We have provided the first details for earnings, Thomson Reuters consensus data, added color of our own on the earnings trends, listed key issues to watch, and included the performance from the June 30 close and from the March 9 close that traders are using as the key pivotal turning day where the bear market died and a new bull market run began.

Apple Inc. (NASDAQ: AAPL) is on deck to report after the closing bell on Monday to show its fiscal 2009 year-end report.  Apple has been hitting 52-week highs and estimates are $1.42 EPS on $9.2 billion in revenues.  Steve Jobs and friends do offer guidance (conservative and sand-bagged), and the estimates for the Dec-2009 (Q1-2010) are $1.91 EPS and $11.45 billion in revenues.  Shares are up over 30% since June 30 and up about 125% from the March 9 close.  Apple is now ranked as #10 on our 24/7 Wall St. Real-Time 500 Largest Companies In America.  Friday’s cautious research note from Oppenheimer and the disappointment from most other earnings reports may have taken some wind from the Apple sails.

Texas Instruments Inc. (NYSE: TXN) is on deck for earnings Monday after the close.  The $0.39 EPS expected has greatly improved from before its last earnings, but the $2.82 billion expected in revenues would compare to $3.387 billion in the year-ago period.  TI shares essentially slid all week, and this major recall from Ford is a blemish that will have an impact on the calendar Q4 rather than on the quarter-end of September that is due on Monday.  What the charges will be and what the ramifications will be have not yet been defined, but the cruise control deactivation switches under the recall are made by TI and the 4.5 million expanded recalls appears to have come to a full tally of about 14 million.  Next quarter estimates are $0.40 EPS and $2.78 billion in revenues, at least that is before any charges and freebies in the Ford recall.  Be advised that this next quarter will also mark the level where revenues appear to be back on track for growth from the year-ago periods as the Q4-2008 period was when business fell off the cliff.  TI shares are up 7% since June 30 and are up over 55% from the March 9 close.

SanDisk Corp. (NASDAQ: SNDK) is back from the abyss and will report after the close on Tuesday.  Shares have rallied 300% from their 52-week lows now that business and profitability have returned.  Shares are up 42% from June 30 and they are up 175% from the March 9 close.  Estimates are $0.25 EPS and $786.69 million in revenues.  For the current quarter due in Dec-2009 the estimates are $0.18 EPS and $857.67 million.  Be advised that SanDisk blew estimates away last quarter by returning to profitability a full two quarters ahead of expectations.  Based upon the last report and based upon the run-up its shares have seen, the largest independent leader of flash memory is probably going to have to give another “Wow!” report to keep everyone happy.

Seagate Technology (NASDAQ: STX) is set to report earnings on Tuesday, and rival Western Digital Corp. (NYSE: WDC) is set to report on Thursday.  Both companies have recovered exponentially from 52-week lows: STX at 400% and WDC at over 250% from lows.  With estimates raised and expectations raised, these are the figures:

• Seagate has an implied market cap of $7.57 billion and is expected to post $0.46 EPS on $2.62 billion in revenues; next quarter estimates are $0.55 EPS and $2.75 billion in revenues.
• Western Digital has a market cap of $8.05 billion and is expected to post $0.92 EPS on $2.04 billion in revenues; next quarter estimates are $1.07 EPS and $2.18 billion in revenues.

Yahoo! Inc. (NASDAQ: YHOO) is also on deck for after the close on Tuesday.  The company is not going to have any broad market impact, but it has an army of shareholders who are buried in the stock that were hoping for that Microsoft buyout that Jerry Yang botched so badly.  Estimates are $0.07 EPS on $1.12 billion in ex-TAC revenues, and next quarter is expected at $0.10 EPS and $1.22 billion in revenues.  Carol Bartz is believed to be a big boost for Yahoo! and its trimming of losing operations is believed to have lent a hand for Q4 or for 2010 after the charges have all been realized.  But the advertising revenues better be strong here to match Google’s advances from last week, or there is going to be the feeling that things are only getting better because the company is leaner.  The Microsoft search-ad swap won’t have had any time to add to last quarter, and asset sale closings will likely not be recognized until the Q4 period.  Shares have risen by about 6% since the June 30 close and are up “only” 32% since the March 9 close.

eBay Inc. (NASDAQ: EBAY) will be more than interesting to see, partly because of the pending Skype process and partly over its explanation of what has been happening in the auction markets now that the consumer is recovering at least somewhat.  Estimates are $0.37 EPS and $2.14 billion in revenues; next quarter estimates are $0.40 EPS and $2.26 billion in revenues.  It is hard to believe that eBay was trading at less than 10-times projected earnings just a few months ago.  Shares have risen by 43% since June 30 and are up a whopping 138% from the March 9 close.  This now trades at 16.2-times implied 2009 estimates of $1.52 EPS and trades at 14.9-times implied 2010 earnings estimates of $1.64 EPS.  Look for eBay to offer some guidance, sans-Skype, for 2010.

