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Applied Materials Weathers Storm – US-FOREX.US

Forex-Publisher — Mon, 10 Aug 2009 20:46:30 +0000

Investors have accepted that 2009 isn’t the year for Applied Materials, making Tuesday’s fiscal-third quarter report an assessment of how well the semiconductor equipment maker has handled the downturn and positioned itself for the future.
In June, Applied Materials
‘ chief executive Mike Splinter warned of more failures in the industry as the number of customers declines. Splinter said that chipmakers are working together to survive weak demand and high development costs, but no such cooperation is occurring among equipment makers like Applied Materials. Splinter said acquisitions in the chip-gear sector are very difficult to conduct, leaving few options for consolidation, other than a company’s outright failure.
Wall Street expects the company to report a loss of 8 cents per share on Tuesday, well off its 14 cents profit recorded in last year’s corresponding period. Since the beginning of the year the company’s market value has risen 32.8%. Peers such as Novellus Systems
and Lam Research
have risen 45.4%, and 36.0%, respectively, over the same period. Meanwhile, the semiconductor industry, as measured by the SPDR S&P Semiconductor
ETF, has gained 56.1%, while the broader Technology SPDR
ETF has risen 27.4%.
The year got off to a rough start. Back in February, Applied Materials reported its first loss in more than five years, thanks to declining semiconductor demand and continued weakness in credit markets. The company also didn’t provide guidance for the rest of the year, only to say sales were expected to fall across its businesses.
Despite the bleak outlook, the company continued to push into the solar energy business. Applied Materials has already moved aggressively into the space over the past three years, but in an interview with Forbes earlier this year, Splinter talked about how he wanted more.

July Job Cuts Expected To Wane – US-FOREX.US

Forex-Publisher — Thu, 06 Aug 2009 18:46:12 +0000

Wall Street may be encouraged by the waning level of job losses on Friday, but it will mean little to Americans stuck in unemployment lines and struggling to make ends meet.On Friday, the U.S. Labor Department is expected to announce that the national unemployment rate rose to 9.7% in July, as 300,000 Americans lost their jobs. Though large, the reading would be below June’s drop of 467,000. Dean Maki, chief U.S. economist at Barclays Capital, expects nonfarm payrolls to fall by 275,000 in July, which would mark the weakest contraction since August of 2008. Maki’s view is held by fellow economist Abiel Reinhart of JPMorgan Chase, who also expects payrolls to fall by 275,000.No matter what the figure ultimately is, it will be seen only as another jobless increase by the general public. Not only is unemployment at its highest level since the early 1980s, but also Americans have been out of work for the longest amount of time since 1948, when the government began keeping track. The average length of unemployment in June was 24.5 weeks, while 29% of the unemployed had been out of a job for 27 weeks or more. In a recent interview, Christian Weller, a senior fellow at the Center for American Progress and associate professor of public policy at the University of Massachusetts, Boston, argued that the current labor market is not comparable to that of the early 1980s because of the length of time it has taken to find a new jobs. Furthermore, the unemployment rate itself does not account for those working part-time jobs who would rather have full-time work.Prolonged unemployment has become a pressing problem for Americans, and policymakers, as an increasing number of individuals and families exhaust their jobless benefits, leaving them without the means to pay their mortgages, credit card bills, and food, not to mention the normal discretionary items that spur economic growth. Stagnated unemployment is also expected stymie the current recovery effort, as the U.S. economy loses the power of its vaunted consumer. Consumer weakness was exhibited in July weak retail sales. Forced to focus on the necessities, venders reported results slightly below expectations, pressuring shares of Wal-Mart Stores
, Costco Wholesale
, and Target
. The SPDR S&P Retail
exchange-traded fund on the other hand actually rose 0.8% in midday trading.
The only measure of solace Americans can take is that the intensity of payroll cuts have shown signs of waning. On Thursday the Labor Department reported individuals applying for jobless benefits for the first time fell to 550,000 for the week ending Aug. 1, down from an upwardly revised figure of 588,000 in the previous week. Furthermore, initial jobless claims declined an average of 57,000 from June to July, though partly owing to seasonal distortions. Friday’s employment report follows one delivered Wednesday by ADP Employer Services, which found the U.S. private sector terminated 371,000 positions in July. The finding was well below June’s revised 463,000 reading, but slightly ahead of the 345,000 fall analysts had expected. The data were developed with Macroeconomic Advisers.To be sure, problems remain. Global outplacement consultancy Challenger, Gray & Christmas, said planned layoffs at U.S. firms increased in July for the first time in six months to 97,373, and more than 30% from June when it had hit a 15-month low. Meanwhile, of people continuing to claim benefits rose last week by 69,000 to 6.3 million, after dropping for three straight weeks.

