Michael Fowlkes
Chapel Hill, NC - http://www.investorsobserver.com
Michael Fowlkes is an options analyst and writer at Investors Observer.
Intel sells off following Q4 revenue guidance
Shares of chip maker Intel Corporation (NASDAQ: INTC) are selling off today after the company announced that fourth quarter revenues were going to be below (wsj subscription required) an already lowered estimate.The stock is currently down 6.4% on the day to $14.38 and trading near its intraday low of $14.34 following the announcement that the company is expecting to see revenues for its fourth quarter around the $8.2 billion level. At this level, the quarterly revenues would be 20% lower than its previous quarter, and well below its guidance from November that forecast a 12% dip in the quarter.
Today's news is a clear sign of the troubles that the semiconductor industry is dealing with at this time. Typically, the fourth quarter is the strongest quarter, and as recently as October, Intel had forecast that its fourth quarter sales would actually be higher than its third quarter numbers by around 3%. How quickly things can change.
Continue reading Intel sells off following Q4 revenue guidance
Oil down sharply following bearish inventory report
Oil prices have dropped sharply today as traders focus on increased demand concerns following this week's oil inventory report.Going into today's inventory report, analysts were expecting to see an increase in oil reserves of around 1.5 million barrels. However, the market was shocked to see that the actual increase last week was well above that figure, as the Energy Information Agency announced that inventories grew by 6.7 million barrels.
The result? Oil prices have dropped over 9% in today's market, falling $4.54, down to $44.04.
Continue reading Oil down sharply following bearish inventory report
Monsanto (MON) higher after reporting Q1 earnings
Shares of Monsanto Company (NYSE: MON) moved up strongly in premarket trading this morning, and opened over 8% higher as buyers move into the stock following strong first quarter numbers and raised full year guidance.Going into this morning's earnings announcement, analysts had been expecting to the see Monsanto, which supplies agricultural products for farmers in the United States and internationally, to show first quarter earnings of $0.59 per share, but the company blew out analyst estimates by reporting $0.98 per share for its first quarter.
Looking at company revenue for the quarter, Monsanto also shattered analyst estimates by raking in $2.65 in the quarter as opposed to estimates of $2.41 billion, an increase of 29% for the company.
The company also raised fully year guidance and the stock is benefiting from that too. Previously, Monsanto had issued full year 2009 guidance of $4.20 to $4.40, but lifted that estimate today to a range between $4.40 and $4.50.
Shares of the stock have opened over 8% higher, and by 9:45 am jumped over 15%, adding $11.10 to $84.32. It closed yesterday at $73.46.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
Bed Bath and Beyond (BBBY) Q3 earnings preview
Investors are going to keep a close eye on Bed Bath and Beyond (NASDAQ: BBBY) Wednesday afternoon when the company reports its fiscal third quarter numbers. Going into tomorrow's earnings announcement, analysts are expecting the company to post third quarter earnings of 33 cents per share. During its third quarter last year the company matched analyst estimates for 52 cents per share, so hitting its 33 cent estimate this year would mean a drop of 36% year over year.
Last month, the company pre-announced its quarterly numbers and stated that it expected earnings would fall somewhere between 31 and 35 cents a share. This estimate was down from the company's previous guidance of 41 to 47 cents per share.
Of course, one of the main reasons for the company's lower guidance was overall weakness in the economy, but it also faced increased competition from the liquidation sale at its main rival, Linens 'n Things. As Linens 'n Things was preparing to close its doors, its inventory was put on massive discount, and Bed Bath and Beyond was hurt by consumers flocking to buy the highly discounted prices over at Linens 'n Things. I, personally, did a lot of holiday shopping at Linens 'n Things, as did many people that I know.
Continue reading Bed Bath and Beyond (BBBY) Q3 earnings preview
Toyota (TM) to shut down production for 11 days
Today we got another clear cut sign of just how tough things have gotten for the auto industry. Japanese automaker Toyota (NYSE: TM) stated it is going to shut down factories for 11 days in February and March.The news comes on the heels of yesterday's announcement that the company had a dismal month of December, with sales dropping by 37% in America, worse than Ford (NYSE: F) and General Motors (NYSE: GM), which saw sales drop by 32%, and 31% respectively.