VMware, Inc. (NYSE: VMW) is due on Wednesday afternoon, a day ahead of ex-parent and still quasi-parent EMC Corp. (NYSE: EMC).  VMware is still the leader in virtualization and has recovered handily from its lows.  While it is close to 52-week highs, this is still only about 40% of post-IPO highs when shares were above $100.00 in and out from October to December in 2007.  Estimates are $0.20 EPS on $473.9 million in revenues, and next quarter estimates are $0.25 EPS on $523.1 million in revenues.  Our two biggest issues here are a very slow return of enterprise spending and an environment with more dense competition from Oracle, Microsoft, and Citrix.

EMC Corporation (NYSE: EMC) is also up over 100% from its absolute lows and close to 52-week highs.  Earnings are due Thursday morning, and estimates are $0.21 EPS on $3.45 billion in revenues this last quarter and $0.29 EPS and $3.97 billion for the Q4 period.  While storage spending is seeming to be endless, we still have at least some pause about the jump expected from the Q3 to Q4 period because of the slow return of enterprise and cap-ex spending.  It may also want to or need to continue its acquisition campaign to keep its trajectory.  With a warchest of $10 billion as of last quarter before its pending Data Domain Inc. (NASDAQ: DDUP) acquisition and effectively double that amount in the majority stake it owns in VMware, we expect the deal flow to continue from EMC.

Amazon.com, Inc. (NASDAQ: AMZN) is on deck to report Thursday after the close.  For Jeff Bezos to get to have his big notorious laugh, he needs to deliver some serious results over and above estimates, or at least we think so, based on the post-earnings reactionary drop last quarter and based on valuations.  The online retail king is expected to post $0.33 EPS and $5.02 billion in revenues, and the Christmas quarter is expected to be $0.62 EPS and $8.08 billion.  With estimates at $1.69 EPS for 2009 and $2.17 EPS for 2010, the $95.32 share price gives implied earnings multiples of 56.3 for 2009 and 43.9 for 2010.  Shares are up almost 14% from June 30, and that is even including the drop seen after the last earnings when shares rose to 93.87 in the days before earnings and dropped immediately down to $86.49 the next day. Shares are also up almost 60% from March 9.  Frankly, there is really nothing not to love about Amazon.com.  With its internal price comparisons, ability to sell new and used, its ability to offer shoppers a flu-fear-free shopping experience, and now its same-day experience coming to some markets, the only concern we have is what sort of earnings multiple Bezos and friends have in the stock.  We eed a “Wow!” report and “Wow!” guidance for us to not believe a repeat of last quarter’s post-earnings reaction will be likely.

Broadcom Corp. (NASDAQ: BRCM) is on deck Thursday and hard to judge this far ahead of time.  Its end markets are mixed between recovering handily and semi-recovering or stabilizing.  Getting direct comparisons is also getting harder and Texas Instruments may set the tone for it on Monday regardless of what Broadcom says on Thursday.  Its shares are also up over 100% from absolute lows of the last year, up about 20% from June 30 and up over 80% from the March 9 close.  Estimates here are $0.33 EPS and $1.16 billion in revenues (vs. $1.298 billion a year ago), and next quarter’s estimates are $0.34 EPS and $1.19 billion in revenues (vs. $1.126 billion a year ago).

Juniper Networks, Inc. (NASDAQ: JNPR) is one of our few sub-$1 billion in revenue companies, but many traders try to get a glimpse of Juniper to try to interpret the much larger arch-rival Cisco’s earnings (due in a month).  Estimates here are $0.21 EPS and $799.43 million in revenues and next quarter estimates are $0.23 EPS and $835.23 million in revenues.

Synaptics Inc. (NASDAQ: SYNA) is by far our smallest “most important tech earnings” but the stock has performed dismally.  The earnings figures have been brought down and the unofficial consensus is under its last guidance because of concerns of push-outs and competition highlighted in a key analyst downgrade last week.  Shares rose 5% to close at $22.64 on Friday, but the stock is DOWN over 40% from June 30 and is now up a whopping 4% from the March 9 date we are benchmarking every stock to.  The valuations here are dirt cheap and the short interest seems elevated, so with a very low bar being set we’d put the “trader alert” status on this one.