MBIAs Split – US-FOREX.US

Forex-Publisher — Wed, 05 Aug 2009 22:46:13 +0000

The housing industry appears to be working its way back to health, and investors will find out Thursday if the same can be said for bond insurer MBIA.Wall Street expects MBIA
to report a loss of 92 cents per share on Thursday. MBIA’s report will be followed Friday by fellow bond insurer Ambac Financial
which is expected to record a loss of 1.04. During the hay-day of the 2000s, MBIA’s stock traded around the high 50s and low 60s. All that changed in the fall of 2007 when the walls came tumbling down, leaving MBIA and other bond insurers like Ambac struggling to maintain their investment-grade rating. They weren’t successful, which was a major blow as the purpose of bond insurance is to enable municipalities with lower credit ratings to ride on the higher rating of the insurer, thereby lowering their borrowing costs.The industry owes much of its problems to the ill-fated ploy to boost profits earlier this decade when it diversified into backing mortgage-backed securities, from the relatively safe but lower-margin business of guaranteeing municipal bond payments. Municipal bonds rarely default, whereas over-extended homeowners often do.By February of 2009, the company opted to split itself into two parts, with one focusing on international and structured finance, while the other covers public finance. ;”>”MBIA Splitting Itself Up.” and “Can MBIA Save its Bond Business?”) Since the beginning of the year MBIA’s stock has mounted something of a comeback, rising 31.5% to 5.35. In contrast, its chief rival Ambac Financial has faltered 10.8% since January. The industry is still experiencing problems, and the past week was particularly tumultuous. Last week Standard and Poor’s cut its rating on Ambac and its insurance arm to a very speculative level. The rating cut was quickly followed by Moody’s which said Ambac’s insurance arm is at high risk of regulatory intervention, thus increasing the likelihood that counterparties to the insurer will have to toss contracts they hold with the firm at a large loss.

Disney Seeks Digital Magic – US-FOREX.US

Forex-Publisher — Thu, 30 Jul 2009 07:46:03 +0000

Walt Disney hopes to show its movies overcame the weak economy and waning ad market during its fiscal third quarter, but Wall Street is more interested in its ideas about how to monetize the Internet.
Disney
‘s market value has risen 14.1% since the beginning of the year. The Street expects the media conglomerate’s quarterly earnings will reach 51 cents per share, below the 62 cents recorded in last year’s corresponding period. Disney’s report on Thursday will follow fellow conglomerate Time Warner
, which announced on Wednesday that, despite a falling ad market, it topped expectations thanks to its cable networks, and the success of the buddy-wedding comedy The Hangover.Disney, whose businesses include film, television, parks and resorts, as well as consumer products, is counting on a similar success. Basic earnings forecasts aside, investors will be anxious to learn more about the company’s plans to navigate an uncertain future in the digital world. Disney, led by Chief Executive Robert Iger, is working to be on the forefront of monetizing the Web. So far, it’s only left media companies-notably newsrooms-with eroding sales and unfulfilled promises. Iger expects that will change as the industry abandons the “free” model and begins using numerous methods to monetize content. Citing Disney’s own experience with making movies and television programming available on the Internet, he recently said there is significant room for charging fees. Among other things, he estimated that consumers would pay 5 per hour to see a movie playing in theaters, 75 cents to read a book or magazine, 50 cents per hour for cable content, and 25 cents per hour for Internet content.Iger also said ads will quickly become more sophisticated as companies begin following individual preferences and selling that information to advertisers. Disney also recently embarked on a new collaboration with Taiwanese manufacturer Asus to make the computer maker’s lightweight, pared-down laptops even more kid-friendly.

