SEC Investor - Earnings

Goldman Sachs Weathers the Storm (GS)

SECInvestor.com — Thu, 20 Sep 2007 15:01:17 GMT

Goldman Sachs (NYSE:GS) surprised shareholders today with a 79 percent surge in fiscal third-quarter net income after sevearl of its segments reported record revenue, according an 8-K filing with the SEC. The financial services firm is one of the few banks not hit hard by subprime mortgage and credit issues.

"Given the difficult environment of the third quarter, many of our businesses were challenged," said Lloyd C. Blankfein, Chairman and Chief Executive Officer. "But overall, the quality of our franchise produced strong results as clients continue to look to us for advice and execution. The strength of our client relationships, the diversity of our businesses, and the talent and teamwork of our people continue to drive our performance."

Goldman Sachs now ranks first in worldwide announced mergers and acquisitions with its financial advisory segment reporting net revenues 64 percent higher than its previous record. Meanwhile, its brokerage business generated record commissions along with its fixed income, currency, and commodities trading segment.

The good news comes after three of Goldman Sachs' investment funds were hit last month with major trouble due to their quantitative trading system, including its flagship Global Alpha fund. As a result, the company announced that it would inject $3 billion into the troubled funds in order to preserve liquidity and help them weather the storm.

Clearly, the concerns about the credit crunch and hedge fund blow-ups were overdone when it came to Goldman Sachs. Given the strong insider buying across the financial sector, perhaps these problems aren't as great as investors had been expecting. Regardless, GS and other investment banks are definitely stocks worth watching!

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Morgan Stanley (MS)
Bear Stearns (BSC)
Merrill Lynch (MER)

A Sign of the Times

SECInvestor.com — Thu, 17 May 2007 14:25:38 GMT

The New York Times Company (NYSE:NYT) moved down marginally today after reporting April sales 2.2 percent lower on weakness in all of its print media groups. Ad revenues dropped 3.6 percent from $203.4 million to $196 million while total revenues dropped from $303.2 million to $203.4 million. Analysts and investors continue to attribute the drop to an overall decline in the print advertising market as more and more users turn to online sources for their news and information.

This thesis is confirmed when we look at the company's internet sales, which climbed 15.6 percent in all three groups. Moreover, it's About.com segment saw its ad revenues soar 26.6% to $187.1 million. It is worth noting, however, that even these growth rates are much lower than other large web properties. The NYT has the 11th largest presence on the web and if it does not quickly act to extract more revenue and greater growth figures, it may fall behind in that arena too.

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The Washington Post Company (WPO)
Gannett Co, Inc. (GCI)
Dow Jones & Company, Inc. (DJ)

RIG Posts Strong Earnings

SECInvestor.com — Thu, 03 May 2007 15:10:27 GMT

Transocean Inc. (NYSE:RIG) shares added more than 3% earlier this week after the company announced first-quarter earnings that topped analyst estimates. The company attributed the performance to net profits which more than doubled due to high oil and gas prices coupled with flat operational costs.

Transocean's conference call today addressed concerns that their drilling operations are a cyclical business and rig rentals will fall in a year or two along with the stock. A company officer reassured shareholders, saying that there is so much demand for deep water drilling that the current cycle will last well beyond 2010.

The conference call also noted that recent deep water rig rentals from other companies soared to over $500,000 per day - a number well below what RIG is charging. Obviously, any rise in Transoceans' rates would provide a direct boost to their bottom line. The reality is that oil demand is going up every year while it continues to be a scarce resource.

Meanwhile, the company's fundamentals continue to be attractive. The current P/E to growth (PEG) ratio stands at just 0.46, meaning the stock is extremely undervalued given its growth prospects. The company's forward P/E of 8x also suggests it is undervalued. Combined, these are all factors that make RIG a safe bet in the oil industry for the next few years.

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Diamond Offshore Drilling, Inc. (DO)
ENSCO International Incorporated (ESV)

RadioShack Surprises Analysts Again

SECInvestor.com — Thu, 03 May 2007 15:08:42 GMT

RadioShack (NYSE:RSH) reported first quarter earnings earlier this week that more than doubled analyst estimates causing shares in the company to rise more than 10% already this week.

The strong report comes despite negative stories out of Barron's and the Wall Street Journal along with a parody in The Onion. So, why is everyone wrong about this company? Well, RSH has recently been restructuring itself by selling off its under-performing stores.

