Earnings - 16th July 2009

4:11PM IBM beats by $0.30; guides FY09 EPS above consensus (IBM) 110.64 +3.42 : Reports Q2 (Jun) earnings of $2.32 per share, $0.30 better than the First Call consensus of $2.02; revenues fell 13.3% year/year to $23.25 bln vs the $23.59 bln consensus. Gross profit margin was 45.5% in Q2 compared with 43.2% in 2Q08, led by improving margins in services and software. Co issues upside guidance for FY09, sees EPS of "at least $9.70" vs. $9.15 consensus and vs prior guidance of $9.20"... We are optimistic about how IBM is positioned to make the most of current growth opportunities as well as those that emerge as the economy recovers. We are well ahead of pace for our 2010 roadmap of $10 to $11 per share."

4:06PM Cubist Pharma beats by $0.12, reports revs in-line, reaffirms FY09 US Cubicin revs (CBST) 17.31 +0.26 : Reports Q2 (Jun) earnings of $0.40 per share, $0.12 better than the First Call consensus of $0.28; revenues rose 28.5% year/year to $130.8 mln vs the $131.9 mln consensus. Cubicin sales of $126.1 mln vs. $122.0 mln First Call Consensus. Cubist Pharma reaffirms 2009 CUBICIN net U.S. revenue to be $520-540 mln vs $532.1 mln consensus. Ecallantide: Cubist is continuing enrollment in the CONSERV(TM)-1 dose-ranging trial in the US and remains confident that the trial will fully enroll patients by the end of the year. The key objective is to generate data to support the selection of the optimum ecallantide dose for Phase 3. Co says, "In a time of continued economic uncertainty, Cubist has again delivered a quarter of strong performance, and made further progress against our strategic goals," said Michael Bonney, President and CEO of Cubist. "CUBICIN has now been used in the treatment of more than an estimated 750,000 patients with serious and sometimes life-threatening infections. Our continued success with CUBICIN also is enabling us to progress four clinical candidates addressing unmet medical need for seriously ill patients."

4:06PM Google beats by $0.27, reports revs in-line (GOOG) 442.60 +4.43 : Reports Q2 (Jun) earnings of $5.36 per share, ex items, $0.27 better than the First Call consensus of $5.09; revenues (after deducting traffic acquisition costs ) rose 4.5% year/year to $4.07 bln vs the $4.06 bln consensus. International Revenues - Revenues from outside of the United States totaled $2.91 bln, representing 53% of total revenues in the second quarter of 2009, compared to 52% in the first quarter of 2009 and second quarter of 2008. Paid Clicks - Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 15% over the second quarter of 2008 and decreased approximately 2% over the first quarter of 2009. Operating Income - GAAP operating income in the second quarter of 2009 was $1.87 bln, or 34% of revenues. This compares to GAAP operating income of $1.58 bln, or 29% of revenues, in the second quarter of 2008. Non-GAAP operating income in the second quarter of 2009 was $2.17 bln, or 39% of revenues. This compares to non-GAAP operating income of $1.85 bln, or 34% of revenues, in the second quarter of 2008.

7:36AM Fairchild Semi beats by $0.08, beats on revs; guides Q3 revs above consensus (FCS) 8.69 : Reports Q2 (Jun) loss of $0.03 per share, excluding non-recurring items, $0.08 better than the First Call consensus of ($0.11); revenues fell 33.6% year/year to $277.9 mln vs the $264.8 mln consensus. Co issues upside guidance for Q3, sees Q3 revs of $300-325 mln vs. $288.89 mln consensus. "We delivered strong sequential sales and margin growth even as we further improved our inventory position in the second quarter. Distribution sell-through was better than expected which helped us to again reduce channel inventory while still posting sales higher than our original expectations entering the quarter. Order rates improved throughout the quarter across a broad range of end markets enabling us to significantly increase our backlog position from a quarter ago. Overall product pricing was down about three percent sequentially which is slightly weaker than prior quarters, but we believe the trend is now moderating as order rates improve. We maintained lead times within a stable range of five to six weeks during the quarter. Our scheduled backlog for third quarter shipments is currently about $300 million which is roughly $50 million higher than this point a quarter ago. Included in this amount is approximately $25 million of backlog that we booked in the first two and a half weeks of this quarter. Assuming we continue to record positive backlog fill consistent with the current order patterns, we believe sales in the range of $300 to $325 million are possible for the third quarter. For this range of revenue, we anticipate adjusted gross margin to be between 25-27%. Adjusted gross margin for Q2 was 24.8%, up nearly 10 percentage points sequentially and 4 percentage points lower than in the second quarter of 2008."

