Google Inc. (NASDAQ: GOOG) and Apple Inc. (NASDAQ: AAPL) along with their mapping and navigation services for free or nearly free took away the need for many of those in-car dashboard devices for drivers who practically live in their cars and trucks.  Trimble Navigation Limited (NASDAQ: TRMB) is not anywhere close to its 52-week high today.

As far as what is driving Garmin, maybe it is the personal navigation devices used for exercise and hiking, as well as the marine and aviation products.  Unless rental car companies have decided to make the devices mandatory in all rentals, then it seems likely that there is not a sudden resurgence of device sales.  Then there is the NTSB recommendation to get rid of electronic device use in cars, but Garmin is looking to get more in-dashboard auto sales ahead.

Perhaps investors have noticed that the 18 million shares in the most recent short interest data was the lowest that it had been for a year.  Or maybe it is a dividend yield north of 4%.  Maybe the excitement was a Garmin CFO interview on CNBC that is giving investors more comfort.  In the middle of December, J.P. Morgan counted Garmin as a stock which should be absolutely avoided.  Then there is the issue of LightSquared’s wireless network interference with most GPS devices.

The Garmin CFO and Treasurer interview can be seen here.  Garmin shares are up at $39.40 after hitting a daily high of $39.53, and the prior 52-week trading range was $29.23 to $39.03.

JON C. OGG

Amgen Inc. (NASDAQ: AMGN) Cut to Market Perform at BMO.
AutoNation Inc. (NYSE: AN) Raised to Neutral at Goldman Sachs.
Boston Properties Inc. (NYSE: BXP) Maintained Buy but cut target to $105 from $120 at Argus.
Cree Inc. (NASDAQ: CREE) Maintained Buy with $33 target at Canaccord Genuity.
Dole Food Co. Inc. (NYSE: DOLE) Cut to Underperform with $9 target at BofA/ML.
Garmin, Ltd. (NASDAQ: GRMN) reiterated Outperform as Bull of the Day at Zacks.
Gilead Sciences Inc. (NASDAQ: GILD) Raised to Outperform at BMO; Raised to Buy at Citigroup (late-Monday).
Hartford Financial Services Group (NYSE: HIG) Cut to Underperform as Bear of the Day at Zacks.
Harman International Industries Inc. (NYSE: HAR) named as Value stock of the day at Zacks.
Microsoft Corporation (NASDAQ: MSFT) Started as Hold at ThinkEquity.
Netflix, Inc. (NASDAQ: NFLX) Re-initiated as Sell with $60 target at Canaccord Genuity.
Pharmasset, Inc. (NASDAQ: VRUS) downgraded by Wells Fargo, UBS, Canaccord Genuity, Leerink Swann, and Citigroup after super-premium buyout.
Tyson Foods, Inc. (NYSE: TSN) Reiterated Buy at BofA/ML.
Wynn Resorts Ltd. (NASDAQ: WYNN) Cut to Neutral at Janney Capital.
YUM! Brands, Inc. (NYSE: YUM) added to U.S. Focus List at Credit Suisse.

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JON C. OGG

Cognizant Technology Solutions Corp. (NASDAQ: CTSH) is down more than 4% premarket to $68.00, relative to a 52-week range of $53.54 – $83.48.

Ericsson Telephone (NASDAQ: ERIC) is up 2.48% before market open to $10.35, relative to a 52-week range of $8.83 – $15.44.

Garmin Ltd. (NASDAQ: GRMN) is up nearly 9% before market open to $37.25, relative to a 52-week range of $28.49 – $36.42.

Human Genome Sciences, Inc. (NASDAQ: HGSI) is down 6.7% premarket to $9.65, relative to a 52-week range of $9.68 – $30.15.

A new announcement this morning would appear to be an implied cost saving acquisition rather than a true expansion.  Garmin announced the acquisition of Garmin Distribution Africa (Pty) Ltd. (GDA).  This company is Garmin’s distributor of Garmin’s automotive, outdoor recreation, fitness and marine products in Southern Africa. It is also acquiring Garmap (Pty) Ltd., a South African mapping and mobile applications provider.

