Q3 2009 Earnings Call Transcript

October 30, 2009 11:00 am ET

• Economy surges back to growth. Stocks logged their best one-day gain in three months on Thursday after the U.S. economy returned to growth in Q3. The government's first estimate of GDP showed the economy expanded at an annual rate of 3.5%, the first growth quarter in more than a year, and well ahead of Street estimates of 3%, sending Treasury prices and the dollar lower as traders exited safe havens. As recently as last week economists had called for a 3.3% gain, but they pared their estimates in the past couple days after week durable goods sales data came up short. "The economy has emerged with gusto from the deepest recession since WWII," one economist said. "The short-term prospects for the economy remain good."
• Private sector must lead the way - Geithner. The return to GDP growth is encouraging but the recovery is still fragile, Treasury Secretary Timothy Geithner said at a Q&A session Thursday evening following yesterday's Q3 GDP announcement. "The number today was really encouraging... it was broad and strong and it wasn't just cash-for-clunkers and it wasn't just economic stimulus... but it's important to remember that it's very early," he said. Geithner stressed that a robust recovery would have to be led by the private sector, saying the U.S. can't borrow-and-spend its way to health.
• Repsol strikes again. Repsol (REP), long derided as the oil company with no oil, will today announce a "fairly sizeable" discovery in the Gulf of Mexico's Shenzi field that it says will help reduce U.S. dependence on foreign oil. Today's discovery comes on top of big finds in Brazil and West Africa, and leaves Repsol with the unexpected challenge of developing a sudden surge in oil and gas resources. "We've had some success in exploration," CEO Antonio Brufau said.
• CIT, Goldman adjust $3B credit line. CIT Group (CIT) reached an agreement with Goldman Sachs (GS) to amend a $3B loan facility, ending their dispute over a $1B "make whole" payment CIT would have owed Goldman if it files for bankruptcy. Goldman will reduce the loan size to $2.13B, wiping out the unused portion of the facility, for which CIT will pay Goldman a $285M penalty, and post an additional $250M of collateral. The announcement, made in an 8-K filing, comes two days after CIT raised an additional $4.5B to bolster its restructuring.
• Rio Tinto doubles capex. A confident Rio Tinto (RTP) doubled its planned 2010 capital spend to at least $5B after it cut debt and saw signs of economic recovery. Rio had planned to cut capex to $2.5B - just enough to sustain current mines. "We will continue our program of cost reduction and debt repayments, but our renewed strength enables us to focus on disciplined capital expenditure on premier growth options," CEO Tom Albanese said. Rio, the world's #3 mining group, said it had cut its debt by 42% so far this year to $22.3B. (statement)
• EDF/Constellation deal at risk. State-owned nuclear power operator EDF is facing pressure from the French government to abandon its $4.5B deal to buy 49.9% of Constellation Energy Group's (CEG) nuclear assets and build four reactors with the U.S. company. "For us, the priority strategy for EDF is indeed in Europe, notably the U.K. and Italy, and everything outside Europe is less essential to EDF's expansion," an unnamed government official said.
• Credit crunch continues. Loan defaults by small and medium-sized U.S. businesses rose in September to 0.85% from 0.81% in August, according to risk management firm PayNet, but accounts in moderate (30 days plus) and severe (90 days plus) delinquency decreased to 4.22% (from 4.35%) and 1.4% (from 1.48%) respectively, the lowest since January. PayNet's Small Business Lending Index, which measures the volume of financing, is down 22% from a year ago, a sign lenders remain reluctant to extend credit to small and medium-sized businesses. "It's hard to imagine a robust recovery when you see numbers like this," PayNet founder Bill Phelan said.
• BoJ holds steady. The Bank of Japan left its key rate unchanged at 0.1%, but said it would discontinue its corporate bond and commercial paper purchase program at the end of December, as scheduled - "given that issuing conditions in the CP and corporate bond markets have been improving markedly, and thus the purpose of the purchases to restore market functioning has been achieved." Still, the BoJ stressed that this doesn't signal the beginning of its exit strategy, and extended its special lending facility to provide three-month funds at 0.1% until the end of March. Remarking on the decision to scrap its corporate funding support, Japan's PM Yukio Hatoyama remarked that it's hard to be as optimistic as the BoJ. (statement)
• House Energy and Commerce Committee OKs consumer agency. A second House panel voted Thursday to create a Consumer Financial Protection Agency to oversee mortgages, credit cards and other financial products, with a full House vote expected in November. The House bill falls short of the administration's original proposal, exempting auto dealers, credit, mortgage and title insurers and banks with less than $10B in assets, among others - exceptions some worry will weaken the agency's power.
• Sands gets OK for $2-3B IPO. Sources say Las Vegas Sands (LVS) has received approval from the Hong Kong stock exchange for a $2-3B IPO of its Macau unit. Sands will kick off pre-marketing next week, and launch its roadshow on Nov. 9, with a trading debut set for the end of November. Goldman Sachs (GS), Citigroup (C) and UBS (UBS) are coordinating. LVS rose 12% Thursday after posting a surprise Q3 profit; shares are up another 12% premarket.
• Junk bond rally becomes self-fulfilling. Demand for junk bonds hit record highs last week, with investors pouring another $207M into junk bond funds, pushing YTD inflows to a record $27.8B. Junk bond indexes are up more than 50% YTD, as investors become more comfortable with risk. The growing cash flow enables shaky companies to head off default - adding more fuel to the rally.
• AIG won't sell Japan units. AIG (AIG) says it will not sell its two Japanese insurers, AIG Edison Life Insurance and AIG Star Life Insurance, reversing its decision from a year ago at the height of the crisis. AIG said in a statement it now believes it would improve its corporate value to keep the two Japanese units, which have a very firm financial base and strong sales network.
• Energy IPO runs out of steam. Former Enron unit AEI, which operates power and gas distribution lines in Latin America, canceled its IPO Thursday hours after it slashed the size of the deal by two-thirds in the face of weak demand. The IPO, managed by Goldman Sachs (GS), Credit Suisse (CS), Citigroup (C) and JPMorgan (JPM), is the first U.S.-listed IPO this year to be withdrawn after an attempt to price the offering. AEI faulted market conditions for the withdrawal, but analysts say its debt load, risk exposure and expected payout to its private-equity owners also raised concerns.
• ChiNext soars on debut. China's Nasdaq-lookalike ChiNext stock market launched trading Friday with strong gains. An initial 28 companies listed, and shares gained 46-123% from their IPO prices, in line with expectations. The listees priced their IPOs at a hefty 56x 2008 earnings.