7:17AM Biogen Idec beats by $0.07, beats on revs; guides FY09 EPS above consensus (BIIB) 46.67 : Reports Q2 (Jun) earnings of $0.75 per share, excluding non-recurring items, $0.07 better than the First Call consensus of $0.68; revenues rose 10.0% year/year to $1.09 bln vs the $1.07 bln consensus. Co issues upside guidance for FY09 (Dec), sees EPS above $3.85 vs. $3.82 First Call consensus; sees rev growth "in the high single-digits" year over year. Capital Expenditures are expected to be in the range of $180-$200 million. BIIB Q2 Drug Sales: Avonex $591 mln vs. $570.2 mln First Call Consensus; Rituxan $276 mln vs. $289.1 mln First Call Consensus; Tysabri $188 mln vs. $188 mln First Call Consensus.

7:05AM Baxter beats by $0.02, reports revs in-line; guides Q3 EPS in-line; slightly increases FY09 EPS guidance, reaffirms FY09 revs guidance (BAX) 53.09 : Reports Q2 (Jun) earnings of $0.96 per share, $0.02 better than the First Call consensus of $0.94; revenues fell 2.1% year/year to $3.12 bln vs the $3.12 bln consensus. Co issues in-line guidance for Q3, sees EPS of $0.95-0.97 vs. $0.96 consensus, sees Q3 sales of ~7-8%. Coraises guidance for FY09 EPS, sees EPS of $3.76-3.80, up from $3.72-3.78, vs. $3.77 consensus; continues to expect sales growth, excluding the impact of foreign currency, to be ~7 to 8% (which calc to ~$13.2-13.3 bln vs. $12.45 bln consensus.

7:03AM Meridian Bioscience beats by $0.02, beats on revs; reaffirms FY09 EPS guidance, revs guidance (VIVO) 22.90 : Reports Q3 (Jun) earnings of $0.21 per share,$0.02 better than the First Call consensus of $0.19; revenues rose 15.4% year/year to $38.2 mln vs the $35 mln consensus. Co reaffirms guidance for FY09, sees EPS of $0.77-0.81 vs. $0.78 consensus; sees FY09 revs of $140-144 mln vs. $141.43 mln consensus. Co says, "Meridian's third quarter performance improved in many areas highlighted by heightened non-seasonal demand for rapid flu tests due primarily to the swine flu pandemic. As a result, USDx sales increased by 28% with approximately two-thirds of the 28% growth rate coming from our Upper Respiratory product lines. The balance of FY 2009 is expected to be strong, even without considering unforeseen upsides from a more robust influenza pre-season. Our guidance for FY 2010 will be issued in September."

