BloggingStocks

Before the bell: BCE, HAL, MOT, FSLR, GOOG, AAPL, MO ...

Melly Alazraki — 2008-06-23T08:21:00+00:00

Filed under: Before the bell, Analyst reports, Analyst upgrades and downgrades, Deals, Google (GOOG), Apple Inc (AAPL), Motorola (MOT), Halliburton (HAL), Nokia Corp. (NOK), Penney (J.C.) (JCP), Altria Group (MO)

Before the bell: Wall Street set to rebound boosted by deals

BCE Inc. (NYSE: BCE) shares are jumping over 10% in premarket trading after Canada's Supreme Court overturned a Quebec Court decision, clearing the way for the $52 billion leveraged buyout by Ontario Teachers' Pension Plan and U.S. private equity firms. The buyers might still negotiate the price down though.

Halliburton (NYSE: HAL) withdrew a $3.6 billion offer for Britain's Expro International after the U.K. oil services firm stuck by a smaller bid from a private-equity consortium.

Some analyst calls this morning:

J.C. Penney Co. (NYSE: JCP) was upgraded by Deutsche Bank to Buy from Hold and the price target upped to $46 from $45.
Motorola Inc. (NYSE: MOT) was downgraded by Piper Jaffray to Sell from Neutral on continued weakness in North American market. The target price was cut to $7 from $9.75. Shares are down over 2% in premarket trading.
First Solar (NYSE: FSLR) price target was upped at Lehman Brothers from $280 to $335. Shares are up over 2.5% in premarket trading.

The Wall Street Journal reports that Google Inc. (NASDAQ: GOOG), which along with more than 30 partners announced in November a plan for new handsets based on the Android mobile software to be out by the second half of this year, now says that the handsets won't arrive until the fourth quarter. And even this belated schedule is a problem for some of its partners.

Meanwhile, Softbank, the carrier that would distribute Apple Inc. (NASDAQ: AAPL)'s iPhone in Japan, said Monday it will sell for 23,040 yen, or $215. But the discount isn't so obvious as Softbank said people will get a discount in their mobile phone bills that will calculate to their paying $215 for the iPhone over two years.

Nokia (NYSE: NOK) said on Monday it would buy social networking start-up Plazes -- a smaller rival to services like Twitter and Jaiku -- as it tries to expand into Internet services. The price was not disclosed.

Altria Group Inc (NYSE: MO)'s Philip Morris USA has cancelled its Marlboro Ultra Smooth cigarettes in a move firther highlighting its challenges to grow its tobacco business as U.S. cigarette sales decline, according to The Wall Street Journal.

Permalink | Email this | Linking Blogs | Comments

Five scary stories for Friday the 13th

Melly Alazraki — 2008-06-13T16:35:00+00:00

Filed under: Yahoo! (YHOO), Wal-Mart (WMT), Ford Motor (F), General Motors (GM), Exxon Mobil (XOM), Altria Group (MO), Anheuser-Busch Cos (BUD), Boeing Co (BA), ConocoPhillips (COP), Amer Intl Group (AIG), BP p.l.c. ADS (BP), US Airways Group (LCC), Lehman Br Holdings (LEH)

Gather around the campfire and let me tell you such scary stories Jason's mask would fail to impress you after that.

Of course, the theme that runs in the background of these scary stories is the state of the economy in the U.S., from the housing slump, inflation and soft labor markets to weak dollar, excessive government spending and increasing national debt load and trade gap.

1. Exxon Mobil and Oil

So scariest of all stories is oil. With prices reaching new records nearly daily, gas prices have also zoomed higher, crossing the $4 a gallon mark. Why, then, is Exxon Mobil (NYSE: XOM) exiting the retail gas business. To be sure, BP (NYSE: BP) and ConocoPhillips (NYSE: COP) have either indicated taking such measures or have taken them already. Apparently, gas prices haven't been rising fast enough to keep pace, causing margins to narrow and for cents-earned-per-gallon to be dismal.

One would then think it's a good move by Exxon and the other oil giants to get out of the retail gas business, but I have questions. First, it's alarming that companies with revenues in the hundreds of billions of dollar look for ways to make even more money (even if YTD XOM is down 6.4%). Second, and most important, what could it mean for the consumer? As Doug McIntyre suggested, would the price of gas at the pump increase even more after the sale to private owners than when it was sold under Exxon? Scary indeed.

2. Cars and Ford

Related to oil is, of course, cars. Car makers particularly have been the perfect example of the effects of high oil prices on industry, consumer choices and the labor market. Detroit has suffered from a slowdown long before it was felt throughout the U.S. with one of the worst housing market and workers being laid off by General Motors (NYSE: GM), Chrysler, and Ford Motor Co. (NYSE: F). Why then would Kirk Kerkorian choose to increase his stake in Ford and at such a premium too? Is it any wonder the tender is oversubscribed? What does he know that we don't? If the Big Three's state of affairs isn't scary, I don't know what is.

