Earnings - 17th July 2008 (2)

4:34PM Skyworks beats by $0.01, beats on revs; guides Q4 EPS above consensus, revs above consensus (SWKS) 10.85 +0.55 : Reports Q3 (Jun) earnings of $0.18 per share, excluding non-recurring items, $0.01 better than the First Call consensus of $0.17; revenues rose 22.9% year/year to $215.2 mln vs the $210.6 mln consensus. Co issues upside guidance for Q4, sees EPS of $0.20 vs. $0.19 consensus; sees Q4 revs of $225 mln vs. $222.07 mln consensus.

4:23PM Microsoft misses by $0.01, beats on revs; guides Q1 EPS below consensus, revs below consensus; lowers Y09 guidance by $0.01 (MSFT) 27.52 : Reports Q4 (Jun) earnings of $0.46 per share, $0.01 worse than the First Call consensus of $0.47; revenues rose 18.4% year/year to $15.84 bln vs the $15.65 bln consensus. Co issues downside guidance for Q1, sees EPS of $0.47-0.48 vs. $0.49 consensus; sees Q1 revs of $14.7-14.9 bln vs. $15.06 bln consensus. Co issues lowers EPS guidance for FY09 by $0.01, sees EPS of $2.12-2.18, compared to previous guidance of $2.13-2.19, vs. $2.16 consensus; sees FY09 revs of $67.3-68.1 bln, compared to previous guidance of $66.9-68.0 bln, vs. $67.29 bln consensus.

4:20PM Merrill Lynch reports wider than expected loss; confirms sale of Bloomberg stake (MER) 30.73 +2.73 : Reports Q2 (Jun) loss of $4.95 per share, $3.04 worse than the First Call consensus of ($1.91). Co confirms it completed the sale of its 20% ownership stake in Bloomberg, L.P. to Bloomberg Inc., for $4.425 bln, and as part of this transaction has entered into a long-term service agreement. Merrill Lynch is also in negotiations and has signed a non-binding letter of intent to sell a controlling interest in Financial Data Services, based on an enterprise value for FDS in excess of $3.5 bln... Amidst a challenging market environment, Merrill Lynch's core businesses continued to perform well; however, second quarter 2008 net revenues were negative $2.1 bln, compared with positive $9.5 bln in the prior-year period. The revenue decline was driven by net losses totaling $3.5 bln related to U.S. super senior ABS CDOs and credit valuation adjustments of negative $2.9 bln related to hedges with financial guarantors, about half of which related to U.S. super senior ABS CDOs. Other significant net losses included $1.7 bln in the investment portfolio of Merrill Lynch's U.S. banks, as well as $1.3 bln from certain residential mortgage exposures. Active efforts to reduce risk through asset sales combined with these net losses, resulted in meaningful exposure reductions for many of these asset classes. "Our core franchise continues to perform well despite the extremely challenging market environment... Against this backdrop, we increased our excess liquidity pool to a record level of $92 bln and significantly reduced our exposures in key asset classes. Importantly, with the transactions we announced today, we are bolstering our capital base and continue to move forward on our risk management and strategic growth initiatives." The firm's liquidity position remained strong with the holding company's excess liquidity pool at a record level of approximately $92 bln, up from $82 bln at the end of 1Q08 and well in excess of debt maturing in less than one year. At the end of the second quarter of 2008, estimated book value per share was $21.43, down from $25.93 at the end of the first quarter.

4:12PM Capital One misses by $0.10 (COF) 42.80 +5.52 : Reports Q2 (Jun) earnings of $1.21 per share, including discontinued operations, $0.10 worse than the First Call consensus of $1.31; co missed on revs reporting $3.35 bln vs $4.37 bln consensus. Charge-offs rose in the second qtr of 2008 to 6.26% from 5.85% in the first qtr of 2008, and from 3.56% in the second qtr of 2007. The company expects the charge-off rate to be in the low six% range in the third qtr, rising to around seven% in the fourth qtr. Delinquencies improved in the second qtr of 2008 to 3.85% from 4.04% in the previous qtr but rose from 2.98% in the year ago qtr. Credit performance in the qtr was largely in line with previous expectations and reflects expected continued weakening as suggested by US economic indicators. Available liquidity increased in the qtr by $3.0 bln to $33.0 bln. "Going forward, we will continue our 37.5 cent quarterly dividend while at the same time maintaining our TCE ratio above our long-term target range."