Earnings: Fri. Before Open

• Alcatel-Lucent (ALU): Q3 net loss of €182M vs. -€174.4M consensus. Sales of €3.69B (-9.3%) vs. €3.88B consensus. Says it has achieved 80% of its goal to reduce annual expenses by €750M. Shares -2.9% premarket. (PR)
• Ameren (AEE): Q3 EPS of $1.16 beats by $0.13. Revenue of $1.82B (-11.9%) vs. $2.1B. (PR)
• American Axle & Manufacturing (AXL): Q3 EPS of -$0.18 beats by $0.20. Revenue of $410M (-22.4%) vs. $420M. Shares -1.4% premarket. (PR)
• Aon (AOC): Q3 EPS of $0.65 misses by $0.01. Revenue of $1.81B (-2.1%) in-line. (PR)
• Apartment Investment and Management Company (AIV): Q3 FFO of -$0.35 in-line. Revenue of $319M (-7.3%) vs. $313M. (PR)
• Arch Coal (ACI): Q3 EPS of $0.16 beats by $0.12. Revenue of $615M (-20.1%) vs. $605M. Shares +3.9% premarket. (PR)
• Chevron (CVX): Q3 EPS of $1.72 beats by $0.25. Revenue of $46.63B (-40.9%) vs. $47.84B. "In our downstream operations, we continued to experience weak margins on the sale of gasoline and other refined products. Weak demand and plentiful supply affected all our major markets." Shares +0.7% premarket. (PR)
• CMS Energy (CMS): Q3 EPS of $0.32 misses by $0.02. (PR)
• Constellation Energy Group (CEG): Q3 EPS of $1.23 beats by $0.16. Revenue of $4.03B vs. $4.48B. Sees full-year EPS of $3.25-3.45 vs. consensus of $3.10. (PR)
• Coventry Health Care (CVH): Q3 EPS of $0.68 beats by $0.14. Revenue of $3.44B (+17.7%) in-line. Shares +2.4% premarket. (PR)
• Cummins (CMI): Q3 EPS of $0.56 beats by $0.19. Revenue of $2.53B (-31.5%) in-line. “While we saw improvement in some markets in the third quarter, we expect the economic climate to remain challenging until late 2010 - especially in the U.S. and Europe.” (PR)
• Dominion Resources (D): Q3 EPS of $0.99 beats by $0.09. Revenue of $3.65B (-16.4%) vs. $3.94B. Sees Q4 EPS of $0.55-0.65 vs. $0.67. (PR)
• Duke Energy (DUK): Q3 EPS of $0.40 beats by $0.02. Revenue of $3.4B (-3.2%) vs. $3.8B. "Industrial sales volumes continued to show signs of stabilization." (PR)
• Estee Lauder (EL): FQ1 EPS of $0.85 beats by $0.51. Revenue of $1.83B (-3.7%) in-line. Shares +4.5% premarket. (PR)
• ITT Industries (ITT): Q3 EPS of $1.03 beats by $0.13. Revenue of $2.7B (-6.3%) in-line. (PR)
• NYSE Euronext (NYX): Q3 EPS of $0.53 beats by $0.07. Revenue of $1.05B (-9.6%) in-line. Announces equity investment in its U.S. futures exchange by Citadel, GETCO, Goldman Sachs (GS), Morgan Stanley (MS) and UBS (UBS), with NYX to remain largest shareholder. (PR I, II)
• Penske Auto Group (PAG): Q3 EPS of $0.34 beats by $0.06. Revenue of $2.59B (-12.9%) in-line. Shares (PR)
• Progress Energy (PGN): Q3 EPS of $1.22 beats by $0.03. Revenue of $2.82B (+4.7%) in-line. (PR)
• Regency Centers (REG): Q3 FFO of $0.69 in-line. (PR)
• Simon Property Group (SPG): Q3 FFO of $1.38 beats by $0.06. Revenue of $925M (-1.1%) vs. $892M. Shares -0.4% premarket. (PR)
• Sony (SNE): FQ2 net loss of ¥26.3B ($287.5M) vs. consensus of -¥40.4B. Revenue of ¥1.66T (-20%). Sees full-year net loss of ¥95B, up from a previous forecast of -¥120B and -¥98.9B last year. Sees sales -5.6%, unchanged. (PR)
• Tim Hortons (THI): Q3 EPS of C$0.34 misses by C$0.12. Revenue of C$564M (+10.7%) vs. C$552M. (PR)
• Ultra Petroleum (UPL): Q3 EPS of $0.57 beats by $0.05. Revenue of $155M (-47.8%) vs. $239M. (PR)
• Weyerhaeuser (WY): Q3 EPS of -$0.26 beats by $0.19. Revenue of $1.41B (-33.2%) in-line. (PR)

Earnings: Thur. After Close

• AllianceBernstein (AB): Q3 EPS of $0.67 beats by $0.22. Revenue of $806M (-5%) vs. $737M. AUM down 16% Y/Y to $498B. Shares +3.8% AH. (PR)
• Bally Technologies (BYI): FQ1 EPS of $0.53 in-line. Revenue of $197M (-17%) vs. $206M. Shares +0.6% AH. (PR)
• BMC Software (BMC): FQ2 EPS of $0.66 beats by $0.08. Revenue of $462M (-1%) vs. $463M. Raises full-year EPS guidance to $2.55-2.65 vs. $2.51. Shares +1.8% AH. (PR)
• Callaway Golf Company (ELY): Q3 EPS of -$0.25 misses by $0.01. Revenue of $191M (-11%) in-line. Sees full-year EPS of -$0.30 to -$0.35, vs. -$0.21. (PR)
• Cliffs Natural Resources (CLF): Q3 EPS of $0.45 may not compare to estimate of -$0.07. Revenue of $666M (-44%) vs. $535M. Shares +4.5% AH. (PR)
• DTE Energy Company (DTE): Q3 EPS of $0.96 misses by $0.03. Revenue of $2B (-16%) vs. $2.1B. Sees full-year EPS of $2.75-3.05 vs. $3.19. Shares -7.7% AH. (PR)
• Eldorado Gold (EGO): Q3 EPS of $0.08 beats by $0.01. Revenue of $82M (-20.3%) vs. $85M. Shares +0.7% AH. (PR)
• Genworth Financial (GNW): Q3 net income available to common shareholders of $0.04 beats by $0.06. Revenue of $2.4B (+10%) vs. $2.5B. Shares +9.7% AH. (PR)
• Hertz Global Holdings (HTZ): Q3 EPS of $0.15 misses by $0.09. Revenue of $2B (-16%) in-line. Raises full-year EPS guidance to $0.21-0.23 from $0.12-0.15, vs. $0.20. Shares +2.9% AH. (PR)
• Human Genome Sciences (HGSI): Q3 EPS of -$0.32 misses by $0.01. Revenue of $19M (+61%) vs. $24M. Shares +0.9% AH. (PR)
• Ingram Micro (IM): Q3 EPS of $0.25 beats by $0.05. Revenue of $7.4B (-11%) vs. $6.7B. Shares +2.4% AH. (PR)
• KLA-Tencor (KLAC): FQ1 EPS of $0.15 beats by $0.13. Revenue of $343M (-36%) vs. $332M. Shares +0.8% AH. (PR)
• Las Vegas Sands (LVS): Q3 EPS of $0.03 beats by $0.04. Revenue of $1.1B (+3%) in-line. Shares +8.4% AH. (PR)
• Manitowoc (MTW): Q3 EPS of -$0.04 misses by $0.12. Revenue of $882M (-20%) vs. $934M. Shares -7.2% AH. (PR)
• Maxim Integrated Products (MXIM): FQ1 EPS of $0.13 beats by $0.01. Revenue of $449M (-12%) vs. $438M. Shares -4% AH. (PR)
• McAfee (MFE): Q3 EPS of $0.62 beats by $0.01. Revenue of $485M (+19%) vs. $487M. Shares -5.8% AH. (PR)
• MetLife (MET): Q3 EPS of $0.87 in-line. Revenue of $12.4B (-1%) vs. $12.3B. Shares -2.3% AH. (PR)
• Mohawk Industries (MHK): Q3 EPS of $0.64 beats by $0.08. Revenue of $1.4B (-22%) in-line. Sees Q4 EPS of $0.28-0.38 vs. $0.45. Shares -5.3% AH. (PR)
• PEPCO Holdings (POM): Q3 EPS of $0.44 beats by $0.01. Revenue of $2.5B (-17%) vs. $2.9B. (PR)
• PerkinElmer (PKI): Q3 EPS of $0.30 beats by $0.03. Revenue of $437M (-9%) vs. $430M. Sees full-year EPS of $1.23-1.26 vs. $1.22. (PR)
• RealNetworks (RNWK): Q3 EPS of $0.00 beats by $0.06. Revenue of $140M (-8%) vs. $141M. (PR)
• Regal Entertainment Group (RGC): Q3 EPS of $0.05 misses by $0.02. Revenue of $674M (-11%) vs. $702M. Shares +0.3% AH. (PR)
• SBA Communications (SBAC): Q3 EPS of -$0.43 misses by $0.17. Revenue of $139M (+17%) in-line. Sees 2010 sales of $512M-532M vs. $604M. Shares -1.3% AH. (PR)
• Southwestern Energy Company (SWN): Q3 EPS of $0.34 in-line. Revenue of $503M (-26%) vs. $387M. Shares +0.2% AH. (PR)
• Standard Pacific (SPF): Q3 EPS of -$0.01 beats by $0.06. Revenue of $327M (-18%) vs. $285M. Shares +3.4% AH. (PR)
• Varian Medical Systems (VAR): FQ4 EPS of $0.78 beats by $0.04. Revenue of $642M (+8%) vs. $593M. Sees Q4 EPS of $0.52-0.56 vs. $0.60, and full-year EPS of $2.65-2.75 vs. $2.61. Shares -2.3% AH. (PR)