3. Airlines and U.S. Airways

And from one form of transportation to another. If Ford and GM look in a bad shape, the airlines look even worse, some probably closer to bankruptcy than anyone would like admit. The culprit? Oil. The result? Layoffs, price increases and ridiculous practices. At least the car companies have some restructuring plans already in place. The airlines? Other than reduce the weight on their current airplanes, all they can do is wait for Boeing's (NYSE: BA) new Dreamliner, which is supposedly more fuel efficient. Deliveries of the new jet will not occur before the third quarter of 2009.

It is no wonder U.S. Airways (NYSE: LCC), which may confuse some with today's stock jumping 10%, is actually down nearly 80% YTD. U.S. Airways announced Friday it will cut 1,700 jobs and charge passengers $15 to check their first bag, but that's not all. Other than reducing flights, it will also charge fliers $2 for soft drinks and water, $7 for alcoholic beverages and $25-50 for redeeming frequent flier miles. There are other measures the airline will take that would hurt consumers. I'm not even sure how much these measures could help some of the airlines, but I am sure sad times are ahead for some.

4. Retail and Wal-Mart

With the consumer accounting for nearly 70% of economic activity, retail sales have been closely watched. In May, sales figures surprised economists as the rebate checks worked better than expected. One major beneficiary was the world's biggest retailer, Wal-Mart Stores Inc. (NYSE: WMT). Now, have you seen the chart lately? Have you compared it to the S&P 500? Here, let me show you:

What's so scary about this chart you may ask? While not exactly a negative correlation to the broader stock market index, some parts of the chart come pretty amazingly close.
And why is it scary? Few reasons: One is that Wal-Mart has by now proven it is doing well in bad times. Given the stock has been climbing, up over 24% YTD, what does it mean for the market, the economy -- set for more declines? For the past three years Wal-Mart has traded in a $44-$50 range, today it came very close to breaking $60. Could it mean the economy would get even worse? And finally, if you're a Wal-Mart shareholder, what do you wish for? I'll leave others to answer that.

5. Other scary tidbits

Is Anheuser-Busch (NYSE: BUD) going the way of the Yahoo! (NASDAQ: YHOO)? Is BUD also trying to thwart a good offer for reasons not related to sound business rationale? Is an overblown ego going to ruin yet another sensible merger?
Have we seen the last of the financial turmoil? Will there be another Bear Stearns? Why do Lehman (NYSE: LEH), AIG (NYSE: AIG) and KeyCorp (NYSE: KEY) -- to name but a few -- insist on scaring us?
Can Altria (NYSE: MO)'s Phillip Morris really develop a smokeless cigarette? And how long before we find out the health implications of that one?

Permalink | Email this | Linking Blogs | Comments

Companies that vanished: General Foods gobbles up rivals, then gets gobbled

Trey Thoelcke — 2008-06-09T10:15:00+00:00

Filed under: Products and services, Competitive strategy, Altria Group (MO), Kraft Foods'A' (KFT), Entrepreneurs

This post is part of a series on some of the most memorable companies that have disappeared.

The history of General Foods can be traced back to the Postum Cereal Company, founded by Charles William Post, inventor of Postum and Grape Nuts, in 1895. Wall Street player E.F. Hutton in time became the chairman, and he initiated a series of acquisitions beginning in 1925: Jell-O, Minute Tapioca, Log Cabin, Hellmann, Calumet Baking Powder, and Birdseye. It was after the Birdseye acquisition in 1929 that the food conglomerate became General Foods.

Among General Foods' many product offerings were Sanka decaffinated coffee and the astronaut's favorite, Tang. General Foods also continued to make acquisitions, including the makers of Kool-Aid in 1953, the Burger Chef restaurant chain in 1968, and Oscar Mayer in 1981.

But late in 1985, General Foods was itself acquired by Philip Morris Cos., which later became Altria Group (NYSE: MO), in the largest non-oil acquisition to date. When Philip Morris acquired Kraft in 1988, the two food companies were merged. In 2007, Altria spun off Kraft Foods (NYSE: KFT), which now owns such former General Foods brands as Jell-O, Kool-Aid, and Maxwell House coffee. And it was announced in late 2007 that Post Cereals, including Grape Nuts, would be sold to Ralcorp Holdings (NYSE: RAH).

So although General Foods may be gone, many of its most popular brands can still be found on supermarket shelves.

Let us know in the comments what you miss about General Foods. And be sure to check out other Companies That Have Vanished.

Permalink | Email this | Linking Blogs | Comments

Before the bell: AAPL, GM, UBS, BUD, MO, MSFT, GS ...