Microsoft Corporation (NASDAQ: MSFT) has changed its reporting structure now to a Friday-morning format.  The #2 US stock by market cap in our Real-Time 500 US Companies index is expected to post $0.32 EPS and $12.4 billion in revenues, and the next quarter estimates are $0.52 EPS and $17.12 billion in revenues.  There are too many moving parts to peg just one issue here, but we view the release of Windows 7 as the biggest upcoming event to watch despite some temperance being signaled by Steve Ballmer.  Shares are up about 11% since June 30 and are up over 70% from the March 9 closing bell.

As a reminder, all estimates from Thomson Reuters can change daily and some are likely to change before the earnings reports get here.  We will follow-up with more detailed preview on each daily to give traders the added ammo they need to pick these earnings apart for shorter-term and longer-term decisions.

You can join our open email distribution list to get daily updates on top analyst upgrades and downgrades, top day trader alerts, IPO’s, secondary offerings, Warren Buffett and other guru activity, M&A and more.

JON C. OGG
OCTOBER 17, 2009

Because estimates had been lowered and expectations were crushed in the Q1 period, the company did handily beat earnings estimates.  But the Wednesday expectations compare to year ago results of $0.22 EPS on $868.77 million in revenue.  If the company gives guidance, the estimates for the coming quarter are $0.30 EPS on more than $862.2 million in revenues.

Data Domain was supposed to be the next growth engine, or so was the thought of Wall Street.  If NetApp can beat estimates again then it will still have organic growth.  Its trailing P/E level is a huge number on the surface, but that is not the case for ahead.  Its April 2010 forward estimate is $1.21 EPS so it trades at close to 19-times forward earnings and it trades at about 2.2-times forward revenues.

The most recent short interest is from the end of July and that is looking to be more than 23.28 million shares.

NetApp’s chart has actually done very well up until the last two days when it pulled back substantially.  It rose from $18 in early July to as high as $24 last week before coming back down.  The 50-day moving average is much lower at $21.03, but that will be at least a bit higher tomorrow when the chart looks at that figure.

The value of the options may change tomorrow, but the actual pricing of an anticipated move currently looks to be only about $1.00 in either direction.  And with shares at $22.70, the average analyst price target is between $23 and $24 per share.

There is one last notion to consider here.  NetApp is becoming a GARP stock… growth at a reasonable price.  It is also now sitting on a mountain of cash and short-term and long-term investments north of $2.75 billion.  Based on how well respected this company is by many of our technology contacts, if this share price goes back down and if the economy continues to normalize then NetApp might find itself as prey rather than as hunter.

JON C. OGG
AUGUST 18, 2009

• Alcoa Inc. (NYSE: AA) shares are ones to watch for a volume spike higher after the company beat Q2 expectations by 12 cents a share and saw signs of auto market stability. Also watch rival Century Aluminum (Nasdaq: CENX) for possible upside.
• NetApp Inc. (Nasdaq: NTAP) shares are pointing higher as the company saved some dough, and actually made a little, by losing its bid for data storage company Data Domain Inc. (Nasdaq: DDUP) to EMC Corp. (NYSE: EMC).
• Rigel Pharmaceuticals Inc. (Nasdaq: RIGL) shares are up very strongly on clinical trial data that raised expectations for a partnership.
• Novavax Inc. (Nasdaq: NVAX) shares are up more than 10 percent with nearly 100,000 shares traded in the pre-market after the company announced a joint venture in India with Cadila Pharmaceuticals, called CPL Biologicals.
• Human Genome Sciences Inc. (Nasdaq: HGSI) shares are rising on strong volume on a New England Journal of Medicine publication regarding its Raxibacumab as a treatment for anthrax.
• California Pizza Kitchen Inc. (Nasdaq: CPKI) shares will be ones to watch for a potential volume spike higher after the company guided Q2 profit higher.
• ScanSource Inc. (Nasdaq: SCSC) shares could be active in early Thursday trading after the company guided higher for its fiscal Q4, ended in June.

-The 24/7 Wall St. Team

NetApp would be acquiring a competing technology and would be opening up the doors to potentially far more business in 2010.  On an organic basis, NetApp’s revenues for fiscal April 2009 were $3.406 billion and those are expected to grow to $3.49 billion in fiscal April-2010 and $3.76 billion for fiscal April-2011.  In short, this solid company has seen a peaking out of its growth either due to the laws of larger numbers or due to the economy.

For a comparison, Data Domain is expected to post $367.49 million in fiscal December 2009 revenues and $469.2 million in fiscal 2010.  The new bid is roughly $2.4 billion, which puts this on the surface in the “getting very expensive” category.  But there seems to be an obvious belief here by both buyers.  Each buyer might be able to leverage this growth by applying their own economies of scale.

