Monday, May 17, 2010

Visa and Bank of Americs

Visa dropped over 10% on Friday due to an amendment added on to the financial reform bill about capping fees that Visa can charge. This can have adverse effects on Visa's business and will need to be looked into further.
As for Bank of America, them like the rest of the financial sector has fallen on hard times due to financial regulation and the European Debt Crisis.


Friday, May 7, 2010

Eldorado Q1 2010 Earnings -- Nick Iuliucci

Eldorado reported Q1 2010 earnings Thursday, May 6th. Eldorado reported net income of $52.8 million or $0.10 per share for the period, compared with $13.1 million or $0.04 per share in the first quarter of 2009, and they generated $80.8 million in cash from operating activities before changes in non-cash working capital. The increase in profit for the period resulted from significantly higher sales volumes from the Kisaladag mine in Turkey, as well as the new contributions of the mines in China previously operated by Sino Gold (the White Mountain and Jinfeng mines). Just like 4th quarter 2009, 1st quarter 2010 was a record quarter.

"We had record quarterly production of 164,928 ounces of gold at a cash operating cost of $371 per ounce with strong performances from all mines, whilst setting consecutive quarterly production records at Kisladag. Our revenues increased by 248% over the comparable period in 2009. Net quarterly income increased by 304% to $52.8 million. Cash generated from operating activities increased by 290% to $80.8 million. With the strong performance of the quarter we are increasing our 2010 production guidance to 575,000 to 625,000 ounces of gold and slightly reducing cost guidance to cash operating costs of $375 - $395 per ounce." said Paul Wright, President and CEO of Eldorado Gold. "We are also extremely pleased that the development of our Company with its strong performance in 2009 and the positive outlook for 2010 and beyond has enabled at this time the adoption of a dividend policy."

Q1 2010 Highlights:

Produced 164,928 ounces of gold at an average cash operating cost of $371 per ounce (total cash cost $398 per ounce)

Sold 163,446 ounces of gold at a realized average price of $1,110 per ounce

Reported earnings of $0.10 per share

Generated $80.8 million ($0.15 per share) from operating activities before changes in non-cash working capital

Announced the adoption of a dividend policy

They sold 163,446 ounces of gold at an average price of $1,110 per ounce, a 184% increase over the first quarter of 2009, when they sold 57,459 ounces at an average price of $909 per ounce. Production from Jinfeng and White Mountain added 57,265 ounces as compared to the prior year, and increased production at both Kisladag and Tanjianshan added to our record production levels.

Going forward, as I’ve said previously in a quarterly update on Eldorado Gold, things are lining up nicely for the company. Things are going so well they adopted their first ever dividend policy just last week. They hit $16 Friday, May 7th. I’ve updated the model with the new numbers and upped my price target from $16 to $16.50 due to higher realized gold prices and higher production levels. Regardless of valuation, I feel that UASBIG will continue to benefit from having EGO in the portfolio. With the volatility of the market and the economic concern regarding Greece, Eldorado provides a good hedge against our other holdings.

Thursday, May 6, 2010

CHK Q1 2010 Earnings - Dan Goldfarb

Chesapeake Energy Corporation reported net income of $590 million or $.92 per share on revenue of $2.798 billion and production of 223 billion cubic feet of natural gas equivalent.

The major drivers of their positive earnings were a 9% year over year increase in average daily production, a 19% year over year increase in production adjusted to asset sales, and a 35% year over year increase in oil and natural gas liquids production. The company’s earnings increase also reflects an increase in the price of natural gas and realized hedging gains.

Chesapeake anticipates full-year production growth of 8-10% for 2010 and 16-18% in 2011. The company is also working on expanding its oil and gas liquids production to 15-20% of total production through organic growth by 2012.

Overall, we maintain a hold rating on the company, expecting revenue growth to be driven by increasing commodity prices, their increased exposure to the US shale play, and their organic growth.