The earnings previews are for the following: Akamai Technologies, Inc. (NASDAQ: AKAM); Atmel Corporation (NASDAQ: ATML); Cisco Systems Inc. (NASDAQ: CSCO); Computer Sciences Corporation (NYSE: CSC); Enbridge Inc. (NYSE: ENB); Groupon Inc. (NASDAQ: GRPN); Ingram Micro Inc. (NYSE: IM); IntercontinentalExchange Inc. (NYSE: ICE); Level 3 Communications Inc. (NASDAQ: LVLT); Moody’s Corporation (NYSE: MCO); News Corp. (NASDAQ: NWSA); PAA Natural Gas Storage L.P. (NYSE: PNG); Plains All American Pipeline L.P. (NYSE: PAA); Prudential Financial Inc. (NYSE: PRU); Ralph Lauren Corporation (NYSE: RL); Reynolds American Inc. (NYSE: RAI); Sprint Nextel Corporation (NYSE: S); Time Warner Inc. (NYSE: TWX); Vical Inc. (NASDAQ: VICL); Visa Inc. (NYSE: V); and Whole Foods Market Inc. (NASDAQ: WFM).

We have compiled earnings preview on each company using Thomson Reuters consensus estimates and added color on each if applicable.  Some are market moving, some are sector moving, and some are just interesting for traders to watch around the earnings reports.

Akamai Technologies, Inc. (NASDAQ: AKAM) has estimates of $0.40 EPS and $311.26 million in revenues.

Atmel Corporation (NASDAQ: ATML) has estimates of $0.09 EPS and $401.5 million in revenues.    Growth is gone, but it still screens as value.

Cisco Systems Inc. (NASDAQ: CSCO) has estimates of $0.43 EPS and $11.23 billion in revenues.  Preliminary preview notes are available.

Computer Sciences Corporation (NYSE: CSC) has estimates of $0.58 EPS and $3.98 billion in revenues.  As a reminder, CSC has warned on earnings.  This one shows up as a value stock in all sorts of investor screens but it is a value trap.

Several other standouts from today are as follows…

Zoll Medical Corp. (NASDAQ: ZOLL) is up nearly 23%, at $43.80. The medical equipment maker beat quarterly earnings estimates and announced a $50 million stock buyback program.

Angie’s List Inc. (NASDAQ: ANGI) is up more than 25%, at $16.32. The company had its IPO today, and shares have risen briskly from the $13 offering price.

Rambus Inc. (NASDAQ: RMBS) is up more than 23%, at $8.78. The company’s shares were torched yesterday following an adverse ruling in a patent case. Today’s comeback will help, though its a long ways back to the $18 level the stock was trading at yesterday morning.

Viasystems Group Inc. (NASDAQ: VIAS) is up more than 22%, at $18.25. The company withdrew a proposed offering of 4 million shares.

Daqo New Energy Corp. (NYSE: DQ) is down about -19%, at $1.82, after setting a new 52-week low earlier today. The company’s CFO will leave the company at the end of this month. Shares fell -3% early this week when the solar PV company missed earnings estimates.

Stay tuned for Friday. New York Federal Reserve Bank president William Dudley is speaking tomorrow morning and Dallas Federal Reserve Bank president Richard Fisher is speaking tomorrow afternoon. Here’s a list of other noteworthy events (all times Eastern):

• 10.00 a.m. – Conference Board index of leading economic indicators

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Paul Ausick

Valero Energy Corp. (NYSE: VLO) shares closed down more than -9% on the day. Marathon Petroleum Corp. (NYSE: MPC) closed down nearly -12%, Tesoro Corp. (NYSE: TSO) closed down nearly -10%, and Western Refining Inc. (NYSE: WNR) was off -13.5%. CVR Energy, Inc. (NYSE: CVI) shares plunged more than -16%.

