Kirby Corp. (KEX) expects first-quarter net income to exceed 66 cents a share, above its previous forecast range of 57 cents to 62 cents. The Houston tank barge and towing vessel operator said the guidance reflects strong demand for both marine transportation and diesel engine service operations.
On average, analysts polled by Thomson Financial expect per-share earnings of 60 cents.
Tuesday, March 18, 2008
Lehman Jumps on Earnings Report...
Lehman Brothers (LEH) - brokerage's net slides 57% to $489 million, or 81¢ a share, as results are hurt by net mark-to-market adjustments of $1.8 billion. Revenue falls by 31% to $3.51 billion.
But shares gain 15% pre-market as results top estimates.
But shares gain 15% pre-market as results top estimates.
Goldman Beats Street....
Financial-services firm Goldman Sachs (GS) reports net earnings of $1.51 billion, or $3.23 a share. Net revenue drops to $8.34 billion from $12.73 billion. CEO says market conditions "are clearly very difficult," as firm takes net losses on residential mortgages and securities of $1 billion, while credit products included a loss of roughly $1 billion.
Wall Street expected EPS of $2.58.
Wall Street expected EPS of $2.58.
Rite Aid Warns....
Shares of Rite Aid (RAD) fell 6.3% after the drugstore operator warned it would lose more than a previous forecast of $0.27-0.31 during the fiscal year ended March 1. Rite Aid said it cannot estimate its exact loss, but noted that weaker earnings are forcing it to reduce by up to $1B ($1.38/share) a deferred tax credit it no longer thinks it will be able to take advantage of.
Earnings Due Today....
COMPANIES REPORTING EARNINGS
• AAR Corp. (AIR). Expected to report Q3 profit of $0.46 per share, according to analysts polled by Thomson Financial.
• Adobe Systems Inc. (ADBE). Expected to report Q1 profit of $0.45 per share.
• Darden Restaurants Inc. (DRI). Expected to report Q3 earnings of $0.82 per share.
• Goldman Sachs Group Inc. (GS). Expected to report Q1 profit of $2.58 per share.
• Healthways Inc. (HWAY). Expected to report Q2 profit of $0.33 per share, which is a 10.33% increase from the same quarter last year when the company earned $0.30.
• Lehman Brothers Holdings Inc. (LEH). Expected to report Q1 profit of $0.72 per share.
• AAR Corp. (AIR). Expected to report Q3 profit of $0.46 per share, according to analysts polled by Thomson Financial.
• Adobe Systems Inc. (ADBE). Expected to report Q1 profit of $0.45 per share.
• Darden Restaurants Inc. (DRI). Expected to report Q3 earnings of $0.82 per share.
• Goldman Sachs Group Inc. (GS). Expected to report Q1 profit of $2.58 per share.
• Healthways Inc. (HWAY). Expected to report Q2 profit of $0.33 per share, which is a 10.33% increase from the same quarter last year when the company earned $0.30.
• Lehman Brothers Holdings Inc. (LEH). Expected to report Q1 profit of $0.72 per share.
Today's Top Stories....
• New York Fed called on banks to support Lehman Bros. - report
• NYSE Euronext announces $1 billion share buyback; hikes annual dividend
• Goldman Sachs raised to 'outperform' at Wachovia on strong capital position
• Bear Stearns shareholder Joe Lewis seeks to block JP Morgan takeover - report
• BlackRock explores solutions for fund shareholders hit by auction-rate failures
• AstraZeneca could pay £14.25/shr for Shire and still create value - UBS
• Vodafone to axe 450 head office jobs • Deutsche Bank sued by auction-rate securities investors
• NYSE Euronext announces $1 billion share buyback; hikes annual dividend
• Goldman Sachs raised to 'outperform' at Wachovia on strong capital position
• Bear Stearns shareholder Joe Lewis seeks to block JP Morgan takeover - report
• BlackRock explores solutions for fund shareholders hit by auction-rate failures
• AstraZeneca could pay £14.25/shr for Shire and still create value - UBS
• Vodafone to axe 450 head office jobs • Deutsche Bank sued by auction-rate securities investors
Monday's Trading Summary...