Today's Markets

Overseas markets were mixed Friday, with strong gains in Japan and China, but some weakness in Europe early on. Futures have moved lower overnight.

Costco Wholesale Corp. (COST) – Shares of the merchandise warehouse operator rose nearly 1.5% during the trading session to $58.77. A chunk of calls purchased in the front-month today indicates some investors expect continued upward movement in shares by expiration this Friday. Approximately 8,000 calls were purchased at the October 60 strike for 15 cents apiece. Shares of COST must increase at least 2% to $60.15 for investors to amass profits.

The Ends Justifies the Means

Watching the end of a blowout NFL game and the financial markets close out 2009 could be eerily similar this year. If over the next three months it seems that market participants are simply trying to run out the clock and close this year on a high, you might be absolutely right.

Below are a few of the most interesting trades that took place in the options market on Wednesday September 30th, 2009.

I not only provide what the action was that traded, but also the most likely reasoning behind the approach and what it means for shares.

Q2 2009 Earnings Call Transcript

July 31, 2009 11:00 am ET

• Bank bonus bonanza. The bonuses paid out to executives at nine banks that received government bailouts exceeded the net income of some of the banks, according to New York Attorney General Andrew Cuomo, substantially so at Goldman Sachs (GS), Morgan Stanley (MS) and JPMorgan Chase (JPM). Cuomo said employee pay "has become unmoored from the banks' financial performance," and that there is "no clear rhyme or reason to the way banks compensate and reward their employees." Even during what was arguably one of Wall Street's worst years in memory, nearly 5,000 bankers and traders received a bonus above $1M. (Read Cuomo's report (.pdf))
• Uncertain future for bank pay bill. Following the release of Cuomo's damning bonus report (see above), the House of Representatives will likely approve a bill requiring regulators to ban compensation practices that encourage 'inappropriate risks.' The Senate, however, and the White House are less enthusiastic about the measure, concerned it may give regulators too great a say on incentive pay.
• Cash for clunkers grinds to a halt. The government has suspended its 'cash for clunkers' program just six days after it started. Meant to encourage new car purchases, the $1B program turned out to be far more popular than expected and has already run through its entire budget, blowing away lawmakers' estimates that the funds would last until November. Lawmakers are pushing for additional funding to help meet the program's larger-than-expected demand.
• Ford stalls Volvo bidding. Ford has reportedly slowed down the bidding process for Volvo in an attempt to secure a better price for the unit. Ford apparently plans to wait until the sale of General Motors' Opel unit is complete, and will then invite the losing bidder to make a bid for Volvo, so nothing is likely to happen for another three to four weeks.
• Troubled banks protest. Regulators have escalated the number of banks put on probation with so-called memorandums of understanding. At least 285 banks have received memorandums so far this year, compared to 399 for all of last year. Some of the targeted banks are complaining that the regulators are being too harsh, since the memorandums of understanding can force banks to increase their capital, overhaul management or take other major steps, but regulators say a tougher stance now could prevent failure later on.
• Southwest wants to reach new frontiers. Southwest Airlines (LUV) unexpectedly bid $113.6M in a bankruptcy-court auction for smaller carrier Frontier Airline Holdings, potentially setting the stage for a bidding war with Republic Airways Holdings, a holding company for three regional airlines which bid $108.75M. If Southwest is successful, it will boost its presence in the highly-competitive Denver market and give the airline its first international destinations, but will also raise questions about Southwest's ability to stick to its low-cost business model.
• Pre, iPhone probe to focus on skipped markets. A probe into wireless phone contracts will focus on markets where Apple's (AAPL) iPhone and Palm's (PALM) Pre are unavailable, with Julius Genachowski, the chairman of the Federal Communications Commission, asking whether such lack of availability is "consistent with broad consumer interests." The FCC will also investigate whether competition is hindered by exclusive agreements between phone makers and service providers.
• No magic for Disney. Disney (DIS) failed to impress when it reported quarterly earnings yesterday (see details below), missing revenue expectations and narrowly beating earnings expectations on heavy cost-cutting. CEO Bob Iger told analysts that the company sees "signs of economic stabilization, but the pace and strength of the recovery remain uncertain." (Read Disney's earnings call transcript)
• Delphi set to exit Ch. 11. Delphi won court approval to sell its assets to lenders and General Motors. The auto-parts supplier is now set to exit bankruptcy protection after nearly four years.
• Jobless claims rise. Initial Jobless Claims came in at 584K, up 25K from a week ago (revised), and worse than the 575K consensus. Continuing claims fell 54K to 6.197M.