Melly Alazraki — 2008-05-27T08:23:00+00:00

Filed under: Before the bell, Analyst reports, Analyst upgrades and downgrades, Microsoft (MSFT), Apple Inc (AAPL), General Motors (GM), Altria Group (MO), Anheuser-Busch Cos (BUD), Goldman Sachs Group (GS), Morgan Stanley (MS), Lehman Br Holdings (LEH)

Before the bell: Futures mixed after break, ahead of data

Apple Inc. (NASDAQ: AAPL) has managed to cover yet another area of the globe. TeliaSonera AB, Sweden's largest telephone company, said it will start selling the iPhone later this year in countries in the Nordic and Baltic region: Sweden, Norway, Denmark, Finland, Lithuania, Latvia and Estonia.

General Motors Corp. (NYSE: GM), which saw its shares reaching 1982 levels Friday, also saw its shares downgraded by Citigroup from Buy to Hold and cut his price target to $21 from $32. The analyst said "the automaker will likely burn through $7 billion in cash through 2009 and may need to raise more capital."

UBS (NYSE: UBS) shares are plunging 14% in premarket trading after on Monday warned it may record further losses on real estate holdings outside the U.S. It seeks nearly $16 billion from shareholders to repair its balance sheet.

Altria Group (NYSE: MO), which holds about 29% of SABMiller, rose in London trade on speculation that if Anheuser-Busch (NYSE: BUD) rejects InBev's speculated renewed attempts to buy it, InBev may then go after SABMiller instead. Meanwhile, Deutsche Bank analyst downgraded BUD to Hold from Buy, saying the brewer may have to make damaging cost cuts if it is bought by InBev. However, according to many reports, merger talks between InBev and Anheuser Busch could start today.

Microsoft Corp (NASDAQ: MSFT) managing director of OEM embedded devices Asia told Reuters the software company expects global unit sales of its Windows Mobile software for cellphones to grow at least 50% per year in 2008 and 2009 as demand for smartphones rises rapidly.

Bank of America and Bernstein cut forecast for the following banks: BofA forecast a second-quarter loss for Lehman Brothers (NYSE: LEH) and cut its earnings outlook for Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS). Banc of America analyst Michael Hecht said said brokers may continue to underperform in the current challenging credit environment.

Permalink | Email this | Linking Blogs | Comments

Altria (MO) gets a boost from lenient cigarrette legislation

Brent Archer — 2008-05-13T14:35:00+00:00

Filed under: Good news, Industry, Law, Altria Group (MO), Options, Technical Analysis, Politics

Altria (NYSE: MO) shares are trading higher today, getting a boost from news that menthol is getting special protection in a new bill as Congress attempts to regulate the tobacco industry. Menthol brands, which make up about one-fourth of the US tobacco output, is getting an exemption from a ban on cigarette flavoring like cinnamon and clove. 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 MO.

After hitting a one-year high of $79.59 in January, the stock spun-off Phillip Morris International (NYSE: PM) in March and hit a one-year low of $19.95 early this month. MO opened this morning at $21.57. So far today the stock has hit a low of $21.50 and a high of $21.94. As of 1:00, MO is trading at $21.85, up $0.27 (1.2%). The chart for MO looks bearish and steady, while S&P gives the stock its highest 4 Stars (out of 5) strong buy rating.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $20 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 19.0% return in just four and a half months as long as MO is above $20 at September expiration. Altria would have to fall by more than 20% before we would start to lose money. Learn more about this type of trade here.

MO hasn't been below $20 by more than a few cents in the past year and has shown support around $21 recently. This trade could be risky if the legislation of tobacco gets tougher in the coming months, but even if that happens, that position could be protected by support the stock might find just above $20, where it bottomed out in the past month.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent controls a bullish hedged trade on MO and PM.

Permalink | Email this | Linking Blogs | Comments

D.R. Horton (DHI) swings to 2Q loss on hefty charges

Eliza Popescu — 2008-05-06T08:50:00+00:00

Filed under: Earnings reports, Bad news, Consumer experience, Altria Group (MO), Economic data, Housing

Shares of D.R. Horton Inc. (NYSE: DHI), the largest U.S. home builder, were plunging in premarket after the company reported a large second quarter loss this morning. Its quarterly numbers were dragged down by the slumping housing market which forced the homebuilder to take hefty charges to write down the value of its inventory.

The company reported a loss of $1.31 billion, or $4.14 per share . The income figures were definitely nothing to cheer about. During its second quarter last year, the company had a profit of $51.7 million, or 16 cents per share, but that number was slashed this quarter as the homebuilder took pretax write-down charges of $834.1 million.

