GE's Q1 Earnings Up 8% on Strong Global Growth
General Electric, the world's second-biggest company, said this morning its Q1 2007 profit gained 8% on strong international sales. First quarter profit was $4.51 billion ($0.44/share), up from $4.18 billion ($0.40/share) in the year-ago period -- in line with analyst consensus estimates. Sales gained 5.7% to $40.2 billion; analysts had projected sales of $39.9 billion according to Bloomberg. The company gave Q2 guidance of $0.52-$0.54/share, and affirmed its 2007 earnings outlook of $2.18-$2.23. CEO Jeff Immelt: "GE Money's earnings were tempered by challenges at its U.S. mortgage business [WMC], and GE Healthcare had a temporary regulatory suspension on shipments of its surgical supplies that affected their performance. Both of these businesses are in great shape and should rebound during the remainder of the year. Our ability to deliver such a solid quarter with these short-term headwinds truly demonstrates the breadth, strength and diversity of our businesses." Shares of GE are down 5% in 2007, vs. a 1% gain for the S&P 500 Index. The stock has been hurt by a jump in its tax rate.
Sources: Press release, Bloomberg, MarketWatch
Commentary: GE's quarterly results a good barometer for key sectors [Globe and Mail] • Goldman on GE: Now is Prime Buying Opportunity • General Electric: A Winner in the Mid-Cycle Slowdown
Stocks/ETFs to watch: General Electric Co. (NYSE:GE). Competitors: Siemens AG (SI), Koninklijke Philips Electronics N.V. (NYSE:PHG), Citigroup Inc. (NYSE:C). ETFs: PowerShares Industrial ETF (PRFN), iShares S&P 100 Index ETF (NYSEARCA:OEF), iShares NYSE Composite Index ETF (NYSEARCA:NYC)
Conference call transcript: General Electric Q4 2006 Earnings Call Transcript • General Electric Earnings Conference Call Transcript (later today)
Apple to Delay Release of Leopard OS
Shares of Apple Inc. fell 3.2% after hours yesterday after the company announced it will delay the release of its Leopard operating system by four months to ensure the iPhone, its combination music/video player and mobile telephone, has sufficient resources to make its scheduled debut. The iPhone is due to be released toward the end of June; Leopard will now be released in October. A "near-final" beta version of Leopard will be presented at Apple's developers' conference in San Francisco in June. Leopard, the sixth edition of Apple's OS X software, will update Tiger, which was released in 2005. Software sales represent approximately 6% of Apple's revenue, or $1.1 billion. According to UBS AG analyst Benjamin Reitzes, the Leopard delay could cost the company $0.03-0.04 per share in each of the next two quarters. Reitzes projects Apple will sell about 850,000 iPhones this fiscal year.
Sources: Wall Street Journal, Bloomberg
Commentary: Why Apple's Leopard Delay is A-Okay • 8 Reasons Apple iPhone Will Succeed (And 8 Reasons It Will Fail) • Why is the iPhone Release the Same Day as Apple's Developer Conference?
Stocks/ETFs to watch: Apple, Inc. (NASDAQ:AAPL). Competitors: Microsoft Corp. (NASDAQ:MSFT), Verizon Communications Inc. (NYSE:VZ), Sprint Nextel Corp (NYSE:S), Motorola Inc. (MOT), Research In Motion Limited (RIMM). ETFs: Internet Architecture HOLDRs (NYSE:IAH), Vanguard Information Technology ETF (NYSEARCA:VGT), Ultra QQQ ProShares (NYSEARCA:QLD), iShares S&P Global Technology (NYSEARCA:IXN)
Conference call transcripts: F1Q07 (Qtr End 12/30/06)
Sony Nears 5-Year High on Bullish Forecast by Nikkei
Shares of Sony gained 5% intra-day to ¥6,660 ($56.20 ADR equiv. at ¥118.5/$1), approaching a five-year high, and closed up 2.7% to ¥6,510 ($54.94), just short of their multi-year high set in late February. A Nikkei Shimbun report without citing sources, said operating profit for the fiscal year ending next March will increase more than six-fold to ¥400 billion yen ($3.4b); exceeding analysts' average estimate of ¥367b (Reuters). Bloomberg quoted a Sony spokeswoman who said, "The Nikkei numbers are just estimates and we can't comment on it." The Nikkei mentioned positive developments for Sony including a forecast increase in LCD TV sales in N. America and Europe to 10 million units (from 6m last year), as well as improving financials at its Game division. It is reportedly on track to reach its goal of 5% operating margin this fiscal year, during which sales are expected to rise 6% to ¥8.7 trillion ($73b) based on analysts' consensus estimate.