Earnings: Friday Before Open

• American Electric Power Company (AEP): Q2 EPS of $0.68 beats by $0.07. Revenue of $3.2B (-8.6%) vs. $3.63B. (PR)
• Anglo American (AAUK): H1 net profit of $2.97B (-30.6%), well outpacing consensus of $859M. Revenue of $11.13B vs. $17.92B a year ago. Says it "expects demand to remain soft in the near term until developed countries begin economic recovery." (DJ)
• AutoNation (AN): Q2 EPS of $0.29 beats by $0.05. Revenue of $2.61B (-28.8%) vs. $2.8B. "Having weathered the storm, AutoNation remains in an excellent position to capitalize on dealer consolidation and the gradual recovery in industry volumes." (PR)
• Calpine (CPN): Q2 EPS of -$0.16 vs. consensus of +$0.18. Revenue of $1.47B (-48%) vs. $1.72B. (PR)
• Constellation Energy Group (CEG): Q2 EPS of $1.08 beats by $0.32. Revenue of $3.86B (-18.8%) vs. $3.57B. Sees full-year EPS of $3.10-3.30 vs. $3.01 consensus. (PR)
• ITT Industries (ITT): Q2 EPS of $1.06 beats by $0.26. Revenue of $2.78B (-9.3%) in-line. Sees full-year EPS of $3.50-3.70 vs. $3.44 consensus. (PR)
• Snap-On (SNA): Q2 EPS of $0.65 beats by $0.07. Revenue of $590M (-23%) in-line. (PR)
• Total (TOT): Q2 net profit of €2.17B, less than half of €4.73B last year. Adjusted profit of €1.72B (-54%), in line with consensus. Sales of €31.43B (-35%). European refining margins narrowed 69% from a year ago. (DJ)

Earnings: Thursday After Close

• ARIAD Pharmaceuticals (ARIA): Q2 EPS of -$0.24 beats by $0.01. Licensing and collaboration revenue of $2.1M. (PR)
• Ariba (ARBA): FQ3 EPS of $0.17 beats by $0.01. Revenue of $84M (-1%) in-line. (PR)
• Arris Group (ARRS): Q2 EPS of $0.27 beats by $0.05. Revenue of $279M (-1%) vs. $281M. (PR)
• BioMarin Pharmaceutical (BMRN): Q2 EPS of $0.09 beats by $0.10. Revenue of $83M (+29%) vs. $78M. (PR)
• Camden Property Trust (CPT): Q2 FFO of $0.78 beats by $0.03. Revenue of $157M (+1%) vs. $141M. (PR)
• Community Health Systems (CYH): Q2 EPS of $0.66 beats by $0.06. Revenue of $3B (+13%) in-line. (PR)
• Disney (DIS): FQ3 EPS of $0.52 beats by $0.01. Revenue of $8.6B (-7%) vs. $8.8B. (PR)
• DryShips (DRYS): Q2 EPS of $0.25 beats by $0.04. Revenue of $210M (-30%) vs. $204M. (PR)
• DTE Energy Company (DTE): Q2 EPS of $0.56 beats by $0.41. Revenue of $1.7B (-25%) vs. $2B. (PR)
• Dun & Bradstreet (DNB): Q2 EPS of $1.21 in-line. Revenue of $417M (+1%) vs. $425M. Issues downside full-year EPS guidance, to up 1-5% from up 9-12%. Lowers full-year revenue guidance to -1% to +1%, from +2-5%. (PR)
• Evergreen Solar (ESLR): Q2 EPS of -$0.11 misses by $0.03. Revenue of $64M (+180%) vs. $63M. (PR)
• Exelixis (EXEL): Q2 EPS of -$0.42 misses by $0.01. Revenue of $27.4M (-10%) vs. $33.4M. (PR)
• First Solar (FSLR): Q2 EPS of $2.11 beats by $0.49. Revenue of $526M (+97%) vs. $459M. (PR)
• Genworth Financial (GNW): Q2 EPS of -$0.11 misses by $0.27. Revenue of $2.5B (+4%) vs. $2.6B. (PR)
• Geron (GERN): Q2 EPS of -$0.23 misses by $0.04. Revenue of $183,000 (-8%) vs. $800,000. (PR)
• Harmonic (HLIT): Q2 EPS of $0.03 in-line. Revenue of $81M (-9%) vs. $75M. (PR)
• HLTH Corp. (HLTH): Q2 EPS of $0.04 beats by $0.08. Revenue of $99M (+15%) in-line. (PR)
• Ingram Micro (IM): Q2 EPS of $0.15 misses by $0.05. Revenue of $6.6B (-25%) vs. $6.7B. (PR)
• Las Vegas Sands (LVS): Q2 EPS of $0.01 beats by $0.02. Revenue of $1.1B (-5%) in-line. (PR)
• McAfee (MFE): Q2 EPS of $0.60 beats by $0.03. Revenue of $469M (+18%) vs. $467M. (PR)
• MetLife (MET): Q2 EPS of $0.88 beats by $0.20. Revenue of $8.4B (+4%) vs. $11.7B. (PR)
• Mohawk Industries (MHK): Q2 EPS of $0.67 beats by $0.20. Revenue of $1.4B (-24%) in-line. Ex-restructuring charge EPS of $0.79. (PR)
• Monster Worldwide (MWW): Q2 EPS of $0.03 beats by $0.02. Revenue of $223M (-37%) vs. $225M. (PR)
• PDL BioPharma (PDLI): Q2 EPS of $0.47 beats by $0.04. Revenue of $126M (+18%) vs. $124M. Sees full-year revenue of $310M-325M vs. $331M. (PR)
• PerkinElmer (PKI): Q2 EPS of $0.28 beats by $0.01. Revenue of $435M (-14%) vs. $460M. Sees full-year EPS of $1.18-1.22 vs. $1.27. (PR)
• Pitney Bowes (PBI): Q2 EPS of $0.55 misses by $0.05. Revenue of $1.38B (-13%) vs. $1.43B. Sees full-year EPS of $2.15-2.35 vs. $2.46. (PR)
• Silver Wheaton (SLW): Q2 EPS of $0.06 misses by $0.01. Revenue of $41M (-17%) vs. $53M. (PR)
• Southwestern Energy Company (SWN): Q2 EPS of $0.35 in-line. Revenue of $478M (-21%) vs. $387M. Cuts full-year production view to 278-288 Bcfe from 289-292 Bcfe. (PR)
• Stone Energy (SGY): Q2 EPS of $0.65 beats by $0.48. Revenue of $263M (-35%) vs. $129M. (PR)
• Synaptics (SYNA): FQ4 EPS of $0.47 beats by $0.03. Revenue of $115M (+19%) vs. $112M. Announces retirement of CEO Francis Lee, succeeded by Thomas Tiernan. (PR)
• Varian Semiconductor Equipment Associates (VSEA): FQ3 EPS of -$0.20 beats by $0.05. Revenue of $73M (-60%) vs. $69M. (PR)
• Vistaprint (VPRT): FQ4 EPS of $0.43 beats by $0.04. Revenue of $135M (+22%) vs. $128M. Sees Q1 EPS of $0.32-0.35 vs. $0.40. (PR)
• Weingarten Realty Investors (WRI): Q2 FFO of $0.61 beats by $0.11. Revenue of $147M (-4%) vs. $144M. (PR)
• YRC Worldwide (YRCW): Q2 EPS of -$3.53 misses by $1.82. Revenue of $1.3B (-45%) vs. $1.6B. (PR)

Today's Markets

Asia markets were broadly higher Friday, Europe is mixed, and futures are up from yesterday's close.