Wall Street analysts expected the company to have a quarterly loss of "only" 39 cents per share. So with the actual numbers, D.R. Horton is looking for a pretty bad day in today's session.

Looking at the quarter's revenue figures, we see a year-over-year plunge of 40%, dropping to $1.62 billion from $2.62 billion. During this period, D.R. Horton saw its home sales decline 31.4%, while net orders plunged 24.6%. Analysts, on average, forecast revenue of $1.36 billion in the second-quarter, according to Thomson Financial.

The company had a pretty difficult 2007, as the homebuilder struggled in the current financial environment, but it has shown some signs of improvement this year. However, with today's weak earnings figures D.R. Horton disappointed investors who pushed shares of the company down 7.64% in pre-market trading.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.

Read | Permalink | Email this | Linking Blogs | Comments

Altria (MO) boosts cigarette prices

Brent Archer — 2008-05-05T13:50:00+00:00

Filed under: Good news, Altria Group (MO), Options, Technical Analysis

Altria Group (NYSE: MO) shares are trading higher after the company announced it is cutting promotional discounts and raising prices on cigarette brands starting today. This move was made to stem losses from lower cigarette volumes. 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 MO.

After hitting a one-year low of $19.47 in July, the stock hit a one-year high of $24.55 in January. MO opened this morning at $20.75. So far today the stock has hit a low of $20.50 and a high of $20.86. As of 12:40, MO is trading at $20.79, up $0.36 (1.7%). The chart for MO looks bearish but improving, while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $19 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 26% return in just four and a half months as long as MO is above $19 at September expiration. Altria would have to fall by more than 8% before we would start to lose money.

MO hasn't been below $19 at all in the past year and has shown support around $20 recently. This trade could be risky if investors rotate out of historically defensive stocks, but even if that happens, this position could be protected by the support the stock might find around $20, where it bottomed out both this past week and back last fall.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither controls bullish hedged positions in MO.

Permalink | Email this | Linking Blogs | Comments

Before the bell: BRK.A, HOV, UAUA, BMY, MO, F ...

Melly Alazraki — 2008-05-05T08:19:00+00:00

Filed under: Before the bell, Apple Inc (AAPL), Dell (DELL), Ford Motor (F), General Motors (GM), Berkshire Hathaway (BRK.A), Altria Group (MO), Bristol-Myers Squibb (BMY), US Airways Group (LCC), UAL Corp (UAUA)

Before the bell: Futures lower after Microsoft's Yahoo deal fails

Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) reported a 64% drop in quarterly profit late Friday. At the company's annual meeting this past weekend, the legendary investor said that while a Berkshire unit has bought portfolios of subprime mortgages (and has frozen resets that were due to send interest rates on those loans higher) he warned investors that housing-market weakness isn't over yet and predicted more losses for banks. At the same time, Buffett said Sunday he will consider investing in the insurance business of U.K. banking giant Royal Bank of Scotland (NYSE: RBS) and is close to buying a medium-sized company in the country.

Hovnanian Enterprises Inc. (NYSE: HOV) estimated on Monday it would take $225 million to $275 million of land-related charges for the that fiscal second-quarter and said that home deliveries dropped 21% to 2,494 homes in the period. The company also turned cash-flow positive faster than it expected and tripled its full-year estimate of cash flow.

After being rejected by Continental Airlines Inc. (NYSE: CAL) last month, United Airlines parent UAL Corp. (NYSE: UAUA) is intensifying merger talks with US Airways Group Inc. (NYSE: LCC), according to The Wall Street Journal. A deal is said could emerge in as soon as 10 days. In light of rising fuel costs, the more than $1.5 billion in potential cost savings and revenue enhancements the companies see from joining forces is no doubt appealing more and more.

Bristol-Myers Squibb (NYSE: BMY) will sell its ConvaTec wound therapy unit to Nordic Capital Fund VII and Avista Capital Partners for $4.1 billion.

Altria (NYSE: MO) shares are trading 1% higher in premarket trading. Bloomberg reports that the tobacco company said it will raise prices on its top-selling Marlboro and other cigarette brands as of May 5. The company will reduce discounts to distributors or increase list prices.

The Canadian Auto Workers, 9,000 of which work for Ford in Canada, voted to ratify a three-year contract with Ford Motor Co. (NYSE: F), an agreement the union expects Chrysler LLC and General Motors Corp. (NYSE: GM) to match. The deal keeps Ford's labor costs essentially the same as they are now, the union said.

Apple vs. Dell -- Fortune looks at the differences, starting at the top of course.

Permalink | Email this | Linking Blogs | Comments

Kraft Food (KFT) Q1 profit slips but tops estimates

Eliza Popescu — 2008-04-30T13:00:00+00:00

Filed under: Earnings reports, Forecasts, Good news, Consumer experience, Altria Group (MO), Kraft Foods'A' (KFT)

Shares of the nation's largest food and beverage maker, Kraft Foods Inc. (NYSE: KFT), have been surging in morning trading despite posting a decline for its first-quarter profit, as its earnings numbers were better than analysts had forecast.