Sources: Bloomberg, Reuters, Nikkei Shimbun
Commentary: LG Philips Posts Fourth Consecutive Loss, Forecasts Rosier Future for LCD Makers • Sony Gearing Up To Challenge Apple TV, Unbox • Microsoft vs. Sony vs. Nintendo: Demand Doesn’t Lie
Stocks/ETFs to watch: Sony (NYSE:SNE) (JP: 6758). Competitors: Matsushita Electric Industrial (NYSE:MC), Nintendo (OTCPK:NTDOY), Canon (NYSE:CAJ), Sharp (OTCPK:SHCAY), Apple (AAPL), Philips Electronics (PHG). ETFs: BLDRS Asia 50 ADR Index (NASDAQ:ADRA), iShares S&P/TOPIX 150 Index (ITF), iShares MSCI Japan Index (NYSEARCA:EWJ)
Conference call transcripts: Sony F3Q06
Infosys: Q4 Earnings Beat Estimates; Bullish Outlook, but Slower EPS Growth
Infosys reported its seventh consecutive quarter of record profits, as Q4 (ended Mar. 31) net income jumped 70% to $259 million, or $0.46/ADS, beating analysts' average estimate (in rupees) by 11%, on a 45.5% increase in revenues to $863m. Full year (ended Mar. 31) net income rose 53% to $850m, on a 44% rise in revenues to $3.1b. "We are bullish about the market. We are seeing a lot of opportunities for us in the marketplace. We are not seeing any concerns on IT spending slowing down with any of our customers," said Infosys' CFO in a Reuters interview. Infosys estimates Q1 ADS EPS will grow 28.2% to $0.41, on a sales increase of 37.0% - 37.6% to $904m - $908m. It expects fiscal year (ending Mar. '08) ADS EPS to grow 25.7% - 27.7% to $1.86 - $1.89, on 28% - 30% higher sales to $3.95b - $4.02b. Two challenges facing Infosys and its rivals are an appreciating rupee and higher wage costs. Infosys was up 2.3% to 2,091.5 rupees in late trading on the Bombay Stock Exchange.
Sources: Press release [pdf], Associated Press, Bloomberg, Reuters
Commentary: Infosys: Stronger Rupee Seen Hitting Margins • Indian IT/Outsourcing Outlook: Wipro, Satyam Remain Top Bellwether Picks • Infosys Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: Infosys Technologies (NASDAQ:INFY) [BOM: 500209]. Competitors: Tata Consultancy Services [BOM: 532540] reports Apr. 16, Wipro (NYSE:WIT) - Apr. 20, Satyam Computer Services (SAY) - Apr. 20, Cognizant Technology Solutions (NASDAQ:CTSH) - May 7. ETFs: BLDRS Emerging Markets 50 ADR Index (NASDAQ:ADRE), Claymore/BNY BRIC (NYSEARCA:EEB), Morgan Stanley Technology (NYSEARCA:MTK); Infosys is an 8.5% component of the closed-end India Fund (NYSE:IFN) as of 3/31/07 and 5.7% of the closed-end Morgan Stanley India Investment (NYSE:IIF) fund as of 12/31/06 [Morningstar.com]
Related: Infosys Financial Fact Sheet [pdf], Financial Statements [i, ii (pdfs)]
Lam Research Posts Q3 Profit Jump
Semiconductor equipment manufacturer Lam Research yesterday reported a near-doubling of fiscal Q3 profit, beating Street expectations. The gain is attributable mainly to demand for equipment used in the manufacture of DRAM memory and NAND flash chips. Lam posted earnings of $164.7 million ($1.15/share), up 91% from $86.3 million ($0.60/share) in the year-ago period. Revenue was up 49% to $650.3 million from $437.4 million a year ago. Analysts had forecast EPS of $1.06 on revenue of $644.2 million. Lam reported that in the quarter, 78% of its sales were to memory chip manufacturers, primarily in Korea, Japan and other Asian countries. Lam is forecasting fiscal Q4 revenue of $655-675 million and EPS in the $1.13-1.17 range, above Street expectations of $649 million and $1.08. Earlier in the week, Lam was upgraded by Citigroup and HSBC Securities. The company's shares closed up 0.9%, or $0.74, at $50.98.