U.S. Markets
Dow +21.16 (+0.18%)
Nasdaq -35.48 (-1.60%)
S&P 500 -11.54 (-0.90%)
News That Moved the Market
Don't Panic. When the opening bell rang, many expected today to be a bloodbath. Bear Stearns's (BSC, -84.0%) liquidity crisis and sale to JP Morgan (JPM, +10.3%) for about $240 million shocked most investors and left many wondering what bank was next. To stem the fears, the Fed reacted with assertiveness, lowering its discount rate by a quarter of a point to 3.25% and offering lending to a greater number of companies, including investment banks. Though foreign markets lost ground overnight, the Fed's actions were enough to reduce nervousness and actually convince some that the Fed will back this market and not let it nosedive. Trading turned around midday and a late rally allowed the markets to end basically flat. Tomorrow's Fed announcement will be important, with the market now expecting a full-point cut.
Lehman May Be Next. Lehman Brothers (LEH, -19.1%) stock dropped as speculation increased that it may be the next to fold. The move came after CEO Richard Fuld said the Fed's "move improves the liquidity picture and, from my perspective, takes the liquidity issue for the entire industry off the table." The idea that the company's CEO would have to say something like that, especially after Bear's CEO's gave a similar statement last week, scared investors and drove them to sell their Lehman positions. Tomorrow, Lehman reports its latest earnings.
Quick Tics:
Commodities had a weak session, with the 4.6% decline in the CRB Index…
To this point, Bear Stearns's book value was reported to be $84 per share at the end of the fourth quarter.
Tuesday's Notable Earnings:
Adobe Systems (ADBE) Time Not Supplied
Goldman Sachs (GS) Before Open
Lehman Brothers (LEH) Before Open
Gamestop Corp. (GME) Time Not Supplied
Economic Events:
8:30 AM: Housing Starts
8:30 AM: PPI
10:00 AM: State Street Investor Confidence Index
2:15 PM: FOMC Announcement
Dow +21.16 (+0.18%)
Nasdaq -35.48 (-1.60%)
S&P 500 -11.54 (-0.90%)
News That Moved the Market
Don't Panic. When the opening bell rang, many expected today to be a bloodbath. Bear Stearns's (BSC, -84.0%) liquidity crisis and sale to JP Morgan (JPM, +10.3%) for about $240 million shocked most investors and left many wondering what bank was next. To stem the fears, the Fed reacted with assertiveness, lowering its discount rate by a quarter of a point to 3.25% and offering lending to a greater number of companies, including investment banks. Though foreign markets lost ground overnight, the Fed's actions were enough to reduce nervousness and actually convince some that the Fed will back this market and not let it nosedive. Trading turned around midday and a late rally allowed the markets to end basically flat. Tomorrow's Fed announcement will be important, with the market now expecting a full-point cut.
Lehman May Be Next. Lehman Brothers (LEH, -19.1%) stock dropped as speculation increased that it may be the next to fold. The move came after CEO Richard Fuld said the Fed's "move improves the liquidity picture and, from my perspective, takes the liquidity issue for the entire industry off the table." The idea that the company's CEO would have to say something like that, especially after Bear's CEO's gave a similar statement last week, scared investors and drove them to sell their Lehman positions. Tomorrow, Lehman reports its latest earnings.
Quick Tics:
Commodities had a weak session, with the 4.6% decline in the CRB Index…
To this point, Bear Stearns's book value was reported to be $84 per share at the end of the fourth quarter.
Tuesday's Notable Earnings:
Adobe Systems (ADBE) Time Not Supplied
Goldman Sachs (GS) Before Open
Lehman Brothers (LEH) Before Open
Gamestop Corp. (GME) Time Not Supplied
Economic Events:
8:30 AM: Housing Starts
8:30 AM: PPI
10:00 AM: State Street Investor Confidence Index
2:15 PM: FOMC Announcement
Monday, March 17, 2008
Afternoon Update....
Dow -146
S&P - 29
Nasdaq -51
After gapping lower, the market actually went positive just before noon. Since then we have drifted back lower.
My take: This market is pretty much washed out. Not that we can't go lower, but long term, we have a serious buying opportunity here. The Fed is not going to let the entire US Financial system collapse. However, this is how assets are currently being priced. Bear Stearns was always the type of company that had an air of shadiness about them....and they probably got what they had coming to them.
Tomorrow the Fed meets on interest rates. No doubt they will try to shock the market back to life again. It's too bad they didn't react quicker...if you remember I was pushing for them to act on rates the first week of January...they waited until the third week...and basically created this run on the bank mentality.
If history holds up...and it should...this looks like an inflection point...a place to buy and NOT a place to sell. Hang in there and I think you will be better off a year from now.
Look for bargains.
S&P - 29
Nasdaq -51
After gapping lower, the market actually went positive just before noon. Since then we have drifted back lower.
