Earnings - 10th Oct 2008

2:45PM CBS Corp announces it now expects to report Q3 adjusted diluted EPS of approx $0.42 to $0.44 vs $0.41 consensus (CBS) 8.92 -1.22 : Co announces the continued economic slowdown in the United States has adversely affected advertising revenues across the co's businesses, primarily at the local level, and the effects of the current financial crisis are likely to cause further declines in advertising spending. As a result of these market conditions, the co is revising its 2008 full year business outlook for both adjusted operating income before depreciation and amortization and adjusted operating income to a decline of mid-teens vs 2007. The co said that, based on preliminary information, its third quarter performance is expected to reflect revenue growth of approx 3% over the comparable period last year (this calculates to ~$3.37 bln vs $3.36 bln consensus), led by higher syndication revenue and recent acquisitions. Further, the co now expects to report Q3 adjusted diluted EPS of approx $0.42 to $0.44 vs $0.41 consensus, compared to $0.51 for the third quarter of 2007. In addition, as a result of these recent adverse market conditions, the co is currently performing an interim impairment test on its existing goodwill, other indefinite lived intangible asset balances and investments. Based on preliminary results, the co expects to incur a non-cash impairment charge of approx $14 bln, in the third quarter of 2008 to reduce the carrying value of goodwill, intangible assets related to FCC licenses and investments.

1:48PM Torchmark Corp sees Q3 EPS of ~$1.51 vs $1.50 First Call consensus (TMK) 12.61 -0.32 : Co says the decline in 2008 is due to a $70 mln charge related to the other than temporary impairment of certain investments. As indicated in its September 18, 2008, Torchmark has holdings in debt issued by AIG, Lehman Brothers (LEH), and Washington Mutual (WM) of ~$209 mln, along with $2 mln of preferred stock issued by Fannie Mae (FNM). Torchmark has determined that a portion of these investments are other than temporarily impaired, resulting in a writedown of ~$93 mln ($70 mln after tax). In spite of this impairment, cash flows remain strong and Torchmark's capital is sufficient to support its current operations.

11:36AM InSteel Industries: Margins contracting and FY09 demand outlook dampened; estimates cut - Davenport (IIIN) 9.07 +0.32 : Davenport cut their Q4 EPS estimate to $0.54 from $0.71 (consensus is $0.65) and their FY08 estimate to $0.89 from $1.31. The reasons for firm's estimate cuts are twofold. First, they cut margins estimates. Margins are contracting as a result of falling steel prices and FIFO accounting. Prices of wire rod, the key raw material, flattened out in Q4 and are now falling. Prices peaked in July and edged slightly lower in Aug and Sep. Second, firm has dampened their demand outlook for FY09. Firm sees shipments down 10% next year (from down 7%). In firm's view the recent financial turmoil has reduced credit availability to consumers, businesses, and governments. This should lead to a bigger downturn in non-residential construction than previously expected.

11:21AM ACE Limited estimates operating income for Q3 to be between $1.44 and $1.48 vs $1.54 consensus (ACE) 39.80 +1.45 : Co announces "Given the extraordinary market conditions and questions of investor confidence in financial institutions generally, we have decided to provide an estimate of our third quarter results in an effort to give greater clarity and certainty about our company, whose financial performance and balance sheet remain strong. ACE has a strong capital position and our financial results for the third quarter were quite good. ACE is well positioned to take advantage of weaknesses and opportunities within our industry as they emerge," The co estimates Q3 operating income to be between $1.44 and $1.48 vs $1.54 consensus. The co will report net realized and unrealized losses of approx $1.5 bln and expects a decrease in book value per share of 7.5% year-to-date. As disclosed previously, the co did not and does not invest in CDOs, CLOs or complex credit structures and does not employ leverage, and as such, has no transactions that require the posting of collateral. Of the estimated $1.5 bln in realized and unrealized losses, approx $1.3 bln relates to the fixed income and equity portfolios and is largely due to the widening of credit spreads in the co's high quality corporate bond portfolio. Approx $220 mln of the company's estimated net realized losses for the third quarter relate to the guaranteed minimum income benefit liabilities of the company's variable annuity reinsurance book. These losses resulted from an increase in the fair market value of the liabilities related to these annuities. This does not present any liquidity exposures. Cash flow in this business is positive and is within our original expectations. As of September 30, 2008, ACE has entered into securities lending agreements approx $2 bln. The co expects operating cash flow to be in the range of $800 mln to $1 bln for Q3