After 16 weeks, 35% gains and more prayers to assorted deities than you can shake a stick at, the sell-side sentiment fell enough between Friday, June 19 and Friday, June 26 to cause the first “sell” signal since the First Coverage Market Index (i.e., sell-side sentiment) turned bullish at the start of March. And, even though Monday saw sentiment tick up a touch, and there was uncertainty reflected in the sell-side closing out more positions than they opened last week, as they say in the Old West, “The damage, she be done, and we be short!”

Mohawk Industries Inc. (MHK) is the second-largest maker of commercial and residential carpets, rugs, and other floor coverings in the US and one of the largest carpet makers in the world. The utilization (which measures the supply and demand in the securities lending market) of MHK is 50.05% and has increased 5.62% in the last month. Over the same period, the share price has decreased 7.01%.

After missing earnings estimates in the last two quarters many believe that the Q2 earnings (which are reported on 22nd July) will be vital to the companies mid- term market valuation.

Q1 2009 Earnings Call

April 24, 2008 11:00 am ET

• Lewis may face SEC probe. Bank of America (BAC) CEO Ken Lewis may come under SEC scrutiny for failing to disclose mounting Merrill Lynch losses. Lewis had testified in February that the Treasury and Federal Reserve strongly pressured him to stay quiet on potential problems with the deal, a claim that both Bernanke and then-Treasury chief Paulson deny. Even if Lewis had been under government pressure, he was still required by law to disclose the potential losses to his shareholders. New York AG Cuomo suggested the SEC "appears to have been kept in the dark" about talks between Bank of America and the Fed and Treasury, while the SEC says it is now "actively reviewing the disclosure."
• Gov't plans for possible Chrysler bankruptcy. As Chrysler nears its deadline to cut its costs and reach a Fiat tie-up, the Treasury is preparing a bankruptcy filing out of 'due diligence.' As of yesterday afternoon, Chrysler was nearing a labor deal with its Canadian union and had substantially completed negotiations with the United Auto Workers as well. Chrysler's lenders and the Treasury have been going back and forth about the terms of a possible debt swap. However, some sources say Chrysler is preparing to file for bankruptcy as early as next week, regardless of whether it reaches a deal with lenders or Fiat.
• Fed opens up its books on Bear. The Federal Reserve provided more details on its efforts to shore up the financial system and the accompanying jump in its balance sheets. The Fed's combined assets hit $2.25T as of Dec. 31, a sharp rise from $1.33T a year ago. Of the $74B in assets the Fed took on from Bear Sterns and AIG (AIG), the Fed had an unrealized loss of $9.6B as of Dec. 31. The value of the Bear Sterns commercial mortgage holdings owned by the Fed was written down by 28% to $5.6B, and residential loans were written down by 38% to $937M.
• Madoff investors sue JPMorgan. Florida investors filed a lawsuit against JPMorgan Chase (JPM), claiming the bank 'entered into a conspiracy' with Bernie Madoff after learning his returns were false in September 2008. The investors lost $12.8M in Madoff's Ponzi scheme. According to the complaint, JPMorgan 'quietly liquidated its entire $250M cash position' with a fund that invested in Madoff while continuing to provide fee-generating services to Madoff's business.
• Morgan may spin-off trading unit. Morgan Stanley (MS) may make major changes to its biggest proprietary-trading desk, including spinning it out into a hedge fund or opening up the unit to outside investors. Sources don't expect a quick decision on the matter and say Morgan may choose to leave the unit unchanged. However, Morgan has already eliminated several proprietary-trading desks since the financial crisis began, in part because of the repercussions of the government's intervention in the financial industry.
• HSBC closes Japan units. HSBC (HBC) will close its equity research and trading businesses in Japan, laying off around 40 workers and moving the equity operations to Hong Kong. Several other banks have recently retreated from the world's second-largest economy, including UBS (UBS), Goldman Sachs (GS) and Citigroup (C).
• NYSE, Deutsche Borse resume talks. Deutsche Borse and NYSE Euronext (NYX) resumed talks on a possible deal, after potential merger discussions were abandoned in December. There are conflicting reports about the nature of the talks; some say the firms are less serious than the first time around and are unlikely to see a near-term tie-up, while at least one business publication reported the talks are in an advanced stage already and a deal could be struck in a few weeks.
• Promotions, Kindle boost Amazon. Amazon (AMZN) beat quarterly earnings expectations (see details below) as Kindle sales picked up and online shoppers were drawn to low prices on Amazon's website. Though some analysts have worried how deep discounting will affect Amazon's bottom line, the company reported operating margins for the quarter of 6.6%, among the highest in recent years.
• Microsoft hit by PC slump. Microsoft (MSFT) met expectations for quarterly earnings (see details below) but fell short on revenue, posting a 5.6% drop from the year before, its first ever decline in quarterly revenue. Four of Microsoft's five business divisions recorded lower sales, which executives blamed on a general pullback in PC spending by both consumers and businesses. The company expects the rest of the calendar year to 'remain very challenging.'
• EU passes rating rules. The EU approved new rules to create European oversight for ratings agencies. The rules primarily aim to avoid conflicts of interest in the ratings process and to improve the way agencies rate debt. They also demand some increased disclosure to ensure agencies understand the risks of the debt being rated.
• Moody's warns on U.K. finances. The pound fell against the yen, euro and dollar after Moody's said the U.K.'s finances are 'deteriorating rapidly' and the government is taking 'risks.' Moody's and S&P are reviewing the U.K.’s AAA sovereign credit rating after the government said the nation’s debt will reach £1.4T ($2.05T) over the next five years.
• U.K. GDP shrinks. The U.K. economy shrank a larger-than-expected 1.9% in Q1, the third consecutive quarter of output declines and the largest quarterly decline since 1979.
• Jobless claims rise. Initial Jobless Claims rose to 640K, up from last week's 613K (revised) and in-line with estimates. Continuing claims rose 93K to 6,137,000.
• Home sales dip. Existing home sales fell to 4.57M in March from 4.72M last month, short of the 4.7M expected by economists. NAR chief economist Lawrence Yun noted that first-time buyers seem to be returning, but sales in the upper price ranges remain stalled.