EMC is listed as one of Data Domain’s top technology partners.  EMC and Data Domain have a combined data protection solution for enterprise level customers.  EMC’ NetWorker® backup software and Data Domain’s Enterprise Protection Storage systems aims for scalability, cost-effectiveness, and the fastest solution for the money.  Data Domain optimizes the storage capacity and claims an average of 20-times data reduction.

Let’s get the Symantec angle out of the way.  Symantec is actually one of the top partners of Data Domain.  The two work together to promote data protection solutions and Data Domain’s deduplication storage works with NetBackup, OpenStorage, Backup Exec, and Enterprise Vault, all of which are from Symantec.  If Symantec’s new partner (whichever wins the bidding war), then it could possibly get a boost in what it already sees here.  The risk is that the inverse can occur.

It is impossible not to consider Cisco Systems, Inc. (NASDAQ: CSCO) in this mix.  Ditto for Juniper Networks, Inc. (NASDAQ: JNPR).  But with Cisco making such a large new enterprise push that puts it in direct competition with many former partners and with it being such a larger player, this makes all the more “bolt-on” acquisitions for Cisco competitors that much more attractive.   Frankly, the list of other companies that could be thrown into the mix are many more.

The endgame for acquisitions in technology has traditionally been that of growth.  That is what NetApp would get here.  Another growth vehicle.  For EMC, this would secure some new revenues and if the company wanted to scale down it could accumulate more customers as well.  But it seems as though EMC may be protecting at least a small portion of its technology sales revenues here.

If another increase comes up in the Data Domain bidding war, then the acquisition price is going to start sounding even more expensive in a world that is crimped by the recent economy.  But another increase in the bidding might also bring up a situation where it would seem rather simple to expect that more bolt-on acquisitions would be an easier to digest in other related sectors.

NetApp has already said it will carefully weigh its options and will consider its duty to shareholders and keep in mind its growth acquisitions.  In short, it sounds like yet another counter-offer could be coming but it doesn’t sound as though the bidding is just going to keep rising indefinitely.

The higher bid values the company at $33.50, yet shares are trading up 2.7% at $34.12 today.  The July $35 Calls which expire in just 11 days are priced at $0.20 today.  In August, those same strike calls are priced at only $0.40.  If a higher bid is coming, it seems that the options traders are not expecting it to be drastically higher.

Jon C. Ogg
July 6, 2009

Data Domain cited the issue that it has already accepted a deal from NetApp and noted that it would have to pay a $57 million break-up fee for the termination of the merger on its part.  Data Domain also cited the rival offer from which would allow EMC to terminate or amend its offer at any time before the June 29 expiration date.

There is one issue here that is also worth a note, and that is the regulatory environment.  The Obama administration has said that it wants to review competitive pressures in new mergers more than the prior administration.  With EMC’s solid position in storage and related fields, there may have actually been some regulatory risks to that merger being allowed to close.  There should be no regulatory risks for NetApp’s proposed Data Domain buyout.

With Data Domain stock at $33.00, it is still trading 10% north of the buyout price.  There was speculation last week that the ultimate price would reach $35.00.  Multiple weekend and Monday newspaper articles mentioned this level as well.  If a $35.00 target is accurate, then arbitrage investors today have roughlya 6% upside.  If this merger closes at the existing $30.00 term, then the downside is close to 10% depending upon how NetApp shares trade between now and then.

EMC can technically pay whatever it wants for this buyout.  The same is not true over at NetApp.  A higher bid may come, but that seems to be up to EMC from this point on.

Jon C. Ogg
June 15, 2009

Reuters:   The Justice Department is probing big tech employee recruiting.

Reuters:   Medical bills underlay 60% of American bankruptcies.

Reuters:   The US will offer its new financial regulatory plan on June 17.

Reuters:   Chinalco may revise its Rio Tinto (RTP) bid.

Reuters:   United (UAUA) is asking Boeing (BA) and Airbus to provide 150 new plans.

Reuters:   Wal-Mart (WMT) will add 22,000 employees at US stores.

Reuters:   Morgan Stanley (MS) may be among the first to exit the TARP.

Reuters:   Touchscreen PCs may be more hype than reality.

Reuters:   Creeping rates, volatility, and risk could derail the financial recovery.

WSJ:   Bernanke warned that the deficit must be reduced.

WSJ:   Banks are trying to escape off-balance-sheet accounting rules that could make them raise more money.

WSJ:   Executives often sell shares in their companies right before their prices go down.

WSJ:   Homebuilders see signs of stabilization.