The result has obviously been declining sales, which caused the bearish sentiment we've seen in many financial publications. What many people fair to recognize is RadioShack's gross margins, which have increased from 48% to 52% while its earnings moved from $0.14 to $0.29 per share last year.

The strategy is one that was pioneered by Sears Holdings (NYSE:SHLD) when it moved from $15 to $190 per share during its turnaround. If RadioShack follows the same road, it is likely that analysts will continue to remain bearish on the stock while its same store sales continue to sink. However, investors who are willing to weather this storm and realize the bottom-line improvements will see blue skies. These factors make RSH a stock worth watching closely over the next few quarters!

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Best Buy Co., Inc. (BBY)
Rex Stores Corporation (RSC)

Google Reports Surge in Profits

SECInvestor.com — Fri, 20 Apr 2007 16:32:59 GMT

Google Inc. (NDAQ:GOOG) reported first-quarter profits that surged on increased advertising revenue from its search segment, which continues to outperform rivals Yahoo and Microsoft. Total revenues rose 63% as the company announced its plans to expand into new products and types of advertising. This has resulted in increased spending, however, which rose from $336.6 billion in the fourth quarter to $596.9 billion in the first quarter of this year. Moreover, shareholders will have to deal with the $3.1 billion acquisition of DoubleClick earlier this month, although Google believes this will immediately begin adding to their bottom line.

In an interview CEO Eric Schmidt speculated that Google's growing efforts to broker advertisements that appear in newspapers, radio, and television would become a significant portion of their overall revenues starting in 2008. Many analysts have suggested that Google needs such a boost in order to sustain its momentum, as the company's rate of growth continues to slow. This quarter's 63% growth compares to 67% in the fourth quarter and 79% in the first quarter of 2006. But for now, the company's continued dominance in the search market (controlling 55.8% of all search queries) continues to keep investors happy. The question is: just how long?

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Yahoo Inc. (YHOO)
Microsoft Corporation (MSFT)
Time Warner (TWX)

SalesForce Choppy after Earnings

SECInvestor.com — Thu, 22 Feb 2007 16:43:35 GMT

SalesForce.com, Inc. (NDAQ:CRM) shares moved down $1.21, or 2.52% to $46.79 in choppy midday trading as investors attempt to digest the company's earnings announcement after the close yesterday. The company announced impressive numbers, but failed to wow some analysts who have extremely high expectations for the quickly growing company. Some of the most important factors to consider for companies like this are customer adoption and revenue ramp. CRM was able to surpass expectations in both of these areas after announcing impressive fourth quarter numbers. "The fourth quarter was remarkable for its strength across all business segments, products, and geographies, best demonstrated by our adding 90,000 net new subscribers, and 2,700 net new customers," said Marc Benioff, Chairman and CEO of salesforce.com. "The fourth quarter also included our largest enterprise implementation, 25,000 subscribers—the largest on-demand CRM customer ever—demonstrating the enterprise-class scalability of our solution that is unrivaled in the industry today. In fact, we added more than a thousand net new subscribers a day during the quarter for a new grand total of approximately 646,000."

Many investors, however, were concerned with the company's guidance for next year. Specifically, they are concerned that there are no short term catalysts to drive revenue and subscriber growth in the near-term future. However, the company announced that it would be increasing its full year revenue outlook, expecting to take in approximately $720m - up from $710m reported in December. Meanwhile, some analysts have also expressed concern that the company may have to continue to increase their spending to remain competitive in the CRM marketplace, which may put a drag on profitability in the future. Regardless, this company is certainly one that is growing at a blistering pace, already up over 90% from its 2006 lows. This makes CRM a stock that is definitely worth watching!

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Oracle Corporation (ORCL)

NewsCorp Gains on Movies and MySpace

SECInvestor.com — Thu, 08 Feb 2007 17:53:40 GMT

News Corporation (NYSE:NWS) shares moved up $0.44, or 1.78%, to $25.14 today after the company posted strong revenues supported by movie sales and MySpace. The company reported that MySpace’s sales had tripled from a year earlier as the company said profit margins should conservatively top 20% in fiscal 2008. President Peter Chernin also told analysts on a conference call that the company believes the segment would “over-deliver” on the $500 million in annual revenues projected three months ago. Meanwhile, operating profits in News Corp’s television business fell from $183 million to $112 million, hurt by both MyNetworkTV and Fox Broadcasting, where profits dropped 36%. The company did, however, experience great success in the hit movie “Borat” and expects the return of hit television series “24” and “American Idol” to boost future revenues in future quarters. Murdoch also said today that his company will launch their long awaited cable business news service this fall, built to rival CNBC. Combined, these factors make NWS a stock that is definitely worth watching - even if it has already moved over 50% this year.