Time Warner- US-FOREX.US

Forex-Publisher — Fri, 24 Jul 2009 21:46:05 +0000

Time Warner is hoping the magic of the movies will act as a counterweight to falling advertising revenue.Wall Street expects the company to report second-quarter earnings of 37 cents per share on Wednesday, nearly half of the 72 cents it pulled in a year ago. Since the New Year, Time Warner
‘s stock has remained relatively flat, falling 8.6%. Peers such as Walt Disney
and News Corp.
have risen 17.1% and 8.8%, respectively. CBS
meanwhile, has slipped 4.4%. The company, which recently spun off Time Warner Cable
, is expected to benefit from its big- budget movie productions. Studios like Warner Bros. and Paramount are outperforming expectations, filling the summer season with big-banner blockbusters. Warner Bros.’ Alan Horn has sought safety in big budgets during the economic downturn, opting to spend more per film, yet on fewer films. Warner Bros. angered fans when it decided almost at the last minute to push Harry Potter and the Half-Blood Prince from its original November 2008 opening date to July 15, 2009. The move will likely prove to have been very savvy.

BBT Looks Strong But Questions Remain – US-FOREX.US

Forex-Publisher — Thu, 16 Jul 2009 22:46:07 +0000

BB&T is expected to announce a strong second quarter Friday, but Wall Street isn’t convinced its credit losses are as clean the regional bank’s books suggest.”BB&T
will probably report a decent quarter tomorrow,” said FBR Capital Markets analyst Paul Miller, who expects earnings of 17 cents per share. “I wouldn’t be completely shocked if they reach the 20-range, which could happen if they get meaningful margin expansion.” Wall Street, on average, is expecting earnings of 28 cents per share, according to Thomson Reuters.BB&T has a solid franchise, and appears to have done a great job at keeping losses low. Paul Miller is skeptical though, and expects its credit losses will catch up with normal levels. It would be difficult for a retail lender like BB&T to avoid industry-wide problems related to consumer loans and rising national unemployment levels. In a recent report, Miller warned of exposure that includes 7.5 billion in residential acquisition, development and construction loans. “We are also concerned about management’s guidance for losses to improve in the second half of 2009,” Miller said, “and believe that losses in Atlanta, specifically, will be more material than management expects.”Since the beginning of the year, BB&T shares have lost 18.7% of their value, while competitors such as SunTrust Banks
and Regions Financial
have tumbled 42.9% and 47.0%. On a whole, the regional banking sector has fallen 35.2%, as measured by the SPDR KBW Regional Banking
exchange-traded fund.
Goldman Sachs
and JPMorgan Chase
have reported banner quarterly reports, but details offer a more complicated picture. For example, at JPMorgan, loans fell and deposits dropped from the previous quarter, meanwhile the pace of non-performing loans appeared to increase. CIT Group
, a major small- and medium-size lender, meanwhile is close to filing bankruptcy protection.