The lack of sales resulted in one big problem for the automaker -- excess inventories -- leaving the company with no choice but to shut down production to reduce output in the face of continued slowing auto sales. The shutdown is going to affect all 12 of its Japanese plants, and is in addition to an already announced three day shutdown in the same plants this month.
Continue reading Toyota (TM) to shut down production for 11 days
As expected, Ford, GM and Chrysler put up dismal December figures
I noted on Friday that American auto maker Ford (NYSE: F) was predicting that December would be a tough month for automakers across the board. It forecast around a 30% drop in sales during the month. Indeed, the numbers that actually came in this afternoon showed sharp drops in December sales for all the major automakers.Chrysler took the biggest hit of the majors, as its December sales dropped by a massive 53%, and on the whole, it saw 2008 sales drop 30% compared to what it was able to sell during the 2007 year.
Of course, the main culprits to the sales drop are nothing new to us at this point: falling consumer confidence, tightened credit lending, and increased unease over rising unemployment. It is just not a seller friendly environment for the auto makers at this time.
Continue reading As expected, Ford, GM and Chrysler put up dismal December figures
Ford struggles to see light at end of the tunnel
I realize it goes without saying, but times are tough for American auto makers, really tough in fact, and for Ford (NYSE: F), the company does not see things changing any time soon, and is predicting another disastrous month for December sales for the ailing auto industry.The company announced today that it believes when final December sales figures are released, we are going to see a horrible month, with Ford estimating that industry-wide, December sales will probably be around 35% lower than the same period last year.
When you consider the estimated December numbers you can start to get a feel for just how bad 2008 has been. Consider this: in 2007, industry-wide sales of light vehicles in America totaled 16.2 million. In 2008, that number is expected to drop dramatically down to around 13.2 million light vehicles in reaction to lower consumer spending and tightened credit lending.
Continue reading Ford struggles to see light at end of the tunnel
Holiday shoppers spent 3% less online in 2008
We all know that the current economic slowdown was bound to hurt holiday spending, and today we get news of just how much an impact it had on online shopping, as comScore announced that shoppers spent 3% less this year compared with 2007.The report was based on spending between November 1 and December 23, and showed that consumers spent $25.5 billion online, compared with $26.3 billion in the same period last year, another clear signal that people are cutting their spending because they are worried about the economy.
A bright spot in the report did show that Cyber Monday, the Monday immediately following Black Friday, was the second biggest day ever for online spending, with an increase of 15% in sales from last year, to $846 million in sales.
Continue reading Holiday shoppers spent 3% less online in 2008
Russian oil giant Gazprom searches for bailout money
What a difference a year makes. Indeed, Russian oil giant Gazprom has seen its fortunes free fall in 2008. The company, which was once on the verge of becoming the largest company in the world, is now looking for the Russian government to step in and offer up some bailout money to keep the company afloat.The Russian natural gas monopoly has seen its market cap shrink by a remarkable 76% since the start of 2008, dropping it to 35th place in overall market cap. Now that the company has hit such hard times, it is looking towards Moscow for a little help, asking for a reported $5.5 billion.
The recent sharp drop in oil prices is largely responsible for the company's hard times, but that is not the whole story. Gazprom, while still enjoying high oil prices, displayed poor judgment in how it used its new found power and money. Instead of taking the profits from the past five years of record prices for natural gas and investing them in new exploration and drilling, they were used by, at the time Russian President, Vladimir Putin to regain public control over the oil fields, and other forms of private industry.
Continue reading Russian oil giant Gazprom searches for bailout money
Amazon announces best holiday season ever
While most retailers were looking at dismal holiday shopping seasons this year, online retailer Amazon.com (NASDAQ: AMZN) announced that it had its best holiday season in history.Early indications are showing that retail sales figures could be down as much as 5.5 to 8% during this year, as rising unemployment and general concern over the economy has led to most consumers tightening up their spending this year.
Amazon, which has probably actually been benefiting from the current economic slowdown, saw massive sales on December 15, which is typically the company's strongest day of the year. This year it saw sales of 6.3 million and shipments of 5.6 million units on the 15th, its strongest day in history.
