Friday, April 30, 2010


Transocean has been down over 5% the past two days and has surpassed are stop loss limit. The reason for the drop in price is due to the explosion of a rig off the Gulf Coast. Going forward I have redone the model and factored in the loss of the rig for this year- its contract was scheduled to start in the 4th quarter- and next year. These losses will have an eps impact projected of $.10 this year and $.40. From what I have read and what information there is about the companies contracts and insurance it seems insurance will cover must of the cost of replacing the Rig. Further more it seems that Transocean will not be responsible for the oil spill but rather BP as stated by President Obama, however I am unsure. Personally I think Transocean is currently trading at a severe discount do to market over reaction.

Any question email me at

Thursday, April 29, 2010


Analysts were expecting Visa, Inc. (V) earnings to come in at $0.91 per share for last quarter, but V beat expectations with actual earnings of $0.96---5 cents above the consensus estimate.
Today's announcement shows that V has made some year-over-year improvements. The company reported gains of $808.55 million last quarter compared with net gains of $614.84 million during the same quarter a year ago.
During the next five years, analysts expect the earnings-per-share (EPS) growth rate in the industry to be 16.79 percent. If you compare V's projected EPS growth rate of 20 percent to that of the industry, you can see that analysts expect V to outperform the industry in the future by 3.21 percent.

Visa has beaten expectations every earnings season since we have purchased this stock in April of 2009. The company has projected EPS growth of 20% over the next few years and Visa is currently on on track to do this. They have already reported $2.00 per share for half of this year and will beat the $3.10 Visa earned for FY 2009.

-Richie Civello

Low Refining Margins Hurt Valero (VLO)

Valero reported first quarter earnings on Tuesday. Results were less than impressive at a loss of $101M $0.18 per share. This result beat the $0.27 consensus loss of the 16 analysts covering. Valero's operating loss was $32 million, versus first quarter 2009 operating income of $593 million. This decline in operating income can be attributed to lower margins on their refined products across all regions. Operating results were also negatively impacted by downtime in some of their key refineries, which management estimates resulted in $200M of lost income. Despite the rough operating environment, Valero managed increase their liquidity position by $4B. Management also purchased an additional 3 plants this quarter, which brings their total to 10, increasing their capacity to 1.1 Billion barrels a year.

For the second quarter and the rest of 2010, management expects to be profitable. They believe that their cost savings initiatives and strategic actions will help them achieve profitability, even if they continue to operate in a low margin environment.

I am planning on locating the original model and updating it and making a decision going forward.

- Thomas Boeje

Wednesday, April 28, 2010

Caterpillar First Quarter Earnings 2010

Caterpillar reported 1st quarter earnings of $.36 per share or $233 million compared to a loss of $.19 per share or $112 million 1st quarter 2009. Caterpillar's estimated earnings were $.39 per share and would have beaten the forecast although they were charged a one time health care of $90 million. Excluding this one time charge Caterpillar would have posted earning of $.50 a share beating the estimate of $.39 per share. Sales fell 11% to 8.2 billion but in Asia sales rose 20%. Manufacturing costs were $566 million lower which helps profits as sales declined.

Chairman and CEO of the company stated that industry activity and orders are higher compared to last year and record level in some areas. Caterpillar is increasing it's production as a result of the increase in demand. This jump in demand is mostly in developing areas like Asia and Latin America and mining equipment worldwide.Higher commodity prices will drive the demand for mining equipment to increase. Caterpillar officials said that some models of 2010 mining equipment are sold out and they are already taking orders for 2011 equipment. The company has hired about 2,000 people after releasing 19,000 full-time employess. CAT's 2nd quarter earnings are estimated to be $.74 per share. The company raised their outlook for 2010 raising sales and revenues range from $38 to $42 billion and profit expectations for 2010 to be between $2.50 to $3.25 per share. The outlook for CAT is looking up and I think it will continue to perform well.

