Filed under: Earnings reports, Cisco Systems (CSCO), Time Warner (TWX), Walt Disney (DIS), Avon Products (AVP), Gannett Co (GCI), Electronic Data Systems (EDS), Activision Inc (ATVI), Old Dominion Freight Line (ODFL), Las Vegas Sands (LVS), Unilever ADR (UL)

The earnings crunch rolls on, and here are a few of the highlights of this past week’s earnings coverage from BloggingStocks:

• Activision Inc. (NASDAQ: ATVI) earnings soared on popularity of Guitar Hero and other game franchises.
• Arch Coal Inc. (NYSE: ACI) beat earnings expectations and offered revised guidance.
• Avon Products Inc. (NYSE: AVP) beat estimates despite lower profits due to restructuring costs.
• Chattem Inc. (NASDAQ: CHTT) beat estimates and raised its guidance.
• Cisco Systems Inc. (NASDAQ: CSCO) met estimates but a weak forecast raised concerns.
• Dionex Corp. (NASDAQ: DNEX) beat estimates on strength in petrochemical and food/beverage markets.
• Electronic Data Systems Corp. (NYSE: EDS) earnings fell, helping to raise concerns about tech stocks.
• Flextronics International Ltd. (NASDAQ: FLEX) beat estimates and affirmed its outlook.
• Gannett Inc. (NYSE: GCI) missed fourth-quarter earnings estimates on lower ad revenue.
• Las Vegas Sands Corp. (NYSE: LVS) missed expectations due to rising construction costs.
• MGM Mirage (NYSE: MGM) forecast it would beat earnings expectations by as much as 10 cents a share.
• Old Dominion Freight Line Inc. (NASDAQ: ODFL) beat revenue estimates and raised its guidance.
• RealNetworks Inc. (NASDAQ: RNWK) warned it would miss first-quarter and full-year expectations.
• Silicon Laboratories (NASDAQ: SLAB) beat expectations and raised its guidance.
• THQ Inc. (NASDAQ: THQI) posted disappointing results that included cancelled game franchises.
• Time Warner Inc. (NYSE: TWX) met estimates and announced restructuring plans (see transcript).
• Unilever (NYSE: UL) fourth-quarter net income tanked on a sell-off of its European frozen food business.
• Walt Disney Co. (NYSE: DIS) posted better-than-expected results on gains in TV and theme parks.

Continue reading Earnings highlights: Time Warner, Cisco, Gannett, Disney, EDS and others

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Filed under: Industry, Japan, Housing, Recession

The New York Times reports that Japan’s decade-long economic slump following the bursting of its 1980s economic bubble offers important lessons for the U.S. Of these, the most important one seems to be that banks and others exposed to bad loans should write them off fast and move on. It was Japan’s unwillingness to bite the bullet that kept it stuck for a decade.

Last month, I compared Japan’s negative interest rates to the ones we have now. But what caused the predicament that led Japan to cut its rates so much? In Japan, housing prices in the major metropolitan regions nearly tripled from 1985 to 1991, then proceeded to lose two-thirds of their value over the next 14 years. In the U.S., the price run up was less extreme: house prices rose 82% from November 2001 to their peak in June 2006. Since the peak, house prices have fallen 10% with 10% to 15% further to go.

Japan was slow to write-down its bad loans. That’s because its industrial groups, or keiretsu, had tight links with banks, so when a bank got in trouble it was often quietly bailed out temporarily with loans or investments from other members of the corporate group. In the U.S., banks are quicker to take write-downs and so far we’ve used Sovereign Wealth Funds (SWFs) to recapitalize the banks.

The lesson we should learn from Japan is that the sooner we face reality, the sooner we can solve our problems and move on to the next period of growth. A larger question is whether we can grow without creating another bubble.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

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Filed under: Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)

Yahoo! Inc.’s (NASDAQ: YHOO) board met Friday to discuss a buy-out bid from Microsoft Corp. (NASDAQ: MSFT). No news was issued by the company, but several media outlets reported that the group discussed licensing its search rights to Google Inc. (NASDAQ: GOOG) for a high sum or trying to get a better bid from Microsoft

Yahoo!’s board can grow old waiting for a bump up in that offer. The Wall Street Journal wrote, referring to the Google option (subscription required), that “such a deal could increase Yahoo’s cash flow and give it more latitude to try to thwart the Microsoft approach.” While the deal might bring in more money and allow Yahoo! to fire much of its R&D staff, there is no guarantee that it will keep the firm’s stock north of $30. Except for periods when there were rumors of a buy-out, shares have traded in the $20s and were below $20 slightly before the bid from Redmond.

Steve Ballmer knows all of this.

It’s time or Yahoo! to admit that its business has faltered badly and probably cannot recover. It could always out-sourced its search business to Google. It clearly never thought the idea was good enough.

And, regulators are not going to like the idea of the No.1 and No. 2 search companies teaming up.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Avery Dennison Corp (AVY), Stocks to Buy

With the U.S. economic landscape becoming more uncertain, it’s prudent to add a defensive stock or two to your portfolio, and with the aforementioned in mind Avery Dennison is worth an evaluation.

Avery Dennison Corporation (NYSE: AVY) is the leading global manufacturer of pressure-sensitive technology and self-adhesive solutions for consumer products and label systems, including office/school products, product identification and control systems, and specialty tapes and chemicals.

Analysts like AVY’s office products/school products division, with a better-than-expected season seen for 2008. Further, AVY’s international business is likely to continue to growth at a healthy rate in 2008-2009, on solid revenue gains in Europe, Asia, and Latin America. The Reuters FY 2008/FY 2009 EPS consensus estimates for AVY are $4.27 to $4.83.