6:39AM JP Morgan Chase beats by $0.24, beats on revs (JPM) 36.26 : Reports Q2 (Jun) earnings of $0.28 per share, includes TARP charge of $0.27, $0.24 better than the First Call consensus of $0.04; revenues rose 2.9% year/year to $27.71 bln vs the $25.89 bln consensus... Average mortgage loans were $145.2 billion, up by $90.4 billion, due to the Washington Mutual transaction. Mortgage loan originations were $41.1 billion, down 27% from the prior year and up 9% from the prior quarter. "Of particular note, the Investment Bank reported record overall revenue for the first half of the year, which included record fees and Fixed Income Markets revenue for this quarter. In addition, Commercial Banking, Asset Management, Treasury & Securities Services and Retail Banking each delivered another quarter of solid performance. These results were negatively affected by the continued high levels of credit costs in Consumer Lending and Card Services, which we expect will remain elevated for the foreseeable future. Even after further strengthening our credit reserves by $2 bln to $30 bln and repaying the $25 bln of TARP capital, the firm ended the quarter with a very strong Tier 1 Capital ratio of 9.7% and a Tier 1 Common ratio of 7.7%. With these additions to reserves, we now have an extremely high loan loss coverage ratio of 5%. We continued to lend, extending approximately $150 billion in new credit to consumer and corporate customers. We approved 138,000 trial mortgage modifications, bringing total foreclosures prevented since 2007 to 565,000 - a number we expect to continue to grow. While we do not know if the economy will deteriorate further, we feel confident that, with our strong capital and reserve levels and significant earnings power, we can continue to reinvest in our businesses and do well for our clients, communities and shareholders over the long term."

Earnings - April 16th 2009

4:06PM Google beats by $0.23, reports revs in-line (GOOG) 388.74 +9.24 : Reports Q1 (Mar) earnings of $5.16 per share, ex items, $0.23 better than the First Call consensus of $4.93; revenues after deducting TAC (traffic acquisition costs) rose 10.1% year/year to $4.07 bln vs the $4.08 bln consensus. Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of their AdSense partners, increased approximately 17% over the first quarter of 2008 and increased approximately 3% over the fourth quarter of 2008. Operating expenses, other than cost of revenues, were $1.52 billion in the first quarter of 2009, or 28% of revenues, compared to $1.65 billion in the fourth quarter of 2008, or 29% of revenues.

4:02PM ICU Medical beats by $0.14, beats on revs; guides FY09 EPS in-line, revs below consensus (ICUI) 31.83 +0.04 : Reports Q1 (Mar) earnings of $0.47 per share, $0.14 better than the First Call consensus of $0.33; revenues rose 21.7% year/year to $54.3 mln vs the $50.6 mln consensus. Co issues mixed guidance for FY09, sees EPS of $1.58-1.70 vs. $1.65 consensus; sees FY09 revs of $215-225 mln vs. $226.84 mln consensus.

4:01PM Online Resources reports preliminary Q1 results above consensus (ORCC) 4.49 +0.21 : Co issues upside guidance for Q1 (Mar), sees EPS of $0.06-0.07 vs. $0.04 First Call consensus; sees Q1 (Mar) revs of $39.1-39.3 mln vs. $38.85 mln consensus. The co also said that after debt repayment of $3.2 mln during the quarter, its cash and short-term investment position is expected to be $27.4 mln at March 31, 2009, or $3.4 mln above its cash and short-term investment position at December 31, 2008. In addition, the co incurred approx $800,000 in expenses related to a proxy contest initiated by hedge fund Tennenbaum Capital Partners and expects to incur additional proxy-related expenses in the second quarter. The co also cautions shareholders that Tennenbaum has indicated should any of its nominees be elected, it will ask the co to reimburse its costs for the proxy contest.

10:18AM PPG Industries beats by $0.05, misses on revs (PPG) 45.12 +0.68 : Reports Q1 (Mar) earnings of $0.19 per share, excluding non-recurring items, $0.05 better than the First Call consensus of $0.14; revenues fell 29.8% year/year to $2.78 bln vs the $3.13 bln consensus... "Looking ahead, we anticipate some seasonal demand growth in the second quarter, but expect activity levels to remain low in comparison with recent years. We will realize further benefits from our restructuring actions in the coming quarters. Also, we remain focused on prudently managing our cash and we ended the quarter with about $530 mln of cash on hand, which is up several hundred million dollars from our 2007 and 2008 first quarter levels."