For the quarter, Kraft Foods announced that its profit dropped 13% to $608 million, compared with $702 million a year earlier, dragged down by higher expenses for ingredients. The 2007 earnings results included a one-time interest benefit related to the spin-off from Altria Group Inc. (NYSE: MO). On an adjusted basis, the company posted quarterly earnings of 44 cents per share, slightly higher the 40 cents per share that analysts expected.

The food giant posted solid growth in its first-quarter revenue, which climbed to $10.37 billion, up from $8.59 billion reported in the same period a year ago. Analysts had forecast lower revenue of $9.77 billion in the quarter, according to Thomson Financial. The increase in revenue came as the company benefited from both the weak dollar and gains related to acquisitions.

Kraft Foods had a a pretty difficult year as higher energy costs and increased expenses for dairy weighed on the company's earnings. Looking ahead, the food producer showed optimism and backed its full-year earnings outlook for a per-share profit of at least $1.90 a share excluding charges. For revenue, Kraft predicted growth of at least 5%.

In reaction to the company's positive earnings and its optimistic guidance, investors have pushed its shares 3.70% higher so far today.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.

Permalink | Email this | Linking Blogs | Comments

My best stock ideas: Looking through Q2 and into the second half of 2008

Gary E. Sattler — 2008-04-25T14:45:00+00:00

Filed under: Forecasts, Apple Inc (AAPL), Dell (DELL), General Electric (GE), Wal-Mart (WMT), Home Depot (HD), Altria Group (MO), Commodities, Stocks to Buy, Burlington Northern Santa Fe (BNI)

I've received a few chuckles for investment directions I've suggested in the past, but if you care to review a couple of my previous generalities, I believe that my record has held up fairly well.

I submit for approval the following investment angles for the balance of 2008 and possibly beyond:

Have I suggested investments in water holdings? Yes, I do believe that I have. I believe that going long in water stocks could be an investment hedge of the decade. I also suggest a look into the desalination technology from General Electric Co. (NYSE: GE).

I'd think it's a good idea to stick with the railroads, such as Burlington Northern Santa Fe (NYSE: BNI). I claim that, with all things given, for now, railroads can't fail. Conversely, I think it's a good time to back away slowly from trucking. I think misery lies ahead there.

In retail, for investors who haven't already, I believe that it's time to exit the high end sector. Shorts sellers can probably clean up nicely on the way out. I'd look for the specialty retail stocks which are artificially high and consider shorting them now. It may be prudent to move retail bets to companies such as, Wal-Mart Stores Inc. (NYSE: WMT) for it's incredible staying power, and Overstock Com Inc., (NASDAQ: OSTK) for it's much maligned growth potential. Both these stocks could benefit greatly from the tightening consumer spending environment.

Oats and rice are ticking up, but the best rice boat may have already sailed. I'd stick with these and other commodity grains as strong short term plays, pulling the profits as contracts expire. Then I'd consider returning the initial investment for another go around. I'd play the companies which consume grain commodities with a light hand. Profits will be stretched as commodities continue to surge. One possible exception might be Altria Group Inc.(NYSE: MO), which has been beaten down badly. However, I wouldn't get caught with all my eggs in that one basket.

I fear that it may be time to back out of consumer electronics, except possibly for Apple Inc.(NASDAQ: AAPL) and Dell Inc. (NASDAQ: DELL). Yes, mobile devices are going to keep moving but I don't think there will be much profit growth there for a while. Gaming devices are still selling strong but I think their profitability is going the way of the albatross. Heavy research is required in this sector. There's not much "cutting edge" going on which I consider worthy of extra attention.

Someone will hate me for this, but I say that it's time to exit gold. Do we really need to suffer though yet another bubble burst? Smart working capital is going into real consumables. Gold is fast becoming a well oiled trap, in my humble opinion.

There may be some good speculative plays in the home improvement sector on stocks which have totally bottomed out. People are going to be staying close to home for awhile. It might be the right time to take advantage of that.

Gary Sattler is a freelance blogger with no professional stock-picking credentials (which may be an asset, depending on your point of view). With the possible exception of Overstock.com, via Vanguard Capital Management, he does not knowingly have interest in the companies mentioned in this blog post.

Permalink | Email this | Linking Blogs | Comments

Before the bell: EMC, VMW, PM, EBAY, GM, AAPL, BA ...

