Ingersoll-Rand (IR) soars higher on Q2 earnings

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IR logoIngersoll Rand (NYSE: IR - option chain) shares are up more than 10% today after the company reported second-quarter earnings of $122.1 million, or 38 cents per share. Excluding restructuring costs, IR earned 50 cents per share, beating analysts' forecasts of 39 cents per share, which could signal a full-fledged economic recovery is underway. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on IR.

IR opened this morning at $25.35. So far today the stock has hit a low of $25.35 and a high of $27.21. As of 11:40, IR is trading at $26.98 up $2.90 (12.4%). The chart for IR looks bullish and S&P gives IR a positive 4 STARS (out of 5) buy ranking.

Continue reading Ingersoll-Rand (IR) soars higher on Q2 earnings

Ingersoll-Rand (IR) soars higher on Q2 earnings originally appeared on BloggingStocks on Fri, 24 Jul 2009 12:20:00 EST. Please see our terms for use of feeds.

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King Report: Manufacturing Earnings

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‘We’re all technicians now!’ Stocks again are so divorced from reality and economic fundamentals that investors must be technicians in order to capture upside and avoid the inevitable recoupling with economic and financial reality…Remember the last recoupling of a few quarters ago?

Please recall the Goldman CFO, David Viniar, warned in early February 2008 that there is a “total disconnect between the equities market and the credit market.” [King Report 2/7/2008] We are now witnessing a historic disparity between stocks and GDP as well as employment. The autumn is going to be very, very interesting.

Globe & Mail: Stocks surged Thursday morning when the Bank of Canada said it has seen signs that the US economic recession has reached its bottom. We don’t recall the Bank forecasting the economic collapse last year.

Hasn’t it already been decreed that the US economy has bottomed? Haven’t stocks already discounted this? Of course – it’s just traders fooling with stocks during the summer – on thin volume.

Why do so many people heed the bottom-braying of people that never forecast the biggest economic and financial collapse since The Great Depression? The economic and financial collapse that occurred last year was as easy to recognize as humanly possible – and look how many people missed it.

Old Ben Bernanke is rebubbling stocks because the market believes he’s back in funny-money mode. And the last thing the US needs is another asset bubble that is intended to paper over structural problems.

The WSJ: Ford Posts $2.3B 2Q Profit On One-Time Gains;Beats Estimates The company burned through about $1 billion in cash - down from $3.7 billion in the first quarter - during the quarter as it controlled incentive spending around the world while increasing output in its North American plants. Ford’s profit came largely from a $3.4 billion gain it received related to debt-restructuring actions in April. Excluding the one-time gains, the company would have narrowed its quarterly loss to $424 million compared with a loss of $1.03 billion a year earlier. It would have been the company’s fifth consecutive quarterly loss…

Once again we have accounting gimmicks (non-cash factors) manufacturing earnings.


FASB Discovers Own Cojones

Make that belatedly.

America’s previously neutered accountants — traditionally, green-visored chickenshit-cowards who have rolled over for their belly rubs from America’s CEOs and CFOs, giving them all of the bullshit they asked for over the past 2 decades — seem to be developing a spine of sorts.

Recall that in the midst of the credit crisis, the Accounting Standards Board were knuckled under by Congress. FASB now seems to be regretting their act of political cowardice. Here’s Jonathan Weil:

“Turns out America’s accounting poobahs have some fight in them after all. Call them crazy, or maybe just brave. The Financial Accounting Standards Board is girding for another brawl with the banking industry over mark-to-market accounting. And this time, it’s the FASB that has come out swinging.

It was only last April that the FASB caved to congressional pressure by passing emergency rule changes so that banks and insurance companies could keep long-term losses from crummy debt securities off their income statements.

Now the FASB says it may expand the use of fair-market values on corporate income statements and balance sheets in ways it never has before. Even loans would have to be carried on the balance sheet at fair value, under a preliminary decision reached July 15. The board might decide whether to issue a formal proposal on the matter as soon as next month.”