My take: This market is pretty much washed out. Not that we can't go lower, but long term, we have a serious buying opportunity here. The Fed is not going to let the entire US Financial system collapse. However, this is how assets are currently being priced. Bear Stearns was always the type of company that had an air of shadiness about them....and they probably got what they had coming to them.
Tomorrow the Fed meets on interest rates. No doubt they will try to shock the market back to life again. It's too bad they didn't react quicker...if you remember I was pushing for them to act on rates the first week of January...they waited until the third week...and basically created this run on the bank mentality.
If history holds up...and it should...this looks like an inflection point...a place to buy and NOT a place to sell. Hang in there and I think you will be better off a year from now.
Look for bargains.
Market Gaps Lower....
Dow -152
S&P - 22
Nasdaq -38
Following Bear Stearns collapse the market is lower. The big question is whether there are any other collapses in the wings.
The Fed meets tomorrow...should be an interesting meeting.
S&P - 22
Nasdaq -38
Following Bear Stearns collapse the market is lower. The big question is whether there are any other collapses in the wings.
The Fed meets tomorrow...should be an interesting meeting.
Fed Cuts Discount Rate....
At the same time it was backstopping J.P. Morgan's buyout of Bear Stearns, the Fed also stepped in to prop up the broader credit crunch. The Fed dropped its discount window rate -- at which intstitutions borrow directly from the Fed -- by 25 BP to 3.25%, and extended the maximum loan term to 90 days from 30. In an unprecedented move, it also opened up the window to securities dealers for at least the next six months.
The move to waive the usual restriction on Fed lending to banks was approved unanimously by the five FOMC governors.
The move to waive the usual restriction on Fed lending to banks was approved unanimously by the five FOMC governors.
Bear Stearns Taken Out by JP Morgan...
Bear Stearns (BSC) shocked Wall Street by selling itself Sunday for just $2/share to J.P. Morgan & Chase (JPM), the bank that stepped up Friday to bail it out in tandem with the New York Federal Reserve. In order to make the deal palatable, the Fed will assume risk on up to $30B of Bear Stearns' riskiest assets, including $20B of mortgage-backed securities. "
Despite recent events, the health of franchise and the prime brokerage and clearing business is in good shape," a JPM executive said Sunday. JPM does, however, assume some of Bear's large positions. It's unlikely other bidders will emerge, due to the degree of uncertainty surrounding Bear's positions.
Despite recent events, the health of franchise and the prime brokerage and clearing business is in good shape," a JPM executive said Sunday. JPM does, however, assume some of Bear's large positions. It's unlikely other bidders will emerge, due to the degree of uncertainty surrounding Bear's positions.
Sunday, March 16, 2008
Free Cash Flow "BUYS"
Barron's interviews free-cash guru Bruce Berkowitz, CEO of Fairholme Capital Management, whose no-load Fairholme Fund boasts returns of 16.27% since its 1999 inception. Berkowitz advocates buying stocks capable of reacting to a variety of economic conditions, with an emphasis on companies with above-average free cash flow.
Stocks he likes:
Conglomerates Berkshire Hathaway (BRK.A) and Leucadia National (LUK) -- "they are always playing defense, because you never know when something bad will happen." Berkshire is still "reasonably priced," and stands to have "one more good growth spurt" as it capitalizes on current economic soft spots.
WellCare Health Plans (WCG) -- shares plunged when its headquarters were raided by federal agents in October. Past history shows that after a fine and some executive firings, firms in similar situations move on. With $5/share ($37) of free cash flow, it's too cheap.
Mohawk Industries (MHK) -- despite a rough residential real-estate market, MHK can earn $7/share of free cash flow. CEO Jeffrey Lorberbaum is growing the business while cutting costs.
St. Joe (JOE) -- an international airport is being built in the middle of its Florida land. Long-term, its holdings of oceans, rivers, lakes and sand make it a "very, very valuable company."
Sears (SHLD) -- despite recent turmoil, CEO Eddie Lampert understands retail. Sears' properties provide a downside cushion; shares are priced for a worst-case outcome.
Stocks he likes:
Conglomerates Berkshire Hathaway (BRK.A) and Leucadia National (LUK) -- "they are always playing defense, because you never know when something bad will happen." Berkshire is still "reasonably priced," and stands to have "one more good growth spurt" as it capitalizes on current economic soft spots.
WellCare Health Plans (WCG) -- shares plunged when its headquarters were raided by federal agents in October. Past history shows that after a fine and some executive firings, firms in similar situations move on. With $5/share ($37) of free cash flow, it's too cheap.
