Wednesday November 12, 2008
Navivest

Intel (INTC) after the close of the stock market today has provided fourth quarter guidance that could serve to spook if not the stock market as a whole tomorrow, then the tech sector.

It was only exactly four weeks ago on 10/14/2008 when the company issued its third quarter financial results, that Intel had forecasted Q4 revenues of between $10.1 billion and $10.9 billion

Today, it announced that it now expects fourth quarter revenue to be $9 billion, plus or minus $300 million.

According to the company, “Revenue is being affected by significantly weaker than expected demand in all geographies and market segments. In addition, the PC supply chain is aggressively reducing component inventories.”

Q4 gross margins are now expected to be 55%, plus or minus a couple points. This compares to the 59% margins that the company forecasted four weeks ago, for the period.

One “bright” note in today’s announcement, is that we may not be getting any more fourth quarter related bad news from the company. Because Intel will be reporting those Q4 results on January 15th, starting November 28th until the results are reported, the company will go into a quiet period. Of course, this then provides for the possibility that the company misses even these lowered forecasts.

Tags: Intel  Earnings  Earnings Guidance

Friday November 7, 2008
Navivest

Apparently, even famed investor Warren Buffet isn’t immune from the battering that the stock market has undergone. His Berkshire Hathaway Inc., (BRK.A) today reported that falling profits in its insurance division as well as a $1.05 billion investment loss caused a 77% drop in Q3 2008 profits.

The company reported that net earnings fell to $1.057 billion, from $4.553 in the Q3 period last year while recording investment and derivative losses of $1.012 billion, compared to a gain of $1.992 billion in the same period last year. Operating earnings for the period were $2.069 billion, a 19.2% drop from the $2.561 billion earned in the third quarter of 2007.

With Berkshire Hathaway only having an average of 1,549,226 class A shares outstanding in the period, the company reported operating earnings per share of $1,335 and net earnings per share of $682. The company also has class B shares and the earnings for those are 1/30 those of the class A shares.

Across the company’s major divisions, operating earnings break down as follows: insurance underwriting, $81 million, Insurance investment income, $809 million, Non-insurance businesses, $1.08 billion and other, $99 million. The company has a net worth of $120.15 billion, a slight drop from the $120.73 billion reported last year.

Highlighting the stock market volatility that has exasperated investors all over, at the start of the year, Berkshire Hathaway had an unrealized loss of $1.67 billion derivatives portfolio. By the second quarter, those losses had been cut by $654 million, but then in Q3, losses on the portfolio grew by $1.05 billion, causing a $2.21 billion unrealized loss through the first nine months of the year.

During regular trading on Friday, Berkshire Hathaway’s (BRK.A) shares rose $800, to close at $113,000.

Tags: Berkshire Hathaway

Friday November 7, 2008
Navivest

The Walt Disney Company (DIS) yesterday reported a 13 percent decline in fourth-quarter income. Also, going on slower than average advanced bookings for the Christmas season, the company is now predicting a difficult operating environment going forward as the weakening economy forces consumers to cut back.

According to Robert Iger, Disney CEO, “Consumer confidence is the lowest we’ve seen in over three decades, and even the best product out there is feeling the effect.”

Analysts were looking for revenues of $9.34 billion, with earnings per share of $0.49. Disney (DIS) reported revenues of $9.45 billion slightly ahead of estimates, but disappointed on the bottom line, with an EPS of $0.43 before factoring out special items.

Including special items, which included a bad debt charge related to the bankruptcy of Lehman Brothers, the company reported earnings per share of $0.43 on net income of $760 million, a penny above the $0.42 reported in the fourth quarter of last year. Net income for the year ago period, was $877 million.

For the full fiscal year 2008 ending September 27, the company reported a 7% jump in revenues to $37.8 billion, compared to $35.5 billion for fiscal 2007. Net profit dropped 5 1/2 % to $4.43 billion, compared to the $4.67 billion earned last year. The net profit translated into earnings per share of $2.28, a 1.3% change from the $2.25 EPS reported last year.

On an operational basis, Disney (DIS) is segmented into four divisions, Media Networks, Parks and Resorts, Studio Entertainment and Consumer Products.

For the full year, revenues for Media Networks came in at $16.116 billion a 7% change from the prior year and operating income was $4.755 billion.

Revenues for Parks and Resorts came in at $11.504 billion, an 8% year over year change, with operating income coming in at $1.897 billion.

At the Studio Entertainment division, revenues came in at $7.348 billion, a 2% decline from the prior year, with operating income coming in at $1.086 billion and the Consumer Products division reported revenues of $2.875 billion, a 26% year over year rise, while operating income came in at $718 million.