BofAs Consumer And Real Estate Woes – US-FOREX.US

Forex-Publisher — Thu, 16 Jul 2009 21:46:20 +0000

Paul Miller of FBR Capital Markets expects strong top-line numbers from Bank of America
on Friday, especially coming out of Merrill Lynch. “It was much more active in the second quarter,” Miller said. “Trading revenue from Goldman Sachs
and JPMorgan Chase
were strong, and I don’t expect anything different from BofA.”On average, Wall Street analysts expect BofA to report earnings of 28 cents per share. JPMorganChase and Goldman both reported impressive second quarter results. The difference between BofA and JPMorgan though is that BofA has more consumer credit exposure. Further, Miller noted, unlike JPMorgan, BofA is loaded with exposure to the troubled commercial real estate market. Friday will also be a major test for BofA’s chief executive Ken Lewis, whose leadership has been brought under question by shareholders. BofA has fared relatively well over the course of the year, falling “only” 6.8%, while other big banks like Wells Fargo
and Citigroup
have slid 16.0% and 54.7%, respectively. JPMorgan meanwhile has risen 13.3%. The SPDR KBW Bank
exchange-traded fund, which follows the banking industry, has fallen 15.5% in 2009, while the Financial Select Sector SPDR
ETF has slipped 3.4%. BofA’s report comes as its acquisition of Merrill Lynch is under scrutiny. On Thursday, former Treasury Secretary Hank Paulson revealed he pressured Lewis to not back out of BofA’s acquisition of the troubled brokerage house. In a lengthy hearing before Congress, Paulson defended his actions as appropriate, and in the best interest of both the country and the two companies.
Meanwhile, Representative Ed Towns, Chairman of the Committee on Oversight and Government Reform, announced on Wednesday that he sent a letter to Lewis regarding recent reports that BofA is not planning to pay the government for financial protection it provided against the bank’s toxic assets. Towns said he has requested Lewis provide him an update on the dispute by Thursday.

Citigroup Fights To The Finish – US-FOREX.US

Forex-Publisher — Thu, 16 Jul 2009 21:46:12 +0000

Citigroup, which is set to report second-quarter earnings on Friday, has been trying to come out ahead by handling operations and troubled assets, not to mention reshuffling management. But will it pay off?Wall Street’s wide range of projections average out to a loss of 37 cents per share. Jason Goldberg of Barclays Capital is optimistic about Citigroup’s quarter, expecting an operating loss of 25 cents per share. Goldberg’s outlook jumps to a gain of 85 cents when including one-time charges, namely the 2.8 billion it accrued from Smith Barney’s joint venture with Morgan Stanley.”We’re constructive on the bigger banks and kind of take a pause when looking at the more regional, midsize players,” Goldberg said. “The bigger banks are benefiting from a good revenue environment amid a strong capital markets backdrop, good mortgage banking activity and a steep yield curve.”Since the beginning of the year, Citi’s shares have tumbled 54.7% over operational struggles and a number of managerial changes. Other big banks like Bank of America
and Wells Fargo
have fallen 6.8% and 16.0%, respectively, while JPMorgan Chase
has risen 13.3%. The SPDR KBW Bank
exchange-traded fund, which follows the banking industry, has fallen 15.5% in 2009, while the Financial Select Sector SPDR
ETF has slipped 3.4%. Citigroup’s report comes on the same day as Bank of America, and follows strong results from JPMorgan and Goldman Sachs
.

