Bank of Montreal (BMO) announced results for Q4 and satisfied investors that the ship is safe. They did not increase the dividend. Many feel that regulators in the back room did not want to see increased dividends. But with the stock trading near its 52 week high and the current dividend ratio is over 5%, why would you raise the dividend. Some purists say yields over 5% are a danger signal. So they keep the powder dry.

BMO has purchased Diners Club from Citigroup (C) but refuses to disclose purchase price. Both parties say it’s not material but just want you to know that they did the deal. Diners Club seems to be the Brand that does not want to go and Citi finally threw it overboard. I cannot remember the last time I saw someone use a Diners Club Card.

Salesforce.com (CRM) on Tuesday produced excellent results but disappointed some of its shareholders, who had expected better. The stock was at or near its 52-week high and reports of 20% increase in revenues in a terrible economy were not satisfactory to this very tough crowd. Who managed those expectations? Marc Benioff?

Hmnm... How to please? Well, let’s look at some balance sheet issues. Salesforce.com currently holds approximately $1 billion in cash and marketable securities. About 60% of this balance seems to be something called a non-current or long-term asset, which raises enough questions on its own. This is a 600% increase in the last nine months. The cash items now constitute 13% of the company's market capitalization, as R&D is comfortably paid for from regular cash flows.

Home Depot (HD) and Lowe's (LOW) both announced much weaker revenues this quarter, with Home Depot down 8% and Lowe's down 29.5%. Both are cutting costs and probably doing everything imaginable to salvage the situation, but economic headwinds continue at gale force levels. They will soon realize they have more capacity than they need, and the super store size may not sustain the economic models they are used to working with.

Being retailers and merchants, Home Depot and Lowe's will look to other product lines to fill their stores and feed their investors. This will entail stepping out into product lines that they are not familiar with. Watch for new hires from non-traditional product groups, along with investments, joint ventures and other forms of partnership with non-traditional product groups. Watch for financial shrapnel in the commercial real estate space as stores go dark and leases are exited. Any technicality will do.

Canadian Solar (CSIQ) recently reported improving results and would have you believe that the trend is up and away. After all, we are solving the world’s energy crisis.

What the company did not point out is that, despite the corporate name, they hardly have any operations in Canada. Most of its revenues come from Europe (well over 85% last quarter), but most of its manufacturing is in China. The revenues in Asia are anaemic. Asia needs to become energy efficient also so you have to wonder about the marketing strategy.

Wendy’s Arby’s Group (WEN) on Thursday reported Q3 numbers which show a reported 9.1% increase in EBITDA. The company has been diligent about reducing costs, and Thursday also announced a Supply Chain Co-Op which will start in Q4.

There was very little information provided other than the fact the franchisee’s will be financial partners. The question becomes, 'who gets the benefits and why penalize the shareholder and advantage the franchise owners?' Initially, Wendy’s will fund the co-op and then the franchisee’s will start to contribute. But there is no real information on the financial model and, therefore, how do you understand the risks.

EW Scripps (SSP) reported results and continued the woes of newsprint. They have sold off their cable and used a big fat tax refund to reduce debt significantly. So the over-leveraged argument is no longer a factor.

"We're determined to position Scripps for continued success in the rapidly evolving news industry. In the third quarter we made significant progress," said Rich Boehne, president and chief executive officer.

Charles Schwab (SCHW) came out with a three tier press release designed to pump up the market. Chairman Chuck leads off by saying that investors can depend on Schwab. CEO Walt Bettinger drills down and says that investors have not given up on the market and are working with Charles Schwab. We finally get to CFO Joe Martinetto, who reports that “Q3 revenues were down 19% from the year-earlier period, reflecting the headwinds we’ve been discussing for some time.”

Everyone knows the markets are off. Depending on which range of products and services a firm offers, you will either create wealth or destroy wealth over the long run. It sounds like the top guys want to beat their drum while the CFO has to report lower earnings. The message is cloudy and therefore will disappoint investors. Management needs to be true to themselves first.

Mosaic (MOS) reported its Q1 numbers and really stuck its neck out with this comment hidden in its press release.

“Mosaic is not providing financial guidance on potash sales volumes or MOP selling price until market conditions normalize.”

Bank of America (BAC) is considering an emergency CEO given that Ken Lewis may suddenly get real busy with legal issues. Emergency CEOs do not work. Look at the AIG experience. Congress just whips them for stuff they did not do. What you really want is a CEO who demands access to the corporate jet. Then you know you have the right gunslinger.

The board is still not on top of the leadership issue, much less where do we go from here.

Constellation Brands (STZ), which bills itself as the world’s largest wine company, headlines some positive results such as debt reduction of $155 million for the quarter and cost reduction benefits.

But revenues are down. It appears that consumers are not drinking away the recession. In fact, they are cutting back.

Bank of America (BAC) announced the appointment of Charles Holliday, Chairman of Du Pont (DD), to Bank of America’s board. Sounds like Bank of America got a good man at a difficult time. What’s in it for Charles Holliday? Bank of America is in danger of being declared a criminal organization. The SEC cannot get judges to bless agreements and are required to go to trial with proper rules of evidence. There will be much to do for new board members. Much of it will be messy legal issues and not strategic business issues that you would expect a board to deal with.

When you finish being confused about Charles Holliday’s rationale, start thinking about why Du Pont would be OK with this. The amount of time he will spend away from Du Pont business without any tangible benefit to Du Pont will be enormous.