4:11PM Evergreen Solar beats by $0.02, beats on revs; guides Q3 EPS below consensus, revs below consensus (ESLR) 10.32 : Reports Q2 (Jun) loss of $0.08 per share, $0.02 better than the First Call consensus of ($0.10); revenues rose 47.8% year/year to $22.8 mln vs the $22.1 mln consensus. ESLR guides Q3 gross margin is expected to be in the range of 6% to 8%. Co issues downside guidance for Q3, sees EPS of ($0.10) vs. ($0.08) consensus; sees Q3 revs of $24.5-25.5 mln vs. $26.51 mln consensus. Operating expenses, excluding factory startup costs, are expected to be approximately $12.0 mln to $12.5 mln. Factory startup costs are expected to be in the range of $8.0 mln to $8.5 mln, including approximately $2.7 mln of accelerated depreciation associated with the Marlboro ramp down.

4:09PM PMC-Sierra beats by $0.01, beats on revs (PMCS) 7.93 +0.62 : Reports Q2 (Jun) earnings of $0.13 per share, excluding non-recurring items, $0.01 better than the First Call consensus of $0.12; revenues rose 33.5% year/year to $139.8 mln vs the $137.3 mln consensus. "In the second quarter, we experienced strong demand for our fiber to the home products in Asia as well as growth in our wireline infrastructure products... We are very focused on product execution in the second half of the year to further penetrate the enterprise storage and communications markets."

4:08PM Stryker reports EPS in-line, beats on revs; guides FY08 EPS in-line, revs below consensus (SYK) 68.41 -0.08 : Reports Q2 (Jun) earnings of $0.73 per share, in-line with the First Call consensus of $0.73; revenues rose 17.0% year/year to $1.71 bln vs the $1.68 bln consensus. Co issues mixed guidance for FY08, sees EPS of $2.88 vs. $2.88 consensus. The financial forecast for 2008 remains unchanged, with a constant currency net sales increase in the range of 11% to 13%, equates to $6.661-6.781 bln vs. $6.85 bln consensus, as a result of growth in shipments of Orthopaedic Implants and MedSurg Equipment. If foreign currency exchange rates hold near June 30, 2008 levels, the Company anticipates a favorable impact on net sales of approximately 2.5% to 3% in the third quarter of 2008 and a favorable impact on net sales of approximately 3% to 3.5% for the full year of 2008.

4:06PM Google misses by $0.11, reports revs in-line (GOOG) 533.44 : Reports Q2 (Jun) earnings of $4.63 per share, $0.11 worse than the First Call consensus of $4.74; revenues after deducting TAC rose 43.2% year/year to $3.9 bln vs the $3.87 bln consensus. Co reports Q2 Paid Clicks increased ~19% yr/yr, compares to Q1 yr/yr increase of ~20%. Co said, "Strong international growth as well as sustained traffic increases on Google's web properties propelled us to another strong quarter, despite a more challenging economic environment... As we continue to focus on innovating in our core business of search, ads and apps, we also look forward to enhancing the experience of our users and expanding the reach of our advertisers and partners with new technologies and formats, particularly as our integration of DoubleClick gains momentum and creates new opportunities in display advertising and elsewhere."

9:06AM Nucor beats by $0.11, beats on revs; guides Q3 EPS below consensus (NUE) 67.26 : Reports Q2 (Jun) earnings of $1.94 per share, $0.11 better than the First Call consensus of $1.83; revenues rose 70.1% year/year to $7.09 bln vs the $6.37 bln consensus. Co issues downside guidance for Q3, sees EPS of $1.80-1.85 vs. $1.95 consensus. Co expects continued strength in its sheet, plate, beam and bar businesses due to the solid global demand for steel. Although downstream businesses will be challenged by rising steel prices, the co expects continued good results from this segment. Note, the Q3 guidance an increase in the diluted share count by 6% vs Q2 due to Nucor's recent stock offering on May 29.

9:04AM Sherwin-Williams beats by $0.07, beats on revs; guides Q3 EPS in-line; reaffirms FY08 EPS guidance (SHW) 47.95 : Reports Q2 (Jun) earnings of $1.45 per share, $0.07 better than the First Call consensus of $1.38; revenues rose 1.4% year/year to $2.23 bln vs the $2.19 bln consensus. Co issues in-line guidance for Q3, sees EPS of $1.20-1.45 vs. $1.20 consensus. Co reaffirms guidance for FY08, sees EPS of $3.60-4.10 vs. $3.79 consensus.