Sources: Conference call transcripts: F3Q07 (Qtr End 3/25/07), MoneyCentral, MarketWatch, TheStreet.com, Reuters
Commentary: Semiconductor Pair Trade: Long Lam Research, Short Applied Materials • Semi Cap Equipment: Bad News Is Bad News, For A Change • JP Morgan Expecting Additional Upside In Semi Equipment Stocks
Stocks/ETFs to watch: Lam Research Corp. (NASDAQ:LRCX). Competitors: Applied Materials Inc. (NASDAQ:AMAT), Novellus Systems Inc. (NASDAQ:NVLS). ETFs: Ultra MidCap400 ProShares (NYSEARCA:MVV), MidCap SPDRs (NYSEARCA:MDY)
McClatchy Abandons Tribune and Gannett For Yahoo Ad Project - WSJ
The Wall Street Journal reports that the nation's third newspaper largest publisher, The McClatchy Company, has abandoned a newly begun national advertising partnership with Tribune Co. and Gannett Co., the nation's number one and two publishers, and opted instead to join a rival group negotiating with Yahoo that establishes a common online platform. The Yahoo group is led by privately owned Hearst Corp. and MediaNews Group and includes 12 publishers who together print more than 250 newspapers. The 12 initially reached an ad sharing agreement with Yahoo over its Hotjobs website in the fall; McClatchy has joined up in time to get in on a more widespread arrangement which could be reached as early as the coming week. It would require the newspapers to power their websites with Yahoo search; Yahoo and the newspapers would in turn sell ads on each others' Web sites, sharing the revenue. In addition, Yahoo would get to feature content from the newspapers on its individual channels, such as news, finance and technology. The partners will gain an enhanced ability to attract national advertisers. According to anonymous sources, the ability to use Yahoo's new ad-serving technology is why McClatchy abandoned the Tribune-Gannett venture. The companies still plan to continue partnering for their joint CareerBuilder website.
Sources: Wall Street Journal, AP
Commentary: The McClatchy Company: Focusing on Local Online Expansion • Project 'Open Network' -- Nation's Big-Three Newspapers to Join Forces? • Yahoo: Estimates Up On Success Of Panama
Stocks/ETFs to watch: The McClatchy Company (NYSE:MNI), Yahoo! (NASDAQ:YHOO). Competitors: Gannett Co., Inc. (NYSE:GCI), Tribune Co. (TRB), The Washington Post Co. (WPO), The New York Times Company (NYSE:NYT), Google (NASDAQ:GOOG). ETFs: Internet Architecture HOLDRS (IAH)
Krispy Kreme Narrows Loss, Sales Drop
Krispy Kreme Doughnuts Inc. said Thursday its FQ4 loss narrowed to $24.4 million ($0.39/share), compared with a loss of $37.7 million ($0.61/share) in the year-earlier quarter. Revenue was down to $112.2 million from $122.2 million in FQ4 2006. For the fiscal year, Krispy Kreme's net loss was $42.2 million ($0.68/share) vs. a loss of $135.8 million ($2.20/share) a year earlier. Yearly revenue fell 15.1% to $461.2 million. The doughnut maker stumbled in 2004 as it attempted to expand. Shares fell from a high of over $50 to $4, but have since nearly tripled. CEO Daryl Brewster: "Krispy Kreme is in the midst of a turnaround... We are moving out of a survival mode and addressing key challenges." The conference call was the company's first in three years. Shares gained 3.2% in regular trading, but shed 4.8% to $10.75 in after-hours trading.