Earnings: Friday Before Open

• American Electric Power Company (AEP): Q1 EPS of $0.89 beats by $0.08. Revenue of $3.5B (+0%) in-line. Reaffirms full-year guidance. (PR)
• Ford (F): Q1 EPS of -$0.75 beats by $0.48. Revenue of $24.8B (-42.7%) vs. $22B. Says it's still on track to meet or beat financial targets, including breakeven or better in 2011. On track to reduce costs by $4B in 2009. Q1 cash burn $3.7B. Shares +14.7% premarket. (PR)
• Honeywell (HON): Q1 EPS of $0.54 in-line. Revenue of $7.57B (-14.9%) in-line. Full-year guidance in line. (PR)
• ITT Industries (ITT): Q1 EPS of $0.72 beats by $0.14. Revenue of $2.56B (-8.9%) in-line. Full-year guidance in line with expectations. (PR)
• Metavante (MV): Q1 EPS of $0.39 beats by $0.01. Revenue of $427M (+0.5%) in-line. (PR)
• Schlumberger (SLB): Q1 EPS of $0.78 beats by $0.05. Revenue of $6B (-4.6%) in-line. "We do not see any significant recovery in North American gas drilling before 2010." (PR)
• Xerox (XRX): Q1 EPS of $0.05 beats by $0.01. Revenue of $3.55B (-18%) in-line. Sees Q2 EPS of $0.10-0.12 vs. $0.14. (PR)

Earnings: Thursday After Close

• Amazon.com (AMZN): Q1 EPS of $0.41 beats by $0.10. Revenue of $4.89B vs. $4.76B. Sees Q2 revenue of $4.3-4.75B vs. $4.61B consensus. Says "Kindle sales have exceeded our most optimistic expectations," but no numbers. Shares +3% premarket. (PR)
• American Express (AXP): Q1 EPS of $0.32 beats by $0.20. Revenue of $5.93B (-18.1%) vs. $6.45B. Consolidated provisions of $1.8B vs. $1.2B last year "primarily reflecting additions to the lending credit reserves in view of increased write-offs and past due loans." Tier-1 ratio 14.8%. "While we did see some recent improvement in early delinquency rates, overall credit indicators reflected rising unemployment levels and the broad-scale weakness in the economy. Based on current indicators, we expect Q2 U.S. lending write-off rates on a managed basis to rise between 200 and 250 bps over Q1 levels. We expect an additional increase of 50 bps or less in Q3, before leveling off during Q4." "If permitted by our supervisors and if supported by the results of the stress assessment, we intend to repay the government investment of preferred shares and warrants." Shares +8.9% premarket. (PR)
• Amgen (AMGN): Q1 EPS of $1.08 misses by $0.07. Revenue of $3.31B (-8.4%) vs. $3.63B. Full-year guidance in line with expectations. Shares -2.5% AH. (PR)
• Burlington Northern Santa Fe (BNI): Q1 EPS of $1.05 beats by $0.09. Revenue of $3.42B vs. $3.68B. Shares +2.1% AH. (PR)
• CF Industries (CF): Q1 EPS of $1.23 beats by $0.52. Revenue of $681M (+2%) vs. $479M. Shares +4.1% AH. (PR)
• Chartered Semiconductor Manufacturing (CHRT): Q1 EPS of -$0.26 beats by $0.16. Revenue of $244M (-37.2%) vs. $240M. Sees Q2 EPS of -$0.09 to -$0.05 vs. consensus of -$0.35, and revenue of $321-333M vs. $269M. Shares +15% AH. (PR)
• Chubb (CB): Q1 EPS of $1.43 beats by $0.05. Shares +0.7% AH. (PR)
• DeVry (DV): FQ3 EPS of $0.70 beats by $0.03. Revenue of $392M (+34.7%) vs. $388M. Shares +0.7% AH. (PR)
• Host Hotels & Resorts (HST): Q1 EPS of $0.10 misses by $0.01. Revenue of $882M (-16.2%) in-line. Will sell 60M shares for cash for operations and to pay down debt. Shares -4.3% AH. (PR)
• Interactive Brokers (IBKR): Q1 EPS of $0.30 misses by $0.16. Revenue of $312.5M (-51.3%) vs. $422.5M. "Our strict risk controls have not completely immunized us from the secondary effects of the financial crises as our results have been largely impacted by competitive pressures on spreads. Exchange listed options are one of the few life rafts still afloat and more and more traders are trying to hold onto it." Shares -12.8% AH. (PR)
• Juniper Networks (JNPR): Q1 EPS of $0.17 in-line. Revenue of $764M (-7.1%) in-line. Shares +7.2% AH. (PR)
• KLA-Tencor (KLAC): FQ3 EPS of -$0.34 misses by $0.08. Revenue of $310M (-48.5%) vs. $300M. Shares -1.6% AH. (PR)
• MEMC Electronic Materials (WFR): Q1 EPS of $0.01 beats by $0.03. Revenue of $214M (-49.7%) vs. $217M. Won't provide guidance due to limited visibility. Shares -1.9% AH. (PR)
• Microsoft (MSFT): FQ3 EPS of $0.39 in-line. Revenue of $13.65B (-5.6%) vs. $14.09B. "We expect the weakness to continue through at least the next quarter." Shares +3.9% AH. (PR)
• Mohawk Industries (MHK): Q1 EPS of -$1.55 vs. consensus of -$0.85. Revenue of $1.21B (-30.5%) vs. $1.38B. Shares +7.1% AH. (PR)
• Netflix (NFLX): Q1 EPS of $0.40 beats by $0.09. Revenue of $394M vs. $391M. Sees full-year EPS and revenue in line. Shares -6.7% AH. (PR)
• Riverbed Technology (RVBD): Q1 EPS of $0.11 beats by $0.01. Revenue of $88.5M (+21.2%) vs. $85.12M. Shares +5.3% AH. (PR)
• SunPower (SPWRA): Q1 EPS of $0.05 misses by $0.19. Revenue of $214M (-21.8%) vs. $269M. Sees full-year EPS of $1.25-1.75 vs. $1.90. Shares -7% AH. (PR)
• Western Digital (WDC): FQ3 EPS of $0.30 beats by $0.18. Revenue of $1.59B (-24.6%) vs. $1.48B. Shares +2% AH. (PR)
• YRC Worldwide (YRCW): Q1 EPS of -$2.63 misses by $0.73. Revenue of $1.5B (-32.7%) vs. $1.61B. Shares +1.4% AH. (PR)

Today's Markets

Asia markets closed mixed Friday. Europe has moved higher, while futures are flat.

As a manufacturer and distributor of lumber and hardwood flooring, Goodfellow (GFELF.PK) is currently in a tough industry. The collapse of the US housing market has drastically reduced demand for products in this industry, and Goodfellow correspondingly showed a year-over-year sales decline of 8% in the last quarter. In that same time period, however, the stock price has dropped some 40%, possibly offering long-term investors an attractive price.

The company trades for about $50 million, but an examination of its balance sheet reveals some downside protection for investors. The company shows A/R of $51 million, inventories of $63 million, and total liabilities of $50 million. As such, Mr. Market is offering the investor a 20% discount on inventory, with the company's fixed assets, customer relationships (of which there are 7,000) and manufacturing know-how thrown in for free!

Bullish Calls:

Denbury Resources (DNR): "is an inexpensive mineral company...it used to be twice as high...buy, buy, buy."