The major integrated oil companies with refining operations also experienced a down day, with Exxon Mobil Corp. (NYSE: XOM) off about -1%, Conoco down about -3%, Chevron Corp. (NYSE: CVX) down about -2%, and BP plc (NYSE: BP) down about -0.5%.

All this carnage over a 150,000 barrel/day pipeline that currently carries almost no oil from the Gulf Coast to the storage tanks at Cushing, Oklahoma, and will not be reversed until sometime later next year. The US consumes about 9 million barrels/day of crude just for transportation use, so less than 2% of that crude should not have such an outsized effect on refiner stocks.

The Seaway pipeline transaction, the other 50% of which is owned by Enterprise Products Partners L.P. (NYSE: EPD), was merely the trigger. Refiners’ profits have been strong in recent months as those with access to WTI and cheaper crudes have been able to price the refined output based on Brent crude input costs. The differential once reached nearly $28/barrel. The price difference closed to about $11/barrel yesterday and is around $8/barrel this morning.

Brent prices are falling, but not as fast as WTI prices are rising. The reversal of the Seaway pipeline means that landlocked WTI can now get to the Gulf Coast refineries where it will be priced the same as Brent. As the two crude prices converge, refiners will not be able to feast off that differential.

Another factor weighing against the refiners is the start-up of the Bakken Oil Express, a tank-car train running from North Dakota to Louisiana. The first train-load of crude left North Dakota on November 7th with 70,000 barrels, with current rail capacity of 100,000 barrels/day expected to increase to 250,000 barrels/day. Rail transport of crude and refined products has risen by more than 9% in the past year, to about 7,600 tank-cars/week.

The price of Brent is falling because production from Libya has ramped quickly, to reach about 700,000 barrels/day already, more than half its total production before the upheaval of last Spring. Full production of 1.3 million barrels/day could be reached before mid-2012, again keeping downward pressure on Brent pricing.

The final factor pushing WTI prices up is the tentative agreement between TransCanada Corp. (NYSE: TRP) and the state of Nebraska on a new route for the Keystone XL pipeline from Canada to the Gulf Coast. This pipeline could carry up to 1.1 million barrels/day when (if) it is built. Because Canada’s synthetic crude is priced even lower than WTI, getting this pipeline into service is critical to oil sands producers who want to see the differential between synthetic crude and WTI/Brent close if not disappear altogether.

TransCanada has said that it is considering moving ahead with the section of the Keystone XL that runs from Cushing to the Gulf Coast and Enterprise has said that it will scrap plans for a new pipeline from Cushing to the Gulf but now plans to expand the Seaway pipeline to as much as 400,000 barrels/day by 2013. The two pipelines combined could carry nearly 1 million barrels/day from Cushing to the Gulf.

That million barrels represents crude that would not need to be imported by ship to the Gulf, but rather than lowering crude prices, it would raise them. That raises refiners’ input costs and raises the price of gasoline at the pump for consumers.

BP and Royal Dutch Shell plc (NYSE: RDS-A) probably stand to gain the most of any of the integrated oil companies from the new outlets to the Gulf. Shell is a big producer from the oil sands and BP is upgrading its refinery in Indiana to process the heavy Canadian synthetic crude, as well as owning production properties in the US midwest.

Refiners’ stocks are likely to take more losses today, though not as bad as the beating they got yesterday. Big oil companies could lose a bit more today, but the rising price for crude more than offsets any hits to their refining operations.