Sources: Press release, AP
Commentary: Krispy Kreme: Round Trip Stock Price • Did Krispy Kreme Sugar Coat Its Financial Statement? • Five Examples of When 'Buy What You Know' Doesn't Pay
Stocks/ETFs to watch: Krispy Kreme Doughnuts (KKD). Competitors: Starbucks Corp. (NASDAQ:SBUX), Tim Hortons Inc. (THI)
TRANSPORT AND AEROSPACE
Navy Cancels Lockheed Ship Contract After Failure To Agree On Costs
After not being able to reach an agreement on ballooning ship costs, the Navy has canceled a contract with Lockheed Martin to build a second prototype of a new, small, high tech warship, the Littoral Combat Ship, or LCS. The nation's largest defense contractor by sales, the cancellation is not expected to have much of a financial effect on Lockheed. The cancellation came after more than a month of negotiations in which Navy Secretary Donald Winter demanded Lockheed accept a fixed-price contract, part of the Navy's attempt to stem chronic cost overruns. According to Adm. Charles Goddard, the Navy's top program officer for ships, "We would like to have had this ship, but we have to have it at a price we can afford." From an initial cost of $220, the first LCS prototype has ballooned to between $350 million and $375 million, leading to the cancellation of a second prototype. Lockheed is still completing the first LCS prototype and will be allowed to compete for future naval contracts.
Sources: Press Release, Wall Street Journal, Reuters, AP
Commentary: DoD's FY-08 Budget: The Largest in US History • War, War, What Is It Good For? Defense Industry Stocks • Lockheed Martin: Earnings May Hit Record High
Stocks/ETFs to watch: Lockheed Martin Corporation (NYSE:LMT). Competitors: Boeing (NYSE:BA), United Technologies Corp. (NYSE:UTX), Northrop Grumman Corporation (NYSE:NOC), Raytheon Company (NYSE:RTN). ETFs: PowerShares Aerospace & Defense (NYSEARCA:PPA), iShares Dow Jones US Aerospace & Defense (NYSEARCA:ITA)
Citigroup Buys Old Lane Hedge Fund and With It, A New Head of Alternative Investments
According to the Wall Street Journal and New York Times, Citigroup's search for a new head of its alternative investments group is finally coming to an end. The company is likely to announce at its annual meeting this coming Tuesday that it has acquired Vikram Pandit's Old Lane hedge fund, begun 13 months ago after Pandit was passed up for promotion by Morgan Stanley. Citigroup will likely buy the fund for between $600 and $800 million dollars - quite a premium for such a young fund, and one which returned under 7% over the last 12 months. Pandit has raised about $5 billion for the fund so far; he will likely be taking the helm at Citi's alternative investments group, which has lacked a leader for more than a year and which is seen as indispensable to the company's growth. Last year it accounted for 6% of Citi's total profit, a number the company would like to see increase. Citigroup has been under pressure lately because of stagnant stock performance and a sharp increase in expenses, leading the company to announce Wednesday it is laying off 17,000 employees, or 5% of its global workforce.
Sources: Wall Street Journal, The New York Times, Reuters, MarketWatch
Commentary: Citigroup To Lay Off 5% of Its Global Workforce • Citigroup Needs Un-Grouping • Citigroup: Break It Up!
