Archive for the ‘Uncategorized’ Category

Sarkozy-Merkel Meeting Disappoints Investors

Tuesday, August 16th, 2011

US markets winning streak is snapped as the Sarkozy-Merkel meeting disappoints investors. Right out of the gate, dismal gross domestic product (GDP) data from Germany overshadowed solid earnings showings. The Dow Jones Industrial Average (DJIA – 11,405.93) traded in a range of nearly 200 points today, but ended with a loss of about 77 points, or 0.7%, but maintained a perch atop its 10-day moving average for the second straight day a feat not accomplished in more than three weeks. The S&P 500 Index (SPX – 1,192.76) dropped 11.7 points, or almost 1%, but it too maintained a foothold atop its own 10-day trend-line. Markets attempted to close in the black until reports came out of Europe to tax on financial transactions and a new measure to require all 17 members of the euro zone to balance their public finances before summer of 2012. The leaders also rejected issuing euro-zone bonds, noting that the bonds will not resolve Europe’s problems nor help to restore confidence. Market participants were disappointed at the fact that the two leaders did not come up with any near-term solutions to address the root cause of the sovereign debt crisis. It was also noted, Sarkozy seemed to quash speculation that the EU could expand its bailout fund.

German Chancellor Angela Merkel and French President Nicolas Sarkozy on Tuesday pledged to bolster the governance of the euro zone and proposed a new council as part of their commitment to defend the shared currency. The two heads of state proposed European Council President Herman van Rompuy to lead the new council for two-and-a-half years. The group will meet at least twice a year and more if needed, the reports said.

A financial transaction tax — essentially a tax on trading in financial instruments (likely stocks, bonds, and futures) — would likelydramatically reduce trading volumes, particularly for cost-sensitive traders like high frequency traders. It would also likely mean wider spreads for stocks, bonds, and futures. If it’s anything like what Reps. Perlmutter & Defazio proposed in 2009, it would put virtually all quant traders (high frequency traders) out of business overnight. Financial transaction taxes have been floated and proposed many times in the past. In the U.S., this was floated in the Dodd Frank legislation but was removed because of the negative impact it would have had on trading and liquidity. It would be even tougher to implement across many jurisdictions in Europe. How can one implement a transaction tax and adopt it across many jurisdictions in order to avoid imbalances of activity. I think it would be devastating to the free markets. If Germany and France adopted transaction taxes without the rest of the European countries, transactions would migrate and create substantial imbalances in liquidity and volume. I think this is all talk.

$UTIL (Daily)

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Nokia Corporation falls on news of operational restructure and uncertain revenue forecast

Monday, February 14th, 2011

Nokia Corporation (ADR) (NYSE:NOK) fell 13.97% after briefing on its new company structure.

The Company is in the phase of formation of a strategic partnership with Microsoft to build a new global mobile ecosystem to capture volume and value growth and brand identity. The Company expects 2011 and 2012 to be transition years with its newly established company structure featuring two distinct business units: Smart Devices and Mobile Phones as on April 01, 2011.

Its Smart Devices unit will focus on Nokia’s high-end smartphones comprising of subunits- Symbian Smartphones, MeeGo Computers and Strategic Business Operations. The Mobile Phones unit will serve the Company’s mass-market mobile phones while bringing an easier access to o the Internet and applications at affordable prices.

Nokia will make its new global mobile ecosystem; Windows Phone as its primary smartphone platform for which the developer tools will be offered by Microsoft as per the partnership agreement. The Company anticipates further growth in the smartphone industry in 2011 driven by the adoption to smartphones by consumers on a larger scale.

The Company expects to sell an additional 150 million Symbian devices in 2011 along the initiation of the shipment of MeeGo-related product in the later part of the year. Revenue from its Devices & Services are expected to grow faster as compared to the growth captured by the market with an operating margin of 10% or above.

The Company’s Nokia Siemens Networks will continue to operate as a separate reporting entity where revenues are expected to grow at a faster rate while being able to cross break even level for operating margin.

