Earnings - 16th Sept 2008

4:36PM Darden Restaurants reports EPS in-line, revs in-line; guides FY09 revs in-line (DRI) 29.89 +0.37 : Reports Q1 (Aug) earnings of $0.61 per share, in-line with the First Call consensus of $0.61; revenues rose 20.9% year/year to $1.77 bln vs the $1.76 bln consensus. Co issues in-line guidance for FY09, sees FY09 revs growth of 12-13%, which equates to ~$7.43-7.49 bln vs. $7.44 bln consensus; sees FY09 EPS growth of 5-10%. On a blended basis, same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse were down 1.0% compared to prior year.

4:19PM Morgan Stanley beats on top and bottom line (MS) 28.70 -3.49 : Reports Q3 (Aug) earnings of $1.32 per share, $0.54 better than the First Call consensus of $0.78; revenues rose 1.1% year/year to $8.05 bln vs the $6.32 bln consensus. The annualized return on average common equity from continuing operations was 16.5% in the current quarter, compared with 17.2% in the prior year. Co cites strong results in commodities, foreign exchange and equity trading, including a record in prime brokerage. The Firm continued to maintain strong liquidity and capital positions in the quarter with average total and parent liquidity of $175 billion and $81 billion, respectively, and leverage and adjusted leverage ratios of 23.5x and 12.9x, respectively. "Despite unprecedented market conditions, Morgan Stanley's core client franchise achieved solid revenue growth, profitability and ROE this quarter. Our people delivered particularly strong performance across our prime brokerage, commodities, foreign exchange and equities businesses, and we saw continued growth in our international business. We have continued to actively reduce our legacy positions and carefully manage our risk, capital and liquidity. I am confident that Morgan Stanley's strong balance sheet and product and geographic diversification leave us well-positioned to serve our clients and realize opportunities in these challenging markets." Equity sales and trading net revenues of $2.7 bln were 42% above last year's third quarter and included $0.5 bln from the widening of Morgan Stanley's credit spreads on certain long-term debt. The quarter's results reflect a decrease in the Company's annual effective tax rate from 30.0% in the second quarter to 29.0%, reflecting higher domestic tax credits. As of August 31, 2008, the co has not repurchased any shares of its common stock this fiscal year as part of its capital management share repurchase program. Total capital as of August 31, 2008 was $202.6 bln, including $46.1 billion of common equity, preferred equity and junior subordinated debt issued to capital trusts. Book value per common share was $31.25, based on 1.1 bln shares outstanding. The Company announced that its Board of Directors declared a $0.27 quarterly dividend per common share (unchanged from prior qtr).

4:07PM Adobe Systems beats by $0.04, beats on revs; guides Q4 EPS in-line, revs in-line (ADBE) 38.35 +0.27 : Reports Q3 (Aug) earnings of $0.50 per share, excluding non-recurring items, $0.04 better than the First Call consensus of $0.46; revenues rose 4.2% year/year to $887.3 mln vs the $876.7 mln consensus. Co issues in-line guidance for Q4, sees EPS of 0.51-0.53 vs. $0.51 consensus; sees Q4 revs of 925-955 vs. $939.41 mln consensus. The co also stated it is targeting an operating margin of ~39.5% on a non-GAAP basis.

9:07AM Monsanto raises guidance (MON) 105.04 : Mon raises FY08 ongoing EPS guidance to $3.58-3.60 vs $3.45 consensus; up from prior guidance of $3.37. The change in ongoing earnings reflected higher-than-expected sales and gross profit in the co's seeds and traits business and its Roundup and other glyphosate- based herbicide business. The ongoing EPS represents approximately 80% growth over last year's ongoing EPS of $1.99, and last year's reported EPS of $1.79 had even greater growth. Monsanto now expects its seeds and genomics segment will generate above $3.8 bln in gross profit for its 2008 fiscal year, up from the earlier expectation of $3.7 bln, representing a growth rate of more than 25% compared with 2007 gross profit. The increased expectation for segment gross profit reflects higher than expected sales from the company's corn, soybean and vegetable platforms... CFO Crews will indicate that Monsanto's Roundup and other glyphosate-based herbicides business is on track to be above $1.9 bln of gross profit for the 2008 fiscal year, ahead of the previous forecast. During Crews's presentation, he will also announce that Monsanto's guidance for free cash for fiscal year 2008 is now at approximately $750 mln, compared with previous guidance of $550 mln. Higher collections from accounts receivable and customer prepayments contributed to the increase in free cash flow. The co's free cash flow guidance for the 2008 fiscal year reflects the cash effect of Monsanto's acquisitions of the De Ruiter vegetable seed business and the Semillas Cristiani Burkard corn seed business.

8:55AM Kroger beats by $0.01, beats on revs; reaffirms FY09 EPS guidance, slightly below consensus (KR) 26.59 : Reports Q2 (Jul) earnings of $0.42 per share, $0.01 better than the First Call consensus of $0.41; revenues rose 12.4% year/year to $18.1 mln vs the $17625.9 mln consensus. Co reaffirms FY09 guidance, sees EPS of $1.80-$1.90 vs. $1.91 consensus. As stated in previous guidance, the Company anticipates that its lowest year-over-year earnings per share growth rate will occur in the third quarter. As a result, the Company anticipates its third quarter 2008 earnings per share results will range from slightly below to slightly above prior year results. Kroger expects its fourth quarter earnings per share growth rate will be higher than its annual growth rate.

8:22AM Goldman Sachs beats by $0.10, misses on revs (GS) 135.50 : Reports Q3 (Aug) earnings of $1.81 per share, $0.10 better than the First Call consensus of $1.71; revenues fell 35.9% year/year to $6.04 bln vs the $6.23 bln consensus. Annualized return on average tangible common shareholders' equity was 8.8% for the third quarter of 2008 and 16.3% for the first nine months of 2008. Annualized return on average common shareholders' equity was 7.7% for the third quarter of 2008 and 14.2% for the first nine months of 2008. Book value per common share increased 2% during the quarter to $99.30. The firm's Tier 1 Ratio was 11.6% at the end of the quarter. "This was a challenging quarter as we saw a marked decrease in client activity and declining asset valuations... Despite the deteriorating market conditions, the focus of our people and strength and breadth of our client franchise produced a solid performance in a tough environment. We remain well-positioned to meet the needs of our clients and identify and act on the right market opportunities." The firm repurchased 1.5 mln shares of its common stock at an average cost per share of $180.07, for a total cost of $271 mln during the quarter. The remaining share authorization under the firm's existing share repurchase program is 60.9 mln shares. Stock is trading at 128.39 in pre-mkt following earnings.