The water industry can be segmented in several ways, municipal (supplying consumers) vs. industrial (supplying mostly process industries); drinking water vs. wastewater. Within each of these segments the market can then be broken down into different sub-sectors, such as equipment vs. chemicals vs. engineering services, etc. Each sub-segment has its own unique issues and opportunities. For example, chemical usage is in decline, whereas the use of membranes is increasing. Additionally, as a result of the increasing use of pharmaceuticals by consumers, new analytical testing requirements are being developed.

On the first issue, the company is emphatic that it has seen “no recurrence at all” of the utilization issues that impacted the 1st quarter commercial MCR. On the second, there is no backing down from long-term growth outlook. It is targeting to more than double the top line over next decade (an extra $100 billion), and reiterated its view for 15% EPS growth. The company sees business unit realignment as more significant than is generally recognized.

Government programs are still a key component for growth, comprising about half of the top-line target. Senior business is a major factor, but could TRICARE be ahead? The company acknowledges that it needs to show a return to organic commercial growth, and believes that the organization is now more focused on product innovation that can achieve this goal, with evidence of this becoming apparent in 2008. The company also notes its strained relationship with the benefit consulting community, even though they have implemented actions to address this issue.

Forums at Search Engine Roundtable, are reporting that Yahoo has begun contacting U.K. advertisers about the impending launch of Panama. Snippets from the email Yahoo sent out can be seen at PPC Blog.

Despite this, Abercrombie & Fitch's (ANF) growth outlook is very strong and visible. It is supported by Hollister, which is expected to double its revenues to $3 billion in the U.S., and International, which has been off to a robust start with the March opening of its flagship store in London.

ANF's business model is one of the best in specialty retail. The bottom line here is that this is one of the strongest and sustainable businesses in an industry that is known for being volatile.

Analysts met with Sun Microsystems CEO Jonathan Schwartz and came away convinced that investors should use the recent pullback to add to positions in order to participate in the ongoing turnaround.

It now is focusing on cost reduction (with operating expenses declining in 2008 from 2007), along with growth (although growth may take longer to show). The company gave no new guidance and is maintaining estimates.

For now, expect the global boom to continue. As a result, the following industries will continue to benefit: infrastructure, materials, consumption, travel and leisure, the expansion of financial services abroad, and environment-oriented capital spending.

In September 1997, Waters further extended its scientific instruments capabilities to include mass spectrometry with the purchase of MicroMass Limited. The combination of these three units is considered to be the current core business of WAT.

Since the acquisition of MicroMass, Waters has completed several smaller acquisitions, with the most important being the rheology product line of Rheometric Scientific in January 2003. Rheometers measure the response of materials to strain, which is complementary to the company’s Thermal Analysis product line. In both instances, the tested materials and customers are similar.

COH reported sales of $625 million versus driven by strong comps in U.S. Retail (15.1%, Factory (26.6%). Operating margins were up an impressive +300bps, Year over Year. Gross margins were disappointing but were offset with some savings on the administrative side and they expect GM to regain traction in the upcoming quarters as the company introduces higher margin coated canvas handbags.

COH is exiting its Small Corporate Accounts business (to increase its brand control), which contributed 1c of income in the quarter and was expected to contribute 10c for 2007. COH trades at 15x EV/EBITDA and 27x calendar 2007 EPS, a premium to its peers but a discount to its historical P/E average of 28x. The multiple can be justified, with room to expand given high and consistent returns on capital, strong cash flow, near 25% sustainable earnings growth, and recent acceleration in the business.

Despite this “head-fake” risk, analysts expect any such risk to be temporary, as NAND industry fundamentals are indeed improving in 2nd quarter 2007 from a supply versus demand standpoint, and we continue to believe that NAND supply-demand will be balanced in 2nd half 2007. At these levels the upside potential on the stock exceeds downside risk.