9:21AM Genuine Parts beats by $0.07, misses on revs (GPC) 31.45 : Reports Q1 (Mar) earnings of $0.56 per share, $0.07 better than the First Call consensus of $0.49; revenues fell 10.8% year/year to $2.44 bln vs the $2.49 bln consensus. Co says, "Our Industrial and Electrical businesses sell to the manufacturing segment of the economy, which has experienced an overall slowdown in activity over the past several quarters... "The effects of the economic slowdown are likely to persist for several more quarters. Clearly, these are challenging times; however, our expectation is to show gradual improvement in our overall results as the year progresses."

9:04AM Sherwin-Williams beats by $0.11, misses on revs; guides Q2 EPS in-line, revs below consensus; reaffirms FY09 EPS guidance (SHW) 51.11 : Reports Q1 (Mar) earnings of $0.32 per share, $0.11 better than the First Call consensus of $0.21; revenues fell 12.9% year/year to $1.55 bln vs the $1.62 bln consensus. Co issues mixed guidance for Q2, sees EPS of 1.20-1.45 vs. $1.20 consensus; sees Q2 revs down 9-12% yr/yr to ~$1.96-2.02 bln vs. $2.05 bln consensus. Co reaffirms guidance for FY09, sees EPS of $3.00-4.00 vs. $3.54 consensus.

8:06AM Illinois Tool beats by $0.03, revs in-line; guides Q2 revs below consensus (ITW) 31.16 : Reports Q1 (Mar) earnings of $0.17 per share, excluding non-recurring items, $0.03 better than the First Call consensus of $0.14; revenues fell 23.8% year/year to $2.91 bln vs the $2.93 bln consensus. For Q2, co sees EPS of $0.25-0.37 vs. $0.36 consensus; sees Q2 revenue growth of 5-11% sequentially, which we compute as $3.06-3.23 bln vs. $3.33 bln consensus. Co says Q1 represented historic challenges as end markets continued to weaken in North America, Europe and Asia-Pacific.

7:49AM Briggs & Stratton misses by $0.13, misses on revs; guides FY09 EPS below consensus; reduces dividend by 50% (BGG) 15.67 : Reports Q3 (Mar) earnings of $0.51 per share, $0.13 worse than the First Call consensus of $0.64; revenues fell 7.2% year/year to $673.8 mln vs the $720.3 mln consensus. Co issues downside guidance for FY09, sees EPS of $0.46-0.65 vs. $0.84 consensus. The quarterly dividend has been reduced 50% to $0.11 per quarter. The reduced dividend is more comparable with their historical payout ratio of 50% of net income and dividend yield of 3.5%. In addition, a reduced dividend preserves cash in light of the continuing uncertainty in the credit markets. This action, along with other cash preserving initiatives, should reduce their need for additional borrowings for working capital in the near to medium term future.

7:36AM Jarden issues upside guidance for 1Q09 (JAH) 16.31 : Co issues upside guidance for Q1, sees adjusted EPS of $0.21-$0.23 vs $0.12 First Call consensus on revs of $1.14-$1.22 bln vs $1.11 bln First Call consensus. Co states, "Our strong sales and segment earnings performance was on the back of organic growth within our consumer solutions business, with our other segments performing in line with expectations. While our first quarter results will not be final until we announce earnings later this month, based on the positive start to the year we believe that we will meet or exceed the analysts' consensus estimates for as adjusted EPS for 2009..."

7:33AM Parker-Hannifin misses by $0.13, misses on revs; guides FY09 EPS below consensus (PH) 36.30 : Reports Q3 (Mar) earnings of $0.33 per share, $0.13 worse than the First Call consensus of $0.46; revenues fell 26.3% year/year to $2.34 bln vs the $2.41 bln consensus. Co lowered their guidance for FY09, sees EPS of $2.95-3.15 down from $3.85 to $4.25 vs. $3.57 consensus. The co says "While the environment we are operating in holds many uncertainties, we anticipate that conditions will not improve appreciably in the near-term and order levels are expected to be similar to what we experienced in the third quarter. Further cost reductions and managing for cash will continue to be our priorities as we close out the fiscal year. Lastly, we will continue to execute our Win Strategy with emphasis on premier customer service, developing innovative systems and solutions, and leveraging our broad distribution network to drive market share gains and increase the value we offer customers. These efforts are expected to position us strongly when the economic rebound occurs."