Tags: Disney Earnings

Wednesday November 5, 2008
Navivest

Cisco (CSCO) has just reported its Q1 2009 earnings and the company beat estimates on both the top and bottom line.

The company reported net revenues of $10.3 billion and net income of $2.2 billion, which translated into $0.37, on a generally accepted accounting principles (GAAP) basis. On a non-GAAP basis, net income was $2.5 billion or $0.42 per share.

Wall Street was looking for revenues of 10.29 billion and net income of $0.39.

The company also reported total cash, cash Equivalents and investments of $26.8 billion.

Tags: Cisco Cisco Earnings
 

Monday November 3, 2008
Navivest

Stifel Financial Corp. (SF) today reported record net revenues of $218.9 million for the third quarter of 2008. Net income for the period was $12.8 million, which translated into an EPS of $0.46 on a diluted basis. This compares to revenues of $183 million and net income of $8.1 million in the comparable period last year.

The company also reported results for the nine-month period that ended September 30, 2008 and for the period, Stifel Financial (SF) recorded revenues of $639.4 million while net income came in at $39.5 million. EPS on a diluted basis for the period was $1.44. For the same period in 2007, net revenues were $550.9 million, net income was $18.3 million and EPS was $0.73.

The company has restated all prior period share and earnings per share amounts retroactively, to reflect the three-for-two stock split distributed in June 2008.

According to the company, “At September 30, 2008, our equity was $565.4 million, resulting in book value per share of $22.21. During the first nine months of 2008, the Company repurchased 567,953 shares of its common stock, at an average price of $27.87 per share. On September 29, 2008, the Company completed the public offering of 1,495,000 new shares of Company common stock.”

After adjusting for acquisition related charges, non-GAAP net income, “Core earnings”, and non-GAAP, the company’s earnings per diluted share were $16.7 million and $0.60, respectively for Q3 2008 compared to 2007 Q3 non-GAAP earnings of $14.3 million and non-GAAP earnings per diluted share of $0.53.

For the nine months ended September 30, 2008, non-GAAP earnings and non-GAAP earnings per diluted share were $51.4 million and $1.88, respectively compared to 2007 year to date non-GAAP earnings of $46.3 million and non-GAAP earnings per diluted share of $1.83.

Prior year nine-month results included a significant investment banking transaction that contributed $24.7 million in revenues in the second quarter of 2007.

Tags: Stifel, Earnings Report

Thursday October 23, 2008
Navivest

Microsoft (MSF) shares are climbing in after hours trading, after the company reported that in the first quarter period that ended September 30 2008, it recorded revenues of $15.06 billion. This was a 9% increase over the same period in the prior year.

Net income came in at $4.37 billion, which translated into a $0.48 EPS, compared to the $4.29 billion and $0.46 EPS in the same period a year ago.

Wall Street had been looking for revenues of $14.8 billion and a $0.47 EPS.

According to the company, “Microsoft showed particular strength in multiyear annuity sales, which grew more than 20% during the quarter from the combined businesses of Client, Microsoft Business Division and Server and Tools.”

The company, which always puts a damper on its guidance, stated that “Microsoft’s business outlook reflects a balance of risks and the likelihood of a continued economic slowdown. The trends seen late in the first-quarter are now forecasted to continue, whereas previous expectations were for the economy to improve in the second half of the fiscal year.”

They also gave guidance for the Q2 period ending December 31 2008 as follows:
Revenue is expected to be in the range of $17.3 billion to $17.8 billion.
Operating income is expected to be in the range of $6.1 billion to $6.4 billion.
Diluted earnings per share are expected to be in the range of $0.51 to $0.53.
Mgmt offers the following guidance for the full fiscal year ending June 30, 2009:
Revenue is expected to be in the range of $64.9 billion to $66.4 billion.
Operating income is expected to be in the range of $24.4 billion to $25.5 billion.
Diluted earnings per share are expected to be in the range of $2.00 to $2.10.

The shares are up almost two percent in after hours trading.

Tags: Microsoft Earnings  Earnings

Wednesday October 22, 2008
Navivest

Concerns about a deteriorating global economy, caused a broad-based sell-off in stocks on Wednesday that saw the Dow, Nasdaq and S&P 500 lose 5.69%, 4.77% and 6.10% respectively.

Adding fuel to fire was the fact that companies that are now reporting their earnings are giving weakened forward guidance, confirming the fact that the economy is in fact slowing.

Shares of Amazon (AMZN) are falling about 7 points in after hours trading, after the company reported its 2008 third quarter earnings. The company actually beat Wall Street estimates by two cents per share with its $0.27 EPS, but it also said that sales started slowing towards the end of the quarter and expects the slowing to continue into the fourth quarter.