Stocks/ETFs to watch: Citigroup (C). Competitors: J.P. Morgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), Deutsche Bank AG (NYSE:DB), Credit Suisse Group (NYSE:CS), ABN AMRO (ABN), UBS AG (NYSE:UBS), Barclays PLC (NYSE:BCS). ETFs: iShares S&P Global Financial Index Fund (NYSEARCA:IXG), iShares Dow Jones US Financial Services (NYSEARCA:IYG), Financial Select Sector SPDR (NYSEARCA:XLF)
Sallie Mae Might Go Private -- New York Times
U.S. student loan company Sallie Mae is in discussions to be bought out by private equity for upward of $20 billion, according to the New York Times. The Blackstone Group has been suggested as a possible suitor. A buyout is by no means a foregone conclusion, however, as Sallie Mae is being probed by state and federal regulators over financial relationships with college officials, and a transaction would likely invite further scrutiny. Earlier this week, Sallie Mae agreed to pay $2 million and change its business practices after an investigation by the New York attorney general. Sallie Mae, which became a publicly traded company in 2004, has a market value of $16.7 billion. Last year, the company posted net income of $1.2 billion. Sallie Mae has grown through acquisition over the past four years and is considered by some analysts to be undervalued; its shares have dropped 20% over the past six months.
Sources: New York Times, Reuters
Commentary: Sallie Mae Looks Oversold - Barron's • Congressional Democrats Question Timing of Sallie Mae CEO's Stock Sales • Sallie Mae: How Bad The Impact From the President's Budget?
Stocks/ETFs to watch: SLM Corp. (NYSE:SLM). Competitors: Bank of America Corp. (BAC), KeyCorp (NYSE:KEY), Student Loan Corp. (STU), Nelnet, Inc. (NYSE:NNI), The First Marblehead Corp. (NYSE:FMD)
Morgan Stanley to Buy 13 Japanese Hotels
U.S. investment bank Morgan Stanley, the largest property investor of all Wall Street firms, has agreed to pay 281.3 billion yen ($2.4 billion) for 13 hotels owned by Japanese airline All Nippon Airways. ANA's stakes in ANA Property Management Co. Ltd. and ANA Hotel Management Co. Ltd. are also included in the deal. The transaction -- thought to be the largest real estate deal in Japanese history -- will approximately double Morgan Stanley's Japanese hotel portfolio, making it the largest hotel owner in that country. Morgan Stanley has been raising an $8 billion portfolio global property fund over the past year. Land prices have risen in Japan for the first time in 16 years, sparking strong competition for commercial property. Hotels are particularly attractive as tourism strengthens and competition heats up for increasingly scarce quality office buildings. The Morgan deal includes ANA Hotel Tokyo in Minato ward, a desirable financial district, and the beachfront Okinawa Harborview Hotel. ANA will continue to operate the hotels through the IHG ANA Hotels Group.
Sources: Bloomberg, MoneyCentral, Reuters
Commentary: Ten Stock Picks From Barbara Marcin of Gamco Investors • BoJ to Maintain Accommodative Policy; Watching Real Estate Prices
Stocks/ETFs to watch: Morgan Stanley (NYSE:MS). Competitors: Goldman Sachs Group Inc. (NYSE:GS), Merrill Lynch & Co. Inc. (MER). ETFs: iShares Dow Jones US Broker-Dealers (NYSEARCA:IAI), PowerShares FTSE RAFI Financials (PRFF), Vanguard Financials ETF (NYSEARCA:VFH)
Conference call transcripts: F1Q07 (Qtr End 2/28/07)
First Russian ETF, New Alt. Energy ETF to Be Launched Soon
Van Eck Global announced that the SEC has declared effective its prospectus for a Market Vectors-Russia ETF, expected to be launched on the NYSE in Q2 2007. Market Vectors-Russia ETF, which will trade under the ticker RSX, is the first Russian ETF to be listed in the U.S. It will seek to replicate the price and yield performance of the DAXglobal Russia+ Index -- which consists of 30 publicly traded companies rooted in Russia and traded on global exchanges. It also announced the approval of its Global Alternative Energy ETF, which will trade under the ticker GEX. It use the Ardour Global Index, which consists of 30 publicly traded companies involved in solar, wind, bio-fuels, water and geothermal energy, environmental technologies, energy efficiency and related activities, as its benchmark.