Big dates coming up. Nokia/April 9th: QCOM's pessimism regarding a near-term resolution with Nokia has not changed. Although the companies will conduct another round of negotiations ahead of April 9th, there is a low likelihood that an agreement will be reached by then. If no agreement is reached, analysts would likely remove Nokia royalties from EPS estimate – the impact would be $0.06 in 2007 and ~$0.28-0.30 in 2008. While the headline multiple would change, it is important to remind investors that Nokia is willing to pay QCOM some royalties (analysts believe a 50% reduction in the rate would be acceptable to Nokia).

The program is designed to bring incremental revenue to content creators, as well as Amazon. The new Context Links format allows publishers to customize: the number of links per page, the portion of the page that is linked, which Amazon products are linked, the format of the link to discern it as an ad, and whether previews appear upon mouse overs. Amazon benefits upon increased sales as well as the branding of Amazon every time there is a "mouse over."

The unemployment rate has been one of the best indicators of the strength and steadiness of the expansion. This rate comes from a survey of households and has been reflecting the dynamism of the economy.

Medco Health Solutions (MHS), the biggest U.S. drug-benefits manager, reported a 29 percent jump in profit to $228 million and raised its 2007 forecast after selling a higher proportion of generic copies of medicines. Revenue rose 1.2 percent to $10.9 billion. New lower-cost copies of drugs such as Pfizer's (PFE) antidepressant Zoloft and Merck's cholesterol pill Zocor have better profit margins for Medco, which buys medicines for employers, unions and insurers. Sales have risen for the past seven quarters, and analysts expect new generics coming on the market to allow Medco to keep growing for several more years. The shift to generics doesn't appear to end for about another three to four years. The model doesn't have any inherent weaknesses.

Deutsche Bank downgrades NovaStar Financial (NFI) Hold from Buy and lowers their target to $8 from $29. The downgrade is based on disappointing results and guidance of little to no taxable income from 2007-2011.

Barron's Online reports in the past 90 days, seven executives and directors from Anheuser-Busch (BUD) grossed $33 million disposing of nearly 652,200 shares on the open market, according to Thomson Financial data.

Wedbush Morgan thinks Electronic Arts' (ERTS) steep research and development costs should start to fall and since the co uses cash flow for R&D, both cash flow and EPS should swell. Electronic Arts' revenue from mobile games reached $100 mln in the nine months, up from virtually nil a year ago. It's sure to keep climbing as cellular networks speed up and handsets get better at displaying games.

Canaccord Adams downgrades iRobot (IRBT) to Hold. The downgrade is based on a lack of visibility into sustained growth and the firm remains concerned about potential benefits from a high level of spending to educate consumers.

Management’s initial revenue guidance for 2007 was very strong, with sales targeted at $2.5 billion, representing 41.3% year over year growth (Street consensus was $2.2 billion). Management believes that all businesses will perform well, with the outdoor, aviation, and marine segments targeted for 20% top line growth, and the automotive segment expected to generate better-than 50% revenue growth for the year.

Yahoo (YHOO), the world's largest consumer e-mail provider, said it has embedded instant messaging features inside its e-mail program, bridging a generational divide that has confused many users. Heavy Internet users have long toggled between e-mail and instant messaging services.

Management indicated that 1st quarter 2007 revenues would decline at less than a typical seasonal rate from an already low 4th quarter 2006. This is a decline despite the addition of Nortel's (NT) UMTS revs in 1st quarter 2007. Because most of 2007 merger synergies will take place in 2nd half 2007, analysts do not see much COGS and opex improvement in 1st quarter 2007 and look for potential mixed results for GM and OM relative to 2006 averages given ALU's high degree of operating leverage. Management guided for ~5% Year/Year revenue growth in 2007. This is off a low 2006 base and includes the addition of Nortel's UMTS revs (revenues start in 2007, adds ~ 130b.p.). In other words, ALU's Year/Year organic rev guidance is actually ~3-4%, compared to peers like Ericsson (ERIC) and Nokia (NOK) which we see growing infrastructure revenues 7% and 7% respectively.