The mere fact these gutless wonders are even considering Fair Value accounting is a massive improvement. If the lobbyists and bought & paid for Congress don’t interfere, we may actually expect to see significant changes:

“The scope of the FASB’s initiative, which has received almost no attention in the press, is massive. All financial assets would have to be recorded at fair value on the balance sheet each quarter, under the board’s tentative plan.

This would mean an end to asset classifications such as held for investment, held to maturity and held for sale, along with their differing balance-sheet treatments. Most loans, for example, probably would be presented on the balance sheet at cost, with a line item below showing accumulated change in fair value, and then a net fair-value figure below that. For lenders, rule changes could mean faster recognition of loan losses, resulting in lower earnings and book values.

The board said financial instruments on the liabilities side of the balance sheet also would have to be recorded at fair-market values, though there could be exceptions for a company’s own debt or a bank’s customer deposits.”

That is a huge correction to a previous outrage.

Remember, mark to market accounting hasn’t caused these problems — It merely exposed them to bank investors.

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Previously:
How Congress Betrayed Investors to Help Banks (April 3, 2009)
http://www.ritholtz.com/blog/2009/06/how-congress-betrayed-investors/

CDS/FASB (April 2nd, 2009)
http://www.ritholtz.com/blog/2009/04/cdsfasb/

What Does the FASB Proposal Mean for Financials? Evolution or Revolution? (March 18th 2009)
http://www.ritholtz.com/blog/2009/03/what-does-the-fasb-decision-mean-for-financials-evolution-or-revolution/

Sources:
Accountants Gain Courage to Stand Up to Bankers
Jonathan Weil
Bloomberg, July 23 2009
http://www.bloomberg.com/apps/news?pid=20601039&sid=a5BsXz90CMso

FASB Grows A Pair? Watch Those Stocks!
Karl Denniger
Market Ticker, July 23. 2009
http://market-ticker.denninger.net/archives/1255-FASB-Grows-A-Pair-Watch-Those-Stocks!.html


You Call These Good Earnings?

I’ve just got home after a fast West Coast trip, and its pretty amazing what passes for good news these days.  Beating dramatically lowered earnings forecasts on cost cutting and layoffs — rather than top line grwoth — seems to be the order of the day.

The irony is that the Wall Street analyst community overestimated earnings at the top of the cycle — pure extrapolation of trend to infinity. They seem to be doing thesame thing now, only extrapolating falling earnings to zero.

What that produces is not true upside surprises, but merely jumping over a dramatically lowerred bar.

Then there is the straight out bad news:

Microsoft Profit Drops 29% as PC Slowdown Weighs on Revenue; Shares Slump
U.S. Stock Futures Fall on Microsoft, American Express, Amazon.com Results
Amazon.com Profit Drops 10% as Sales Fall Short of Estimates; Shares Slide
American Express Profit Drops as Recession Pressures Cardholder Payments

We have been lightening up into the rally, but I expect tomorrow will sting the long positions.


Amazon sells off sharply on second quarter numbers

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amazon amzn second quarter earningsShares of e-commerce giant Amazon.com, Inc. (NASDAQ: AMZN) are selling off sharply this afternoon after disappointing Wall Street with its second quarter numbers.

This afternoon's results shows the company posting a 10% drop in quarterly net profit, as the company was hit by an unfavorable foreign currency translation and legal expenses related to its recent $51 million Toys R Us settlement.

Continue reading Amazon sells off sharply on second quarter numbers

Amazon sells off sharply on second quarter numbers originally appeared on BloggingStocks on Thu, 23 Jul 2009 18:00:00 EST. Please see our terms for use of feeds.

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Q2 earnings: Those sagging sales are not due to the ‘strong’ (?) dollar

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Those who follow the U.S. economy and the financial markets are accustomed to hearing investors and holders of U.S. assets complain about the weak dollar.

'The federal budget deficit is going to lead to a weak dollar and rampant inflation.' 'The Fed is going to inflate the economy to help the U.S. pay its debt, undermining the value of my portfolio.' 'The weak dollar is causing inflation, forcing up the price of oil and other commodities.'

Continue reading Q2 earnings: Those sagging sales are not due to the 'strong' (?) dollar

Q2 earnings: Those sagging sales are not due to the 'strong' (?) dollar originally appeared on BloggingStocks on Thu, 23 Jul 2009 14:40:00 EST. Please see our terms for use of feeds.