-Jared Duckstein

Tuesday, April 27, 2010

Life Technologies beats forecast

* Q1 ex-items $0.87/shr vs. forecast of $0.80/shr

* Q1 revenue $887 mln vs. forecast of $864 mln

* Shares rise 1 pct after-hours

NEW YORK, April 27 (Reuters) - Life Technologies Corp (LIFE.O) on Tuesday reported better-than-expected first-quarter earnings, on strong demand for its tools and equipment used in genetic testing and stem cell research.

The company earned $91.5 million, or 48 cents per share, compared with $15.6 million, or 9 cents per share, in the year-earlier period.

Excluding special items, Life Technologies said it earned 87 cents per share. Analysts on average expected 80 cents per share, according to Thomson Reuters I/B/E/S.

The company reported revenue of $887 million, well above Wall Street expectations of $864 million.

Life Technologies, created by the merger of Invitrogen and Applied Biosystems, said it expects full-year revenue to grow in the mid-to high-single digit percentage range. It predicted 2010 earnings, excluding special items, of $3.30 to $3.50 per share, in line with Wall Street expectations of $3.41 per share.

Shares of the company rose 1 percent in after-hours trading to $51.69 from their closing share price on Tuesday of $51.15 on the Nasdaq. (Reporting by Ransdell Pierson; Editing by Bernard Orr)

This is just a copy and paste job. I will review the numbers in detail tonight and repost an analysis of results and explain affects on my price target.

----- Michael Arias

Ecolab Delivers Strong First Quarter Earnings

Ecolab reported 1Q 2010 earnings this morning. EPS was $0.40, up 67% quarter over quarter. This exceeded the top of Ecolab’s forecasted range. Net income attributable to shareholders increased 66% to $96 million. Adjusted EPS forecast for the year was raised to $2.21-2.26. Previous forecast was $2.17-2.25. My model has them earning $2.22 in 2010.

Sales were up 6% to $1.4 billion. They saw strong sales growth from Kay, Asia Pacific, Canada, and Latin America, along with cost savings actions and favorable delivered product costs.

Segments US Cleaning and Sanitizing and US Other Services operating income both rose 11% while International Operations operating income rose 81%.

Ecolab reacquired 3.3 million shares of its common stock during the first quarter under its share repurchase program.

Commenting on the quarter, Douglas M. Baker, Jr., Ecolab's Chairman, President and Chief Executive Officer said, "We are off to a good start in 2010. We once again outperformed our end markets, and through our aggressive sales efforts, cost savings and efficiency actions, we turned in a strong earnings gain that exceeded the top end of our forecasted range.

"We are confident in our prospects for 2010. Our markets are generally showing expected improvement from 2009's difficult environment, and we are stepping up our investments to drive growth within them. These investments include expanding our sales and service force, developing new innovative products and programs that provide better results and lower operating costs for customers, building infrastructure in key geographies to enable faster and more efficient growth and profitability, and looking at new ways to better serve our strong customer base. We are seeing returns from these investments today and expect much more as they progress, providing not only strong results in 2010 but positioning us for even better results in the years ahead. We believe we are in solid shape for the year, we continue to make progress on our long term growth initiatives, and we expect to continue delivering superior results for shareholders in 2010 and beyond."

Going forward, Ecolab expects 2nd quarter 2010 EPS of $0.54-0.57 with a gross margin of 50% and tax rate of 30-31%. My model remains unchanged at a price target of $52. The company is doing well, but based on the current price of $47.13 (down 1% in reaction to a market correction), there is only 10% upside. If opportunities arise for a company with more upside, I would be supportive of selling in order to free up cash.

Travelers Take Hit on CAT losses

Net income dropped 2.6% to $647 million for Travelers due to higher catastrophe losses from the winter storms on the U.S. East Coast and the earthquake in Chile. Catastrophe losses of $312 million were five times what the company projected and the largest since the company merged in 2004. Operating profit of $1.22 was below the street estimate of $1.36. Investment income rose 39% from the previous year when the company had to take large write downs. Net earnings per share were $1.25 from $1.11 a year ago due to fewer shares outstanding. Travelers is expected to continue their share buyback program with $3.5-4 billion scheduled for this year alone. Dividends also increased 9% for the sixth straight quarter. Travelers is a solid company but we haven't seen much movement in the price since we bought it last December and has dropped a dollar from our buy-in price. If opportunities arise for a company with more upside I would be supportive of selling.