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The Walt Disney Corporation (DIS)

eBay Jumps on News of Strong Quarter

SECInvestor.com — Thu, 25 Jan 2007 15:28:38 GMT

eBay Inc. (NDAQ:EBAY) share rose $3.20, or 10.67%, to $33.12 today after the company surprised investors with a strong finish to a mixed year. The company's 8-K filing with the SEC revealed record net revenues of $1.7 billion with a net income of $346 million, or $0.24 per share. eBay also announced that it had repurchased $1 billion worth of stock and planned to expand its program to an additional $2 billion.

Meg Whitman, President and CEO of eBay, commented, "Q4 was an excellent quarter for eBay, bringing 2006 to a very good close. All three of the company’s business units delivered impressive results this quarter, including record net revenues from our Marketplaces business, strong total payment volume on PayPal, and a triple-digit increase in the number of Skype users." Specifically, eBay saw a 24% growth in net revenues from its Marketplaces business, a 57% increase in total payment volume for its PayPal segment, and a 129% increase in the number of Skype users.

Meanwhile, Bob Swam, Chief Financial Officer, stated, "Overall, Q4 was a great quarter, with strong results across all of our businesses. The $1 billion share repurchase we executed this quarter, in addition to expanding the program for another $2 billion, further underscores our confidence in the long-term outlook of the business." These share repurchases will continue to increase the company's earnings per share, as it now expects to make between $0.28 to $0.30 for Q1 2007 and $1.25 to $1.29 for FY2007. Combined, these aspects make eBay a stock worth taking a look at over the next few months.

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E*Trade Posts Record Income, Open to M&A

SECInvestor.com — Thu, 18 Jan 2007 22:28:58 GMT

E*Trade Financial Corporation (NDAQ:ETFC) announced that its quarterly net income jumped 37% to a record $176.7 million in an 8K filing with the SEC today. The news comes after many other players in the brokerage industry have experienced similar successes, along with widespread gains in the overall financial industry. The company also reported revenues of $627 million with a profit margin of 43% - in line with last year. Chief Operating Office Jarrett Lilien commented on the results, saying that "all parts of the model performed well, with organic customer growth, more assets and cash coming in and more trading". The company said that it wants to attract more mass-affluent customers and expand internationally, opening the door to possible M&A activity. While the company's current forecasts of $1.65 to $1.80 are based on purely organic growth, they did not discount the possibility of utilizing acquisitions to reach its targets more quickly.

E*Trade Financial Corporation's principal activities are to provide differentiated trading, investing, banking and lending products, primarily through the Internet and other electronic media. It operates in two segments: The Brokerage segment provides services including automated order placement, execution of market and limit equity orders. It also includes access to nearly 5,000 non-proprietary and proprietary mutual funds; futures; bond trading and proprietary bond funds. It provides individual retirement accounts; college savings plan products; real-time market commentary and stock option plan administration products and services. The Banking segment provides consumer banking products and services. The lending services include first and second mortgage, refinance of existing mortgage and home equity loan.

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Evergreen Takes a Dive

SECInvestor.com — Wed, 01 Nov 2006 18:04:46 GMT

Evergreen Energy, Inc. (NYSE:EEE) reported wider than expected losses today in their 10Q filing with the SEC due to plant startup costs and higher operating expenses. The losses totaled $17.4 million (or $0.22 per share) compared to last years loss of only $4.9 million (or $0.07 per share). The company said it spent $17.2 million in plant startup costs (bringing the total spent to over $166 million of the years) and $31.3 million in capital expenditures in the nine months ended September 30, 2006. After all of this, its new fuel only generated $192,000 in income for the company. The company also announced that its deal with Arch Coal Inc. (NYSE:ACI) had expired. The stock is trading down 22% today after the company held its conference call.

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Google Tops Earnings

SECInvestor.com — Fri, 20 Oct 2006 14:33:17 GMT

Google Inc. (NDAQ:GOOG) reported in an 8K filing after-hours yesterday that they topped earnings estimates by $0.20, coming in at $2.62. The company impressed analysts with a net income that nearly doubled to $733.4 million while they reported that their foreign market share rose from 39% to 44%. These results suprised analysts as the stock traded up over 6% at open today.