JPMorgans Summer Blockbuster – US-FOREX.US

Forex-Publisher — Thu, 16 Jul 2009 16:46:05 +0000

JPMorgan Chase blew past Wall Street’s second-quarter expectations, but the bank faces difficulties navigating credit and loan losses in an uncertain environment.
JPMorgan Chase
reported earnings of 2.7 billion, or 28 cents per share, ahead of the 2.0 billion, or 53 cents per share, recorded in last year’s corresponding period. The Street had predicted earnings of 4 cents per share. JPMorgan’s year-over-year earnings per share fell because of the increased amount of outstanding shares.Despite the good news, JPMorgan’s stock slipped 1.1%, or 39 cents, to 35.87. The Financial Select Sector SPDR
exchange-traded fund also slid 1.2%, or 15 cents, to 12.11, while the SPDR KBW Bank
ETF decreased 0.6%, or 11 cents, to 18.64. Thursday’s report came with its share concerns. In the second quarter, Chase’s credit card portfolio saw 8.8% charge-offs, while the Washington Mutual portfolio “trended toward” 18%-24% charge-offs. JPMorgan Chief Executive Jamie Dimon said it was unlikely that the company’s credit card business will make money in 2010, according to TradeTheNews.com. JPMorgan also sees WaMu credit losses approaching 24% by the end of the year, with Chase losses approaching 10% in the third quarter.Dimon expects to add to loan loss reserves in the third and fourth quarters, and said that commercial real estate will continue to worsen for the next several quarters. Though it will not be significant for JPMorgan’s numbers, he does expect commercial real estate trouble to be “a big deal” for regional banks.Overall trading is expected to remain volatile, as well as an uncertain environment. Dimon said that there will need to be an improvement in conditions and charge-offs before the company increases its dividend, adding that it could happen in the early part of next year. He also said the company would repurchase shares when deemed appropriate.
JPMorgan has emerged from the financial crisis relatively unscathed. Dimon has guided it in a good direction by picking up big-ticket assets like Bear Stearns and WaMu, making him one of Wall Street’s “big men on campus”. According to the league tables compiled by Dealogic, JPMorgan was a leader in equity offerings and bond underwriting, and was only behind Goldman Sachs
in merger advisory. Yet, while Goldman’s shares have risen 83.5% since the beginning of the year, JPMorgan has only grown 13.4%. Unlike pure-play brokers, JPMorgan also has a sizable loan portfolio, tying it to the issues related to mortgages, bank equity and credit cards. Still, the company has managed to outperform the Financial Select Sector SPDR ETF, which has slipped 3.6% in 2009, and the SPDR KBW Bank ETF, which has tumbled 15.8%.Uncle Sam has also taken a bite out of JPMorgan’s bottom line. Last month, prominent banking analyst Dick Bove cut his full-year earnings outlook to 1.23 per share, from 1.61. Bove, who is vice president of equity research at Rochdale Research, made his call on account of a Federal Deposit Insurance Corporation assessment charge, as well as costs related to the Troubled Asset Relief Program.On Tuesday, Goldman announced it beat quarterly expectations, thanks to record trading revenue and diminished competition.

All Eyes On JPMorgan – US-FOREX.US

Forex-Publisher — Wed, 15 Jul 2009 20:46:05 +0000

JPMorgan Chase has emerged from the financial crisis relatively unscathed, and investors are looking ahead to its second-quarter results, due out Thursday. The company’s chief executive Jamie Dimon has guided it in a good direction by picking up big-ticket assets like Bear Stearns and Washington Mutual.Jason Goldberg, an analyst at Barclays Capital, expects JPMorgan’s second quarter to produce earnings of 10 cents per share, below his prior estimate of 40 cents, but still ahead of the Street’s 4 cents outlook. The bank excels in its core operations, and Goldberg expects solid profitability with continued strength in its capital markets and mortgage banking. He also sees a rebound in asset management.According to the league tables compiled by Dealogic, JPMorgan
emerged as a leader in all areas of investment banking activity from M&A advisory, to equity offerings to bond underwriting. It topped both equity and debt underwriting, and was only behind Goldman Sachs
in merger advisory.Yet while Goldman’s shares have risen 82.8% since the beginning of the year, JPMorgan has only grown 14.5%. Unlike pure-play brokers, JPMorgan also has a sizable loan portfolio, tying it to the issues related to mortgages, bank equity and credit cards. Still, the company has managed to outperform the broader financial sector, which has slipped 3.3% in 2009, as measured by the Financial Select Sector SPDR
exchange-traded fund and the SPDR KBW Bank
ETF, which has tumbled 15.6%.Uncle Sam will also take a bite out of JPMorgan’s bottom line. Last month, prominent banking analyst Dick Bove cut his full-year earnings outlook to 1.23 per share, from 1.61. Bove, who is vice president of equity research at Rochdale Research, made his call on account of a Federal Deposit Insurance Corporation assessment charge, as well as costs related to the Troubled Asset Relief Program. In the second quarter, these hits are expected to cost JPMorgan 39 cents a share.On Tuesday, Goldman announced it beat quarterly expectations, thanks to record trading revenue and diminished competition. JPMorgan’s stock rose 5.2%, or 1.79, to 436.49, in late-afternoon trading on Wednesday.