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

Next up is Pequot Capital Management run by Art Samberg. Pequot was founded by Art in 1986 with $3 million in assets and peaked with $15 billion in assets around the tech bubble. Today, he manages over $4 billion. They have 150 employees and employ multiple strategies, including private equity and venture capital, as Art believes equity returns will decline over time. Art holds a S.B. from Massachusetts Institute of Technology, an M.S. from Stanford University, and he received his MBA from Columbia University. Pequot Capital Management was recently ranked 93rd in Alpha's hedge fund rankings. In terms of their 2008 performance, their main fund was -17.5% for 2008, while their health care fund finished -27.9% as noted in our post on hedge fund year-end performance. Recently, we had noted that they amended some 13G filings and made some portfolio changes to a few larger positions. You can also read Pequot's March Commentary here by Byron Wien.

Homebuilders wisely took any and all losses possible last year in order to receive checks from the federal government. They had to show losses to benefit from rebates of taxes paid during better times. This was a gift from the 2008 stimulus bill. It is even rumored that many sold land holdings at losses with agreements to repurchase the same property in the future in order to obtain these lucrative rebates. No need for me to pontificate here on the tax payer fleecing. My job is to look for investment opportunities.

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

This week, turning the focus to global macro funds, we'll be checking in on Bruce Kovner's Caxton Associates. Do note that global macro funds are typically not equity focused funds. While they do indeed have equity exposure, the majority of their holdings are in other markets. So, we mainly check in on their sector exposure to see what types of global macro themes they may be investing in.

Q4 2008 Earnings Call Transcript

February 24, 2009 11:00 am ET

• AIG wants new loan terms, again. Sources say AIG (AIG) is looking to overhaul its $150B government bailout to reduce its financial burden, and in the process would further expose taxpayers to the troubled insurer's balance sheet. The new plan would have $60B of the government's loan repaid with a combination of debt, equity, cash and operating businesses. It would also mark a complete turnaround for the government, changing its approach to the insurer from that of a creditor to one of a potential owner. Sources say AIG would like to announce the changes next week when it releases Q4 earnings but talks, though in advanced stages, have not yet produced a final deal. The company is expected to post a heavy quarterly loss of over $60B, marking the biggest loss in corporate history.
• Thain testifies on bonuses. John Thain, former CEO of Merrill Lynch, will answer questions posed by New York AG Andrew Cuomo's staff today, and will disclose the names of Merrill employees who received $3.6B in bonuses just before the bank merged with Bank of America (BAC). Thain had already answered some general questions from Cuomo's office but had refused to identify individual recipients, citing orders from Bank of America to keep that information private. A judge on the New York Supreme Court ruled that Thain is required to provide those details, and the judge will later decide if that information should become public.
• Hedge funds face off on more regulation. One of the world's largest hedge fund groups is ready to propose new measures that would push money managers to open up their businesses. The Alternative Investment Management Association, a U.K. group with members in the U.S. and many other countries, could release a proposal as early as today suggesting hedge fund managers take such steps as registering with regulators and having regular contact with authorities about their businesses. These changes have faced resistance from many U.S. funds, but global pressure is growing to institute financial reform and extend hedge fund regulations.
• JPMorgan slashes dividends. JPMorgan (JPM) cut its common stock dividend by 87%, to $0.05 from $0.38. The surprise move will save JPMorgan around $5B a year, money it hopes to use to speed its repayment of $25B in TARP funds. CEO Jamie Dimon said the firm cut its dividend out of a "normal abundance of caution," and that "extraordinary times must call for extraordinary measures." The bank also said it has been 'solidly profitable' this quarter and quarterly outlook is 'roughly in line' with consensus forecasts.
• Roche bid still too low. Roche Holding (RHHBY.PK) will likely have to raise its bid for the 44% of Genentech (DNA) it doesn't already own after Genentech urged shareholders to reject Roche's $42B bid, saying it substantially undervalues the company. Before Roche went forward with its $86.50/share hostile offer, Genentech's banker had proposed $112/share as an acceptable price, showing just how far apart the two sides are on a fair valuation of the deal. Analysts believe the companies will ultimately meet somewhere in the middle, around the $95-$100 range.
• Employee churn at News Corp. Peter Chernin, the highly regarded President and COO of News Corp. (NWS), plans to leave the company when his contract expires this summer. Chernin has run News Corp.'s Fox television and film production, one of the company's largest divisions, for over 12 years. No replacement was named, and businesses Chernin oversaw will instead report directly to CEO Rupert Murdoch. Chernin's departure comes at a difficult time for the media giant, whose stock price has dropped by more than two-thirds in the past year.
• Yahoo upgrades ad services. Trying to win back business as the economy falters, Yahoo (YHOO) will unveil several new tools today to help create better matches between online ads and their target audiences. Among the services offered, ads can be customized based on which websites consumers have visited and their behavior on those sites, and marketers will be able to buy text ads targeted to users at a certain time of day or based on other factors like age or gender. Though other companies already offer some similar features, Yahoo is betting on its ability to harness a user base of hundreds of millions of monthly visitors.
• Here's $300. Now shoo! American Express (AXP) is offering select customers a $300 prepaid AmEx gift card to pay off their balances and close their accounts. The unusual move underscores how badly the credit card market has deteriorated and the steps companies are willing to take to avoid what could become a massive surge in credit card defaults. American Express declined to disclose the specifics of which customers are eligible for the offer, but said the offer applied to a "relatively small number of cardmembers who have sizeable balances and little spending and payment activity."
• Dark news from regional Feds. The Chicago Fed's National Activity Index inched up to -3.45 from -3.65 in December, but the three-month average of -3.41 was the lowest since at least 1975. According to the Dallas Fed's Texas Manufacturing Outlook Survey, factory activity deteriorated further in December. New orders and capacity utilization fell precipitously, with declines outnumbering increases 5 to 1.
• German confidence keeps falling. German business confidence fell to a 26 year low in February as the worst recession since WWII led companies to slash production and fire workers. The IMF expects Germany's economy to contract 2.5% this year, despite stimulus efforts.