WSJ:   Merck (MRK) plans to sell its animal health assets.

WSJ:   Electronics companies are now selling screens that are thinner than those released just a few years ago.

WSJ:   Icahn claimed board seats in his fight with Biogen.

WSJ:   Data Domain (DDUP) took at $1.9 billion order from NetApp (NTAP) over one from EMC (EMC).

WSJ:   Dish Network (SATS) won a stay of a court victory by Tivo (TIVO).

WSJ:   GM may become profitable but only because of billions of dollars in upfront investment by taxpayers.

WSJ:   Temasek lost big on its investment in Barclays (BCS).

WSJ:   The market is wondering if Pepsi (PEP) will stand by its original offer for its bottlers.

WSJ:   Southwest (LUV) pilots rejected a new contract.

WSJ:   News Corp (NWS) appointed a new president.

WSJ:   Adobe (ADBE) is trying to crack the handset market.

NYT:   Taiwan tech firms are seeking to expand into global markets.

NYT:   More and more Americans cannot afford prescription medicines.

NYT:   Rising interest rates on world debt could hurt growth across the globe.

NYT:   Regulators will announced their plans for derivatives.

NYT:   Investors in developing markets see optimism.

NYT:   In its restructuring, GM will try to learn from its successful global operations.

NYT:   Selling troubled mortgage assets would force banks to take large write downs.

NYT:   Manchester United will replace AIG (AIG) as its sponsor.

FT:   Clear Channel investors may force a debt restructuring on the company.

FT:   AIG (AIG) may break up its aircraft leasing company.

Bloomberg:   GM’s bonds indicate investors think its market value will eventually be greater than Ford’s (F).

Bloomberg:   The International Air Transport Association says global airline losses will be worse than expected.

Douglas A. McIntyre

The new price for Data Domain common stock is valued at $30.00 per share in cash and stock.  This is listed as a transaction valued at approximately $1.9 billion, which is actually net of Data Domain’s cash and subject to certain adjustments.

There was an analyst call yesterday calling a possible $35.00 peak buyout price.  Shares closed at $31.58 yesterday and are trading up around $32.50 in early trading.  With a premium of this sort, the belief is obviously that the bidding prices are heading higher rather than lower.

NetApp’s shares appear to be trading down close $19.00 in pre-market trading after closing at $19.34 Tuesday.  EMC shares are trading at $12.75 after closing at $12.85 yesterday.

Jon C. Ogg
June 3, 3009

Just to show how much speculation has been in NetApp as a takeover candidate of its own, the options open interest for the call options that expire on June 19, 2009 had over 60,000 contracts across all strike prices in the call options and close to 50,000 in the put options.

We have seen and heard rumors that NetApp would be taken over on more occasions than we can count.  That might not go away, particularly if the company has successfully rolled up competition and gained a new revenue stream.  The economy has put it in a situation where its growth has been interrupted.  That is expected to pick back up between this year and next year if the analyst are accurate.

The merger has been approved and is expected to take two to four months to close.  NetApp shares are down 3% at $16.80, and its 52-week trading range is $10.39 to $26.78.  Data Domain (DDUP) shares are up a sharp 33% at $23.90 in pre-market trading, while its 52-week trading range is $10.25 to $25.16.

One interesting notion is that Data Domain has only been public since Mid-2007.  There was a brief period that its stock also hit $40.00 in Late-2007.  Data Domain’s IPO priced at $15.00, but traded in the mid-$20′s out of the chute and never did get under that deal pricing until January and February of this year when the market was in free fall.

JON C. OGG
May 21, 2009

Nanogen (NGEN) Delisting notice. Drops to $.07 from 52-week high of $.59.

Data Domain (DDUP) Lazard downgrade. Sells off to $10.25 from 52-week high of $25.16.

Sinclair Broadcasting (SGBI) No news. Just another media company out of favor. Drops to $.90 from 52-week high of $10.03.

Douglas A. McIntyre

• ADTRAN (ADTN) Started as Equal-Weight at Barclays.
• AFLAC (AFL) Cut to Hold at Deutsche Bank.
• CBS (CBS) Cut to Underperform at Bernstein.
• Data Domain (DDUP) Started as Sell at Broadpoint AmTech.
• Energizer (ENR) Cut to Sell at UBS.
• Innerworkings (INWK) Cut to Hold at Jefferies.
• MetroPCS (PCS) Cut to Sector Perform ar RBC.
• Pantry (PTRY) Cut to Market Perform at FBR.
• Royal Gold (RGLD) Cut to Underweight at HSBC.
• Stryker (SYK) Cut to Hold at Needham.

Jon C. Ogg
January 27, 2009