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Garmin Goes Off Course
Tweet Share on Facebook July 30, 2008 CommentNo good news from the GPS maker.
1) Earnings: Excluding one-time gains, Garmin's earnings of 93 cents a share were well short of the $1 figure expected by Wall Street. Revenue of $912 million was way below forecasts of $956 million, and the company slashed full-year guidance to $3.98 billion in revenue from $4.5 billion.
2) New products: Garmin said its hyped Nuvifone launch would be put off until mid-'09, blaming retooling to meet carrier requirements.
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Investors See the Bright Side
Tweet Share on Facebook July 29, 2008 CommentMarkets may be hurting now, but investors think stocks will rally over the coming year, according to a new survey by asset manager Schroders.
The survey asked 507 investors with assets over $100,000 whether they predicted a positive annual rate of return over the next 12 months. Ninety-four percent said yes. In fact, 55 percent expected their investments to be up at least 5 percent—even though most say we're in a recession right now.
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Auto Woes Hit Axel
Tweet Share on Facebook July 28, 2008 Comment (1)American Axel and Manufacturing Holdings (AXL) posted a loss of $1.33 a share, a good bit worse than the 95-cent hit Wall Street had predicted.
So far today, its shares are off almost 18 percent to $5.41 midday, and they've slumped more than 71 percent so far this year.
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Tiffany & Co. and the Weak Dollar
Tweet Share on Facebook July 25, 2008 Comment (2)Ongoing weakness in the greenback (a euro is worth $1.57 at the moment, if you're keeping track) has been one of the factors optimistic economists point to as a source of support for a hobbled American economy.
Basically, even though the United States is in trouble, global growth is still healthy, and that means hefty demand for American exports, plus a reason for richer-feeling Europeans and Asians to head stateside for a vacation and a little shopping.
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One Sunny IPO
Tweet Share on Facebook July 24, 2008 CommentGT Solar, a supplier of equipment used to make photovoltaic wafers and other components of solar power systems, is set to go public at an offering price of $16.50.
The offering could be worth $500 million at a time when the market for initial public offerings, solar or otherwise, remains in a deep slump. The only other solar IPO this year, installer Real Goods Solar, slumped from a debut price of $10 to around $6.
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Now Back to the Consumer
Tweet Share on Facebook July 23, 2008 CommentIn the weeks between the March collapse of Bear Stearns and the latest crisis at Fannie Mae and Freddie Mac, there was barely time to get back to worrying about the economy's other big uncertainty: consumer spending.
It may be less dramatic than the bad news exploding out of the financial sector lately, but a slow leak in consumer optimism is arguably a bigger risk to the U.S. economy. Barring some new calamity (bank failures, anyone?), the discussion will most likely turn back to strategies for propping up American shopping habits.
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Wachovia Misses Badly
Tweet Share on Facebook July 22, 2008 CommentStocks are looking a bit weaker today thanks to Wachovia's terrible earnings report that kicked off a host of bad news at regional banks.
The bank's operating loss of $1.27 a share is far larger than the 78 cents expected by Wall Street. The bank is battening hatches all around: Loan loss provisions tripled, defaults rose, and uncollectible losses increased. Quarterly losses included $6 billion in write-downs (total losses hit $8.9 billion), and the bank cut its dividend by 87 percent to 5 cents a share. That's the second time it has slashed the dividend this year.
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Fannie and Freddie Cut Back
Tweet Share on Facebook July 21, 2008 Comment (1)Analysts at Friedman, Billings, Ramsey are adamant that Fannie Mae and Freddie Mac won't be privatized. That's nominally good news for shareholders. The bad news? They'll each need to raise $10 billion to $15 billion in new capital to reassure investors.
FBR left its Underperform rating on the stocks, but lowered its price target on Fannie to $11 from $23. It cut Freddie to $7 from $17.
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Wachovia Leads Banks Down
Tweet Share on Facebook July 15, 2008 Comment (14)Wachovia's Woes
Oppenheimer analyst Meredith Whitney cut the North Carolina-based bank to "underperform," blaming too-rosy valuations on the bank's mortgage assets. She called the outlook "bleak" for shareholders.Basically, the bank's current path means losses are rising as assets are shrinking, and as Whitney titled her report, "Shrinking to Grow Historically Doesn't End Well for Financials."
She says on-balance-sheet loans will drop by 5 percent by year-end and warns that "in this very real scenario, expenses simply cannot come down fast enough, seriously jeopardizing [Wachovia Bank's] ability to grow earnings." She predicts losses at the bank in 2008 and 2009.
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Bank Fallout: Regional and International Edition
Tweet Share on Facebook July 14, 2008 Comment (1)A couple things to add about today's problems in the banking sector:
The government's plan to prop up Freddie Mac and Fannie Mae looks as if it's helping (even though their shares aren't likely to get any boost). But it doesn't really fix entrenched problems in the economy. Namely, the overarching theme of today's bad market: America's worsening credit profile.
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