Melly Alazraki — 2008-04-23T08:23:00+00:00

Filed under: Before the bell, Earnings reports, Apple Inc (AAPL), eBay (EBAY), Ford Motor (F), General Motors (GM), Toyota Motor Corp. (TM), Altria Group (MO), Boeing Co (BA), EMC Corp (EMC)

Before the bell: Earnings have soured mood again

EMC Corp. (NYSE: EMC) said its first-quarter profit dipped 14% on acquisition-related charges, but it posted a 17% revenue gain to $3.47 billion that beat Wall Street forecasts. Excluding items, EMC's profit was $477.3 million, or 23 cents per share. Also, VMware (NYSE: VMW) reported a 5% profit rise on faster-than-forecast sales growth. The company is mostly held by EMC. EMC shares are up about 5.5% in premarket trading. VMW shares are up 13.75% in premarket trading.

Philip Morris International Inc. (NYSE: PM), spun off last month by Altria Group Inc. (NYSE: MO) reported first-quarter earnings this morning, posting a 29% increase in profit to $1.87 billion, or 89 cents a share as new varieties of Marlboro cigarettes such as clove flavored ones as well as acquisitions spurred sales in Indonesia, Pakistan and Mexico. The weak dollar also helped boost the bottom line. Revenue climbed 18% to $15.6 billion. The results beat the 78 cents analysts were looking for. Altria reports quarterly results Thursday. While Altria now does all its business in the U.S. where smoking has been on the decline, cigarette companies tend to do well in a weak economy.

Last night we heard that eBay Inc. (NASDAQ: EBAY) is suing Craigslist for unfairly trying to dilute eBay's 28% stake in it by more than 10%. Craiglist today is firing back, saying the online auctioneer's actions are unethical and smelling of a hostile takeover.

Boeing Co. (NYSE: BA) posted a 38% in crease in profit to $1.2 billion in the first quarter, or $1.62 per share. Its backlog of orders grew to a new record of $346 billion. Revenue rose 4% to $16 billion. The results beat analyst estimates of $1.35 earnings per shares but came lower on the revenue side.

General Motors Corp. (NYSE: GM) is set to report international sales this morning. Japanese rival Toyota Motor Corp. (NYSE: TM) has already reported that its global sales rose 2.7% from a year ago in the first quarter due to steady demand in Asia. While GM remains number one in annual global vehicle sales, Toyota has beat it in production last year. Ford Motor Co. (NYSE: F) will report its first-quarter results Thursday and is expected to post yet another loss, while GM is forecast to report a large operating loss.

According to Forbes, Apple (NASDAQ: AAPL) said late Tuesday it has agreed to buy a boutique microprocessor design company called PA Semi, "known for its design of sophisticated, low-power chips." Naturally, this could might improve things at the already successful iPhones and iPods. Apple is reporting after the close today.

Permalink | Email this | Linking Blogs | Comments

Early analyst calls (MO) (SLM)

Douglas McIntyre — 2008-04-16T07:42:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Altria Group (MO), SLM Corp (SLM)

JP Morgan downgraded Altria (NYSE:MO) from "overweight" to "neutral" according to Briefing.com. The news service also reports that Morgan Stanley downgraded SLM (NYSE:SLM) to "underweight" from "equal weight."

Lehman Bros. started coverage of NutriSystem (NASDAQ:NTRI) with an "underweight" rating, according to the AP.

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

Read | Permalink | Email this | Linking Blogs | Comments

Option Update: Philip Morris volatility at 23 after spin-off from Altria Group

Paul Foster — 2008-04-09T09:33:00+00:00

Filed under: Altria Group (MO), Options

Philip Morris (NYSE: PM) closed at $50.60 Tuesday.

Altria Group (NYSE: MO) completed its spin-off of PM on March 31.
PM over all option implied volatility is at 23 according to Track Data.

Volatility Index S&P 500 Options-VIX at 22.36; 10-day moving average is 23.98

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

Permalink | Email this | Linking Blogs | Comments

What future products lurk in the hearts of companies

Timothy Sykes — 2008-04-08T16:36:00+00:00

Filed under: Consumer experience, Competitive strategy, Google (GOOG), Microsoft (MSFT), Apple Inc (AAPL), Motorola (MOT), Nokia Corp. (NOK), Altria Group (MO), Washington Mutual (WM), Technology

When I saw the news of NTT DoCoMo (NYSE: DCM)'s new mobile phone that emits fragrances, I began wondering what other oddities today's corporate powerhouses may be working on. No financial advice here, these are just some ideas I came up with:

Apple Inc (NASDAQ: AAPL) will unveil headgear that doubles as both headphones and a personal masseuse, giving tantalizing head, neck and shoulders massages.

In an attempt to help with falling click-through rates, Google Inc (NASDAQ: GOOG)'s new mobile phone will be offered free as long as you sign Google's activation agreement requiring you to click on a mobile ad every hour, even while you sleep.