Financial terms were not disclosed, but the company said it will continue operations at its current headquarters and warehouse facility outside of Johannesburg with about 70 associates.

Garmin’s stock has fought off the erosion trends so far as its share price is $33.73 and the 52-week trading range is $28.49 to $36.42.  To show just how cautious the field is, Thomson Reuters has a consensus price target objective of $34.13 and the short interest is about 19 days to cover with some 22,381,340 shares listed as the most recent short interest.

JON C. OGG

Earnings per share fell 16% to $0.56 from $0.67 in second quarter 2010, but the ‘pro forma’ earnings came down by 26% to $0.63 EPS from $0.85 in the same quarter in 2010.  Revenue fell 8% to $674 million.  The $0.63 and $674 million compares to Thomson Reuters estimates of $0.66 EPS and $633.75 million.  Free cash flow generation was $196 million in the quarter.

The company has given guidance that is a disappointment as well for 2011: it sees earnings at $2.00 to $2.15 EPS and sees revenues in 2011 at $2.5 to $2.6 billion.  Thomson Reuters has estimates of $2.48 EPS and $2.52 billion in revenues.

The company’s core Automotive/Mobile segment revenue was down 19% to $363 million.  Its “other” 4 areas did grow but the issue is that they grew at a rate that still does not come close to offsetting the bleed-out in the auto segment with revenues as follows: Outdoor rose 1% to $81 million; Fitness rose 25% to $78 million; Aviation rose 13% to $73 million; and Marine rose 6% to $79 million.

If Garmin looks at the map, the North American market is tanking, with growth coming from elsewhere: North America revenue fell 21% to $358 million; Europe revenue rose 12% to $253 million, Asia revenue was up 31% to $63 million.  Garmin also noted a drop in units shipped by 6% year-over-year to 3.8 million units.

Gross margin rose sequentially but fell year-over-year to 48% (versus 47% in the first quarter and 54% in second quarter 2010).  Operating margin fell to 20% (versus 28% in Q2 and 15% a year ago).  Garmin also lowered its margin guidance: 45% to 46% for 2011 on a gross margin basis and 16% to 17% on an operating margin basis.

The improved revenue note for 2011 appears to be from acquisitions as well.  The company noted that the improvement in sales will be driven primarily by the acquisitions of Navigon and Tri-Tronics; the EPS drop is due to the accelerating deferral of high margin revenues and associated costs.  In short, the decline is happening at a rate that may even be faster than Wall Street is expecting.

Garmin may feel like a value stock to many of the hold-out bulls.  The problem is that with a core business decline coming faster than its other segments can possibly grow this is actually a value trap.  After closing at $31.53 on Tuesday, the pre-market is down close to $28.00 in very thin volume indications.  Analysts are already looking for lower numbers in 2012.

Trimble Navigation Limited (NASDAQ: TRMB) was actually higher after its earnings on Tuesday evening.  We have yet to see formal trading but the stock is indicated up above $35 this morning after closing at $33.08 yesterday.

Another business segment has been marginalized by the growth of smartphones and the GPS and PND features offered.  At some point, the company better go hire some of the cigarette executives to help manage the business through a period where the core business faces a secular decline.

JON C. OGG

We have given previews using Thomson Reuters Consensus data, shown price ranges, trading ranges, shown a Thomson Reuters analyst consensus price target, and added in color on most companies.

MONDAY

Chimera Investment Corporation (NYSE: CIM) has estimates of $0.15 EPS and $175.58 million in revenues; next quarter estimates are $0.14 EPS and $173.62 million in revenues.  Shares are trading around $3.09, the 52-week trading range is $2.62 to $4.36 and the consensus price target from analysts is $4.18.  Chimera is not going to be a market mover, but it will highlight some of the issues facing the leveraged MBS REIT players.  Will it be able to maintain what was recently tallied up as being nearly 17% on an annualized basis.  Per its REIT status, Chimera is required to distribute at least 90% of its REIT taxable income to shareholders.