Paul Ausick

Autodesk Inc. (NASDAQ: ADSK) Raised to Buy with $47 target at Argus.
Carnival Inc. (NYSE: CCL) Started as Neutral at HSBC.
Chesapeake Energy Corporation (NYSE: CHK) Cut to Sell at Argus.
Enbridge Inc. (NYSE: ENB) Raised to Buy at TD.
Leggett & Platt, Inc. (NYSE: LEG) named Bear of the Day at Zacks.
Lululemon Athletica Inc. (NASDAQ: LULU) Raised to Buy at Stifel Nicolaus.
Micron Technology Inc. (NASDAQ: MU) Raised to Outperform at Oppenheimer; Reiterated Outperform and raised target to $12 at Credit Suisse.
NetApp Inc. (NASDAQ: NTAP) Cut to Neutral at Collins Stewart; Maintained Outperform but estimates cut at Credit Suisse.
Perrigo Company (NASDAQ: PRGO) named Bull of the Day at Zacks.
QUALCOMM Incorporated (NASDAQ: QCOM) Reiterated Buy with $74 target at Canaccord Genuity.
Royal Caribbean Cruises Ltd. (NYSE: RCL) Started as Neutral at HSBC.
Toronto Dominion Bank (NYSE: TD) Cut to Market Perform at KBW.
TravelCenters of America LLC (AMEX: TA) named as Value stock of the day at Zacks.

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JON C. OGG

A decision on the pipeline was due last December, but it was delayed due to a request from the US EPA to the US State Department for a new environmental review. That review has been completed, but now the State Department appears to be bowing to pressure to consider an alternative route for the pipeline as a result of concerns raised by Nebraska farmers and environmentalists about the effect of the proposed route on the environment and, especially, the vast Ogallala acquifer that provides water to a large portion of the state. A decision on the project, which was due by the end of this year, has now been delayed until after the 2012 US presidential election.

Environmental objections to the pipeline fall into two basic groups: first, mining the oil sands is an environmental disaster and should be stopped; and second, transporting the synthetic crude by pipeline to the US is too great an environmental risk.

The first objection raises the ire of Canadian officials who don’t believe that “outsiders” have any business telling them how to run their country. The counter-argument is that stopping an environmental disaster, wherever it is taking place, is everyone’s business. There’s little question that mining the oil sands requires vast amounts of water and energy, both of which Canada appears willing to spend.

As to the second objection, Canada is determined to send its synthetic crude somewhere, and if it is not to be the US, then the country will build a pipeline to the west coast and export the oil by ship to Asia. There has also been some chatter about reversing an east-to-west pipeline to carry the synthetic crude to Canada’s east coast.

Canada’s finance minister has said that the new delay jeopardizes the viability of the entire $7 billion project. Two other pipeline companies, Enbridge Inc. (NYSE: ENB) and Kinder Morgan Inc. (NYSE: KMI), are either proposing a new pipeline to the west coast (Enbridge’s Northern Gateway) or expanding an existing pipeline to carry more crude (Kinder Morgan’s Trans Mountain). Canada is clearly committed to producing the oil sands, and if the US is not interested in the synthetic crude, then the country will just sell it elsewhere.

US resistance to the project could be mitigated by a route change to avoid the environmentally sensitive area in Nebraska, but that may not be enough to mollify US protesters who want mining in the oil sands to stop completely. At this time next year, their success in getting a delay could well encourage further protests to kill the pipeline altogether. TransCanada and the Canadian government may not be willing to wait to find out.

To some degree, TransCanada is partially responsible for the delays for failing to recognize or respond to the issues raised in Nebraska. Merely saying that the Keystone XL will be really safe and that any spills will be cleaned up quickly and thoroughly is not much comfort when the water supply for more than a million people is at stake. A modest shift in the proposed route could have moved the pipeline farther east, where it could have run through the same right-of-way as the existing pipeline. There could be some reason that wouldn’t work, but there’s no evidence that TransCanada even considered it.

The US needs (or at least is expected to consume) the oil carried by the Keystone XL pipeline, and that oil will get here one way or another. By tanker, if from a non-North American source, or by rail or truck if from Canada. A pipeline moves much more crude much more safely than any other method of transport. It would be foolish for the US to prevent the Keystone XL pipeline from being built. So far, though, the fools seem to be in charge.