Sources: Press release, Reuters
Commentary: Russian ETF : Not for the Weak of Heart • Russian ETF Takes a Beating • Is Emerging Market ETF Slicing and Dicing Necessary?
Stocks/ETFs to Watch: Market Vectors-Russia ETF (NYSEARCA:RSX), Global Alternative Energy ETF (NYSEARCA:GEX). Competitors: PowerShares WilderHill Progressive Energy ETF (NYSEARCA:PUW), PowerShares WilderHill Clean Energy ETF (NYSEARCA:PBW)
MedImmune Considering Possible Sale
MedImmune Inc. announced yesterday it has engaged Goldman Sachs to assist it in exploring strategic alternatives, including a possible sale. Analysts estimate the company could be sold for $11-12 billion. MedImmune shares rose 15% to close at $43.63, hitting a 52-week intraday high of $43.77. Potential purchasers could include Merck, Wyeth, Eli Lilly, Abbott, and AstraZeneca plc. MedImmune manufactures Synagis, a respiratory virus medication, and FluMist, an inhalable flu vaccine. The company's board has resisted the idea of a sale in the past, but is apparently responding to overtures by pharmaceutical companies as well as "dissatisfaction with the company's short-term stock price performance" among investors. In February, Carl Icahn's firm disclosed it holds 2.8 million shares of MedImmune, sparking rumors of an eventual sale of the company. David Katz, CIO of investor Matrix Asset Advisors Inc., believes MedImmune could command a price in the $45-50 per share range. Lazard Capital Markets analyst Joel Sendek: "MedImmune offers a mixed bag to potential acquirers..."While the company has a blockbuster franchise in Synagis, the franchise is mature...The flu vaccine franchise is not profitable and the pipeline, though promising, is in early stage development."
Sources: Wall Street Journal, Reuters, SmartMoney
Commentary: Icahn's Golden Touch: MedImmune Up 12% • Biotech Day In Review: MedImmune Puts Itself Up For Sale • Biotech Day in Review: FluMist from MedImmune Outperforms Injected Vaccine
Stocks/ETFs to watch: MedImmune, Inc. (MEDI). Competitors: Bristol-Myers Squibb Co. (NYSE:BMY), Valeant Pharmaceuticals International (NYSE:VRX). ETFs: SPDR S&P Biotech (NYSEARCA:XBI), Biotech HOLDRs (NYSEARCA:BBH), iShares Nasdaq Biotechnology (NASDAQ:IBB)
Conference call transcripts: Q4 2006
FDA Panel Nixes Merck's Arcoxia; Shares Climb on Raised Guidance
An FDA advisory panel has voted 20-1 against approval of Arcoxia, an arthritis drug manufactured by Merck. The company's shares rose, however, on a higher-than-expected preliminary Q1 earnings report and an upward revision of full-year guidance. Arcoxia is a Cox-2 inhibitor, the class of drug to which Merck's withdrawn painkiller Vioxx belongs. Vioxx was taken out of circulation on concerns about cardiovascular risks, and the FDA panel believes Arcoxia is similarly risky. Merck said yesterday it had earned Q1 EPS of $0.78, exceeding its earlier $0.58-0.64 forecast (itself an upward revision of a prior estimate), on stronger drug sales across the board. Excluding costs, profit is now expected to come in at $0.84, well beyond Street forecasts of $0.64. Merck also raised its full-year EPS estimate to $2.75 -2.85 (excluding items) from $2.55-2.65. Analysts are forecasting $2.66 EPS. The new forecasts do not reflect reserves for potential Vioxx liability. The company's shares rose 3.9% to $48.19 in AH trading after the report. Merck will report Q1 results on April 19.