Humana Inc. (NYSE: HUM) has estimates of $2.06 EPS and $9.32 billion in revenues; next quarter estimates are $1.97 EPS and $9.21 billion in revenues.  Shares are trading around $74.38, the 52-week trading range is $45.36 to $84.32 and the consensus price target from analysts is $88.22. Humana will follow three other healthcare insurers in earnings, and so far it is UnitedHealth which has hit highs and is so far winning the race this earnings season.

TUESDAY

Archer-Daniels-Midland Company (NYSE: ADM) has estimates of $0.85 EPS and $20.43 billion in revenues; next quarter estimates are $0.76 EPS and $18.33 billion in revenues.  Shares are trading around $30.74, the 52-week trading range is $26.50 to $38.02 and the consensus price target from analysts is $38.71. The saga continues for ADM.  With a $20 billion market cap this would still have to run 50% to challenge the old agriculture and energy highs seen in 2008.

Coach, Inc. (NYSE: COH) has estimates of $0.65 EPS and $1.01 billion in revenues; next quarter estimates are $0.69 EPS and $1.00 billion in revenues.  Shares are trading around $64.50, the 52-week trading range is $35.06 to $69.20 and the consensus price target from analysts is $67.52. Coach is one company that investors will use as a proxy for luxury or at least “above the middle of the pack” when it comes to previewing retail earnings that are about two weeks or three weeks out.  The purse and apparel accessories giant is actually worth a whopping $19 billion in market cap now.  Coach’s guidance could signal the trend of things to come in the higher-end and above the middle retail segment.

DryShips Inc. (NASDAQ: DRYS) has estimates of $0.18 EPS and $270.74 million in revenues; next quarter estimates are $0.21 EPS and $320.2 million in revenues.  Shares are trading around $3.75, the 52-week trading range is $3.56 to $6.44 and the consensus price target from analysts is $6.25. DryShips does not run the market and it does not even really influence other shippers.  The Greek aspect cannot be helping matters, but it is now in the midst of an acquisition after having been a serial capital raising company.  The concerns actually have this one close to 52-week lows and it is not unusual to see massive volume spikes when DryShips has news.

Air Lease Corporation (NYSE: AL) Started as Outperform at Credit Suisse.
AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) Raised to Outperform at Baird.
Analog Devices Inc. (NYSE: ADI) Raised to Buy at BofA/ML.
Anadarko Petroleum Corporation (NYSE: APC) Raised to Outperform at Wells Fargo.
Broadcom Corporation (NASDAQ: BRCM) Raised to Outperform at BMO.
Capital One Financial Corporation (NYSE: COF) Reiterated Sell at Argus.
eBay Inc. (NASDAQ: EBAY) Raised to Buy at ThinkEquity.
Education Realty Trust Inc. (NYSE: EDR) Raised to Outperform at KBW.
Franklin Resources Inc. (NYSE: BEN) Raised to Buy at BofA/ML.
Garmin Ltd. (NASDAQ: GRMN) Maintained Underperform at BofA/ML.
Goldman Sachs Group Inc. (NYSE: GS) Raised to Overweight at JPMorgan.
Medtronic Inc. (NYSE: MDT) Cut to Sell at Argus.
Mosaic Co. (NYSE: MOS) Raised to Buy at Citigroup.
NVIDIA Corporation (NASDAQ: NVDA) Raised to Buy at Auriga.
Old Dominion Freight Line Inc. (NASDAQ: ODFL) Reiterated Strong Buy as Aggressive Growth at Zacks.
Oracle Corporation (NASDAQ: ORCL) Raised Target to $41 as Bull of the Day at Zacks.
Potash Cor. of Saskatchewan (NYSE: POT) Raised to Buy at Citigroup.
TASER International Inc. (NASDAQ: TASR) Cut to Underweight at JPMorgan.
Tesoro Logistics LP Common Unit (NYSE: TLLP) Started as Outperform at Wells Fargo; Started as Outperform at Credit Suisse; Started as Buy at BofA/ML.
Universal Forest Products Inc. (NASDAQ: UFPI) Maintained Underperform as Bear of the Day at Zacks.
Wisconsin Energy Corporation (NYSE: WEC) Cut to Hold at Argus.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Allergan Inc. (NYSE: AGN) is due Wednesday morning and shares were down 2.3% at $78.52 late on Tuesday.  Thomson Reuters has estimates of $0.74 EPS and $1.22 billion in revenues; next quarter estimates are $0.92 EPS and $1.32 billion in revenues.  Thomson Reuters has a consensus price target objective of $80.75 and the 52-week trading range is $56.26 to $80.70.