9:04AM Safeway beats by $0.01, misses on revs; guides FY08 EPS in-line (SWY) 30.01 : Reports Q2 (Jun) earnings of $0.53 per share, $0.01 better than the First Call consensus of $0.52; revenues rose 3.0% year/year to $10.12 bln vs the $10.25 bln consensus. Co issues in-line guidance for FY08, sees EPS of $2.25-2.35 vs. $2.28 consensus. Safeway revised guidance for identical-store sales growth, excluding fuel, from a range of 2.0% to 2.3% to a range of 1.0% to 2.0%.

8:58AM Reliance Steel beats by $0.02, slight miss on revs; guides Q3 EPS below consensus (RS) 71.79 : Reports Q2 (Jun) earnings of $2.12 per share, $0.02 better than the First Call consensus of $2.10; revenues rose 10.5% year/year to $2.10 bln vs the $2.12 bln consensus. Co issues downside guidance for Q3, sees EPS of $1.80-1.90 vs. $1.94 consensus. Co says Q2 turned out to be quite a bit better than originally anticipated primarily as a result of higher carbon steel prices, which resulted in higher gross profit margins as the co quickly passed through the increases to its customers. The price increases were larger than anticipated. Looking at Q3, the co expects pricing to be slightly above Q2 levels. While the co does not expect any unusual changes in demand, it does expect normal seasonal softness. As a result, the co expects volume to decrease slightly and its gross margin to be a bit lower because the rate of carbon steel price increases will be below that of Q2.

8:37AM InSteel Industries beats by $0.33, beats on revs (IIIN) 19.72 : Reports Q3 (Jun) earnings of $0.97 per share, $0.33 better than the First Call consensus of $0.64; revenues rose 32.0% year/year to $104.3 mln vs the $92.9 mln consensus. "We expect business conditions to become increasingly challenging in view of the anticipated softening in nonresidential construction, particularly for commercial projects. In addition, we foresee further increases in raw material costs in the coming months driven by tight supply in the domestic market and limited availability of imports at competitive prices. It may become more difficult for us to pass on these additional costs depending upon the magnitude of the drop-off in demand and competitive dynamics. We also expect spreads and margins to narrow to more sustainable levels when the pricing for wire rod and our products levels out and the higher cost material begins to be reflected in cost of sales."

8:12AM PPG Industries beats by $0.08, beats on revs (PPG) 55.79 : Reports Q2 (Jun) earnings of $1.62 per share ex-items, $0.08 better than the First Call consensus of $1.54; revenues rose 41.8% year/year to $4.47 bln vs the $4.17 bln consensus. "Looking ahead, we expect our growth to be sustained, due in part to these same factors," Chairman and CEO, Bunch said. He added that announced price increases in the commodity chemicals business are being implemented, along with price actions in other businesses, with the intent of offsetting further inflationary pressures. "We expect our future operating results to remain solid and to compare favorably within our industry groups," Bunch concluded.

8:12AM Sonoco Products beats by $0.02, reports revs in-line; guides Q3 EPS below consensus; guides FY08 EPS in-line (SON) 30.84 : Reports Q2 (Jun) earnings of $0.62 per share, excluding non-recurring items, $0.02 better than the First Call consensus of $0.60; revenues rose 9.3% year/year to $1.09 bln vs the $1.08 bln consensus. Co issues downside guidance for Q3, sees EPS of $0.63-0.65 vs. $0.66 consensus. Co reaffirms guidance for FY08, sees EPS of $2.44-2.47 vs. $2.46 consensus.