Fedex (FDX) excited the market with a change in guidance upwards. At the same time spot oil prices seem to be down (at least for long enough for the headlines to intersect) Earnings will be released on Sep 17, 2009 but they feel justified in letting the world know today that Q2 EPS will be $0.58 @ share. This is way down from last year; but much better than previously expected.

But look at the range for Q2 $0.65 to $0.95. The quarter in question is the next ninety days and management wants 50% wiggle room. The problem with guidance being changed six days before results are released is that there really is insufficient information for a complete decision. Investors are now shooting in the dark and hoping for the best.

Home Depot (HD) announced the same difficult numbers as Lowe’s (LOW) did. Same store sales and overall revenues are negative. The market found comfort by concluding that the numbers were not as bad as expected. This style of delusional thinking was used on the Titanic when from time to time it was noticed that the ship was not sinking as quickly as they thought.

The situation is difficult. The press release shows that management does not have any fresh or new ideas. They just report the negative overall numbers, try to cut overheads and hope for something better. Just like Lowe’s they need to be prepared for a sustained recession and have nothing to offer. Difficult times call for difficult strategies. Opening and closing a few stores does not cut it anymore. The new strategy needs to be shared with the investing world. If there is one?

Twitter is not profitable say media elites. Allen & Co., a major venture capital power house is hosting a no media media conference at the posh location of Sun Valley. Major business news outlets all are reporting that the participants on a panel moderated by media writer Ken Auletta of The New Yorker magazine predict Twitter will face major challenges when they finally try to generate revenue. Mr. Auletta confirmed the tenor of the Twitter talk afterward.

What was not confirmed is how the established elites plan on making money right now.
Two of the panel participants, veteran media executive Barry Diller who is CEO of InterActiveCorp (IACI) and cable television magnate John Malone, chairman of Liberty Media Corp. (LCAPA), reiterated their skepticism about Twitter's moneymaking potential in separate interviews. Secret code for we do not want to over pay like we have done in the past.

Rio Tinto (RTP) claims that it is surprised by allegations from Chinese authorities that key executives were involved in stealing state secrets. The business media paint China as a big bad government arresting innocent people. The reality is that a lot of hard ball meetings have been held behind closed doors. We do not truly know what went on.

Rio Tinto and employees want to characterize themselves as small and relatively powerless. The Chinese are not stupid. The Chinese are subtle and astute. Rio Tinto did in fact have the power of a sovereign state, acted tough and probably did not think their way through the relationship.

Teck Resources (TCK) which has been in financial trouble (too much debt) made a strategic play by selling Class B shares for the equivalent US$1.5 Billion. The Vancouver based NYSE listed company is now welcoming China Investment Corporation (CIC, which will sit at the table with 17.2% equity interest and a 6.7% voting interest in Teck. The funds will be used to repay debt so the fundamentals should improve immediately. China Investment Corporation is a sovereign wealth fund.

The deal was announced when the US market was celebrating Independence Day. The Chinese have taken strategic steps to guarantee reliable supplies of critical metals. They have bought low so you may be sure they will sell high.

Castle Brands (AMEX:ROX), which bills itself as an emerging developer and international marketer of premium branded spirits, recently reported Q4 and year end financial results ending March 31, 2009. There were a few mixed messages as well as red ink. The press release says

“the Company continued to focus on its more profitable brands and markets and its pricing strategy.”

KB Home (NYSE: KBH), one of America’s largest homebuilders, reported Q2 financial results (see earnings call transcript). Predictably the results include massive amounts of red ink. But when you try to look into the future as stock market investors are prone to do you find confusion. Read this quote about pre-sales:

“The Company’s backlog at May 31, 2009 totaled 3,804 homes, representing potential future housing revenues of approximately $796.9 million, compared to a backlog of 6,233 homes representing potential future housing revenues of approximately $1.47 billion at May 31, 2008. Company-wide net orders for new homes in the second quarter were 2,910, down 31% from 4,200 in the second quarter of 2008 but up 59% from 1,827 net orders in the first quarter of 2009. The Company’s cancellation rate based on gross orders improved to 20% in the current quarter, compared to 28% in the first quarter of 2009 and 27% in the second quarter of 2008.”

The Goodyear Tire and Rubber Company (GT) yesterday reported Q1 2009 financial results (Q1 conference call transcript). Demand for tires is down as new car sales dropped dramatically. Also, I suspect replacement tires are not selling as well as cash-strapped consumers stretch their budgets. So if sales are down, their purchases of raw materials must also be dropping. But Goodyear reports that the cost of raw materials has increased. Read this quote in a Q1 context:

“Higher raw material costs, which increased 31 percent, or approximately $332 million, more than offset improved price/mix of $161 million.”

Williams Sonoma (WSM) announced Q4 results and year end. The numbers are difficult to terrible, and the company announced a few initiatives to improve. With a lot of jargon and buzzwords they talk about inventory control and improving the catalog operation. They plan on cutting expenses wherever possible. The margins narrowed as sales revenue dropped faster than expenses could be cut out. Hopefully on the way up revenues will rise faster than expenses.

The interesting strategy is Williams-Sonoma's insistence on paying a dividend. The current cash position looks good and they can cut the cheque quite easily. The question becomes: is the strategy of paying a dividend in difficult times properly aligned with whatever strategies will be needed to position for the future?