AOL Inc. (NYSE: AOL) is due Wednesday morning. Thomson Reuters has estimates of $0.17 EPS and $536.35 million in revenues; next quarter estimates are $0.22 EPS and $521.22 million in revenues.  The shares were trading around $20.30 late on Tuesday. Thomson Reuters has a consensus price target of $24.77 and the 52-week trading range is $18.51 to $27.65.

Garmin Ltd. (NASDAQ: GRMN) has managed to hold up despite competition and changing demand concerns.  The stock was around $33.50 late on Tuesday with earnings early Wednesday morning. Thomson Reuters has estimates of $0.33 EPS and $413.09 million in revenues; next quarter estimates are $0.65 EPS and $637.04 million in revenues.  Thomson Reuters has a consensus price target objective of $31.53 and the 52-week trading range is $26.11 to $39.05.

Goldcorp Inc. (NYSE: GG) may trade around gold more than earnings.  Shares were down 3.3% late in the day at $51.00. Thomson Reuters has estimates of $0.48 EPS and $1.26 billion in revenues; next quarter estimates are $0.53 EPS and $1.36 billion in revenues.  Thomson Reuters has a consensus price target objective of $64.50 and the 52-week trading range is $38.07 to $56.20.

JDS Uniphase Corporation (NASDAQ: JDSU) will come Wednesday afternoon and shares have come back to about $20.25. Thomson Reuters has estimates of $0.20 EPS and $448.17 million in revenues; next quarter estimates are $0.25 EPS and $470.18 million in revenues.  Thomson Reuters has a consensus price target objective of $24.74 and the 52-week trading range is $9.05 to $29.12.

MetLife Inc. (NYSE: MET) is due Wednesday morning and Thomson Reuters has estimates of $1.26 EPS and $15.89 billion in revenues.  Shares were around $46.32 late Tuesday and Thomson Reuters has a consensus price target objective of $55.44 and the 52-week trading range is $35.38 to $48.72.

What is happening is what you will see below on a segment and regional basis.  North America continues to slide in a post-saturation market as Garmin units are gradually being replaced by the free or near-free services offered in Google Inc. (NASDAQ: GOOG) and Apple Inc. (NASDAQ: AAPL) smartphones.  TeleNav, Inc. (NASDAQ: TNAV) has been spotty in growth but it remains a pressure mechanism as well with an AT&T Inc. (NYSE: T) contract extended recently and with the launch of the App for Verizon Communications Inc. (NYSE: VZ) on the iPhone.

Automotive/Mobile revenues fell 31% to $559 million.  Its Outdoor/Fitness revenue rose 15% to $171 million, aviation revenue rose 10% to $71 million, and the marine revenue rose 9% to $37 million. The breakdown is also one of geography.  North America was down about 30% to $537 million, while Europe down 4% to $235 million and Asia was up 46% to $66 million.  Unless everyone out there becomes a fitness guru worried about getting lost, or becomes a boating enthusiast and aviator, the core auto-guidance system business is one that is facing secular pressure that is not going away.

Margins are contracting as well. Gross margin fell to 45% from 46% and operating margin fell to 22% from 28%.  At the same time, Garmin’s effective tax rate rose to 15.0% from 4.7% in fourth quarter 2009.

Garmin did manage to generate $175 million of free cash flow in the last quarter and it ended with a balance of cash and marketable securities of over $2 billion.

Guidance is cautious as well.  Garmin noted, “We expect revenues to decline in 2011 as the growth in the outdoor, fitness, marine and aviation segments, as well as auto OEM opportunities, is offset by ongoing declines in the PND market. We anticipate gross margins to be stable and operating margins to decline slightly from the strong margins generated in 2010. The operating margin declines will be primarily driven by ongoing investment in the business. These factors and an anticipated effective tax rate of 20% result in a forecasted 2011 earnings per share range of $2.25 – $2.50.”

