Filed under: Earnings reports, Next big thing

Over the past few years, the on-demand software company,
Concur (NASDAQ: CNQR), has been making some big changes in its business - especially its business model (to focus on recurring revenue streams). And, as seen with the latest quarterly report, things are starting to pay off. Revenues increased 69% to $49.4 million and net income came to $3.4 million, or $0.07 per share. There were 400 new customers in the quarter (the total is roughly 6,000).

Basically, Concur provides software to help manage corporate travel spending. It’s a tough problem, but the company has a broad offering of solutions, helping with vendor payments, direct reimbursements, audits and so on.

In fact, Concur recently completed the acquisition of Information Network. This will add some value payment systems (as well as customers).

What’s more, Concur upped its full-year guidance. The company expects to earn $0.22 per share and post revenues of $204 million. This compares to the prior guidance of $0.15 per share and revenues of $194.5 million.

Interestingly enough, Concur’s solutions tend to do well in tough economic environments as companies try to cut costs. Keep in mind that the company’s solutions are highly automated.

In today’s trading, Concur’s stock is up 20.83% to $34.16 per share.

Tom Taulli is the author of various books, including The Complete M&A Handbook. He also operates DealProfiles.com.

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Filed under: Earnings reports, Microsoft (MSFT), Cisco Systems (CSCO), International Business Machines (IBM), Technical Analysis, Stocks to Buy

ScanSource (NASDAQ: SCSC) is a distributor of specialty technical products for automatic identification/data capture, point of sale and communications applications. It provides such devices as bar code scanners, receipt/label printers, PC-based terminals, pole displays, call center equipment and electronic security products. The firm sells equipment from such manufacturers as Cisco Systems (NASDAQ: CSCO), IBM (NYSE: IBM) and Microsoft (NASDAQ: MSFT).

ScanSource pleased investors last week, when it reported fiscal Q2 EPS of 60 cents and revenues of $553.3 million. Analysts had been looking for 48 cents and $553.9 million. The CEO noted that growth was led by record results in the North American and International point of sale/bar code units. Management also guided Q3 revenues to $550-$570 million, versus the $549.94 million consensus estimate.

Continue reading ScanSource (SCSC): Shares in bullish ‘pennant’ formation

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Filed under: Competitive strategy, Wal-Mart (WMT)

Wal-Mart Stores, Inc. (NYSE: WMT) was an early proponent of the tracking technology known as RFID years ago, but seems to have lost patience with vendors that are taking too long to equip their merchandise pallets with the inventory tracking and shrinkage tags. As opposed to bar codes, a reader can track a package or pallet with an RFID chip without scanning anything; a two-way radio chip is used instead.

2008 is now here, and the world’s largest retailer has apparently grown quite frustrated with the slowness some vendors have displayed in adopting the new technology. It will, as such, be charging suppliers $2.00 for each pallet that does not contain an RFID tag as of yesterday. This only applies (so far) to its Sam’s Warehouse distribution center in Texas.

Wal-Mart is making it clear that the $2.00 surcharge some suppliers will see is quite a bit more than the estimated $0.20 per RFID tag per pallet. With an estimated 15,000 suppliers still not complying with Wal-Mart’s three year-old RFID mandate, company will probably be forcing the hand of slow-to-adopt vendors and suppliers this year as it ramps up to have all products tagged with RFID in all 22 nationwide distribution centers in the U.S. by 2010. Until then, it can make a nice side of change with these non-compliance fines. Perhaps an analyst will ask how much the company has made on the next Wal-Mart quarterly results conference call.

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Filed under: Federal Reserve, Recession

The compelling question, following the U.S. Federal Reserve’s 125-basis-point cut in short-term interest rates in 8 days, is whether the Fed has done enough.

“Probably not,” economist David H. Wang told BloggingStocks Thursday. “But they’ve done all they can do, politically and practically, until the next meeting in five or so weeks.”