Sources: Wall Street Journal, Bloomberg, MarketWatch
Commentary: Merck High On New Drugs' Success; Shares Gain • HealthShares Founder: Buy Biotech Stocks and ETFs, Avoid Big Pharma • Where's the Money Flowing in Healthcare Stocks?
Stocks/ETFs to watch: Merck & Co., Inc. (NYSE:MRK). Competitors: Bristol-Myers Squibb Co. (BMY), Pfizer Inc. (NYSE:PFE), Sanofi-Aventis (NYSE:SNY). ETFs: Pharmaceutical HOLDRs (NYSEARCA:PPH), PowerShares FTSE RAFI Health Care (PRFH), iShares Dow Jones US Pharmaceuticals (NYSEARCA:IHE)
Conference call transcripts: Q4 2006
China's Reserves Mysteriously Hit $1.2T, More PBoC Tightening Expected
News reports covering China's latest foreign reserves data note there is as much as $73 billion in unexplained new reserves. The People's Bank of China now holds over $1.2 trillion -- the most in the world. The Wall Street Journal explains the "leading suspect is a possible series of foreign-currency swaps by Chinese banks." The Journal mentions forex trading among Chinese banks last year was 'more active than widely known.' The PBoC did not provide any comments or an explanation. The key is whether the funds are in fact swaps, which would mean "few implications for the broader economy," or if they are actual inflows, which "could further stimulate an economy growing almost uncomfortably fast." The latter case would mean further tightening by the PBoC is likely, on top of the numerous rate and bank reserve requirement hikes over the past year. A strategist at the Royal Bank of Scotland in Hong Kong comments, "The risks of an equity bubble are serious enough to warrant more significant tightening."
Sources: The Wall Street Journal, Bloomberg, Reuters
Commentary: China's Q1 Trade Surplus Nearly Doubles, but Smaller March Surplus a Surprise • Shanghai's Dramatic Recovery: 9% Drop But a Distant Memory • China's Earnings Season: What to Expect in April
Stocks/ETFs to watch: iShares Trust FTSE-Xinhua China 25 Index Fund (NYSEARCA:FXI), PowerShares Golden Dragon Halter USX China Portfolio (NYSEARCA:PGJ). Bond ETFs: iShares Lehman 1-3 YR Treasury Bond (NYSEARCA:SHY), iShares Lehman 7-10 YR Treasury Bond (NYSEARCA:IEF), iShares Lehman 20+ YR Treasury Bond (NYSEARCA:TLT). Currency ETFs: PowerShares DB G10 Currency Harvest Fund (NYSEARCA:DBV), Euro Currency Trust (NYSEARCA:FXE)
Vimpel-Com's Earnings Rise 30%, Miss Estimates Due to Tax Charge
Russian wireless firm Vimpel-Communications this morning reported fourth-quarter earnings slightly below market expectations, the result of a large charge related to a tax dispute. Shares are currently higher by $0.50, or 0.53%, to $95.20 in late morning trading of ADRs in New York. Despite net income falling $70 million on a quarter over quarter basis to $198 million, or $3.89 a share, income would have eclipsed Reuters analyst expectations of $238 million if not for a $42.5 million tax dispute charge. On a year over year basis, net income gained 30%, to EPS of $3.89, compared with $2.97 a year earlier. Net operating revenue rose 59% to $1.45 billion. The company said it expects to continue its strong subscriber growth outside of Russia. Vitaly Kupeev, telecom analyst at Alfa-Bank pointed out that "overall this is a good set of results, and there is no reason for concern."
Sources: Press Release, Reuters, MarketWatch
Commentary: How To Invest In WiMAX • MTS vs. Vimpelcom: Russian Cellular Market Leaders' 3Q Results • World's Biggest Emerging Market: Russia
Stocks/ETFs to watch: Vimpel-Communications (NYSE:VIP). Competitors: Rostelekom OAO (ROS), Golden Telecom (OTCPK:GLDN), Mobile TeleSystems (NYSE:MBT). ETFs: Wireless HOLDRS (NYSEARCA:WMH)
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