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Amazon (AMZN) second quarter earnings preview

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amazon earnings previewOnline retailer Amazon (NASDAQ: AMZN) is due to report its second quarter earnings Thursday following the market close, and investors are hoping for a repeat performance of the company's strong first quarter results.

Analysts are expecting the company to report earnings of 31 cents per share. Ironically, when the company was due to report earnings for its first quarter, analysts were also looking for 31 cents per share, but Amazon was able to easily beat out those estimates by posting 41 cents a share for the first quarter.

Continue reading Amazon (AMZN) second quarter earnings preview

Amazon (AMZN) second quarter earnings preview originally appeared on BloggingStocks on Thu, 23 Jul 2009 10:00:00 EST. Please see our terms for use of feeds.

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Closing Bell: Despite action, tech wants to rule (AMD, AAPL, BA, GE, SBUX, YHOO)

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This was a very light economic day that was again sort of trumped by a Ben Bernanke speech, but this was to the Senate panel rather than yesterday's House panel. Earnings dominated the trends of the news and the markets spent all day trying to figure out if they wanted to be up or down. However, tech stocks have managed to rise and rise. And rise. Right before the closing bell, this looked to be the eleventh day up in a row.

Here were today's unofficial closing bell levels:

Dow 8,881.26 -34.68 (-0.39%)
S&P 500 954.06 -0.52 (-0.05%)
Nasdaq 1,926.38 +10.18 (0.53%)

Major Analyst Upgrades

Continue reading Closing Bell: Despite action, tech wants to rule (AMD, AAPL, BA, GE, SBUX, YHOO)

Closing Bell: Despite action, tech wants to rule (AMD, AAPL, BA, GE, SBUX, YHOO) originally appeared on BloggingStocks on Wed, 22 Jul 2009 16:00:00 EST. Please see our terms for use of feeds.

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Bank of New York Mellon (BK) reports weak Q2 earnings, slashes dividend

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BK logoBank of New York Mellon (NYSE: BK - option chain) stock is lower today after the company reported a second-quarter profit this morning of $176 million, or 15 cents per share. Excluding one-time items, BK earned 23 cents per share, missing analysts' estimates of 53 cents per share. BK also announced its quarterly dividend of 0.09 per share down 62% from the previous 0.24. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on BK.

This morning, BK opened at $27.55. So far today the stock has hit a low of $26.48 and a high of $27.67. As of 11:40, BK is trading at $26.89, down $2.22 (-7.6%). The chart for BK looks bullish and S&P gives BK a positive 4 STARS (out of 5) buy ranking.

Continue reading Bank of New York Mellon (BK) reports weak Q2 earnings, slashes dividend

Bank of New York Mellon (BK) reports weak Q2 earnings, slashes dividend originally appeared on BloggingStocks on Wed, 22 Jul 2009 13:00:00 EST. Please see our terms for use of feeds.

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Starbucks gives investors jolt with Q3 2009 earnings

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Long-time investors in Starbucks (NASDAQ: SBUX) have not had a great ride over the past 24 months, in which the stock tumbled to a several-year low, hitting bottom in November 2008 at $7.06. It's a far cry from the growth stock dreams of 2006, where the stock regularly scored in the upper $30s. Today's close, $14.69, is more than double that day in November; but still many investors are likely below water. And while the third quarter 2009 results won't push the stock back toward its 2006 highs, at the very least, it's cracking $16 in after-hours trading.

After the bell today, Starbucks surprised with non-GAAP earnings came in at 24 cents a share after one-time charges associated with store closings, or $151.5 million. Analysts' consensus had been earnings of 19 cents a share. These results are compared to 16 cents a share in Q3 2008. Starbucks registered revenue of $2.4 billion, compared to $2.6 billion in Q3 2008 and $2.3 billion in Q2 of this year. Comparable store sales were down 5% between Q3 2008 and 2009, which Starbucks says was an improvement over Q2 2009, with a nine percent same-store sales decline.

