Thursday January 8, 2009
Navivest

Today and tomorrow should prove to be very much of a test for the stock market, as we will be getting employment or more appropriately, unemployment numbers that will show just how weak the economy is.

On Wednesday 01/07/09, we got a preview, after ADP (ADP) issued a report that showed the private sector lost 693,000 jobs just in December.

Today, at 8:30 AM, we get Initial Jobless Claims numbers from the Labor Department. This measures the number of newly unemployed who are applying for benefits for the first time.

Then on Friday, we get a trifecta of Hourly Earnings, Non-farm Payrolls and the Unemployment Rate. Economists are forecasting that with Friday’s numbers, the country’s unemployment rate will jump to 7.0%, from the current 6.7%.

While stocks have had a tendency of late to overlook bad economic news, that tendency seems to have come to a halt for now, after Alcoa (AA) announced Tuesday evening, that it will be cutting production as well as 13,500 jobs, then Intel (INTC) on Wednesday morning, lowered its Q4 2008 earnings guidance. The second time it was doing so in as many months.

On that, the stock market opened lower and the Dow shed 2.72%, the Nasdaq, 3.23% and the S&P 500 index lost 3% on the day.

Tags: The Economy  Unemployment Rate  Intel  Alcoa  ADP

Wednesday January 7, 2009
Navivest

Stocks are moving to the downside today, on a profit warning from technology bellwether company Intel (INTC), as well as a report from payroll processing company ADP (ADP) that showed that the private sector lost 693,000 jobs in December.

The stock market of late has had a tendency to ignore bad new news, but this was much too much. Intel’s profit warning, in which the company said that it is projecting Q4 2008 revenues of $8.2 billion, a 23% decline year over year, was the second downward guidance from the company in under two months.

On November 12th, just four weeks after the company released its third quarter results in which forecasted Q4 revenues of between $10.1 billion and $10.9 billion, Intel issued guidance that called for Q4 revenues to come in at $9 billion, plus or minus $300 million.

Being that Intel provides about 80% of the chips that go into personal computers, it is easy to see that the tech sector as a whole is in trouble. The tech laden Nasdaq is down about 2.52%, while the Dow is down 2.02% in early going.

Intel is due to report those Q4 earnings on January 15th.

We do welcome the move to the downside. Yesterday, we recommended that subscribers to our Options Capitalist trading advisory service buy the Wynn Resorts (WYNN) Jan ’09 55 puts, as the stock had run up more than 10 points since December 31st. We got in at $3.30 and were able to exit at $6 within the first hour of trading today – unfortunately – They hit a high of $7 before 11AM.

Tags: Intel  ADP  Wynn Resorts  Stock Market  Earnings Warning

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

Intel (INTC) reported third quarter 2008 earnings results that beat analyst forecasts, but the company is also giving guidance that raises concerns about future earnings.

Revenues came in at $10.22 billion, a 1% increase when compared to the same period last year and 8 percent sequentially, from Q2 2008. Analysts expected $10.26 billion.

Operating income came in at $3.1 billion, a 44% increase over the same period last year and 37% sequentially.

Net income came in at $2 billion, a 12% year over year increase and 26% sequential increase.

EPS of $0.35, a 17% year over year increase and 25% sequential increase. Analysts were looking for $0.34.

According to the company’s CEO Paul Otellini, this was Intel’s (INTC) best Q3 revenues in history, but the company also said that as it looks to Q4, it will be hard to determine what the financial crisis will have on customer demand.

That statement is causing concern among analysts.

Tags: Intel  Earnings