Thursday, April 22, 2010

Verizon -VZ - Quarter 1 2010 Earnings

Verizon posted Quarter 1, 2010 earnings today, Thursday April 22nd. Earnings were $0.56 a share meeting analyst expectations.

Verizon reported $7.1 billion in cash from operations up 7.5% from Quarter 1 2009 and $3.7 billion in free cash flow up %25.6. Verizon’s wireless segment increased total customers by 1.5 million and a 4.4% increase in total revenues compared to Quarter 1 2009.Verizon Fios growth remains strong with an increase of 185,000 internet subscribers and an increase of 168,000 TV subscribers.

Throughout the quarter Verizon has been capable of maintaining its high margins mainly through wireless data plan subscribers. In accordance with Verizon’s business plan, data plans have slowly become the status quo. Few phones are now offered through Verizon Wireless that can be purchased and used without data subscription. Management stated plans to introduce its 4G network to approximately 25-30 areas by the end of the year. Advancement in Verizon’s 4G network and breaking ground on its new Technology Innovation Center will lead to innovative products will continue to help Verizon gain market share, solidifying the investment thesis this company was purchased on.
- Chad Schneider

ENSCO 1Q earnings

Ensco plc (NYSE: ESV) reported diluted earnings per share from continuing operations of $1.11 for first quarter 2010, compared to $1.59 per share in first quarter 2009. Earnings from discontinued operations were $0.22 per share in the first quarter, compared to a loss of $0.03 per share a year ago. Discontinued operations in first quarter 2010 included a $34 million pre-tax gain from the sale of two jackup rigs and $7 million of pre-tax income related to jackup rig ENSCO 69, which was reclassified as discontinued operations in second quarter 2009. Diluted earnings per share were $1.33 in first quarter 2010, compared to $1.56 per share in first quarter 2009.

Deepwater segment revenues grew to a record $130 million in the first quarter, or nearly 30% of total revenues, highlighting the success of their deepwater fleet expansion strategy initiated in 2005 and reinforcing their hybrid drilling strategy. Only one-third, or $1 billion, of the ENSCO 8500 Series(R) newbuild capital commitments are remaining.

*startup of ENSCO 8500 Series(R) semisubmersibles and the remaining rigs under construction are on schedule for their delivery dates. In the first quarter, achieved 99% utilization in their deepwater segment. ENSCO 8502, is their latest ultra-deepwater semisubmersible drilling rig, was delivered during the first quarter and is now mobilizing to the U.S. Gulf of Mexico to commence operations under a multi-year contract.

Segment Highlights


Deepwater segment revenues grew to $130 million in first quarter 2010, from zero dollars a year ago. ENSCO 7500, which operated during first quarter 2010, was mobilizing to Australia during first quarter 2009 when it was the only rig in the deepwater segment. Revenues related to the mobilization were deferred until drilling commenced in April 2009. Additionally, two new ENSCO 8500 Series(R) rigs commenced operations in 2009: ENSCO 8500 in June and ENSCO 8501 in October.

In first quarter 2010, the average day rate was $411,000 and utilization was 99%. Comparable figures for the prior year period are not applicable due to revenues being deferred while ENSCO 7500 was mobilizing.

Contract drilling expense was $45 million in first quarter 2010, up from $5 million in first quarter 2009. The increase was primarily due to the deferral of certain costs associated with the ENSCO 7500 mobilization to Australia during first quarter 2009 and the commencement of ENSCO 8500 and ENSCO 8501 operations in mid- and late-2009, respectively.

Total Jackup Segments

Revenues from the jackup fleet totaled $319 million in first quarter 2010, down from $500 million a year ago. The decline primarily was due to a six percentage point decrease in utilization to 76% and a $55,000 decline in average day rates to $113,000. Contract drilling expense was reduced by nine percent year to year as personnel and other costs were lowered to address declining utilization.