Mohawk Industries (MHK) -- despite a rough residential real-estate market, MHK can earn $7/share of free cash flow. CEO Jeffrey Lorberbaum is growing the business while cutting costs.
St. Joe (JOE) -- an international airport is being built in the middle of its Florida land. Long-term, its holdings of oceans, rivers, lakes and sand make it a "very, very valuable company."
Sears (SHLD) -- despite recent turmoil, CEO Eddie Lampert understands retail. Sears' properties provide a downside cushion; shares are priced for a worst-case outcome.
Saturday, March 15, 2008
Friday's Trading Summary...
U.S. Markets
Dow -194.65 (-1.60%)
Nasdaq -51.12 (-2.26%)
S&P 500 -27.34 (-2.08%)
News That Moved the Market
With A Name Like Bear, Why Didn't I Buy Puts? Financial news continues to determine the direction of the market and today's news was bad. Before the open, information was released that Bear Stearns (BSC, -47.4%) would receive emergency funding from the Fed through JP Morgan (JPM, -4.1%). The Fed used a little-known law that allows it to lend funds to companies after a special FOMC vote. The funds went through JP Morgan because it was operationally simpler than a direct loan, according anonymous staff member. The Fed made a pivotal decision to save Bear, understanding that a major bank going under would create an enormous financial crisis. JP Morgan is also looking to purchase at least some parts of Bear, and will help the troubled brokerage to locate additional funding. T he markets fell sharply on the news, with the VIX jumping to a 7-week high.
CPI Shows Tame Inflation. Though the news was forgotten after Bear Stearn's bombshell, the Labor Department announced this morning that inflation had moderated last month. The CPI and core-CPI, which does not include food and energy costs, both came in flat. The data said energy prices fell 0.5%, which surprised many considering the huge run up in energies recently. Most economists believe the Fed will lower interest rates by half a point next week.
Lehman Obtains Credit Line. Lehman Bros. (LEH, -14.6%) got a $2 billion, three year credit line from 40 banks. Lehman dropped dramatically after Bear Stearn's news came out. We will get a look at Lehman's numbers next week, when it reports its latest quarterly earnings.
Quick Tics:
Microsoft (MSFT, -2.3%) and Yahoo (YHOO, -2.9%) met earlier this week without reaching an agreement on Microsoft's merger proposal…
Gold hit an all-time high of $1,007.30 today...
Boeing (BA, +2.7%) traded higher after getting an upgrade from Morgan Stanley (MS, -4.9%).
Monday's Notable Earnings
Bear Stearns (BSC) Before Open
Economic Events:
8:30 AM: NY Empire State Index
9:00 AM: Net Foreign
9:15 AM: Capacity Utilization
9:15 AM: Industrial Production
Dow -194.65 (-1.60%)
Nasdaq -51.12 (-2.26%)
S&P 500 -27.34 (-2.08%)
News That Moved the Market
With A Name Like Bear, Why Didn't I Buy Puts? Financial news continues to determine the direction of the market and today's news was bad. Before the open, information was released that Bear Stearns (BSC, -47.4%) would receive emergency funding from the Fed through JP Morgan (JPM, -4.1%). The Fed used a little-known law that allows it to lend funds to companies after a special FOMC vote. The funds went through JP Morgan because it was operationally simpler than a direct loan, according anonymous staff member. The Fed made a pivotal decision to save Bear, understanding that a major bank going under would create an enormous financial crisis. JP Morgan is also looking to purchase at least some parts of Bear, and will help the troubled brokerage to locate additional funding. T he markets fell sharply on the news, with the VIX jumping to a 7-week high.
CPI Shows Tame Inflation. Though the news was forgotten after Bear Stearn's bombshell, the Labor Department announced this morning that inflation had moderated last month. The CPI and core-CPI, which does not include food and energy costs, both came in flat. The data said energy prices fell 0.5%, which surprised many considering the huge run up in energies recently. Most economists believe the Fed will lower interest rates by half a point next week.
Lehman Obtains Credit Line. Lehman Bros. (LEH, -14.6%) got a $2 billion, three year credit line from 40 banks. Lehman dropped dramatically after Bear Stearn's news came out. We will get a look at Lehman's numbers next week, when it reports its latest quarterly earnings.
Quick Tics:
Microsoft (MSFT, -2.3%) and Yahoo (YHOO, -2.9%) met earlier this week without reaching an agreement on Microsoft's merger proposal…
Gold hit an all-time high of $1,007.30 today...