Nokia has also in its aim at regaining our smartphone leadership and to provide its products at unrivalled scale, product breadth, geographical reach, and brand identity; executed some operational changes including changes in its company structure.

Nokia Corporation (ADR) (NYSE:NOK) fell by $1.52 to trade close at $9.36 on high volume trading of 203.23 million shares as compared to average trading of 22.26 million. Its market capitalization stands at $35.05 billion on 3.74 billion shares outstanding at the current market prices.

Nokia Corporation (Nokia) is engaged in the manufacturing of mobile devices and in converging Internet and communications industries.

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Akamai Technologies, Inc. (NASDAQ:AKAM) Reports In-line 4Q Quarter & Q1 Growth Expectations Lowered

Friday, February 11th, 2011

Akamai Technologies, Inc. (NASDAQ:AKAM) reported some upside to December quarter estimates on Wednesday, but it guided down relative to expectations for Q1.

The Company reported fourth fiscal quarter revenue of $284.7 million, up 12% from the prior quarter, 19% year-over-year and above consensus of $283.2 million.

Net income during the quarter increased 32% quarter-over-quarter and 31% year-over-year to $52.5 million or 27 cents a share from $39.71 million or 21 cents a share and $40.08 million or 21 cents a share respectively.

Adjusted EPS of 40 cents a share has been recorded, above consensus of 38 cents a share aided by FX and better-than-expected margins. Adjusted EBITDA margin came in at 45.6% in the fourth quarter. Guidance had called for revenue of $272-285 million with EPS of 35-38 cents and a 45% margin.

The cash gross margin (excludes depreciation and stock based compensation) stayed at exactly 80.7%, in-line with the 80-81% guided range. Good operating expense control lead to a 45.6% cash operating margin, higher than the 45% guidance. The upside to operating margin is a bit more impressive considering that 43% of revenue was lower margin M&E business. PPE capital expenditure spiked to 13.9% of revenue, up 80 basis points quarter over quarter, and overall capital expenditure rose to 17.1% of revenue, above the ambient 13-16% range.

The company guided to first quarter 2011 revenues of $265 million – $275 million and EPS of $0.35 – $0.37. Capital Expenditure for 2011 is expected to be roughly 16% of the revenues. Analysts were expecting the Company to report EPS of $0.38 on revenues of $284 million for the first quarter of 2011.

Shares of the company tumbled $7.24 or 15.09% to trade close at $40.75 after the company announced its fiscal fourth quarter results and first quarter 2011 guidance.

The stock traded with high volume of 42.33 million shares, about 11.5 times the daily average of 3.62 million shares after opening at $41.67 and trading in the range of $39.90-$42.08. The stock has 52 week range of $24.64-$54.65. The market capital of the stock stands at $7.43 billion with P/E of 48.29 and beta of 0.69.

Akamai Technologies, Inc. (Akamai) provides services for accelerating and improving the delivery of content and applications over the Internet, ranging from live and on-demand streaming video capabilities to conventional content on Websites, to tools that help people transact business and reach out to new and existing customers.

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McDonald’s Corporation (NYSE:MCD) Reports Strong Jan11 Global SSS of +5.3%

Wednesday, February 9th, 2011

McDonald’s Corporation (NYSE:MCD) posted ‘strong’ January global same store sales of 5.3% versus consensus of 4.4%, despite a negative calendar shift on Tuesday.

The Company reported worldwide same store sales up 5.3%, modestly exceeding the high end of its up 4%-5% guidance provided on January 24 and the 4.4% consensus estimate.

The Company reported strong same store sales in Europe of 7.0% versus 4.5% in December (excluding weather).  This marked a solid acceleration in the 2-year average trend, and importantly results were positive across the company’s core markets (UK, Germany, France & Russia).

The Company’s same-store sales in the U.S. were up 3.1% versus down 0.7% in December and were achieved despite an unusually heavy negative trade day variance of 1.3%. Traffic continued to be positive and check negative.