I wrote at length on DailyFinance about Starbucks' third quarter 2009 events and hopes for the future. While analysts seem to be focused on same-store sales and when they'll turn positive (management won't say), my judgment is that it's far more important that Starbucks find a way to connect with consumers' changing desires. Slowly, Americans are losing their brand loyalty and turning more toward authentic, personal experiences; this new experimental series of locally-branded not-Starbucks is a great attempt at capitalizing on that. Whether Starbucks can maintain this focus on consumers' trending desires will determine whether the company's next several quarters continue to reverse its losing trend.

Starbucks gives investors jolt with Q3 2009 earnings originally appeared on BloggingStocks on Tue, 21 Jul 2009 19:00:00 EST. Please see our terms for use of feeds.

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PepsiCo earnings preview

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Pepsi Earnings PreviewSo far this has been a pretty decent earnings season, and soft drink giant PepsiCo, Inc. (NYSE: PEP) gets its turn to impress Wall Street tomorrow morning when it releases its second quarter numbers.

The company will be announcing its second quarter earnings before the market opens tomorrow, and analysts are expecting to see earnings of $1.00 a share from the world's second largest beverage maker. For the same period last year PepsiCo posted earnings of $1.03.

Continue reading PepsiCo earnings preview

PepsiCo earnings preview originally appeared on BloggingStocks on Tue, 21 Jul 2009 18:00:00 EST. Please see our terms for use of feeds.

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State Street (STT) Q2 earnings disappoint

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STT logoState Street (NYSE: STT - option chain) stock is falling today after the company reported a second-quarter loss of $3.3 billion or $7.12 per share, hurt by charges related to the consolidation of the asset-backed commercial paper conduits onto the company's balance sheet and its TARP repayment. Excluding one-time items, STT earned 79 cents per share, missing analysts' estimates of 97 cents per share. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on STT.

This morning, STT opened at $48.81. So far today the stock has hit a low of $45.98 and a high of $48.77. As of 11:45, STT is trading at $46.91, down $1.90 (3.9%). The chart for STT looks bullish and S&P gives STT a positive 4 STARS (out of 5) buy ranking.

Continue reading State Street (STT) Q2 earnings disappoint

State Street (STT) Q2 earnings disappoint originally appeared on BloggingStocks on Tue, 21 Jul 2009 13:40:00 EST. Please see our terms for use of feeds.

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Coca-Cola earnings down, but developing markets a bright spot

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Coca-Cola Co. (NYSE: KO), the beverage giant with the world's most valuable brand according to BusinessWeek, reported earnings before the market opened today. Earnings per share for the second quarter of 2009 were $0.92 after items on $8.27 billion in revenue, compared to the $0.89 average EPS expected from analysts. The consensus revenue target was $8.66 billion, meaning that Coke missed on the top line even though global unit case volume increased 4%, driven by a 33% increase in India and a 14% increase in China. The company said they increased market share for the eighth consecutive quarter.

Shares fell slightly more than 1% in early trading, after rising yesterday.

Continue reading Coca-Cola earnings down, but developing markets a bright spot

Coca-Cola earnings down, but developing markets a bright spot originally appeared on BloggingStocks on Tue, 21 Jul 2009 13:20:00 EST. Please see our terms for use of feeds.

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AK Steel posts better-than-expected earnings

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As we saw in yesterday's earnings preview, AK Steel Holding Corp. (NYSE: AKS) was expected to post a loss for its second quarter, but the good news is that the loss was less than analysts had been expecting to see.

Going into this morning's earnings announcement, analysts had been expecting the company to post a loss of 51 cents per share, but the company was able to show a better than expected loss of just 43 cents per share. While it is good to see the company beat estimates, we still have to keep in mind that during the same period last year the company was able to show earnings of $1.29 per share.

Continue reading AK Steel posts better-than-expected earnings

AK Steel posts better-than-expected earnings originally appeared on BloggingStocks on Tue, 21 Jul 2009 12:40:00 EST. Please see our terms for use of feeds.

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AK Steel earnings preview

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AK Steel Earnings PreviewAK Steel Holding Corporation (NYSE: AKS) is due to report earnings tomorrow before the market opens, and the company is expected to post another quarterly loss.

