, but in the end, farm lobbies and renewable fuel lobbies will prevail. It’s too bad.

Paul Ausick

Acorda Therapeutics (NASDAQ: ACOR) Cut to Market Perform at Leerink Swann.
AGCO Corporation (NYSE: AGCO) Started as Hold at Morgan Joseph.
American Eagle Outfitters (NYSE: AEO) Raised to Buy at Wells Fargo.
AngloGold Ashanti Ltd. (NYSE: AU) Cut to Neutral at UBS.
Andersons Inc. (NASDAQ: ANDE) Cut to Neutral at Piper Jaffray.
Citrix Systems (NASDAQ: CTXS) Started as Neutral at UBS.
Deere & Co. (NYSE: DE) Raised to Overweight at JPMorgan.
Itron Inc. (NASDAQ: ITRI) Raised to Buy at Needham.
NetApp, Inc. (NASDAQ: NTAP) Cut to Market Perform at BMO Capital; Cut to Hold at Canaccord Adams.
VMware, Inc. (NYSE: VMW) Started as Buy at UBS.

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JON C. OGG
FEBRUARY 18, 2010