The primary concern that investors had going into the quarter was the fact that Google was spending too much money without showing significant improvements in their bottom line. The numbers released yesterday relieved these concerns as well as some copyright infringement concerns that investors had concerning the acquisition of YouTube. The company noted that federal legislation protected the company so long as it made "good faith" efforts to remove material that infringed on intellectual property rights. All together, this release boded well for the company, as many investors are expecting Google to hit $500 before heading lower.

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Goldman Sachs Continues to Impress

SECInvestor.com — Tue, 12 Sep 2006 15:56:47 GMT

Goldman Sachs Group, Inc. (NYSE:GS) released another impressive earnings report in an 8K filed with the SEC today. This announcement comes after investors have seen the stock decline by 10% since its record last quarter, just on fears that the company wouldn’t be able to maintain its impressive growth. However, despite a seasonal slowdown in trading revenues, the investment bank still beat the street estimates, earning $3.26 per share against a $2.97 consensus.

Highlights featured in an attached press release included:

During the third quarter, Goldman Sachs surpassed its previous annual record for net revenues and earnings per common share.
The firm continued its leadership in investment banking, ranking first in worldwide announced and completed mergers and acquisitions, equity and equity-related offerings and public common stock offerings for the calendar year-to-date. (3)
Fixed Income, Currency and Commodities (FICC) generated its third highest quarterly net revenues of $2.74 billion.
Assets under management increased to a record $629 billion, 21% higher than a year ago, including net asset inflows of $30 billion during the quarter.
Securities Services produced its second best quarterly net revenues of $537 million.

So, will this growth continue? Well, the company announced that it would buyback an additional 60 million shares which certainly shows a lot of confidence. Moreover, the 8K also mentioned that the company’s strong backlog remains strong and shows no signs of slowing down. The company has great management that has consistantly shown its ability to outperform. With a share price down 10% on speculation that this quarter would be bad, this may be a good time to pick up some shares after this notion was proven wrong. Other companies to watch include competitors Lehman Brothers (LEH), Bear Stearns (BSC), and Morgan Stanley (MS) - all due to announce their own results over the next week.

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Dell Takes a Dive After Hours

SECInvestor.com — Thu, 17 Aug 2006 21:33:19 GMT

Dell Inc. (NDAQ:DELL) fell after hours today after it released its 8K filing to the SEC, which announced disappointing earnings and revealed that it is currently involved in an informal SEC investigation into the ways it booked revenue during the past year.

Dell's earnings were cut in half from $0.41/share a year ago to just $0.22/share today, which was below analyst expectations. The company attributed this to "aggressive pricing in a slower market". Perhaps as a consequence, Dells market share did increase by 6% to 19.3% - most of that growth coming from outside of the United States. The company's CEO said the following:

"While we are disappointed with the results for the quarter, we are taking the necessary actions to correct missteps and improve our results for the long term," said Kevin Rollins, Dell chief executive officer. "Key actions include accelerating cost initiatives, increasing investments in service and support, and better pricing management."

Meanwhile, the company also announced an SEC investigation:

"In August 2005, Dell received notice from the U.S. Securities and Exchange Commission that it was conducting an informal investigation of the company. The notice stated that the investigation is not an indication that any violations of law have occurred. The SEC has requested information relating to revenue recognition and other accounting and financial reporting matters for certain past fiscal years, and Dell has been cooperating. In the course of responding to the requests, the company recently discovered information that raises potential issues relating to certain periods prior to fiscal 2006. While the company does not believe that these issues have had or will have any material impact on its financial position or the reported results of operations for the relevant years, the company's audit committee, upon the recommendation of management, has initiated an independent investigation. Management is committed to addressing any questions, concerns or issues the SEC or the audit committee may have."

Note that companies are not required to disclose anything that is not material. As a result, this is the first time we've heard of this SEC investigation dating back to August of 2005. The cause for concern is that the company's internal investigation has "discovered information that raises potential issues relating to certain periods prior to fiscal 2006". Whether or not this will have a material affect on the company has yet to be seen; however, it is something that will be held over Dell's head until resolved.

Currently, Dell is trading at a PE of around 19, which is at a discount to their industry and most of their peers. Provided Dell is able to find itself innocent of any wrong doings with the SEC and recover from its pricing mistakes, it could represent a great buy at these levels.

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