Wednesday, April 29, 2009

Visa posts Q2 2009 Earnings of $.71 per share, beating the Street

Net Income for Q2 was $536 million or $.71 per diluted share. Net operating revenues increased 13% YoY to $1.6 billion despite negative growth in U.S. payments volume. Total cards carrying the Visa brand increased 8% over the prior year to $1.7 billion. Service revenues increased 2% versus the prior year to $804 million. As of March 31, 2009, Visa's cash, cash equivalents and investment securities were $5.8 billion. Furthemore, management maintains that they will be able to achieve an operating margin in the low 50% range for 2009 and the high 40% to low 50% for FY 2010.

Visa continues to show that despite recent economic trends, their business continues perform well. Street estimates for Q2 earnings were around $.63 and Visa beat these easily. The company continues to rely on their strength in debt cards and we believe this trend will continue as Visa's current marketing campaing encourages people to use their cards more frequently for everyday expenditures.

Tuesday, April 28, 2009

ECL Earnings in line w/ street

"Ecolab Inc (ECL.N), a provider of cleaning supplies and services for restaurants, hotels and other businesses, reported a 44 percent decline in quarterly profit on Tuesday, matching expectations, and affirmed its full-year profit forecast."
-see full article @:

Aside from the earnings report, this Swine Flu outbreak may be a positive catalyst for a provider of sanitation supplies and equipment. History has shown that food scares and public health emergencies such as the taco bell e.coli scare a few years ago or the SARS outbreak, have increased demand for the supplies and services that ECL provides. It's up 3% already today, while the market is about flat. I believe the movement is tied to a combination of the earnings report and swine flu concerns. I still like the stock and believe that $40 is a key resistance level that, if passed, may improve investor confidence in the stock as it has hovered in the mid 30's since we bought it at $35.


Sunday, April 26, 2009

AAPL F2Q09 Earnings 04/22/2009-(Daren Pon)

This past Wednesday Apple Inc. released their F2Q09 report. Revenues increased 8.7% to $8.16 billion and profits increased from $1.05 billion to $1.21 billion, or from $1.16 to $1.33 per share. Gross margins increased from 32.5% to 36.4%. Cash and marketable securities increased by about $800 million to $28.9 billion.

Profits came from strong iPhone sales at 3.8 million units, an increase of 128% year-over-year, and increasing margins. Margins were lifted due to decreasing commodity prices of key component materials, sales of higher margin products including software from the Apps Store, and lower warranty and freight costs. Although Mac products and Services declined about 3%, this number compares favorably to the overall market decline estimated at 7% for the quarter by the IDC.

Apple resisted the recession and posted an increase in quarterly profits of 15%. With CEO Steve Jobs sitting this quarter out, the strong financial results helps to affirm the idea that Apple has a deep bench and will only benefit from Job's intended return this June. A sudden change in Job's condition would nonetheless create strong negative pressure on Apple's stock price and now may be a time to reevaluate Apple and possibly take our gains.

Thursday, April 23, 2009


On Tuesday, April 21st, CAT released negative earnings for the first quater of 09, which is the first time in 17 years, but still beat analyst expectations. They also cut there EPS from 1.79 to 1.25, bringing down share price to a week low of $28.84. CAT's stock price increased to $34.72 because CEO James owens said in a conference call that Chinas stimulus bill will help growth towards the end of 2009 into 2010. Today, CAT closed at 32.45, bringing our position up to a gain of 23.2%.

Tuesday, April 21, 2009

IP down about 12% on 4/20

IP fell about 12% on 4/20 due to the overall market drop. With the DJIA off almost 300 points, material companies and industrials slid . The wall street journal cited that "Many industrial and material stocks slid as the recent bounce for commodity prices was interrupted." With the recent upgrade, and no material fundmentals changing, this is still a good stock and its back up almost 10% at 8.50 as of 10:45AM

DD Earnings

see above article for summary of DD's earnings release

DuPont beat street EPS estimates, however missed on revenue targets and lowered their full year guidance. The new CEO, Ellen Kullman said "strong performance in the agriculture and nutrition unit, along with cost-cutting measures, helped curb the impact of the largest decline in industrial demand in decades." We will update the model and see where the valuation comes out. This is a strong blue-chip company that has undoubtedly been driven down by historically low-demand in many of its key business areas. I still call this stock a HOLD. It has been updated to BUY recently by Jefferies & Co., with the analyst citing its strong dividend yield

Thursday, April 16, 2009

IP rallies 22% on 4/15....down 1/2 pct on 4/16

IP rallied 22% and was as high as 9.13 on 4/15. This significant rise was attributed to a lead analyst upgrade that was supported by belief that the worst is over for the paper industry. That Deutsche Bank analyst changed IP to a "BUY" with a price target of $11. IP Closed today at 8.75. I still think we should hold on to this for the same reasons I've cited over and over and I hope this upgrade is a game changer for investor confidence with regard to IP.

Thursday, April 9, 2009

CAT - Up Around 10%

Caterpillar Incorporated is up around 10% as of 2:45PM today on the good news that they will not be slashing dividend payments as analysts had previosuly expected. Other major industrial companies are up big today as well and the future is looking a little less bleak for construction companies as the light at the end of the tunnel draws near and hopes of an economic turnaround grow.