Boeing (BA, +2.7%) traded higher after getting an upgrade from Morgan Stanley (MS, -4.9%).
Monday's Notable Earnings
Bear Stearns (BSC) Before Open
Economic Events:
8:30 AM: NY Empire State Index
9:00 AM: Net Foreign
9:15 AM: Capacity Utilization
9:15 AM: Industrial Production
Friday, March 14, 2008
Gold and Oil Soar...
Gold (GLD) topped $1,000/ounce Thursday and crude (USO) hit a record $111, as a weak U.S. dollar, concerns over a shaky U.S. economy, and inflationary fears saw investors moving money to tangible assets. "The funds keep throwing big-time money at commodities," a gold analyst said. Some experts say the gold rush is likely far from over, while noting sentiment can and does change quickly.
Zumiez 4Q Net Climbs 10%...
Zumiez's (ZUMZ) net income rose despite challenges late in quarter and the surf-and-skate company said it remains "upbeat" about its prospects going forward. The company offered 2008 guidance bracketing analysts' expectations, sending shares up after-hours. Zumiez's net income rose 10% to $12.4 million, or 42 cents a share, up from $11.3 million, or 39 cents a share, a year earlier. Revenue grew 13% to $126.6 million from $112.4 million while same-store sales rose 4%, compared with a 12% rise a year earlier.
Analysts' latest mean estimates were for earnings of 38 cents a share on revenue of $126 million. Gross margin slid to 38.4% from 39.3%.
Looking ahead, Zumiez, which has most of its stores in the West, expects fiscal year per-share earnings of 90 cents to 93 cents on same-store sales flat or up in the low single digits. Analysts' mean estimate was for fiscal year earnings of 92 cents.
Analysts' latest mean estimates were for earnings of 38 cents a share on revenue of $126 million. Gross margin slid to 38.4% from 39.3%.
Looking ahead, Zumiez, which has most of its stores in the West, expects fiscal year per-share earnings of 90 cents to 93 cents on same-store sales flat or up in the low single digits. Analysts' mean estimate was for fiscal year earnings of 92 cents.
Aeropostale Beats Estimates...
Aeropostale (ARO) reported net income of $64.7 million, or 95 cents a share, up 13% from $57.3 million, or 72 cents a share, a year earlier. The quarter for all three firms ended Feb. 2. Excluding items, earnings rose to 93 cents a share from 67 cents.
Aeropostale in January raised its earnings guidance to 87 cents a share.
Analysts' latest mean estimate was for earnings of 88 cents a share, according to a poll by Thomson Financial.
Aeropostale in January raised its earnings guidance to 87 cents a share.
Analysts' latest mean estimate was for earnings of 88 cents a share, according to a poll by Thomson Financial.
Genentech Boosts 2008 Forecast...
Biotech company Genentech (DNA) now expects 2008 earnings excluding items of $3.35 to $3.45 a share, revised from a prior forecast of $3.30 to $3.45 a share.
CPI Shows Inflation Slowing...
Consumer prices were unexpectedly flat last month, paving the way for a large interest rate reduction by the Fed next week to shore up the economy. Wall Street economists had expected a sharper 0.2% rise in both the headline and core indexes.
Bear Stearns to Get Financing From JP Morgan...
J.P. Morgan Chase says it agreed, in combination with the Federal Reserve Bank of New York, to provide secured financing to Bear Stearns as needed for an initial period of up to 28 days. Bear Stearn's CEO Alan Schwartz says the firm's liquidity position in the last 24 hours has significantly deteriorated. Bear Stearns shares are down 43%.
Today's Top Stories....
• Carlyle studying ways to compensate Carlyle Capital investors - report
• Target, JP Morgan in talks on credit card deal - report
• Exxon Mobil upgraded to ‘outperform’ at Credit Suisse
• Boeing upgraded to 'overweight' from 'equal-weight' at Morgan Stanley
• Napster and Telefonica's O2 link up to offer 5 million tracks - report
• Steris names Michael Tokich as CFO; to buy back up to $300 million of stock
• Target, JP Morgan in talks on credit card deal - report
• Exxon Mobil upgraded to ‘outperform’ at Credit Suisse
• Boeing upgraded to 'overweight' from 'equal-weight' at Morgan Stanley
• Napster and Telefonica's O2 link up to offer 5 million tracks - report
• Steris names Michael Tokich as CFO; to buy back up to $300 million of stock
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