APMEA same store sales were solid, coming to 5.2% above consensus of 4.6% as the business saw positive results in China, Japan and Australia.

Systemwide sales increased 7.4%, or 6.7% in constant currencies, for the month.

Shares of the company climbed 2.60% or $1.91 to $75.36 after the company  reported stronger than expected global SSS in January, led by strength in Europe, particularly Germany, UK, France, and Russia.

The stock opened at $74.37 and traded in the range of $74.20-$75.97 with high volume of 11.86 million shares compared to the daily average of 9.75 million shares. Currently, the market capitalization of the stock stands at $79.62 billion with P/E of 16.45 and beta of 0.49. The stock has 52 week range of $62.54 – $80.94.

McDonald’s Corporation franchises and operates McDonald’s restaurants in the food service industry. These restaurants serve a varied, yet limited, value-priced menu in more than 100 countries worldwide. All restaurants are operated either by the Company or by franchisees, including conventional franchisees under franchise arrangements, and foreign-affiliated markets and developmental licensees under license agreements.

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Merck & Company, Inc. Common St (NYSE: MRK) Reports Disappointing 4Q and Weak 2011 Outlook

Thursday, February 3rd, 2011

Merck & Company, Inc. Common St (NYSE: MRK), a global health care company that delivers health solutions through its medicines, vaccines, biologic therapies, and consumer and animal products, which it markets directly and through its joint ventures reported disappointing fourth fiscal quarter results and swung to a loss of $531 million or 17 cents a share, a decrease of 107.65% year over year today with weak 2011 outlook.

The Company posted net loss of $531 million or 17 cents per share in the fourth fiscal quarter, down from a profit of $6.94 billion or $2.35 per share in the same quarter last year.

Excluding one-time items, the company earned 88 cents per share in the quarter, above the street estimate of 83 cents per share.  A 5 cent beat on EPS versus consensus was mainly the result of very low tax rate, due in part to the extension of the R&D tax credit

Sales rose 20% to $12.1 billion from $10.1 billion, above the street estimate of $11.55 billion.

The strong performance was driven by ex-US pharma sales and the lower tax rate partially offset by a weaker gross margin, higher SG&A and higher other expenses.

Management issued non-GAAP EPS guidance for FY 2011 in a range of $3.64-$3.76, 3% below consensus $3.81. It expects strong revenue of “low- to mid-single digits” implying $46.5 billion to $48.8 billion versus the Streets estimate of $45.0 billion. Management assumes a tax rate range of 20%-22%.

Management withdrew their previous long-term guidance of high single-digit non-GAAP EPS CAGR from 2009-2013.

The stock tumbled $1.00 or 2.96% and is currently trading at $32.82 after reporting fourth fiscal quarter results and 2011 outlook.

Shares of the company opened at $32.99 and traded in the range of $32.51-$33.03 with lower volume of 11.78 million shares, compared to the daily average volume of 18.48 million shares. The stock has 52 week range of $30.70-$39.42. The market capitalization of the stock stands at $100.99 billion with beta of 0.85 and P/E of 11.73.

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Banking Stocks Mostly Higher (AIB, NBG, STD, BCS)

Thursday, January 20th, 2011

Allied Irish Banks, plc. (ADR) (NYSE:AIB) slid 0.93% to $0.803. The stock has a 52-week range of $0.75-$4.75.

The stock has average daily volume of 10.94 million shares. At current market price, the market capitalization of the company stands at $513.17 million.

National Bank of Greece (ADR) (NYSE:NBG) added 3.37% to $1.84. National Bank of Greece S.A. is a Greece-based financial institution. It offers a range of integrated financial services, including corporate and investment banking, retail banking (including mortgage lending), leasing, stock brokerage, asset management and venture capital, insurance, real estate and consulting services.

The stock opened at $1.82 and is trading within the range of $1.80-$1.86.