Total operating expenses in first quarter 2010 increased to $259 million from $215 million last year. Contract drilling and depreciation expense rose by 17% and 20%, respectively, driven by growth in the deepwater segment. General and administrative expense increased to $21 million, from $12 million in first quarter 2009, as a result of increases in share-based compensation expense, professional fees incurred in connection with the redomestication and costs related to opening the new London headquarters.

Strong Financial Position - 31 March 2010

Ensco continues to maintain a strong financial position:

  • $1.2 billion of cash and cash equivalents
  • $350 million fully available revolving credit facility
  • Long-term debt of only $257 million
  • Long-term debt-to-capital ratio of 4%
  • Contract backlog totaling $2.8 billion
Additionally they announced a dividend increase of $.10 to $.35

Based on Ensco recent earnings, the current rig market, and my outlook on the future of the rig market compared to Ensco PLC's growth strategy. I still maintain the buy valuation.

Please fill free to send me an email with any questioning concerning you about ensco or the rig market in general.


James Menicucci

Wednesday, April 21, 2010

AAPL F2Q10 Earnings 04/20/09-(Daren Pon)

Revenue was $13.5 billion, a 49% increase year over year. Net income rose 90% year-over-year to $3.1 billion. Margins were slightly higher than expected at 41.7% versus guidance at 39%. Cash and short-term securities increased from $39.8 billion to $41.7 billion quarter-over-quarter. This was the best non-holiday quarter in Apple history.After yesterday's earnings release after the bell, Apple shares closed today at $259.22, for a gain of 5.98% for the day.

Strength was attributed to iPhone sales doubling and strong momentum across the boards, allowing Apple to avoid the great magnitude of their normal seasonal sales declines after December. New Intel processors and NVIDIA graphics chips were added to the Apple's computer and laptop lines providing better performance, crisper graphics, and improved battery life. Mac revenue increased 33% and iPod revenue grew 12% year-over year. iTunes delivered over $1.1 billion in sales, a quarter best. 8.75 iPhones were sold, a year-over-year increase of 131%, crushing the IDC estimate of 41% due to expansion in Asia, Australia, Japan, and Europe. As mentioned in an earlier post, the iPhone OS4 is due this summer and will have multitasking, folders, improved enterprise support, and iAds. Retails sales increased by 22% year-over-year.

I still feel that Apple will outperform the broad market going forward this year due to their premium product lineup, an unparalleled user experience, and an application market that is light years ahead in development of quality software (I own a Motorola Droid, the Google Marketplace is a joke). Every single community service related event on campus with a raffle/prize is using either an iPad or Apple gift certificates to draw in students and the Apple store is STILL always crowded at Crossgates Mall. I am raising my one year price target to $315, looking forward for a potential Verizon iPhone contract this summer and continued increases in market share in the Mac product segment as iPhone users spill off into new Mac owners.

McDonald's Q1 Earnings

McDonald's released first quarter earnings today showing an increase in global comparable sales by 4.2%. Specifically, U.S. comparable sales improved 1.5%, Europe up 5.2%, and Asia/Pacific Middle EAst and Africa up 5.7% Combined operating margin jumped 220 basis points to 29.8%. Diluted earnings for the quarter increased 15% (9% constant currencies) to $1.00. Sharepurchases and dividends put 1 billion dollars back into investors hands. Improved profits were attributed to McCafe beverages, the Breakfast Dollar Menu, and Chicken McNuggets. Stock price hit a new 52 week high of $71.19 today after the announcement. The company is doing a good job promoting new menu items as well as supporting sales with classic and bargain priced foods. Prices already pushed past my valuation of $69. This earnings release shows solid positive performance going into 2010 and keeps me optimistic that the stock should hit my yearly price target of $75 at the end of 2010. After hour trading places prices at $70.10.

Press Release

-Roopa Bhopale

Gilead Falls 10% due to Lower Forecasts

Gilead Sciences shares are trading around 10% lower hovering around $41 after the company issued weaker-than-expected 2010 guidance.The company lowered its 2010 sales forecast by about $200 million to a range of $7.4 billion to $7.5 billion due to the impact of the recently passed health care reform.