Continue reading When students and businesses stock up, so does Avery Dennison

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Filed under: Wal-Mart (WMT), Columns

Welcome to the 48th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions and just a bit of everything else when it comes down to a very hot topic these days: Wal-Mart.

In the last edition of The Wal-Mart Weekly, I focused on a two-part series that examined a speech a few weeks ago by Wal-Mart Stores, Inc. (NYSE: WMT)’s CEO, Lee Scott. Part 1 and Part 2 are ready for your eyes in case you missed them last week.

This week, I’ll be peering into an area that is rarely talked about in the venue of retail — returns and exchanges. I’ve seen many inconsistencies in the last month on a series of experiments I’ve performed and found the results somewhat amazing for the world’s largest retailer.

Continue reading The Wal-Mart Weekly: Customer returns process shows severe weaknesses

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Filed under: Stocks to Buy

Some investors / readers probably are not aware that the Internet — critical as it is today for commercial activities and the flow of information — was not designed to handle the volume and complexity of today’s web tasks. Moreover, the appearance of Internet bottlenecks created an opportunity for Akamai Technologies.

Akamai Technologies, Inc. (Nasdaq: AKAM) solutions accelerate and improve the delivery of Internet content and applications.

Analysts like Akamai’s broad, 1,800-member customer base, including many blue chip companies. Further, analysts also like the fact that AKAM has continued to deliver material revenue increases and earnings gains, despite infrastructure and related expansion investments.

Further, the consensus among analysts is that 28,000-server Akamai will continue to have a competitive advantage in its key business segments for at least the next two years. The Reuters FY 2008/FY 2009 EPS consensus estimates for AKAM are $1.68 to $2.04.

Continue reading Akamai Tech eases congestion on the information superhighway

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Filed under: Indices, Market matters, Money and Finance Today, Technical Analysis, Housing

Many people believe that the bursting of the housing bubble was a prelude to a far-reaching property bust, and that few segments of the market will ultimately be spared.

Indeed, reports indicate that the commercial property market, which held up relatively well amid the early decline in home prices, is now in trouble and seems headed for a potentially nasty spill.

Given that, I thought it might be useful to go back and look at the pattern of the S&P 500 Homebuilder’s Index in the run-up to the July 2005 peak and beyond, and see how that pattern compares to the recent price action in the Dow Jones Equity REIT index, which is made up of publicly-traded real estate investment trusts.

Continue reading If REITs follow homebuilders, a technical rally may be on the cards

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Filed under: Brazil, Mexico, Stocks to Buy

The choppy/consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case, and one growth company worth reviewing is American Movil SA.

American Movil S.A.B de C.V. (ADR) (NYSE: AMX) is the largest wireless service provider in Latin America, and one of the 10 largest in the world.

Analysts see 2008 revenue rising of 15-20%, after a 32% increase in 2007. Further, analysts also like the company’s successful expansion to 13 other markets in the region, to go along with its two key markets: Brazil and Mexico.

Hence, analysts also really like AMX’s current subscriber base — a remarkable 153 million in 2007 — and its projected subscriber growth rate of 12-15% for 2008, and 10-13% for 2009.

Continue reading American Movil SA is an incontrovertible south-of-the border success story

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Filed under: Apple Inc (AAPL), General Electric (GE), Time Warner (TWX), News Corp’B’ (NWS), Media World, Presidential elections

Super Tuesday had a super payoff for CNN.

The Time Warner Inc. (NYSE: TWX) cable channel attracted 3.6 million viewers, beating out Fox News Channel which had 3.5 million and MSNBC — which I prefer — which had 2.1 million viewers between 8 and 11 p.m., according to The Los Angeles Times. Before you NPR listeners raise your Starbucks cafe au laits in triumph, remember that one night does not make a trend. Fox still rules the ratings roost overall.

This does underscore a few trends. One is that Fox is no longer the only voice of conservative thought on cable TV with the likes of Lou Dobbs on CNN and Pat Buchanan on MSNBC. Also, the far right brand of conservatism espoused by Fox may be out of favor. The presumptive Republican nominee John McCain is hardly a favorite of the far right even though he’s trying really hard to mend fences ahead of the general election.

News Corp., though, is not hurting. During the second-quarter, operating income from its cable channels rose 34% to $1.24 billion as higher revenue from Fox News Channel and the other networks more than off set the startup costs at Fox Business Network and the Big Ten Network.

When Rupert Murdoch’s News Corp. (NYSE: NWS) first announced plans to start a cable channel to compete against CNBC, I was psyched. At least, I thought, there would be an alternative to the General Electric Co. (NYSE: GE) channel’s must yell TV format. Boy was I wrong.

In its brief existence, Fox Business Network has largely distinguished itself for being undistinguished, making some unbelievably stupid mistakes such as confusing Apple Inc. (NASDAQ: AAPL) with Abu Dhabi. More recently, the anchors of the show “Fox Business Happy Hour”, Cody Willard and Tracy Byrnes, appeared a little too happy during a segment on of all things drunk driving. Call it an occupational hazard of hosting a show at a bar. Missing in all of this merriment was one crucial thing: breaking news.

(Note: I crossed paths with Willard and Byrnes at TheStreet.com though I never worked directly with either of them.)

Continue reading Media World: Rupert Murdoch will get the last laugh on his many critics

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Filed under: Amgen Inc (AMGN), Options

Amgen, Inc. (NASDAQ: AMGN) recently trading up 15 cents to $46.87 on unconfirmed takeover chatter:

AMGN call option volume of 18,974 contracts compared to put volume of 3,607 contracts. AMGN March option implied volatility of 36 was above its 26-week average of 31 according to Track Data, suggesting traders are positioning for an upside move.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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