Earnings: Tuesday Before Open

• FirstEnergy (FE): Q4 EPS of $1.09 beats by $0.06. Revenue of $3.2B vs. $3.32B. (PR)
• Foster Wheeler (FWLT): Q4 EPS of $1.03 beats by $0.08. Revenue of $1.6B (+11.9%) vs. $1.8B. (PR)
• GrafTech International Ltd (GTI): Q4 EPS of $0.49 beats by $0.11. Revenue of $265M (-1.7%) vs. $280M. (PR)
• Heinz (HNZ): FQ3 EPS of $0.76 beats by $0.12. Revenue of $2.4B (-7.5%) vs. $2.5B. (PR)
• Home Depot (HD): Q4 EPS of $0.19 beats by $0.04. Revenue of $14.6B (-17.3%) vs. $14.7B. (PR)
• Macy's (M): Q4 EPS of $1.06 beats by $0.05. Revenue of $7.9B (-7.7%) in-line. (PR)
• Magna International (MGA): Q4 EPS of -$0.68 in-line. Revenue of $4.8B (-29.3%) vs. $4.7B. (PR)
• Medco Health Solutions (MHS): Q4 EPS of $0.59 beats by $0.01. Revenue of $13.0B (+13.9%) vs. $12.7B. (PR)
• Office Depot (ODP): Q4 EPS of -$0.73 vs. consensus of -$0.06. Revenue of $3.27B (-15.4%) vs. $3.47B. Takes $1.27B charge for goodwill and trade-name impairments. (PR)
• Pacific Gas & Electric (PCG): Q4 EPS of $0.70 beats by $0.04. "Looking ahead, we are confident that we are well positioned to continue making the needed investments to strengthen energy reliability and services for our customers." (PR)
• Parker Drilling Company (PKD): Q4 EPS of $0.27 beats by $0.12. Revenue of $212.4M (+17.5%) vs. $225.7M. (PR)
• Quanta Services (PWR): Q4 EPS of $0.24 beats by $0.05. Revenue of $921.5M (+4.8%) vs. $913.5M. (PR)
• RadioShack (RSH): Q4 EPS of $0.50 misses by $0.20. Revenue of $1.3B (-7.7%) vs. $1.4B. (PR)
• Sempra Energy (SRE): Q4 EPS of $1.30 beats by $0.39. Revenue of $2.3B (-26.3%) vs. $2.55B. (PR)
• Target (TGT): Q4 EPS of $0.81 misses by $0.02. Revenue of $19.02B vs. $19.53B. Credit card receivables increased 9.6% to $9.1B from a year ago. (PR)
• Tenet Healthcare (THC): Q4 EPS of -$0.02 in-line. Revenue of $2.2B (+5.7%) in-line. (PR)
• Valeant Pharmaceuticals International (VRX): Q4 EPS of $0.52 beats by $0.24. Revenue of $183M (-3.1%) vs. $185M. (PR)
• ViroPharma (VPHM): Q4 EPS of -$0.01 misses by $0.16. Revenue of $50M (+4.8%) vs. $61M. (PR)

Earnings: Monday After Close

• DTE Energy Company (DTE): Q4 EPS of $0.80 misses by $0.18. Revenue of $2.17B (-1.8%) vs. $2.1B. Shares -2.4% AH. (PR)
• Forest Oil (FST): Q4 EPS of $0.32 beats by $0.01. Revenue of $281M (-15.7%) vs. $331M. Shares +2.4% AH. (PR)
• General Growth Properties (GGP): Q4 FFO of $0.70 misses by $0.15. Revenue of $1B (-2.8%) vs. $830M. Shares +16.7% AH. (PR)
• Health Management Associates (HMA): Q4 EPS of $0.07 in-line. Revenue of $1.11B (+3.3%) in-line. (PR)
• Healthcare Realty Trust (HR): Q4 EPS of $0.38 in-line. Revenue of $57.1M (+13.5%) vs. $58.3M. Shares +7.6% AH. (PR)
• Hecla Mining Company (HL): Q4 EPS of -$0.24 misses by $0.13. Revenue of $27.5M (-24.1%) vs. $73M. Shares -1.2% AH. (PR)
• Hertz Global (HTZ): Q4 EPS of -$0.22 misses by $0.17. Revenue of $1.79B (-16.4%) vs. $1.95B. (PR)
• Mohawk Industries (MHK): Q4 EPS of -$1.87 vs. consensus of $0.24. Revenue of $1.49B (-17.8%) vs. $1.54B. Sees Q1 EPS of -$0.89 to -$0.80 vs. $0.28 consensus. Shares -15.1% AH. (PR)
• Nordstrom (JWN): Q4 EPS of $0.31 beats by $0.01. Revenue of $2.3B (-8.5%) in-line. Sees 2009 EPS of $1.10-1.40 vs. $1.22. Shares +13.3% AH. (PR, earnings call transcript)
• ONEOK (OKE): Q4 EPS of $0.65 misses by $0.02. Revenue of $2.84B (-28.7%) vs. $3.49B. Shares +1.6% AH. (PR)
• St. Mary Land (SM): Q4 EPS of $0.43 misses by $0.11. Revenue of $258M (-6.2%) vs. $264M. Shares -2.1% AH. (PR)
• Whiting Petroleum (WLL): Q4 EPS of -$0.07 misses by $0.01. Revenue of $224M (-3.7%) vs. $220M. Shares +2.5% AH. (PR)

Today's Markets

• Asia markets declined Tuesday, largely a reaction to the lack of buying in Monday's U.S. session. Nikkei -1.46% to 7,269. Hang Seng -2.86% to 12,798. Shanghai -4.56% to 2,201. BSE Sensex -0.24% to 8,882.
• In Europe markets opened down and moved lower, but are off from their lows at midday. London -1.1%. Paris -1.35%. Frankfurt -2.1%.
• U.S. futures are up in the overnight session. Dow +0.6% to 7,160. S&P +0.6% to 749. Nasdaq +0.4%. Crude +0.3% to $38.56. Gold -0.5% to $989.40.

Tuesday's Economic Calendar

• 7:45 ICSC Retail Store Sales
  8:55 Redbook
  9:00 S&P/Case-Shiller Home Price Index
  10:00 Consumer Confidence
  10:00 Bernanke speaks to Senate Banking Committee
  10:00 Richmond Fed's Manufacturing Index
  5:00 PM ABC Consumer Confidence Index
• Notable earnings before Tuesday's open: FE, FWLT, GTI, HD, HNZ, M, MGA, MHS, ODP, PCG, PKD, PWR, RDN, RSH, SRE, TGT, THC, VPHM, VRX
• Notable earnings after Tuesday's close: CBI, CCI, FSLR, HCN, HLX, IAG, NBR, QCOR, RRC, WYNN, XCO

Seeking Alpha editor Eli Hoffmann contributed to this post.

Based on our proprietary Signal Rank™ methodology, The Manual of Ideas estimates that Bruce Berkowitz’s top three ideas are AmeriCredit (NYSE: ACF), United Rentals (NYSE: URI) and Hertz Global Holdings (NYSE: HTZ). While these companies are not in Fairholme’s top ten holdings by dollar value, our proprietary metrics suggest that those are the stocks in which Bruce Berkowitz may have the highest level of conviction at this time. Please see below for an explanation of the MOI Signal Rank™ methodology.

Our analysis is based on Form 13F-HR filed by Fairholme Capital Management on February 13, 2009. We also consider Fairholme’s past 13F-HR filings, recent 13G and 13D filings as well as the latest market prices of the portfolio holdings.

We continue our look at various money managers' portfolios with Bruce Berkowitz of the Fairholme Fund. Notable changes include the following:

Fairholme continues its thematic investing, opening or adding to bullish positions in defense and health insurers. New investments include Humana (HUM) and General Dynamics (GD), which complement existing stakes in Boeing (BA), Northrup Grumman (NOC), Spirit Aerosystems (SPR), Wellpoint (WLP) and Wellcare (WCG).