7:16AM Intuitive Surgical reports EPS in-line, misses on revs (ISRG) 117.41 : Reports Q1 (Mar) earnings of $1.02 per share, excluding $0.30 impact from revenue deferral, in-line with the First Call consensus of $1.02; revenues were unchanged from the year-ago period at $188.4 mln vs $200.76 mln First Call consensus. First quarter 2009 revenue of $188.4 mln was net of $20.1 mln of revenue deferrals associated with offers made to certain customers to upgrade their recently purchased da Vinci S Surgical Systems to the recently announced da Vinci Si Surgical System. The deferrals reduced Q1 2009 system revenue by $18.0 mln and accessory revenue by $2.1 mln. Co expects to recognize all $20.1 mln of the revenue deferrals within 2009. The Q1 revenue deferral reduced net income by ~$12.1 mln, or $0.30 per diluted share... Co also reports that 66 da Vinci Surgical Systems were sold during the first quarter of 2009, compared to 74 during the first quarter of 2008.

7:03AM Baxter beats by $0.02, misses on revs; guides Q2 EPS in-line; guides FY09 EPS in-line, revs in-line (BAX) 49.25 : Reports Q1 (Mar) earnings of $0.83 per share, excluding non-recurring items, $0.02 better than the First Call consensus of $0.81; revenues fell 1.8% year/year to $2.82 bln vs the $2.87 bln consensus. Co issues in-line guidance for Q2, sees EPS of $0.93-0.95, excluding non-recurring items, vs. $0.95 consensus. Co issues in-line guidance for FY09, sees EPS of $3.72-3.78, excluding non-recurring items, vs. $3.74 consensus; sees FY09 revs flat with FY08 or roughly $12.35 bln vs. $12.41 bln consensus.

6:44AM JP Morgan Chase beats by $0.08, beats on revs (JPM) 32.56 : Reports Q1 (Mar) earnings of $0.40 per share, $0.08 better than the First Call consensus of $0.32; revenues on a reported basis rose 48.2% year/year to $25.02 bln vs the $22.95 bln consensus. Revenues on a managed basis (GAAP) rose 50.4% year/year to 26.92 bln. As of March 31, 2009, JPM reported a Tier 1 Capital ratio of 11.3%, or 9.2% excluding TARP capital from the government. Tangible common equity compared to risk-weighted assets was 7.2%, the allowance for credit losses was $28 bln and the firmwide loan loss coverage ratio stood at 4.53%. CEO Jamie Dimon commented: "We remain focused on capital and balance sheet strength. These levels of capital and reserves, combined with our significant pre-provision earnings power, enable us to withstand an even worse economic scenario than we face today." Dimon further remarked: "We are maintaining our efforts to help the economy recover. We continue to lend and have extended approximately $150 billion in new credit to consumer and corporate customers during the first quarter. We made additional progress on our foreclosure prevention program, opening the remaining 22 of our 24 new Chase Homeownership Centers during the quarter, and continued working towards our goal of preventing 650,000 foreclosures by the end of next year to help keep people in their homes." Looking ahead to the rest of 2009, Dimon concluded: "It is reasonable to expect additional increases to credit reserves if the economic environment worsens. Yet, we are confident that even a highly adverse economic scenario would not compromise our overall strength and stability - or our ability to enhance our franchises. We remain well-positioned to benefit when the economy recovers and remain committed to serving our clients, investing in our franchise and building a stronger company for the future." Net income in JPM's investment bank was $1.6 bln vs a Q108 loss of $87.0 mln. Net revenue in this segment increased 177% year/year to $8.34 bln. As for card services, net loss was $547.0 mln vs net income of $609.0 mln in Q108, a decline of $1.2 bln year/year.