Paul Ausick

TransCanada stands to lose the most if the project is denied. The entire Keystone pipeline system is nearly fully contracted for a total of 900,000 barrels/day for an average term of 18 years. That is a big loss if the pipeline isn’t built. The largest producer in the oil sands is Syncrude, a joint venture that includes Imperial Oil Resources (wholly owned by Exxon Mobil Corp. (NYSE: XOM)), Suncor Energy Inc. (NYSE: SU), and China Petroleum & Chemical Corp. (NYSE: SNP) — Sinopec — among others. Other producers include ConocoPhillips Corp. (NYSE: COP), Chevron Corp. (NYSE: CVX), Murphy Oil Corp. (NYSE: MUR), Total SA (NYSE: TOT), Royal Dutch Shell plc (NYSE: RDS-A), BP plc. (NYSE: BP), and Devon Energy Corp. (NYSE: DVN).

These companies won’t lose everything because the bitumen from the oil sands will go somewhere, somehow. Unless, of course, the Canadian government decides to shut down every project in Alberta, and that simply will not happen. One of the big problems facing the producers now is that they’re crude is landlocked and sells at a substantial discount to WTI. For the week ending September 23rd, Heavy Hardesty grade crude sold for $78.28/barrel, while WTI sold for $80.29 and Brent sold for $109.17. Getting crude from Alberta to a coast, any coast, is critical for producers.

If the Keystone XL pipeline is killed, an expansion to an existing pipeline system to the US/Canadian west coast could take up some of the slack. Kinder Morgan Energy Partners LP (NYSE: KMP) is investigating an expansion to its Trans Mountain system and Enbridge Inc. (NYSE: ENB) has already begun the permitting process for a similar pipeline to the west.

Another interesting development are proposals from both of Canada’s major railroads to construct a pipeline-by-rail from Alberta to west coast. And while nothing officially like a pipeline-by-rail has been proposed for the run to the US Gulf Coast, rail traffic has already increased substantially from North Dakota south to Cushing and, eventually producers hope, to the Gulf.

In July weekly US rail carloads of petroleum and petroleum products hit a four-year high, and the August total of about 7,400 carloads is even higher. A rail tanker holds about 1,500 barrels, so every day about 1.6 million barrels of petroleum is moving around on the US rail network. Add to that another half a million barrels a day from the oil sands and that puts about another 2,500 tanker cars on the rails every day.

There were 750 reported rail accidents involving hazardous materials in 2010. The odds of a significant oil spill rise if we add more oil transport by rail.

The same is true if the Canadian crude is moved by truck. Truck transportation by surface road is even more expensive and prone to accidents. There were nearly 12,000 road accidents involving hazardous materials in 2010. Besides being much more expensive, more tanker trucks carrying up to 300 barrels of oil each raises again the odds on an environmentally significant spill.

So while pipeline spills are a concern, rail and truck accidents are far more common. The Keystone XL pipeline should be held to a very high safety standard, but it is probably the safest way to move the most Canadian crude.

The argument that Canada should stop development and extraction in the oil sands may make more environmental sense, but until a large-scale alternative transportation fuel is available at a reasonable price, oil sands development will very likely continue. And moving that oil by pipeline is really the only sensible option.

Paul Ausick

Or maybe Solyndra, the solar PV firm that recently filed for bankruptcy protection after taking a $535 million loan from US taxpayers. Solyndra’s bankruptcy has generated calls from some federal legislators and solar industry critics to end federal guarantees and loans to alternative energy projects. The fallout hits not only First Solar, but SunPower Corp. (NASDAQ: SPWRA), Trina Solar Ltd. (NYSE: TSL), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), LDK Solar Co. Inc. (NYSE: LDK), and other solar industry companies competing for solar farm projects in the US.

First Solar says it is in “advanced talks regarding the sale and financing of the project with potential buyers utilizing a different transaction structure that does not require a DOE loan guarantee.” The leading candidate to buy Topaz is rumored to be Enbridge Inc. (NYSE: ENB). Enbridge’s access to low cost capital could in fact make such a sale possible.