Continue reading Amazon announces best holiday season ever
November a tough month for Toyota (TM)
There is no question about the troubles that the American auto makers have been dealing with, and things are not looking too bright for their overseas competitors as well. Toyota (NYSE: TM) announced today that November was another tough month for the Japanese auto maker, as the company witnessed the largest monthly decline in sales for the past 8 years.During the month, Toyota saw its global sales dip by a massive 21.8%, and highlights the bad news that the company shared with the market earlier this week that 2008 would mark the first time in the past 70 years that the company would be reporting an operating loss for the year.
Earlier this year, the Japanese auto makers had appeared to be somewhat insulated from the slowdown that American makers General Motors (NYSE: GM) and Ford (NYSE: F) were dealing with. The main reason why the Japanese makers were able to weather the storm a bit better was their strong reputation for producing better, more fuel efficient vehicles. While this perception kept the Japanese auto makers stronger for the first part of the year, the overall economic slowdown and credit crunch have been taking their toll recently on all auto makers, the Japanese included.
Continue reading November a tough month for Toyota (TM)
Not such a Merry Christmas at eBay (EBAY)
While this is a week when many of us are celebrating and enjoying some much needed time with friends and family, things are not looking so cheerful over at eBay (NASDAQ: EBAY) as slow sales and low traffic are hurting sales on the popular online auction site (subscription required).This is the first holiday season for the company under its new CEO, John Donahoe, and things are definitely not looking too jolly. According to research firm comScore Inc., the site has been losing a lot of valuable traffic to its competitors, such as Amazon.com (NASDAQ: AMZN) that have more fixed-price products for consumers to purchase, an area where eBay is still lagging.
For the period of November 3 through December 14, a time when many of us were busy spending hours online researching those perfect presents to hand out this holiday, eBay was just not getting the hits that it usually does, and traffic was down by 16% from the same period last year. In contrast, Amazon was enjoying a modest increase in traffic of 6% during the same time frame.
Continue reading Not such a Merry Christmas at eBay (EBAY)
OPEC rumors boost oil prices
Oil prices are getting a big boost today, as investors are betting on hearing news of huge production cuts coming out of OPEC this week.With oil well off its highs from over the summer, many had already been expecting to see OPEC step in and cut production, but earlier this month OPEC made it clear that it wants to shock the market into sending prices higher.
Prices have moved up over $50 a barrel today, hitting a high of $50.05, but have cooled off slightly and are currently sitting at $49.25, up $2.97 as we await to hear exactly how deep the production cuts could run.
Continue reading OPEC rumors boost oil prices
After almost 20 years, Exxon Valdez payments start hitting banks
It doesn't seem like it's been almost 20 years since the devastating oil spill that hit Prince William Sound, Alaska, but it has been, and finally, 19 years later, Exxon Mobil (NYSE: XOM) has started to send out lawsuit settlements to those affected by the spill.In the first decision on the settlement, the company was ordered back in 1994 to pay damages of $5 billion for its role in the environmental disaster. But after years and years of legal battles, the company was able to first get the $5 billion cut in half, and then this June had the damages reduced yet again, down to $507 million.
The payments come with a bitter-sweet taste, as many of the plaintiffs are glad that something is being paid, but feel that the sums they are getting fall far short of what should have been owed to them.
Continue reading After almost 20 years, Exxon Valdez payments start hitting banks
OPEC warns of substantial cuts coming soon
For those of us who were dying for relief from record high gasoline prices this summer, the recent drop in oil prices comes as great news, but this is not the case for everyone. OPEC, which supplies the world with roughly 40% of its oil, would like to see prices rise higher again, and today gave a clear sign that larger than expected production cuts are on the horizon.
In an interview today, the President of OPEC, Chakib Khelil, stated that a consensus had been reached for cuts at the next meeting of the oil cartel. The next scheduled meeting is on December 17, and according to Khelil, the market will be surprised.
Khelil stated that the he felt the best way to get a quick boost in oil prices is to shock the market, and he felt that the upcoming production cuts would be able to do just that. While he did not indicate exactly how large the production cuts would come, he left no doubt that they will be substantial.
"The stronger the decision, the faster prices will pick up," Khelil said.
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