Tuesday, April 20, 2010

Illinois Tools Works Q1 2010

Illinois Tools Works posted 2010 first quarter earnings today, April 20th. Analysts expectations for first quarter were 52 cents a share to 60 cents a share. ITW was aligned with analysts expectations and achieved EPS of 58 cents share, excluding a tax adjustment of 4 cents per share related to new health care legislation and Medicare prescription drug subsidies. Excluding special items, adjusted earnings were 63 cents per share. ITW performed extremely well first quarter, especially when compared to Q1 2009 EPS of 2 cents a share.

ITW reported revenue for Q1 of 3.606 billion, 14.6% higher than 2009 Q1. The main increase in revenues was due to their automotive OEM, polymers and fluids, industrial packaging, and PC board fabrication segments.

Operating income rose 393 million to 483.9 million from Q1 2009. Income from continuing operations totaled 294.3 million compared to a loss of 8.0 million in 2009 and first quarter operating margins were 13.4 percent, which is 1050 basis points higher than the year ago period.

ITW has increased their outlook for 2010. For 2Q, the company is expecting earnings of .74 cents to .86 cents, which is assuming a 15-19% increase in revenue. For the full year, EPS is expected to be in the range of 2.72-3.08$, an increase from 2.39-2.89$

After ITW released earnings, their stock price hit a new 52 week high of 51.28$. In the after hours, ITW continued to rise and is currently trading at 50.71$.

Andrew Helfont

Novartis Q1 Earnings 2010

Hello all,

Novartis released their earnings hours ago with an EPS of $1.29 and a street estimate of $1.11. Previous year's EPS was $.87 so a dramatic increase in revenues helped bolster earnings. The majority of the increase in earnings can be attributed to the sale of H1N1 vaccinations purchased by the U.S and Chinese governments. Recently appointed CEO Joe Jiminez is expecting consistent growth in the pharmaceutical department with the help of 2 recent acquisitions in the cancer drug division. Novartis is still planning on completing the full acquisition of Alcon (The world's leader in eye-care products). Currently, Novartis has 77% stake in the company and is planning on closing the deal soon. The 18% growth in revenue from last year is a strong sign of consistent growth for the future in addition to the corporate strategy of acquiring more firms to broaden their market penetration.

Monday, April 19, 2010

Spreading the Joy Global: China Watch

A video from; an analyst talking about why she likes Joy Global

Hasbro Q1 2010 Earnings Release

Hasbro announced better than expected profits for their first quarter of 2010 linked to a double digit sales increase in the girls' toys and overseas markets. Net revenue rose 8.2% to $672.4 million beating analyst estimates. Sales in all segments and locations rose, some of which was due to positive foreign exchange rates. CFO Deborah Thomas did say however that this favorable foreign exchange rate effect could be less later on this year. Without this movement in currency net revenue increased 5%. CEO Brian Goldner kept a positive outlook for higher revenues and EPS for 2010.

In an article on Reuters, BMO Capital Markets analyst Gerrick Johnson was quoted as saying "The toy industry as a whole is performing well... "Parents might not have more money than last year, but they have more certainty about their budget. Parents don't cut back on their kids when they can plan."

Hasbro's first-quarter net profit almost tripled to $58.9 million, close to 40 cents per share in comparison to a year ago. HAS reported a profit of 26 cents per share while analysts predicted earnings of 16 cents per share.

The company's board also authorized a stock repurchase worth $625 million.

Following this announcement HAS stock price increased 1.5% hitting $40.45 and peaked at $40.77 during the trading day so far. Mattel stock price dropped just .8%. If this surge in prices remains steady, a sound price point to buy in might not come around for the UASBIG Portfolio. But this increase in earnings is a positive direction for Hasbro moving into 2010 in terms of the value of the company. Going forward it will be especially important to monitor Hasbro in case an opportune price point hits and updating the model in anticipation of 2011 expectations of even higher growth.

-Roopa Bhopale

Reuters article
Call Transcript from Seeking Alpha

Saturday, April 17, 2010

Goldman Sachs Takes Down Financial Sector

Goldman Sachs on Friday was named as defendant in a civil law suit on fraud allegations. To sum up the case Goldman Sachs and partnered with John Paulson and his hedge fund to design a portfolio to sell to investors while Paulson and his hedge fund shorted this exact same portfolio. Paulson and his hedge fund had no role in the marketing or selling of these CDO's so no wrong doing was done on their part.