6:43AM Titan Machinery misses by $0.03; beats on revs; guides FY10 EPS below consensus; revs in-line (TITN) 10.72 : Titan Machinery reports Q4 EPS of $0.18 vs $0.21 First Call consensus; revs grew 39.8% to $189.0 mln vs $175.88 mln First Call consensus. Co issues downside guidance FY10 EPS; sees FY10 EPS of $0.92-1.04 vs $1.08 First Call consensus; co issues in-line guidance for FY10 revs; sees revs $750-790 mln vs $753.33 mln First Call consensus. Co says, "In fiscal 2010, we expect to achieve overall revenue growth despite the historically stronger than normal agriculture sector results in fiscal 2009. We also will continue to use our strong operating cash flow and strong balance sheet to further invest in our business and make strategic selective acquisitions in construction and agricultural dealerships as we position ourselves for long-term growth and profitability."

6:08AM Polaris Inds beats by $0.06, beats on revs; guides Q2 EPS below consensus; reaffirms FY09 EPS and revenue in-line (PII) 27.12 : Reports Q1 (Mar) earnings of $0.26 per share, excluding non-recurring items, $0.06 better than the First Call consensus of $0.20; revenues fell 19.7% year/year to $312 mln vs the $298.2 mln consensus. Co issues downside guidance for Q2, sees EPS of $0.40-0.50 vs. $0.51 consensus. Co reaffrims in-line guidancefor FY09, sees EPS of $2.50-3.00 vs. $2.66 consensus. Sales are expected to decline 15-23% for FY09, also unchanged from previously issued guidance. Retail sales for Q209 are expected to remain weak for all product lines with total co sales projected to decline 25-30% compared to Q208.

Earnings - 15th Jan 2009

6:22PM Agrium announced that it expects to record a write-down in Retail in Q4 of 2008 of ~$96-mln ($0.41 diluted EPS) (AGU) 32.30 +1.20 : Co announced that it expects to record a write-down in Retail in Q4 of 2008 of ~$96-mln ($0.41 diluted earnings per share), of which $11-mln is for our South American Retail operation and $85-mln is for our North American Retail operations. The adjustment to our North America Retail operations is primarily related to the difference in the value between anticipated nutrient sales prices and prices that North America Retail has contracted for prepayments and other committed crop nutrient tonnes in 2009. AGU also expects a further $21-mln ($0.09 diluted EPS) write-down in its Wholesale Purchase For Resale (PFR) business. These adjustments are indicative of the unprecedented volatility in global economic and commodity markets, and the decline in certain nutrient prices since early December 2008 when we issued updated guidance. AGU does not expect any write-down with respect to manufactured wholesale volumes. The write-downs of $96-mln for Retail and an additional $21-mln in PFR were not included in the update to guidance issued December 8, 2008. Our December 2008 update to guidance did include a write-down of ~$90-mln for our PFR business in North America, South America and Europe.

4:35PM Meridian Bioscience lowers FY09 revs guidance below consensus, guides Q1 EPS and revs below consensus (VIVO) 23.20 +0.31 : Co lowers FY09 revs to $151-156 mln vs $159.4 mln consensus, down from $157-160 and reaffirms EPS of $0.86-0.90 vs $0.89 consensus. Co issues downside Q1 guidance; co sees Q1 EPS of $0.20 vs $0.22 consensus, revs of $34.3 mln vs $38.1 mln consensus. Co says, "During the quarter, sales to our largest distributor were essentially flat. However, shipments to customers from this distributor continued at a double-digit pace. Revenues from the European Diagnostics segment grew 1% on a local currency basis but were adversely impacted by lower H.pylori sales in Italy and reflect a 7% decline on a US dollar basis due to the effects of the strengthening dollar. Life Science comparable revenues declined 7% due in part to a large order in the first quarter of 2008 that did not repeat this year. The recent strengthening of the dollar will continue to have a negative effect on European Diagnostics sales denominated in the Euro. Natural hedging programs mitigate the impact of currency at the operating income line on a consolidated basis. Customers reducing inventory levels to conserve cash and reduce costs will also likely have a negative effect on fiscal 2009 revenues. As a result, VIVO lowered guidance.