Back in July of this year, Amazon (AMZN) forecasted sales of sales of $19.35 billion to $20.10 billion. However, the company revised that downward yesterday, saying it now expects full year sales for fiscal ’08 to come in at $18.46 billion to $19.46 billion, obviously a result of consumers tightening their belt.

The Dow closed at 8,519.21, down 514.45, the Nasdaq closed at 1,615.75, down 80.93, while the S&P 500 closed at 896.78, down 58.27. Unlike recent days when stocks wildly fluctuated between positive and negative territory and then rallied towards the close, the tone was negative all day.

The Dow opened at 9,027.84, from yesterday’s close of 9,033.66 and by 10:15 AM, we were down 398 points to 8629.44. We got an attempt at a rally, that saw the Dow climb back up to 8796 at 10:55 AM, but the index down trended from there, falling to 8619 at 1:35 PM.

From there, we traded in a roughly 104 point range until about 3 PM, when things got even uglier, and the Dow lost another 320 points to hit an intra-day low of 8,335.30. We then saw some buying that pushed the Dow to 8,519.21, for the loss on the day, of 514.45 points.

Tags: Stock Market  Dow

Wednesday October 21, 2008
Navivest

Amazon.com (AMZN) released its third quarter 2008 earnings after the close of the markets today and the stock sold off dramatically on the news, in after hours trading.

Net sales for the quarter climbed by 31% to $4.26 billion, compared to the $3.26 billion that the company reported in the third quarter of 2007. Factoring out the $80 million in favorable currency exchange impact, net sales grew by 28%.

Net income climbed to $118 million or $0.27 per share, from $80 million or $0.19 per share, in the comparable period last year, a 48% climb.

Wall Street had been looking for revenues of $4.27 billion and earnings per share of $0.25.

With the economy weakening, analysts are looking to see what sort of guidance for future earnings companies are giving and here, Amazon (AMZN) tripped up.

In July 2008, Amazon (AMZN) was predicting that revenues for the fiscal year 2008, would come in at $19.35 billion to $20.10 billion but with yesterday’s earnings release, the company said it now expects revenues for the year to come in at $18.46 billion to $19.46 billion

Consequentially, Amazon (AMZN) shares are trading at $42.98, down $7.01 or 14.02% in after hours trading.

Tags: Amazon Earnings

Monday October 20, 2008
Navivest

Shares of American Express (AXP) are climbing $1.50 or 6.16% in after hours trading, after the company reported its third quarter 2008 earnings.

Highlights from the report include:

Consolidated revenues net of interest expense rose 3 percent to $7.2 billion, up from $7.0 billion a year ago.

Consolidated expenses totaled $4.7 billion, up 4 percent from $4.5 billion a year ago.

Net income came in at $815 million. This was a 24% decline from the same period a year ago,

Earnings per share of $0.70, representing a 22% decline from the $0.90 reported a year ago.

Consolidated provisions for losses totaled $1.4 billion, up 51 percent from $905 million a year ago.

The company’s return on average equity (ROE) was 27.8 percent, down from 38.2 percent a year ago.

While Wall Street seems happy with the news based on after hours trading of the company’s shares, there were several negatives in the earnings release that should raise concern about future earnings.

According to the company, “We saw clear signs earlier this year of a weakening environment and the recent volatility in the financial markets has reinforced our view that consumer and business sentiment is likely to deteriorate further, translating into weaker economies around the globe well into 2009. Card member spending is likely to remain soft. Loan growth will be restrained, in part because of the steps we are taking to reduce credit risks, and credit indicators are likely to reflect the continued downturn in the economy and throughout the housing sector.”

Additionally, provisions for losses rose to $941 million, up from $638 million a year ago. That represents a 47% rise. Third quarter net income for the U.S Card Services division was $244 million, down from $592 million a year ago, a 58% decline and the company said that human resources and other operating costs rose 7% as a result of increased tech spending and increased credit and collection costs.

Also of note was that net income from the International Card Services division, dropped 52% to $67 million, from $140 million.

Tags: American Express  Earnings

Monday October 20, 2008
Navivest

Texas Instruments (TXN) after the close of the stock market today reported third quarter earnings that came in a penny shy of forecast. The company’s Q3 2008 earnings per share was $0.43 cents versus the $0.44 cents that Wall Street was looking for.

Revenues came in at $3.39 billion versus the $3.40 billion that was expected. This compares to the $3.66 billion that was reported in Q3 2007. Net income came in at $563 million, a 26% drop, when compared to the net profit of $758 million, or 52 cents a share that was reported in the same period a year ago.

The company is also giving future guidance that will be a drag on the company’s stock price tomorrow. TXN expects a decline in revenues that will result in earnings per share for the fourth quarter to come in at $0.30 - $0.36 versus the $0.43 that Wall Street is looking for.

Tags: Texas Instruments Earnings