Banco Santander, S.A. (ADR) (NYSE:STD) is up 0.77% to $11.71. The stock has a 52-week range of $8.65-$16.33. The stock has average daily volume of 10.85 million shares. At current market price, the market capitalization of the company stands at $96.36 billion.

Barclays PLC (ADR) (NYSE:BCS) surged 0.90% to $19.14. The stock opened at $19.18 and is trading within the range of $19.09-$19.34.

Barclays PLC is a global financial services provider engaged in retail banking, credit cards, corporate and investment banking and wealth management.

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Ruby Tuesday, Inc. (NYSE: RT) Shares Jumped After Q2 Results

Friday, January 7th, 2011

Casual dining chain Ruby Tuesday Inc’s quarterly results beat market expectations on strong guest traffic aided by its value menu offerings. The Company’s second quarter diluted EPS was reported to be $0.07 as compared to $0.01 in the prior year period. The company expects to report full year 2011 diluted EPS of $0.76 to $0.86.

Ruby Tuesday Inc. was range-bound throughout the day Wednesday and closed up by 0.09 at $14.01. The stock is now up 0.47 on 90K shares after the bell. The shares touched the intraday high of $14.97 and low of $14.59. It has 52 week range of $15.57-$6.77. At the current market price, the market capitalization of the stock stands at 959.18 million shares with beta of 3.95. The market volume of the stock was 0.23 million shares as against daily average volume of 0.55 million shares.

The competitors like Brinker International Inc’s (EAT.N) Chili’s, Buffalo Wild Wings Inc (BWLD.O) and Dine Equity Inc’s (DIN.N) Applebee’s, has been one of the top performers in the severely aggressive bar and grill segment. The company had cut costs to combat sluggish sales and has been investing in innovation through new menu and marketing initiatives to allure more guests to its chains.

For the second quarter ended Nov. 30, the bar and grill restaurant chain earned 7 cents a share on revenue of $290.5 million. The company also backed its 2011 earnings view of 76-86 cents a share which was in line with the analyst’s estimation. The stock is up about 10 percent since it reported first-quarter results in October.

Ruby Tuesday, Inc., including its wholly owned subsidiaries (RTI) owns and operates Ruby Tuesday casual dining restaurants. The Company-owned and operated restaurants are concentrated in the Northeast, Southeast, Mid-Atlantic and Midwest regions of the United States.

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Evergreen Energy Inc. (NYSE: EEE) Receives an Extension Grant from NYSE Arca

Thursday, January 6th, 2011

Evergreen Energy Inc. (NYSE:EEE) tumbled 14.26% to $0.986 on volume of 2.64 million shares after NYSE Arca Inc. (NYSE Arca) granted an extension to the company.

Shares of the Denver energy technology have the 52-week range of the stock is $0.52 – $7.87. The stock opened at $1.12 and traded within the range of $0.94-$1.14. At current market price, the market capitalization of the company stands at $18.62 million with beta of 0.93.

Yesterday, The Company was granted until February 28, 2011 an extension by NYSE Arca Inc. to regain compliance with the requirements for continued listing on NYSE Arca after the notification that on Nov 29, 2010 that it was not in compliance with NYSE Arca’s continued listing standards under Rule 5.5(b) (1) and Rule 5.5(b) (2) of NYSE Arca Equities Rules. As per the standards a listed common stock must maintain an average closing price in excess of $1.00 over a consecutive 30 trading-day period and must maintain a market value of publicly held shares of at least $15.0 million.

The company on Monday named Ilyas Khan as its new chairman of its board of directors, its fourth since last July.

So far in the last 5 day trading sessions, the stock went up by 40.86% after touching a 52-week low of $0.52 on Dec 27, 2010, its 52 week high being $2.00. There were no official news, but it looks like the traders made their positions as the stock touched its 52-week low. As the stock consolidated, investors/traders rushed to buy the stock from the oversold territory.

Evergreen Energy Inc. (Evergreen Energy) is a cleaner coal technology, energy production and environmental solutions company focused on developing technologies. The Company developed two green technologies: the GreenCert suite of software and services and K-Fuel.