What people forget to mention is that also on Friday the SEC released an independent examiners report that they completely dropped the ball and should have closed Lehman months before they collapsed. People believe the Goldman case was announced Friday to delfect attention from Lehman report.

The announcement of the case against Goldman Sachs brought down the entire financial sector with Goldman shares dropping over 10%, and Bank of America shares dropping 5% (a UASBIG holding).

Bank of America Q1

Bank of America Corp posted its first quarterly profit since summer 2009 as it generated outsized bond trading revenue and set aside less money to cover bad loans. Big trading profits show the Merrill Lynch acquisition is paying off and the bank's lower credit provision signals that borrower defaults may be stabilizing as the economy improves.

Chief Executive Brian Moynihan has reshuffled management and is expanding Merrill Lynch's commercial and investment banking business in a bid to keep boosting the bank's profits. Moynihan sounded optimistic about the bank's outlook on a conference call with analysts."The worst of the credit cycle is clearly behind us," he said.Five of the bank's six major business units were profitable during the quarter, with the exception being the home loans unit.

Earnings were driven by arguably Lewis's most controversial deal in his nearly decade-long run as CEO -- the Merrill Lynch purchase, which closed in early 2009. Bank of America's global banking and markets division generated $3.2 billion of profit in the quarter, the best results of the six major business units. Record sales and trading revenue drove that profit, particularly in fixed income, currencies and commodities. That investment banking division reported $5.8 billion in revenues during the quarter.

The acquisition of Merrill Lynch was the main driver of the groups decision to purchase Bank of America for UASBIG. The overall credit quality of the overall consumer is improving and has been said not only by BAC, but also by its biggest competitor JP Morgan. I have a lot of faith in new CEO Brian Moynihan, primarily because he realizes the their business has changed with the aquistion of Merrill and is looking to expand on that segement of business.

-Richie Civello

Friday, April 9, 2010

Apple - New iPhone OS Update

Apple will bring multitasking features to the iPhone in the next operating system update mid-year and will also be entering the advertising business by embedding ads within app store applications, taking a 40% cut of revenue.

Thursday, April 8, 2010

Life Technologies business with SUNY Albany

Today I was finally able to speak to someone on campus about the molecular and academic research being done and whether or not UAlbany was purchasing products from Life Tech. I first spoke to James A. Large, senior assistant to the Chairpserson for Facilities and Fiscal Management for the Department of Biological Sciences. He knew that they did buy products from Life Tech but not specifically any monetary amounts. He referred me to Bernie O'Connor in the chem building. I spoke to Mr. O'Connor and he is the purchaser of all of the supplies that academic researchers need as well as faculty needs for classes.

What Mr. O'Connor told me was that a few times a year they would purchase supplies from Life Tech specifically Applied Biosystems. Each purchase was for very small materials, he showed me maybe half the size of his index finger that sold for over $1200 a pop, so this again paints the gross margins that Life Tech is able to achieve. One recent order was placed for $4200. These purchases he showed me were just in the last 6 months, and if you multiply this by the 90% of academic research facilities in the US that Life Technologies sells to you can understand the amount of money they are making, just alone from academic research customers in the US. He also told me that their websites were absolutely phenomenal, never had any problems with ordering products online and that they had overnight shipping. Furthermore, he mentioned that they basically had a monopoly on the forensics industry, because he really knew of no other company providing those forensic systems.

To conclude, I just want to reiterate that Life Technologies is a very profitable company and remains a very good investment. I maintain that a 12 month price target of $57.00 is a conservative one, and I will be adjusting the model for a potentially higher price target after 2010 Q1 earnings are released.

-------Michael Arias

Wednesday, April 7, 2010

Eldorado Gold up 7% today

Eldorado Gold (EGO) was up 7.01% in trading Wednesday to $13.59.

Gold spiked to over the $1,150 mark, sending mining shares higher across the board on a down day for the equity markets and energy commodities.

Days like this are normal for EGO and I maintain my price target of $16