Not to be outdone by Google, Chinese rival, Baidu.com Inc (NASDAQ: BIDU), will design software that instantaneously translates Chinese websites to English and vice versa!

To attract more capital, Washington Mutual Inc (NYSE: WM) will partner with Altria Group (NYSE: MO) to give away thousands of cases of cigarettes to customers willing to deposit amounts over the $100,000 FDIC-insured limit.

And what I'm looking forward to most, Microsoft Corp (NASDAQ: MSFT)'s new operating system, code named "Love Doctor," will not only run your computer, it will also manage your personal relationships -- as determined by a special algorithm that Bill Gates is working on this very moment -- with the tagline "Life is tough, let us make it easier for you!"

I admit most of these ideas are unlikely -- at best -- but don't laugh at them; some might be here before you know it. After all, everybody laughed when they first heard about mobile ringtones, but billions of dollars in revenues -- and profits -- later, early adopters like Nokia (NYSE: NOK) and Motorola Inc (NYSE: MOT) laughed their way to the bank.

Timothy Sykes writes the blog timothysykes.com, is a former hedge fund manager, star of the TV show Wall Street Warriors and author of the book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund

Permalink | Email this | Linking Blogs | Comments

Option Update: Philip Morris spun-off from Altria Group

Paul Foster — 2008-04-02T09:20:00+00:00

Filed under: Altria Group (MO), Options

Philip Morris (NYSE: PM) closed at $50.58.

Altria Group (NYSE: MO) completed its spin-off of PM on March 31.

Goldman has a 12-month price target of $60 on PM and says: "A premier tobacco company deserves a premium valuation."

PM overall option implied volatility is at 26 according to Track Data.

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

Permalink | Email this | Linking Blogs | Comments

Closing Bell: Best quarter start in years, bad news gets less bad

Jon Ogg — 2008-04-01T16:29:00+00:00

Filed under: Microsoft (MSFT), General Motors (GM), Altria Group (MO)

Today's headlines could have read, "Rally on Financial Write-Downs, Go Figure!" Last night we saw a $3 billion preferred offering out of Lehman Brothers Holdings, Inc. (NYSE: LEH) that became a $4 billion offering. Shares were down on the news but after the dust settled the market decided this was a net-net good and shares rose almost 18% to $44.34. Even UBS AG (NYSE: UBS) rallied a sharp 14% to $33.01after it said it was going to take a $19 Billion additional writedown charge and its chairman left the company. Go figure.

The Institute for Supply Management said its index of national manufacturing activity rose to a reading of 48.6 in March, which is still a contraction but not as bad as estimates of about 47.5 from economists. There may be hope that the de-leveraging being seen by financial firms and tightened trading standards may be taking some steam out of the greatly inflated commodities. Crude oil fell $0.74 to $100.84/barrel, but briefly each barrel traded back under the $100 mark. Even gold dropped back below $900.00/ounce level after having seen north of $1,000.00 just last month. Below are the unofficial closing averages for US market index readings:

DJIA 12,654.36 (+391.47; +3.19%)
S&P 500 1,370.16 (+47.46; +3.59%)
NASDAQ 2,362.75 (+83.65; +3.67%)
10YR-TBond 3.545% (+0.113)
52-week lows, there are always some

After the quarter has now ended, we noticed how many tech firms actually performed worse than major financials.

Despite horrible industry auto sales from everyone today, General Motors (NYSE: GM) saw shares rise a sharp 5.7% to $20.15 as GM is still keeping its production targets as is despite 19% down in units.

Yahoo! Inc. (NASDAQ: YHOO) saw shares fall 1.5% to $28.50 after Microsoft Corporation (NASDAQ: MSFT) said that it will not be hiking its bid for the search laggard.

Cell Genesys (NASDAQ: CEGE) was the biotech winner after Takeda in Japan signed what may end up being a $320 million total package for its prostate cancer drug. Shares rose 31% to $3.09.

Travel Centers of America (AMEX: TA) was the "daily fugly" after along with an earnings report it filed noting lease activities that put the financial statements as "no longer should be relied upon" status. Shares didn't just do the walk of shame with another 52-week low. Shares are down more than 90% from its yearly highs and this has only been public just over a year. This closed down over 40% at $3.46.

Altria Group, Inc. (NYSE: MO) is now on a post-split basis but a downgrade this morning punished shares with a drop of -0.15% at $22.17. See full top 10 pre-market analyst calls.