By practically, Wang means that barring another market plunge or a capitulation day, the Fed is not prepared to lower rates before its next meeting. The Fed is already facing criticism that it responded earlier not to economic conditions, but to Wall Street’s demands — perpetual demands in the view of some — for interest rate cuts. In this climate it would take an extraordinary event to secure another Fed emergency cut, he said.

By politically, Wang means the Fed is, similarly, facing criticism that its current easing policy will increase inflation pressure. “Some in Washington believe in inflation will accelerate so much that by year’s end the Fed may be forced to raise rates. And I grant you, it’s not a baseless concern,” Wang said.

Continue reading With Fed rate cuts in place, focus turns to fiscal stimulus, private investment

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Filed under: Earnings reports, Good news, Housing

Tool supplier Stanley Works (NYSE: SWK) remains optimistic about earnings into 2008, despite deterioration of the U.S. homebuilding market. Even in 4Q2007, when the domestic construction market softened like warm butter, Stanley Works managed to post more than respectable earnings. 4Q sales increased 15% to $1.2 billion. Diluted EPS increased 7% to $1.11, operating margins increased and free cash flow increased 89% from 4Q2006.

4Q2007 was a tough quarter in the U.S., as subprime mortgage losses ran into the billions, banks tightened credit, and construction slowed dramatically. Despite the meltdown in the U.S. market, Stanley posted double-digit sales increases in all its international markets, which helped to offset slower sales in the U.S. The story is the same for FY2007.

Overall, the company is in good shape with net sales up 12% to $4.5 billion, although only 2% of that growth is organic. More than half of the increase was due to acquisitions. FY2007 diluted EPS increased 15% to $4.00, and free cash flow increased by $99 million to $457 million. Despite forecasting an organic growth rate of 0-1%, CEO John Lundgren states that Stanley Works is well positioned to withstand a possible U.S. recession.

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Filed under: Earnings reports, Google (GOOG), Microsoft (MSFT)

Google, Inc. (NASDAQ: GOOG) will be reporting its fourth quarter results today after the close of the market. Of course, the arguably hottest internet company will also be reporting on its overall fiscal year 2007 results as well. Normally, Google takes analyst expectations, smashes them to bits, and then acts like nothing happened. Will the search giant do the same thing this afternoon?

Google’s shares have been shaken from a high of over $700 this past Christmas to under $543 today, as the company has joined in with the overall market teeter-totter amid continued housing worries and recession talk and FUD that spreads like wildfire every week. Will it recover some lost ground in after-hours trading if the company reports another standout quarter? Perhaps — and it could lead to a tech stock recovery tomorrow in standard market-nuttiness fashion. Remember, Microsoft Corp. (NASDAQ: MSFT) had an excellent quarter as well just recently. As usual, the company’s stock yawned and fell asleep.

Google is expected to report earnings of $4.45 per share on $3.45 billion revenue — results any company in any industry would love to have. If Google once had dreams of a $900 share price, the company may never get there if results continue to match (or slightly surpass) analysts’ expectations during 2008. Regardless, the company’s leaders — founders Sergey Brin, Larry Page and CEO Eric Schmidt — will be around for a few decades to ride the company’s potentially turbulent waves.

[DISCLOSURE: the author holds a long position in MSFT]

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Filed under: Microsoft (MSFT), Analyst initiations, Symantec Corp (SYMC)

MOST NOTEWORTHY: Enterprise Software Sector, NewMarket and Great Plans Energy were today’s noteworthy initiations:

• Stanford believes Software companies could be better positioned to withstand an economic slowdown than most believe, but feels demand is positioned to slow in 2008. They are “somewhat cautious” on the sector and initiated coverage of Microsoft (NASDAQ:MSFT) and McAfee (NYSE:MFE) with Buy ratings and Symantec (NASDAQ:SYMC) with a Hold rating.
• Oppenheimer initiated NewMarket (NYSE:NEU) with an Outperform rating and $68 target, as they believes it is an underfollowed specialty chemical company with improving fundamentals and low investor expectations. They think the company’s free cash flow could fuel large share buybacks and strategic acquisitions.
• Great Plains Energy (NYSE:GXP) was started with an Outperform rating at Wachovia, as they are positive on the company’s strong rate base growth and valuation.

