Q3 2009 Earnings Call Transcript

November 2, 2009 4:30 pm ET

Bullish Calls:

Bank of America (BAC): "Bank of America's come down way too much."

From our Interactive Earnings Report Database, below we have filtered out the US stocks that have historically been the most volatile on their earnings report days. To calculate this, we use the average absolute percentage change on all earnings report days for each stock that has reported earnings going back to 2001. (If a stock is up 10% on one day and down 20% on the next day, the average absolute 1-day change is 15%.)

The stocks below all have at least 10 quarterly earnings reports in our database and are trading higher than $5/share. As shown, FSLR has historically been the most volatile stock on earnings with an average daily change of +/-17.71%! in our database. MFLX isn't far behind at +/-17.03%. A stock that gains or loses nearly 20% of its value on every quarterly report is a day trader's dream. Other notables on the list of the most volatile stocks on earnings include ISRG, PCLN, UAUA, NFLX, and SNDK. For those interested, we also provide each stock's expected upcoming earnings report date.

by Thomas Rasmussen

We’ve been closely watching VeriSign’s (VRSN) grueling divestiture process from the beginning. One year and $750m in divestitures later, VeriSign is largely done with what it set out to do. The company finally managed to shed its messaging division to Syniverse Technologies (SVR) for $175m recently. Although we have to give the Mountain View, California-based Internet infrastructure services provider credit for successfully divesting nine large units of its business in about a year during the worst economic period in decades, we nonetheless can’t help but note that the vendor came out deeply underwater on its holdings. From 2004 to 2006 it spent approximately $1.3bn to acquire just shy of 20 differing businesses, which it has sold for basically half that amount. (Note that the cost doesn’t include the millions of additional dollars spent developing and marketing the acquired properties, nor the time spent on integrating and running them, which undoubtedly hurt VeriSign’s core business.)

Investors in Syniverse Holdings Inc. (SVR) woke up to a pleasant surprise Tuesday as the company announced a strategic acquisition. The agreement with Verisign Inc. (VRSN) has Syniverse purchasing the messaging business for a tidy sum of $175 million. The news sent SVR up 22% as the acquisition is seen as an opportunistic move which should immediately add to the company’s profitability.

In a normally functioning market, you would expect to see the stock of a company making an acquisition trade a bit lower as skeptical investors fret about overpaying for the new assets. But the current economic environment has created opportunity for companies with access to liquidity, as they are often able to make purchases for significantly reduced prices – often from troubled sellers. Verisign is about 2.5 times the size of Syniverse as measured by market cap, but Syniverse likely had the advantage in this transaction because of the excessive debt levels carried by Verisign. Syniverse was able to take advantage of its financial strength, and purchase an attractive asset at what will likely be proved to be a discount as Verisign was a “motivated seller” trying to raise much needed cash.

Q2 2009 Earnings Call

August 5, 2009 4:30 pm ET

We're currently running a number of earnings season reports over at Bespoke Premium, and below we have filtered our interactive earnings database to find the stocks that have historically been the most volatile on their report days. The stocks below have the highest average absolute one-day percentage changes on the first trading day in reaction to their quarterly earnings reports. To make the list, the stocks have to have reported earnings at least 12 times. Average absolute change makes negative and positive moves all positive, so a change of +10% and -20% equates to an average absolute change of 15%.

As shown below, MFLX, which is expected to report on August 6th, has an average absolute one-day change of 17.06% on its earnings report days. This is the most volatile stock in our database of ones expected to report over the next month or so. VDSI ranks second at 16.31%, followed by Travelzoo (TZOO), Intuitive Surgical (ISRG), and Priceline.com (PCLN). Other notable stocks that are volatile on their earnings report days include Netflix (NFLX) and Sandisk (SNDK).

Many of the institutional clients of The Applied Finance Group, Ltd. (AFG) tend to focus on large cap stocks and benchmark themselves against the S&P 500 Index, which is why many of the buy ideas from ValueExpectations.com usually come from the large cap index. Earlier in the week we highlighted companies from our buy/sell list both from large and small cap, as well as from growth and value style universes. We thought it would be a good follow up for some of the investors we work with who focus on small and mid cap stocks, to provide a more thorough list of companies from the Russell 2000 Index.

Below is a summary of 20 companies to watch from the Russell 2000 Index. The table highlights the 2 companies from each sector (ex. Financials) that have the most attractive Value Score (above 80) and are currently rated Neutral or higher by AFG’s buy/sell criteria. Factors used to derive an AFG recommendation include: Expected change in Economic Margins, Intrinsic Value, and Management Quality. Many classify stocks with market capitalization under $250 million as micro caps, therefore only those companies within the index that met that market cap minimum were considered for the list.