9:25AM Lincoln National guides Q3 net income per share to $0.50-$0.70 vs $1.32 consensus; reduces dividend (LNC) 18.31 : Co issues downside guidance for Q3, sees net income per share of $0.50-$0.70/share vs $1.32 consensus. Income from operations for the Q3, is expected to be in the range of $280-$320 mln, or $1.10-$1.25 per diluted share, including deferred acquisition cost unlocking as a result of the company's annual assumption and DAC model review. The Board of Directors has declared a quarterly dividend on common stock of $0.21/share to be paid on Feb 1, 2009. Assuming the current number of issued and outstanding shares, the reduction from the $0.415 dividend per share paid in recent qtrs would add approx $50 mln to capital each qtr. Both the holding company and insurance companies have ample liquidity to satisfy their respective obligations. In addition to cash and cash equivalents of approx $3 bln, the company has diverse sources of liquidity including revolving credit facilities of over $1 bln, securities lending capacity, and borrowing capacity from the Federal Home Loan Bank. Co states, "...While external conditions have pressured our earnings and stock price and have led to higher asset impairments, our liquidity position is strong both at the holding company and within our insurance operations."

9:01AM Compuware sees Q2 EPS of $0.08 vs $0.13 dual analyst est, on revs of approx $268 mln vs $305.75 mln dual est (CPWR) 7.57 : Co issues downside guidance for Q2, sees EPS of $0.08 vs $0.13 dual analyst est on revs of approx $268 mln vs $305.75 mln dual estimate. Co states, "The current economic volatility has certainly extended buying cycles for businesses around the globe and unfortunately had a negative impact on the quarter."

8:01AM Macy's lowers FY08 EPS guidance (M) 11.46 : Based on the potential for lower sales, the company's guidance now is for earnings per share on a diluted basis of approximately $1.30 to $1.50 for fiscal 2008 as a whole, excluding one-time division consolidation costs and impairment charges (vs $1.76 First Call consensus). Previous guidance was for earnings of $1.70 to $1.85 per diluted share, excluding division consolidation costs and impairment charges. If weaker sales trends continue, same-store sales in the fall season could be down by 3 to 6 percent. (Previous guidance was for fall season same-store sales to be flat to down 1 percent.)

7:06AM Infosys beats by $0.01, reports revs in-line (INFY) 25.02 : Reports Q2 (Sep) earnings per ADS of $0.56, $0.01 better than the First Call consensus of $0.55; revenues rose 19.0% year/year to $1.22 bln vs the $1.21 bln consensus. "We benefited from the depreciation of the rupee against the US dollar during the quarter which was partially offset by the sharp appreciation of the US dollar against all other major currencies," said V. Balakrishnan, Chief Financial Officer. "Our liquidity position continues to be strong with cash and cash equivalents reaching US$ 1.9 billion."

6:38AM General Electric reports EPS in-line, revs in-line; on track to meet full yr guidance; maintains dividend at $1.24 per share (GE) 19.01 : Reports Q3 (Sep) earnings of $0.45 per share, in-line with the First Call consensus of $0.45; revenues rose 11.1% year/year to $47.23 bln vs the $47.34 bln consensus. Co announced that it will maintain dividend at $1.24 per share through 2009 . Co said,"We are on track to meet our September 25 revised guidance for the full year". GE says to maintain dividend at $1.24 per share through 2009. Co said, "Our financial services business generated $2 billion of earnings, consistent with our revised expectations. While GE Capital is not immune from the current environment, we continued to outperform our financial services peers. We are improving our margins and focusing these businesses on the right products and markets. GE Capital is on track to earn over $9 billion for the year".

6:20AM Zhongpin guides above consensus for FY08 (HOGS) 6.81 : Co issues upside guidance for FY08 (Dec), sees EPS of $1.15-1.19 vs. $1.13 First Call consensus; sees FY08 (Dec) revs of $550-570 mln vs. $533.47 mln consensus. Zhongpin's guidance has been increased to reflect strong revenue growth during the third quarter of 2008 and anticipated strong performance in the upcoming peak season in the fourth quarter. The Company's new plant in Luoyang city, which began production in the beginning of the third quarter, contributed to the Company's third quarter sales growth.