The current recession has been tough on steel makers, and Ohio based AK Steel is no exception. The company has been forced to lower prices and lay off workers in the wake of slumping demand for its steel products.

Continue reading AK Steel earnings preview

AK Steel earnings preview originally appeared on BloggingStocks on Mon, 20 Jul 2009 17:30:00 EST. Please see our terms for use of feeds.

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M&T Bank (MTB) Q2 earnings smash estimates

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MTB logoM&T Bank (NYSE: MTB - option chain) shares are rising today after the company reported Q2 earnings this morning. While Q2 profits fell by 75% year-over-year due to one-time charges, adjusted earnings came in at 0.79 per share, well above analyst estimates of 0.47. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MTB.

MTB opened this morning at $56.76. So far today the stock has hit a low of $55.04 and a high of $60.00. As of 11:40, MTB is trading at $56.88 up 2.44 (4.5%). The chart for MTB looks bearish and S&P gives MTB a negative 2 STARS (out of 5) sell ranking.

Continue reading M&T Bank (MTB) Q2 earnings smash estimates

M&T Bank (MTB) Q2 earnings smash estimates originally appeared on BloggingStocks on Mon, 20 Jul 2009 13:20:00 EST. Please see our terms for use of feeds.

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King Report: Looking more Closely at Earnings

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The Washington Post: The huge profits reported this week by some of the nation’s largest banks showed that the government is succeeding in its rescue of the financial industry, but the details of those earnings reports made it clear that the broader economy is not seeing the benefits…

Washington once celebrated such profits as evidence of economic strength, but the current round of earnings has instead become a political problem…
The core business of banking — lending money to companies and consumers — remains deeply troubled. The number of borrowers defaulting on existing loans continued to rise rapidly, and the bankscontinued to respond by shrinking the total volume of their lending…

Speculation via levered trading, inside info and electronic advantage, as well as mark-to-model/fantasy accounting allows a select few banks to greatly profit at the expense of the rest of the country. Funny money concentrates wealth so Main Street has not seen the benefits that have disproportionately accrued to Wall Street since the Great US Stock Bubble commenced over a decade ago.

The media is getting smarter. The NY Times: Citigroup and BofA Report Profits, Aided by Asset Sales Bank of America reported a $3.2 billion profit for the second quarter. Citigroup said it earned $4.3 billion during the period.

But behind the figures was a sober reality: Those happy results were driven by billions of dollars in one-time gains — in the case of Bank of America, by a profit from the sale of a stake in a big Chinese bank and, in the case of Citigroup, by a bonanza from a new joint venture for its Smith Barney division.


The week in preview: Earnings crunch expected to reveal lots of lower profits

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The earnings crunch begins in earnest this week, and analysts surveyed by Thomson Reuters are expecting a parade of companies reporting profit declines in the just completed quarter. That includes more financials, such as American Express Co. (NYSE: AXP), Bank of New York Mellon Corp. (NYSE: BK), M&T Bank Corp. (NYSE: MTB), Northern Trust Corp. (NASDAQ: NTRS), State Street Corp. (NYSE: STT), US Bancorp (NYSE: USB), and Wells Fargo & Co. (NYSE: WFC). On the other hand, Capital One Financial Corp. (NYSE: COF), E*Trade Financial Corp. (NASDAQ: ETFC), Regions Financial Corp. (NYSE: RF), and Zions Bancorp. (NASDAQ: ZION) are expected to post losses.

This week's anticipated earnings decliners also include tech companies such as Apple Inc. (NASDAQ: AAPL), Lexmark International Inc. (NYSE: LXK), Microsoft Corp. (NASDAQ: MSFT), Qualcomm Inc. (NASDAQ: QCOM), Texas Instruments Inc. (NYSE: TXN), and Yahoo! Inc. (NASDAQ: YHOO). Advanced Micro Devices Inc. (NYSE: AMD) is expected to post a loss.

Continue reading The week in preview: Earnings crunch expected to reveal lots of lower profits

The week in preview: Earnings crunch expected to reveal lots of lower profits originally appeared on BloggingStocks on Sun, 19 Jul 2009 13:00:00 EST. Please see our terms for use of feeds.

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