F1Q09 Earnings Call Transcript

May 07, 2009 at 4:30 pm ET

Syniverse Holdings, Inc. (SVR) was hit brutally in the fourth quarter after the Sprint / Alltel (S) merger caused the company to lose one of its largest customers. In just one day, the stock lost more than 40% of its value as investors grappled with the reality of this loss of revenue.

But in the four months or so since this announcement, the stock has regained nearly the entire loss and appears to be trading in a relatively healthy manner. In February, the company issued its fourth quarter announcement which showed pro-forma earnings of $0.39 per share - an increase of 25.7%. The company benefited from ongoing growth in the mobile industry despite significant weakness in economic conditions.

Q4 2008 Earnings Call Transcript

February 10, 2009 at 4:30 pm ET

Syniverse Holdings, Inc. (SVR) took quite a hit back in early November as the loss of a major customer frustrated investors. The stock dropped 44% the day after it released earnings on November 5th. At issue was an agreement by Alltel (AT) and Sprint (S) to in-source the processing of mobile data roaming traffic.

Syniverse is a major player in the wireless data business. The company produces technology to assist with interoperability (the ability for data plans on different carriers to operate seamlessly). While the name may not be a household staple, the company has a wide footprint with customers in 120 different countries and relationships with more than 600 wireless operators. As more of the world's population turns to the use of cell phones (and a greater majority of those cell phone plans include data), Syniverse should see its addressable market expanding.

Q3 2008 Earnings Call

November 5, 2008 4:30 pm ET

• Freddie CEO ignored red flags. Freddie Mac (FRE) CEO Richard Syron chose to ignore internal warnings that, if heeded, could have shielded the GSE from some of its current devastation. As early as 2004, then chief risk officer David Andrukonis told Syron the bad loans the company was buying likely posed "an enormous financial and reputational risk to the company and the country." Syron: "If I had perfect foresight, I would never have taken this job in the first place." He also notes that shareholders and regulators often have contradictory demands. "Sure, it’s hard to deal with the pressures of Congress and shareholders and regulators," a former top FRE executive says, "but that’s why executives get paid so much. It’s not acceptable to blame those pressures for making bad choices." Large shareholders are calling for the ouster of both Syron and Fannie Mae CEO Daniel Mudd.
• Yahoo shareholder troubles not over yet. The Yahoo (YHOO) saga continues as a large shareholder requested an examination of the election results from last Friday's annual meeting. Capital Research, and related fund Capital World Investors, control 16% of Yahoo shares, and had advised withholding votes for CEO Jerry Yang in response to Yang's perceived mishandling of negotiations with Microsoft (MSFT). Yang says he received support from 85% of shares voted - indicating that few other investors withheld their votes in a year when many investors have been unhappy with management.
• ImClone opposes $4.5B unsolicited bid. ImClone Systems (IMCL) and its chairman Carl Icahn indicated their opposition to a $4.5B/$60/share unsolicited bid from Bristol-Myers Squibb (BMY). Bristol-Myers, which has held a 17% stake in ImClone since 2001, is seeking to purchase the 83% of shares it does not already own. The ImClone board felt that this bid "substantially undervalues ImClone," and Icahn questioned whether Bristol-Myers' actions may have been triggered by access to confidential ImClone information. Coming two weeks after Roche Holding's (RHBBY.PK) unsolicited bid for Genentech (DNA), the move reflects the pharmaceutical industry reorienting itself towards biotech. BMY countered by saying its offer is already "full and fair." Some analysts say a deal is likely, though at a higher price.