According to a report from TheStreet.com, First Solar estimated earlier this year that it could lose as much as $0.625/watt in a sale of the Topaz project if the federal loan guarantee was lost.  That would hit EPS to the tune of $4-$4.50 over the next two years. But a buyer like Enbridge, with a low cost of capital, would likely only cost First Solar a few cents of loss per watt and an essentially insignificant amount of lost earnings.

But, wait, there’s more. The story at the TheStreet.com details contacts between First Solar and various brokerage firms that might have violated the SEC’s Regulation FD that prohibits officers or directors of a company from selectively disclosing information that may be material to the company’s business. If the company did selectively release material information, that could jeopardize the other two solar farm projects for which First Solar still expects to receive loan guarantees, Antelope Valley Solar Ranch and Desert Sunlight.

Losing or significantly delaying those guarantees would be substantially reduce First Solar’s earnings outlook for the next couple of years. Unless the company can find a buyer like Enbridge, with access to low-cost capital, it would have to try to borrow the necessary funds itself at a much higher cost. That in turn would reduce the amount the company would realize in an eventual sale of either of the two projects for which it still hopes to get federal guarantees.

The overall softness in the solar PV market has crushed solar industry stocks since late April. First Solar shares are down nearly -50% since then and SunPower shares are down more than -25%, even after getting a huge boost from the purchase of a controlling stake in the company by Total SA (NYSE: TOT). Trina, JA Solar, and LDK are all down more than -70% since April, both due to oversupply of solar panels and accounting concerns that have hit Chinese companies hard.

Today doesn’t look like a recovery day for First Solar either. The stock is trading down another -1%, at $66.07, below the new 52-week low set yesterday of $66.19. The stock’s 52-week high is $175.45.

Paul Ausick

Applied Materials Inc. (NASDAQ: AMAT) Cut to Sell at Goldman Sachs.
Avis Budget Group (NYSE: CAR) named as Bull of the Day at Zacks.
Bristol-Myers Squibb Company (NYSE: BMY) Raised to Buy at Jefferies.
Broadcom Corporation (NASDAQ: BRCM) Raised to Outperform at William Blair.
Citi Trends, Inc. (NASDAQ: CTRN) named as Bear of the Day at Zacks.
Colgate-Palmolive Co. (NYSE: CL) Added to Focus 1 List at BofA/ML.
Enbridge Inc. (NYSE: ENB) Started as Outperform at Scotia.
Huntsman Corporation (NYSE: HUN) Reinstated as Neutral at BofA/ML.
Lam Research Corporation (NASDAQ: LRCX) Cut to Neutral at Goldman Sachs.
Micron Technology Inc. (NASDAQ: MU) Raised to Neutral at Goldman Sachs.
Pier 1 Imports, Inc. (NYSE: PIR) Raised to Buy at KeyBanc.
Renren Inc. (NYSE: RENN) Started as Underperform at Macquarie.
Telefonica, S.A. (NYSE: TEF) Raised to Buy at UBS.

See last week’s top analyst calls here.

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JON C. OGG

BP has also said that it plans to commit $2.5 billion to the Sunrise oil sands project it owns in a joint venture with Husky Energy Inc. (OTC: HUSKY). Husky is majority-owned by Hong Kong tycoon Li Ka-shing and his conglomerate, Hutchison Whampoa. Husky recently paid about $841 million to Exxon Mobil Corp. (NYSE: XOM) for additional oil and gas properties in Alberta and British Columbia.

BP is getting a late start in the Canadian oil sands, mainly because former CEO John Browne had concerns about both production costs and environmental damage. Suncor Energy Inc. (NYSE: SU) has been producing synthetic crude from the oil sands since 19XX. Earlier this month Suncor said it was producing an average of 275,000 barrels/day in 2010. Husky and BP expect to produce 60,000 barrels/day of bitumen after production begins in 2014 at the Sunrise project. Production could reach 200,000 barrels/day by 2020.