4:20PM Intel reports EPS in-line, revs in-line; co does not provide rev outlook (INTC)13.29 +0.21 : Reports Q4 (Dec) earnings of $0.04 per share, in-line with the First Call consensus of $0.04; revenues fell 22.8% year/year to $8.27 bln vs the $8.21 bln consensus, in-line with company's preliminary Q4 results of $8.2 bln issued last week (01/07). The results included a billion-dollar negative impact from the previously announced reduction in the carrying value of the company's Clearwire investments. Due to economic uncertainty and limited visibility, Intel is not providing a revenue outlook at this time. For internal purposes, the company is currently planning for revenue in the vicinity of $7 billion ($7.27 bln consensus). The gross margin percentage is expected to decline to the low 40s (vs 51% consensus) primarily due to higher underutilization charges and 32nm start-up costs.  

8:40AM ConAgra reaffirms FY09 EPS guidance of "slightly above $1.50" vs. First Call Consensus of $1.46 (CAG) 16.76 :  

6:38AM JP Morgan Chase reports Q4 results (JPM) 25.91 : Reports Q4 (Dec) earnings of $0.07 per share, vs the breakeven First Call consensus. Excluding extraordinary gains the co reports a loss of $0.28. The co says a $4.1 bln (pretax) increase to loan loss reserves, resulting in coverage ratios of 4.24% for consumer businesses and 2.64% for wholesale businesses $2.9 bln (pretax) net markdowns due to leveraged lending exposures and mortgage-related positions in the Investment Bank $1.1 bln (after tax) benefit from merger-related items $854 mln (after tax) benefit from MSR risk management results $680 mln (after tax) private equity write-downs $627 mln (after tax) gain due to dissolution of Paymentech joint venture Maintained strong balance sheet, with Tier 1 capital of $136.2 bln, or 10.8% (estimated), at year-end. Revenues fell 0.9% year/year to $17.23 bln vs the $18.83 bln consensus. As of December 31, 2008, the firm reported a Tier 1 capital ratio of 10.8% (estimated). During the year, the firm increased its total allowance for loan losses to $23.2 bln, resulting in a firmwide coverage ratio of 3.16%. The provision for credit losses was $3.6 bln, an increase of $2.5 bln from the prior year, as housing price declines continued to result in significant increases in estimated losses, particularly for high loan-to-value home equity and mortgage loans. In card services, the managed net charge-off rate for the quarter was 5.56%, up from 3.89% in the prior year and 5.00% in the prior quarter. The 30-day managed delinquency rate was 4.97%, up from 3.48% in the prior year and 3.91% in the prior quarter. Excluding Washington Mutual, the managed net charge-off rate for the fourth quarter was 5.29% and the 30-day delinquency rate was 4.36%. Co says, "Our fourth-quarter financial results were very disappointing, driven by a loss in Investment Banking largely attributable to continued markdowns on leveraged loans and mortgage trading positions, as well as weak trading results. We also faced higher credit costs associated with continued deterioration across our loan portfolios, including a $4.1 bln addition to loan loss reserves. However, we continued to see underlying growth in many business areas. The integration of our recently-acquired Washington Mutual franchise has progressed well, and we continued to grow in Treasury & Securities Services and Commercial Banking. We also opened mlns of new checking and credit card accounts, experienced net inflows in assets under management, and gained Investment Banking market share in all major fee categories... While the diversified nature of our franchise and strong capital position have enabled us to weather the recessionary environment so far, we added $13.9 bln to our allowance for loan losses in 2008 to keep this important component of our fortress balance sheet firmly intact.... If the economic environment deteriorates further, which is a distinct possibility, it is reasonable to expect additional negative impact on our market-related businesses, continued higher loan losses and increases to our credit reserves... We are doing our part to help stabilize the financial markets and hasten recovery. We assumed risk and expended resources to assimilate Bear Stearns and Washington Mutual. We continued to lend in a safe and sound manner - extending more than $100 bln in new credit in the fourth quarter alone to consumers, businesses, municipalities, and non-profit organizations."