After you finish reading Wall Street BreakfastSeeking Alpha's Market Currentswill keep you current all day long.
• Swiss Re buys Barclays Life for £753M. Swiss Re (SWCEY.PK) is buying Barclays' (BCS) life insurance unit for £753M ($1.48B), a move that will boost its Admin Re business in the U.K. Swiss Re also took a mark-to-market loss on structured credit default swaps of SWF362M ($346M). It turned a Q2 net profit of SWF600M, short of analyst consensus.
• Oil touches $118. After breaching $120 to the downside Monday, oil continued to move lower in after-hours trading - posting an overnight low of $118 on the Sept. contract. Tropical Storm Edouard, which oil bulls thought may disrupt production, now seems unlikely to do so. Other bearish factors included a Barack Obama about-face in which he advocated Monday opening up the SPR's light crude supplies, which he said would bring almost-immediate price relief, to be replaced by heavy crude. There were also rumors of heavy selling by a collapsing energy fund. The CRB commodity index (-3.3%) posted its biggest daily drop in four months, lead by natural gas (UNG -7.3%). "Investment monies are exiting away from commodity markets," one senior broker said.
• GM, Ford ponder engine JV. In an effort to save on R&D, GM (GM) and Ford (F) are in talks about collaborating on developing new engines, sources say. A deal could give Ford access to GM's Volt technology.
• Motorola gets co-CEO. Motorola (MOT) announced it will take on Qualcomm (QCOM) COO Sanjay Jha as co-CEO. He'll head up MOT's mobile-devices unit, which is expected to be spunoff later this year. "Our ability to attract a leader of Sanjay's caliber is a testament to the strong potential of the Mobile Devices business," co-CEO Greg Brown said.
• Global chip sales were up 8% Y/Y in June, SIA said. First-half sales gained 5.4% to $121B. Strong sales were driven by PCs (40%) and cell-phones (20%). SIA says it is seeing healthy U.S. demand - and even greater strength in emerging markets.
• Memory sales slump. iSuppli warns the DRAM market is showing renewed weakness after a short-lived Q2 quasi-recovery. Expect Q3 pricing to fall due to bloated inventories, it says. A real recovery may not happen until late 2009. (MU, IFX, QI)
• Personal income was up $6.8B (+0.1%), vs. -0.2% consensus. Personal consumption +$57.1B (+0.6%) vs. +0.5% consensus. The PCE price index inflation measure jumped 0.8% in June - the biggest increase since Sept. 2005. Core PCE prices +0.3% vs. +0.2% consensus.
• July factory orders gained 1.7% vs. +0.7% consensus. At almost $458B, orders are at their highest levels since at least 1992. Shipments also set new records. Factory order strength, up 5% from a year ago, may be one of the great untold stories of the downturn. In the 2001 recession orders plunged 10% - though then they weren't buoyed by a weak dollar.
• Interest rates for week ending Aug. 1: Fed funds 2.08% vs. 1.99% July 25. 3-month T-bills 1.67% vs. 1.57%. 3-month commercial paper 2.02% vs. 2.11%.
• Challenger said July layoff announcements were up 141% from a year ago to 103K. Hardest-hit were transportation (17K), financial (16K), and retail (12K).
• Europe retail sales plunge. European retail sales fell by 3.1% in June, more than twice the consensus forecast of -1.3% - and the worst annual decline since at least 1995. High energy and food costs are leaving shoppers with little money for discretionary purchases. "We could possibly have negative growth in the third quarter. Household spending has been very weak," economist James Shugg says. Food sales fell 4.4% and non-foods sales were off 2.2%. From May, they were down 0.4% and 0.6% respectively. Data released yesterday showed Eurozone consumer price inflation jumped to 4.1% in July - its fastest in 16 years - and producer prices rose 8% in June, an 18-year high.