8:12AM Cypress Semi beats by $0.07, beats on revs (CY) 26.47 : Reports Q2 (Jun) earnings of $0.28 per share, excluding non-recurring items, $0.07 better than the First Call consensus of $0.21; revenues rose 58.9% year/year to $592.3 mln vs the $540 mln consensus. "Cypress achieved record quarterly revenue and exceeded guidance in both our core semiconductor and SunPower businesses. Despite a very challenging economic environment, our semiconductor business grew solidly across all divisions driven by the strength of our programmable solutions.... While we remain cautious about the macro economic environment for the second half of 2008, we anticipate strong sequential growth in our semiconductor business, driven mainly by our flagship programmable products, our PSoC Programmable-System-on-Chip solution and by our WestBridge peripheral controllers. Both of these products are expected to achieve record quarterly revenues in our seasonally strong Q3." Non-GAAP consolidated gross margin for the second quarter was 35.0%, up 0.8 percentage points from the previous quarter. Non-GAAP semiconductor gross margin for the second quarter was 50.7%, matching the previous quarter... Separately, the co announced that its Board of Directors has authorized management to proceed with a spin-off to Cypress's shareholders of the Class B common shares of SunPower (SPWR) held by Cypress, with the objective of having the transaction completed by the end of 2008, or sooner if possible. Cypress previously announced that on April 16, 2008, it had received a favorable ruling from the Internal Revenue Service with respect to certain tax issues arising under Section 355 of the Internal Revenue Code in connection with a potential spin-off transaction. In connection with the proposed spin-off, the Cypress Board contemplates adjusting outstanding employee equity awards in a manner intended to preserve their intrinsic value as well as a possible tender offer for all or a portion of the company's outstanding 1.00% convertible senior notes due September 2009.

8:11AM ValueClick lowers Q2 rev and FY08 EPS and rev guidance; issues upside Q2 EPS (VCLK) 13.77 : Co issues mixed guidance for Q2 (Jun), sees EPS of $0.17-0.18 vs. $0.16 First Call consensus, up from $0.15-0.16 previously; sees Q2 (Jun) revs of $163-164 mln vs. $169.84 mln consensus, down from $166-170 mln previously. Co issues downside guidance for FY08 (Dec), sees EPS of $0.69-0.71 vs. $0.81 consensus, down from $0.81-0.83 previously; sees FY08 (Dec) revs of $655-675 mln vs. $738.52 mln consensus, down from $730-745 mln previously. "Due to increasing macroeconomic uncertainty, we no longer anticipate the seasonal strength in ad spending we typically see in the second half of the year. However, we continue to focus on gross margins and operating expenses such that we expect to maintain an adjusted-EBITDA margin for fiscal year 2008 that is consistent with our prior guidance. The Company currently has $101 million in authorization in its share repurchase program, and we plan to be actively buying back stock in the coming weeks."

8:07AM Illinois Tool beats by $0.04; guides Q3 EPS in-line (ITW) 46.55 : Reports Q2 (Jun) earnings of $1.01 per share, $0.04 better than the First Call consensus of $0.97; revenues rose 10.5% year/year to $4.57 bln vs the $4.58 bln consensus. Co issues in-line guidance for Q3, sees EPS of 0.93-0.99 vs. $0.95 consensus. Co issues guidance for FY08, sees EPS of 3.40-3.52, includes 22 cent after-tax charge, may not be comparable to $3.64 consensus.

8:04AM Sunpower beats by $0.10, beats on revs; guides Q3 EPS in-line, revs in-line; guides FY08 EPS above consensus, revs above consensus; guides FY09 EPS above consensus, revs above consensus (SPWR) : Reports Q2 (Jun) earnings of $0.61 per share, excluding non-recurring items, $0.10 better than the First Call consensus of $0.51; revenues rose 120.3% year/year to $382.8 mln vs the $343.1 mln consensus. SPWR reported total gross margin of 26.4%, Co issues in-line guidance for Q3, sees EPS of $0.53-0.57 vs. $0.57 consensus; sees Q3 revs of $340-355 mln vs. $346.86 mln consensus. Co issues upside guidance for FY08, sees EPS of $2.26-2.36 vs. $2.17 consensus; sees FY08 revs of $1.39-1.44 bln vs. $1.36 bln consensus. Co issues upside guidance for FY09, sees EPS of $3.50 vs. $3.41 consensus; sees FY09 revs of $2.0-2.1 bln vs. $1.94 bln consensus.

8:02AM Compass Minerals Intl announces price increase on sulfate of potash specialty fertilizer (CMP) 72.28 : Great Salt Lake Minerals, a subsidiary of Compass Minerals (CMP), announces a $255 per-ton price increase on all sulfate of potash specialty fertilizer products effective with shipments on August 15, 2008. The new list price for standard, non-granulated S.O.P. will be $988 per short ton and granular SOP will be $1000 per short ton at the company's solar evaporation plant at Ogden, Utah.