Permalink | Email this | Linking Blogs | Comments

Analyst initiations: MO, AUO, GSI and SQNM

Eric Buscemi — 2008-03-20T10:59:00+00:00

Filed under: Analyst reports, Altria Group (MO), Analyst initiations

MOST NOTEWORTHY: AU Optronics, General Steel and Sequenom were today's noteworthy initiations:

Jefferies initiated AU Optronics (NYSE: AUO) with a Buy rating and $25 target and believes LCD trends will be healthy in 2008 despite a soft economy.
General Steel (NYSE: GSI) shares were started at Merriman with a Buy rating, as the firm believes strong demand for steel in China should last for years and finds the valuation attractive at current levels.
Cantor believes Sequenom (NASDAQ: SQNM) is positioned to establish sustainable market leadership as a provider of genome analytical products and molecular diagnostics. Shares were assumed with a Buy rating and $12 target.

OTHER INITIATIONS:

UBS initiated Altria Group (NYSE: MO) with a Buy rating and $30 target.
Canaccord Adams assumed Drugstore.com (NASDAQ: DSCM) with a Buy rating and $3.50 target.
Goldman Sachs initiated DirecTV (NASDAQ: DTV) with a Buy rating and $30 target.

Permalink | Email this | Linking Blogs | Comments

Early analyst calls (NWA) (MO) (FNM)

Douglas McIntyre — 2008-03-20T07:35:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Abbott Laboratories (ABT), Altria Group (MO), Federal Natl Mtge (FNM)

UBS downgraded United Airlines (NASDAQ: UAUA) and Northwest (NYSE: NWA) from "buy" to "neutral," according to Briefing.com. The news service also writes that Keefe, Bruyette upgraded Fannie Mae (NYSE: FNM) to "outperform" from "market perform."

Altria (NYSE: MO) was started as a "buy" at UBS, according to 24/7 WallSt. The website also reports that Abbott Laboratories (NYSE:ABT) was raised to "outperform" by Wachovia.

Douglas A. McIntyre

Read | Permalink | Email this | Linking Blogs | Comments

Defensive assets boost Altria (MO)

Steven Halpern — 2008-03-19T10:00:00+00:00

Filed under: Newsletters, Altria Group (MO), Stocks to Buy

"Altria (NYSE: MO) is one of the best stocks to own in this current market environment," says leading market expert Bill Martin. In his Bullmarket.com, he looks at the stock's defensive characteristics.

"Altria just recently reiterated its earnings outlook for itself and soon to be spun-off Philip Morris International (PMI). Excluding PMI, Altria said it expects to grow 2008 EPS by 9-11% off an adjusted base of $1.50. Longer term, the company expects EPS growth of 8-10%.

"Altria's projections come despite the company expecting cigarette volumes in the U.S. to decline by -2.5% to -3.0% over the next few years. The company also anticipates cost savings of $1 billion annually as a result of the PMI spin-off, with $300 million realized last year and the rest to be wrung out by 2011.

"PMI, meanwhile, is forecasting 12-14% EPS growth from a 2007 pro-forma adjusted base of $2.78. Longer term, the company is looking for EPS growth of 10-12% on revenue growth, net of excise taxes, of 4-6%.

"Shipment volume is projected to rise 1-2%, helped by the introduction of new products. The company also expects to realize $1.0 billion in annual cost saving by the end of 2010, and a cumulative total cash flow of approximately $22 billion by the same date.

"Altria continues to be a solid defensive holding paying an attractive dividend -- both of which are invaluable attributes in this market. With the PMI spin-off on track and large buybacks set to be implemented after the split, Altria is one of the best stocks to own in this environment. We rate the stock a buy."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

Permalink | Email this | Linking Blogs | Comments

Analyst initiations: Amazon, Altria Group, Skilled Healthcare

Eric Buscemi — 2008-03-18T12:30:00+00:00

Filed under: Analyst reports, Amazon.com (AMZN), Altria Group (MO), Novell Inc (NOVL), Intuit Inc (INTU), Analyst initiations

MOST NOTEWORTHY: Amazon.com, Altria Group and Skilled Healthcare were today's noteworthy initiations:

Canaccord Adams expects Amazon.com (NASDAQ: AMZN) growth to be driven by its expanding international reach, mix shift to third-party revenue, product innovation, and category expansion. The firm initiated shares with a Buy rating and $78 target.
UBS is positive on Altria's (NYSE: MO) growth, low likelihood of downward EPS revisions, and best-in-class cash flow distribution; shares were started with a Buy rating.
Skilled Healthcare (NYSE: SKH) was initiated with an Outperform rating at Morgan Keegan, as they believe nursing home reimbursement risk is already reflected in its valuation.

OTHER INITIATIONS:

KeyBank assumed Callaway Golf (NYSE: ELY) with a Buy rating and $19 target.
Credit Suisse initiated Intuit (NASDAQ: INTU) with an Outperform rating and $35 target.
Broadpoint initiated Novell (NASDAQ: NOVL) with a Buy rating.

Permalink | Email this | Linking Blogs | Comments