Earnings: Tuesday Before Open

• CapitalSource (CSE): FQ3 EPS of $0.12 misses by $0.11. [PR]
• Cimarex Energy (XEC): Q2 EPS of $2.68 beats by $0.15. Revenue of $589M (+80.7%) vs. $600M. [PR]
• Covidien (COV): FQ3 EPS of $0.72 beats by $0.06. Revenue of $2.6B (+14.4%) vs. $2.5B. [PR]
• Global Industries (GLBL): Q2 EPS of -$0.12 vs. consensus of $0.39. Revenue of $300.5M vs. $319M. [PR]
• NiSource (NI): Q2 EPS of $0.09 misses by $0.01. Revenue of $1.8B (+15.2%) vs. $1.5B. [PR]
• Mitsubishi UFJ Financial Group (MTU): FQ1 profits fall 66% to ¥51.2B ($475M), less than half the ¥127.8B analysts expected. MTU lost ¥16B ($150M) on subprime-based assets, bringing its total credit-crisis losses to $1.3B. [Bloomberg, Reuters]
• W&T Offshore (WTI): Q2 EPS of $1.86 beats by $0.02. Revenue of $461M (+69.1%) vs. $433M. [PR]

Earnings: Monday After Close

• Anadarko (APC): Q2 EPS of $1.78 beats by $0.04. Revenue of $2.79B (-39.2%) vs. $3.68B. Shares -5.4%. [PR]
• Comstock Resources (CRK): Q2 EPS of $1.50 vs. consensus of $1.24. Revenue of $172M (+107%) vs. $227.5M. Shares +1.1%. [PR]
• DaVita (DVA): Q2 EPS of $0.90 beats by $0.07. Revenue of $1.41B (+7.2%) vs. $1.37B. Shares +2%. [PR]
• Gasco Energy (GSX): Q2 EPS of $0.03 in-line. Revenue of $12.6M (+147.1%) vs. $11.8M. [PR]
• Hecla Mining Company (HL): Q2 EPS of -$0.01 beats by $0.04. Revenue of $64M (+44%) vs. $83M. [PR]
• HCP Inc. (HCP): Q2 FFO of $0.57 beats by $0.01. Revenue of $251M (+21.5%) vs. $262M. Shares [PR]
• Pitney Bowes (PBI): Q2 EPS of $0.69 beats by $0.02. Revenue of $1.59B (+2.9%) in-line. [PR]
• Principal Financial Group (PFG): Q2 EPS of $0.97 beats by $0.02. Revenue of $2.79B (+0.1%) in-line. Shares +1.8%. [PR]
• Rackable Systems (RACK): Q2 EPS of -$0.12 misses by $0.11. Revenue of $76M (-7.6%) in-line. Shares -13.5%. [PR]
• St. Mary Land (SM): Q2 EPS of $1.29 beats by $0.01. Revenue of $357M (+44.4%) vs. $297M. [PR]
• Syniverse (SVR): Q2 EPS of $0.42 beats by $0.05. Revenue of $128M (+39.6%) vs. $117M. Shares +9.75%. [PR]
• UDR Inc. (UDR): Q2 EPS of $0.36 in-line. Revenue of $139M (+12.2%) vs. $129M. [PR]

Today's Markets

• Markets dropped in Asia Tuesday, while India was up strongly. Nikkei -0.14% to 12,915. Hang Seng -2.51% to 21,950. Shanghai -1.86% to 2,691. BSE +2.63% to 14,961.
• In Europe, bourses are broadly higher at midday. London +1.6%. Paris +1.4%. Frankfurt +2.2%.
• Futures at 6:30a.m. are up. Dow +0.76%. S&P +0.84%. Nasdaq +0.95%. Crude -1.52% to $119.50. Gold -1.56% to $893.40.

Q2 2008 Earnings Call

August 4, 2008 4:30 pm ET

An earnings "triple play" occurs when a stock beats earnings and revenue estimates and guides future earnings higher.  There were about 70 stocks that had "triple plays" during the first quarter earnings season.  As we enter the second quarter earnings season, investors may want to look at these stocks to find momentum plays or ones that had strong reports but fell by the wayside as the overall market declined.

In the first table below, we highlight "triple play" stocks from the first quarter that are up the most since they opened for trading following their last earnings report.  These stocks had a solid earnings report and haven't looked back since, even in one of the worst markets in decades.  For momentum traders out there, these names currently have great relative strength.

Here is my initial list of replacement candidates for the third quarter 2008 portfolio reshaping:

AA ACMR ACS ACXM ADP AEM AEO AET AFFM AHL AIB AINV ALL AME AN APA ARP ATWO AVID AVZA AXS AYR BAGL BCPC BDK BGC BHI BJS BKS BLL BP BRO BRS BSET CAM CBI CBK CCK CCRT CDNS CFI CKH CMI COG COLM COMS CPB CRDN CROX CSCO CSL CTB DD DELL DFG DLM DRYS DUK DVN EGLE ENH EP ETP FAST FCX FDRY FITB FLEX FLXS FRPT FRZ FSR FTEK FTO GFF GHM GIL GMT GNK HAIN HAL HAR HAST HCC HCN HCP HELE HK HLYS HNT HNZ HOC HON HRS HRZ HTH INFS IPSU IR IRE ISCA ISYS IVN JCI JNX JOSB KCI KEY KMX KOF LMC LPX LRCX LSTR LZB MAN MAS MCRL MGIC MHK MHP MI MKSI MOT MPS MPWR MWA/A MXGL MYE NBR NBTY NFX NG NM NRG NSHA NTGR NVS NWLIA OC OCR ODP OIS OKE OMAB ONNN ORI OSK OXY PAYX PBI PBY PCZ PHX PKD PKI PPC PPG PRE PRU PTEN PVA PWR PXP PZZA RCII RDC RDK ROP RS RTN SAFM SCX SENEB SFY SGIC SGY SI SII SJM SKM SKX SLB SLGN SNDK SNG SNX SNY SPSS STZ SVR SVU SWN TECUA TEX THOR TLK TMS TPX TRMA TRN TRV TSC TSO TTC TXT UNF UNT URI USU VE VLGEA VLTR VZ WAG WDC WFT WGOV WNC WRB WTI WTIU WTM WY XEL Y ZNT ZZ

Below we highlight the 25 stocks with the highest average one-day absolute percentage change on report days.  As shown, Multi-Fineline (MFLX) tops the list with an average absolute change of 18.64% on its 14 report days.  It is volatile both on the upside and downside, however, since its average one-day change (not absolute) is just 0.89%. 

Intuitive Surgical (ISRG) ranks second at 17.77%, but it typically moves to the upside since its average one-day change (not absolute) is 9.46%. 

Q1 2008 Earnings Call

May 6, 2008 4:30 pm ET

Q4 2007 Earnings Call

February 19, 2008 4:30 pm ET