BP claims that by integrating production from the Sunrise project with its refinery in Toledo, Ohio, the company can make the economics of oil sands mining work. To make that idea a reality, BP/Husky needed a pipeline, and Enbridge Inc. (NYSE: ENB) has agreed to build a $475 million pipeline to move the bitumen to its Alberta distribution hub, from where it can flow to Toledo.

That takes care of the economics, but what about environmental damage? BP’s record here is, in a word, awful. Pipeline leaks in Alaska, the Gulf disaster which killed 11 workers, the 2005 Texas City refinery explosion that killed 15 workers, none of these inspires trust in BP’s commitment to safety or environmental concerns. In fact, at the company’s annual meeting in March of this year, about 150 investors charged the company with conducting an insufficient assessment of the environmental risks of developing the Sunrise project. According to the Financial Times,  the projections for development of Sunrise “entail catastrophic consequences for the climate.”

Having gotten rid of some of its Gulf of Mexico holdings and with its reserves in Alaska dwindling, BP wants to stay in North America any way it can. The US Congress has threatened to make it very difficult for BP to operate in the US. Now it’s up to Canada to decide if the company gets the chance.

Paul Ausick

The ruptured pipeline, part of Enbridge’s Lakehead system, consists of about 293 miles of 30-inch steel pipeline that was first put into service in 1969. The line transports crude oil from northwest Indiana to Sarnia, Ontario, just across the US-Canada border at the southern tip of Lake Huron.

The pipeline had been checked for corrosion in June 2009, using a device called a ‘smart pig’, which is inserted into the line and creeps along using ultrasonic and other technology to check for weaknesses in the pipe. Enbridge notified the US Pipeline and Hazardous Materials Safety Administration (PHMSA) on July 15th that the company planned to remediate anomalies in the line by replacing rather than repairing the pipe, but that the effort would require more time than Enbridge had been given. The pipeline ruptured on July 26th.

The damaged section of pipeline has now been removed and shipped to Washington for further examination. Here’s a photo of the damaged section.

The damage appears to be along a seam that runs the length of each 50-foot section of pipe. The hole itself is called a “fish mouth” rupture for obvious reasons. The position of the rupture in the photo is oriented approximately as it was when it was underground, with the rupture at about the 3 o’clock position.

A common cause of ruptured oil and gas pipelines is stress corrosion cracking, where water in the pipeline gathers at the bottom of the pipe and slowly corrodes and weakens the pipe from the inside out. Damage to the coating could also occur when the pipe is transported from the factory to the pipeline site or any of a variety of knocks and dings occurs during construction or service.

Under the pipeline pressure needed to move the oil, stress is added to the corrosive effect, particularly near pump stations like the one at Marshall, Michigan. Pressure in the pipeline at the time of the rupture was estimated to be 425 psig, safely below the rated maximum of 624 psig.

It is highly unlikely that the rupture in the Enbridge pipeline was caused by stress corrosion cracking because that anomaly nearly always occurs at the bottom of a pipe (the 6 o’clock position). In a similar pipeline rupture in Minnesota in 2002 the cause was determined to be a stress fracture that started when the pipeline was loaded onto a truck in 1967 for transport.

The service life of a pipeline is typically judged to be about 30-40 years. In general, periodic inspection of the pipelines leads to sections being replaced piecemeal rather than replacing the pipeline at one time. New pipeline construction costs could total as much as $2 million/mile.

From 1990 through 2009, the US has averaged more than one serious incident on an oil or gas pipeline every week. That totals nearly 1,100 in twenty years. For ‘significant’ incidents on all oil pipelines, the 20-year total is 5,626, or more than five incidents per week. A ‘significant’ incident releases 50 or more barrels of liquid into the environment or costs more than $50,000 in 1984 dollars; a ‘serious’ incident is one in which someone is killed or a hospital stay is required.

As will be the case with offshore drilling, onshore, and offshore, pipelines are sure to come under greater scrutiny after the Gulf of Mexico and Michigan spills. More frequent inspections and a quicker response from the industry to repair deficiencies are the two likeliest outcomes.

Paul Ausick