OTHER INITIATIONS:

• Time Warner Cable (NYSE:TWC) was initiated with a Neutral rating at Cowen.
• Nokia (NYSE:NOK) was initiated with an Above Average rating at Caris.
• Broadpoint started Take-Two (NASDAQ:TTWO) with a Buy rating and $20 target.

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Filed under: Earnings reports, Analyst upgrades and downgrades, General Electric (GE), Agilent Technologies (A), Technical Analysis, Stocks to Buy

AMETEK Inc. (NYSE: AME) manufactures and markets electronic instruments and electromechanical devices in North America, Europe, Asia and South America. The firm’s Electronic Instruments Group makes testing, monitoring and calibration instruments for the aerospace, transportation, research, industrial and power markets. Its Electromechanical Group produces motors, blowers, fans, heat exchangers and connectors for appliance, defense, medical and computer applications. The group also makes industrial specialty metals. General Electric (NYSE: GE) and Agilent Technologies (NYSE: A) are major competitors.

The firm pleased investors last week, when it reported fiscal Q4 EPS of 57 cents and revenues of $583.3 million. Analysts had been looking for 53 cents and $553 million. Management also predicted FY08 EPS of $2.40-$2.45, versus Street consensus of $2.43. Friedman Billings subsequently boosted its rating on the shares to “outperform”.

Continue reading AMETEK (AME): Shares defining bullish ‘flag’ pattern

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Filed under: Analyst upgrades and downgrades, Adobe Systems (ADBE), Monster Worldwide (MNST), Yum Brands (YUM)

MOST NOTEWORTHY: Yum! Brands, Adobe and Polo Ralph Lauren were today’s noteworthy downgrades:

• Deutsche Bank downgraded shares of Yum! Brands (NYSE:YUM) to Hold from Buy and lowered their target to $37 from $43 on valuation and believes 2008 estimates reflect “lofty” expectations.
• Jefferies downgraded shares of Adobe (NASDAQ:ADBE) to Underperform from Buy and lowered their target to $30 from $50 following channel checks, as they believe business has decelerated more than expected in January. Jefferies is concerns the slowing consumer will negatively compound the end of the CS3 cycle.
• Banc of America downgraded shares of Polo Ralph Lauren (NYSE:RL) to Neutral from Buy and lowered their target to $63 from $90, as they believe the tough macro environment will pressure US wholesale revenues in 2008.

OTHER DOWNGRADES:

• Deutsche Bank downgraded Monster (NASDAQ:MNST) to Hold from Buy.
• UBS (NYSE:UBS) was downgraded to Underweight from Equal Weight at Morgan Stanley.
• Soleil downgraded Accuray (NASDAQ:ARAY) to Hold from Buy.

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Filed under: Analyst upgrades and downgrades, Wal-Mart (WMT), Sears Holdings (SHLD), CVS Corp (CVS)

MOST NOTEWORTHY: The Retailing Broadline Sector, Mips Technologies and Alliance Data were today’s noteworthy upgrades:

• Deutsche Bank upgraded the Retailing Broadline Sector to Neutral from Cautious and believes the worst is over for the retailing sector. The firm recommends long Buy rated CVS Caremark (NYSE:CVS) and Wal-Mart Stores (NYSE:WMT) vs. short Sell rated Sears Holding (NASDAQ:SHLD).
• B. Riley upgraded shares of Mips Technologies (NASDAQ:MIPS) to Buy from Neutral on valuation, as they find the risk/reward attractive at current levels.
• Alliance Data (NYSE:ADS) was raised to Outperform from Market Perform at JMP Securities following its strong Q4 report and guidance.

OTHER UPGRADES:

• Roche (RHHBY) was raised to Overweight from Neutral at HSBC.
• Bear upgraded Nordstrom (NYSE:JWN) to Outperform from Peer Perform.
• Wachovia raised Gilead Sciences (NYSE:GILD) to Outperform from Market Perform.

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