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Top Traded Financial Stocks (Bank of America Corporation, USB, ZION, JPM)

Monday, December 13th, 2010

Bank of America Corporation (NYSE:BAC) slid 0.70% to $12.71.

The stock has average daily volume of 197.72 million shares. At current market price, the market capitalization of the company stands at $128.18 billion.

U.S. Bancorp (NYSE:USB) is down 0.53% to $26.31. The 52-week range of the stock is $20.44-$28.43.

The stock opened at $26.46 and was trading within the range of $26.08-$26.47. The stock jumped more than 16% year-to-date.

Zions Bancorporation (NASDAQ:ZION) lost 1.97% to $22.90. The 52-week range of the stock is $12.51-$30.29. The stock jumped more than 78% year-to-date.

The stock has average daily volume of 3.77 million shares.

JPMorgan Chase & Co. (NYSE:JPM) added 1.18% to $41.92. The 52-week range of the stock is $35.16-$48.20. The stock added more than 1% year-to-date.

The average daily volume of the stock is 35.36 million shares. At current market price, the market capitalization of the company stands at $163.78 billion.

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CMTL falls on anticipation of a decline in sales to U.S. Army

Friday, December 10th, 2010

Comtech Telecomm. Corp (NASDAQ:CMTL) fell 11.98% to $27.71 after the Company reported an increase of 116.78% in the adjusted EBITDA of $46.414 million.

Shares of the Company lost $3.77 after opening at $30 and trading on a high volume of 1.69 million shares as compared to 0.283 million shares. The Company’s stock trades in the 52-week range of $20.18-$38.39 and has a market capitalization of $785.07 million on 28.33 million shares outstanding. Currently, its shares are trading above its 200-Day Moving Average of $27.37 but below 50-Day Moving Average of $30.51.

Revenue generated by the Company for the first quarter of fiscal 2011 was $178.2 million, an increase of 33.18% from $133.8 million for the first quarter of fiscal 2010. The increase in net sales was mainly attributable to higher net sales in both the Company’s telecommunications transmission and mobile data communications segments offset by lower net sales in the Company’s RF microwave amplifiers segment.

Adjusted EBITDA posted by the Company was $46.414 million which was 116.78% higher than the adjusted EBITDA of $21.4 million for the corresponding period year earlier. This excludes $1.4 million and $1.73 million of stock-based compensation incurred in the first quarter of fiscal 2011 and fiscal 2010 respectively.

Net income earned on GAAP basis was $25.7 million or $0.79 per diluted share in the reported quarter as compared to $9.0 million, or $0.30 per diluted share, for the first quarter of fiscal 2010. Cash generated by the Company through its operations was $19.3 million which includes receipt of merger termination fee of $12.5 million by which the Company and CPI International, Inc. (“CPI”) terminated a previously announced Merger Agreement.

CMTL also announced a quarterly cash dividend of $0.25 per share, payable on February 21, 2011 to shareholders of record at the close of business on January 21, 2011 with the Board of Directors is currently targeting annual dividend payments aggregating $1.00 per share per year. In the reported quarter the Company has repurchased 720,996 shares of its common stock under $100.0 million stock repurchase plan in open-market transactions for an aggregate cost of $20.2 million (including transaction costs) with an average price per share of $28.01.

The CEO and president, Fred Kornberg, pointed that sales to the U.S. Army are expected to decline in future quarters as compared to the first quarter sales but the Company’s fundamentals remain solid and that many of its product lines will benefit from slowly improving business conditions.

The Company had on December 7, 2010 announced that it has received a contract modification to its Movement Tracking System (MTS) program contract with the U.S. Army extending the performance period under the contract by six months to July 14, 2011, with deliveries and performance now authorized to continue into July 2012.

Comtech Telecommunications Corp. (Comtech) is engaged in designing, developing and marketing products, systems and services for communications solutions. The Company operates in three segments: telecommunications transmission, mobile data communications and radio frequency (RF) microwave amplifiers.

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