After going back to review our “Garmin stories on earnings” there is one thing that has been present in each of the past reports and which remains present ahead: Secular trends are working against the company.  Management needs to go hire one of the ex-tobacco executives who knows how to properly drive growth in a period of what will otherwise be a long-term slide in revenues.

Trimble Navigation Limited (NASDAQ: TRMB) has not offered any indications as of yet, but Garmin closed at $32.14 and shares are indicated lower by 5% or more in the early pre-market hours.  The pressure has been mounting and will only continue.

JON C. OGG

In each call we have given some basic data on the rating and followed up with individual color where applicable.

Banks and Ireland, a two-in-one analyst call…. S&P cut the ratings of six Irish banks this last week.  The Bank of Ireland (NYSE: IRE) was cut to BB+ from BBB+, while Allied Irish Banks PLC (NYSE: AIB) was cut to BB from BBB.  These cuts were about as timely as a Bush-Gore vote recount.  Can you believe that these Irish banks were still investment grade before the cut?  Amazing.

Celgene Corporation (NASDAQ: CELG) had a rough day after Zacks.com detailed Celgene as a “Stocks to Sell Now.”  While shares did recover approximately half of the losses, the drop n the day of the research was 6.9% to $49.50.  That was the lowest close going all the back to July and shares were approaching 52-week lows.  The good news is that at least its valuations are getting back to more attractive levels.

China MediaExpress Holdings (NASDAQ: CCME), an advertising operator on inter-city and airport express buses in China, was hit very hard this week. A short selling research piece from Citron Research (think lemons) threw China MediaExpress under the bus, no pun intended.  The report said that the company has misrepresented its financial performance, and that it has overstated its prospects and financial condition to investors.  After the research report hit this week, shares fell a whopping 33% down to $11.09; and then after the company defended itself the shares popped higher by 25% to $13.89 by Friday’s close.  We asked Herb Greenberg of CNBC about the ongoing issues of many of these previously unheard of Chinese companies and his comment was more of a sector call rather than just toward this company.  He said the added risks and reasons to be leery n the sector are “too many stock promoters, too many dubious models, too difficult to research and ownership structures from hell.”

Cisco Systems, Inc. (NASDAQ: CSCO) might not seem like much here on the surface as the rating was merely a reiteration.  Oppenheimer maintained an “Outperform” rating but it raised the target to $25.00 from $23.00.  Why this matters is that Cisco’s earnings are less than a week away and the implication came from channel checks that business was improving after its hiccup last quarter.  If you saw John Chambers speak on CNBC a week ago in Davos, there is an obvious: Cisco made its quarter rather easily.  If not, “Lucy, you got some splaining to do!”

Garmin Ltd. (NASDAQ: GRMN) might sound like a puny upgrade on the surface.  Stifel Nicolaus upgraded shares from ‘Sell’ to ‘Hold’ on Friday.  Garmin is a heavily shorted stock due to the rise of smartphones that it now has some 24,578,815 shares listed in the short interest, about 23 days equivalent of trading volume.  The issue outside of Navi, Apple, and Google competition is that Garmin became a cult stock long ago and now the moves on any news can be very exaggerated.  The upgrade allowed shares to close up 4.1% at $31.94 on Friday, and shares had reached up as high as $32.59 at the peak on Friday.  The 2.46 million shares traded was actually the highest volume back to December 17 and was actually the highest closing price since November 2, 2010.

Southwest Airlines Co. (NYSE: LUV) is supposed to be the golden-child in the airline industry with earnings expected rain or shine.  Higher fuel prices are not as hedged as they once were by Southwest, and that removes some of its competitive advantages.  Argus downgraded the stock this week and that only took a negative trading pattern and made it worse.  The rating went from Buy to “hold” and the rating cut took out 2.5% of the value of the stock.  Still, shares were down over 12% from the peak right after the start of 2011.  Higher fuel costs allowed Argus to cut estimates in 2011 and 2012, and the reliance upon a single-model and expected weather-related losses all were noted as well.  With a 52-week trading range of $$10.42 to $14.32, Southwest shares are now technically weak.

You can join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG