Earnings Report Update 04/26/07
In the virtual world... After the bell: Microsoft
Apple (APPL) Q2 Yoy profit +88% on a 21% revenue jump, margins +5%. However, Q2 sequential revenues fell from Q1 $7.12B to $5.26B, a 26% decline.
Sequentially, unit shipments and revenues of Americas slid 3% and 30%, respectively. Europe sequentially revealed a 12% drop in shipments and a steeper 27% fall in revenues.
PMC Sierra (PMCS) developer of communications semiconductors and storage semiconductors, Q1 net loss widened to ($15.8M) as net income plunged -75%.
Qualcomm (QCOM) wireless chip king pin, Q2 Yoy net income +22%; revenue +21%. Sequential earnings +12%. Their the only game in town, but the patent battle with Broadcom is not over.
Xilinx (XLNX) logic chip maker, fiscal Q4 profit -21%, revenue -6% Yoy. Due partly to declines in defense, wireless and consumer-application sales.
Homebuilders Plunge...
Pulte Homes (PHM) #2 US Homebuilder Q1 net loss ($85M) vs Q106 net profit $262M; revenue -37%; new orders -21%; value of new orders -21%; closings -37%; cancellation rate 24%
Ryland (RYL) Q1 net loss ($24M) vs Q106 net profit $90M; revenue -34%; new orders -26%; new order value -26%; closings -35%
Beazer (BZH) Q1 net loss ($43M) vs Q106 net profit $104M; revenue -35%; new orders -3.3%; closings -36%; cancellations 29%.
Beazer and Ryland withdrew their earnings forecasts for 2007 and Pulte declined to provide an outlook for the rest of the year.
Beazer CEO Ian McCarthy said the market was "extremely challenging" citing troubled waters ahead "no meaningful evidence of a sustainable recovery" in the visibility.
Mortgage Lenders Squeezed...
Countrywide (CFC) #1 US mortgage lender, Q1 profit -37%; revenues -15%; earnings from interest income +29% on rising ARM's, mortgage banking revenues fell -82% on plunging demand.
The company attributed the slump in profit to charges for subprime activities as well as increases to loss reserves and related asset valuation adjustments that arose from higher delinquencies and softer housing markets.
CFC lowered forward guidance, CEO Angelo Mozilo: the shakeout still has `"a way to go".
IndyMac (NDE) Q1 earnings -34% $52M, its lowest profit in 3 years. Despite mortgage production +27%; revenue -1% on impacted mortgage spreads, NDE lowered forward guidance.
IndyMac President Richard Wohl: "With respect to mortgage banking revenue margins, the spread widening in the private mortgage-backed securities markets that occurred in the first quarter will continue to impact margins in the second quarter."
Friedman, Billings, Ramsey Group (FBR) investment bank and brokerage, Q1 loss ($186M) vs Q106 profit $26M, due to the poor performance of its non prime mortgage businesses.
Gary Gordon, an analyst at Portales Partners LLC in New York. "The worst thing that could happen did in the quarter, with investors pulling money from the loans and creating a liquidity crisis,''
"Housing downturns don't take a few quarters, they take years. Prices for subprime loans aren't going to get better anytime soon.''
Pay on heed to the man behind the curtain... the housing sector debacle "will not bleed" into the mainstream economy...
Fortune Brands (FO) Q1 EPS -24%; income -20%; net sales -3.4%; operating income -15%.
CEO Norm Wesley: "As anticipated, the strong headwinds of lower housing activity in the U.S. and the impact of higher raw materials costs for home products weighed on our first quarter results."
Office Depot (ODP) Q1 net earnings +16.6%; revenues +7%. North American sales revenues +3% on higher prices as sale store sales +1%. NA profit as a % of sales falling from 8.3% to 6.3%. International sales +21% to save the day.
CEO Steve Odland: "growth was realized despite... a softening in small business spending during the quarter. Sales in the second quarter may be similarly affected if the current business conditions persist in North America."
CocaCola (CCE) Q1 profit -6.2% on soaring prices for aluminum cans and high fructose corn syrup. North American operating income -14%, case volume -2%; cost of sales +7.5%; net pricing +4%
CCE: "North American marketplace conditions remain challenging due to significant cost of goods increases and the market impact of necessary pricing actions."
Wendy's International(WEN) #3 US hamburger chain reported a 71% drop in Yoy Q1 profit; revenues +2%.
Wendy's: "rising commodity prices, driven by demand for ethanol, will result in higher-than-expected food costs for the balance of the year, specifically, produce and chicken."
Bristol Myers Squibb (BMS) pharmaceuticals, net income -3.3% on -4% net sales decline, US sales -5% offset by +5% favorable currency exchange.
Dow Chemical (DOW) Q1 profit -19% due to higher costs +8%; +3% revenue on 2% higher prices; EPS -25%; US sales -13%.
"Double-digit sales improvements in Europe, Asia Pacific and Latin America more than offset continued weakness in North America, particularly in the housing and automotive sectors."
3M (MMM) Q1 net profit +52%; EPS +58% on a divestiture gain; revenue +6%. Adjusted for the divestiture net profit was +5.2% on sales +6% (+2.5% of the gain on foreign currency exchange).
Newmont Mining (NEM) Q1 Yoy net income -67%; revenues +12%; NEM was hurt by higher operating costs and startup challenges at the Nevada mine, increased waste removal costs and adverse exchange rate.
Alaska Air (ALK) net loss ($10M) vs Q106 ($79M); mainline passenger traffic -0.3%, and load factor -2.3%. Bill Ayer CEO: "higher fuel costs, increased competition, and a softer revenue environment in Q1."
US Air (LCC) EPS -7.8%; net income +1M; operating income -7.4%; operating expenses +4.4% Yoy; load factor +1.5%; express passenger revenue -0.3%; cargo revenue flat.
Doug Parker, CEO observed, "Looking forward, the recent rise in fuel prices is once again having a material effect on our outlook."
Daimler Chrysler (DCX) Q1 earnings -30%; EPS -40%; Mercede sales -7%; Chrysler revenue -7%; US production -3%. Daimler Benz makes no bones that it wants to dump the Chrysler unit.
Ford (F) Q1 net loss ($282); loss from continuing operations ($171M) vs Q106 profit $223M. Pre tax operating income declined -60% despite revenue +5.4% on favorable currency exchange and lower sales.
North American Automotive Pre tax Q1 LOSS excluding items +39% on US sales -13%; cars -22%; trucks -8%. During Q1 Ford reduced its North American workforce by 18,000.
ExxonMobil (XOM) Q1 net income +10%; adjusted EPS +18% on share repurchases. Total revenue -2% as upstream earnings (exploration & production) declined on lower Yoy prices and volumes.
Saving the day...downstream earnings (refining) increased 50% with higher refining and marketing margins.
Valero (VLO) #1 US refiner, Q1 net income +41% on higher refining margins, showing that downstream is the place to be.
Apple (APPL) Q2 Yoy profit +88% on a 21% revenue jump, margins +5%. However, Q2 sequential revenues fell from Q1 $7.12B to $5.26B, a 26% decline.
Sequentially, unit shipments and revenues of Americas slid 3% and 30%, respectively. Europe sequentially revealed a 12% drop in shipments and a steeper 27% fall in revenues.
PMC Sierra (PMCS) developer of communications semiconductors and storage semiconductors, Q1 net loss widened to ($15.8M) as net income plunged -75%.
Qualcomm (QCOM) wireless chip king pin, Q2 Yoy net income +22%; revenue +21%. Sequential earnings +12%. Their the only game in town, but the patent battle with Broadcom is not over.
Xilinx (XLNX) logic chip maker, fiscal Q4 profit -21%, revenue -6% Yoy. Due partly to declines in defense, wireless and consumer-application sales.
Homebuilders Plunge...
Pulte Homes (PHM) #2 US Homebuilder Q1 net loss ($85M) vs Q106 net profit $262M; revenue -37%; new orders -21%; value of new orders -21%; closings -37%; cancellation rate 24%
Ryland (RYL) Q1 net loss ($24M) vs Q106 net profit $90M; revenue -34%; new orders -26%; new order value -26%; closings -35%
Beazer (BZH) Q1 net loss ($43M) vs Q106 net profit $104M; revenue -35%; new orders -3.3%; closings -36%; cancellations 29%.
Beazer and Ryland withdrew their earnings forecasts for 2007 and Pulte declined to provide an outlook for the rest of the year.
Beazer CEO Ian McCarthy said the market was "extremely challenging" citing troubled waters ahead "no meaningful evidence of a sustainable recovery" in the visibility.
Mortgage Lenders Squeezed...
Countrywide (CFC) #1 US mortgage lender, Q1 profit -37%; revenues -15%; earnings from interest income +29% on rising ARM's, mortgage banking revenues fell -82% on plunging demand.
The company attributed the slump in profit to charges for subprime activities as well as increases to loss reserves and related asset valuation adjustments that arose from higher delinquencies and softer housing markets.
CFC lowered forward guidance, CEO Angelo Mozilo: the shakeout still has `"a way to go".
IndyMac (NDE) Q1 earnings -34% $52M, its lowest profit in 3 years. Despite mortgage production +27%; revenue -1% on impacted mortgage spreads, NDE lowered forward guidance.
IndyMac President Richard Wohl: "With respect to mortgage banking revenue margins, the spread widening in the private mortgage-backed securities markets that occurred in the first quarter will continue to impact margins in the second quarter."
Friedman, Billings, Ramsey Group (FBR) investment bank and brokerage, Q1 loss ($186M) vs Q106 profit $26M, due to the poor performance of its non prime mortgage businesses.
Gary Gordon, an analyst at Portales Partners LLC in New York. "The worst thing that could happen did in the quarter, with investors pulling money from the loans and creating a liquidity crisis,''
"Housing downturns don't take a few quarters, they take years. Prices for subprime loans aren't going to get better anytime soon.''
Pay on heed to the man behind the curtain... the housing sector debacle "will not bleed" into the mainstream economy...
Fortune Brands (FO) Q1 EPS -24%; income -20%; net sales -3.4%; operating income -15%.
CEO Norm Wesley: "As anticipated, the strong headwinds of lower housing activity in the U.S. and the impact of higher raw materials costs for home products weighed on our first quarter results."
Office Depot (ODP) Q1 net earnings +16.6%; revenues +7%. North American sales revenues +3% on higher prices as sale store sales +1%. NA profit as a % of sales falling from 8.3% to 6.3%. International sales +21% to save the day.
CEO Steve Odland: "growth was realized despite... a softening in small business spending during the quarter. Sales in the second quarter may be similarly affected if the current business conditions persist in North America."
CocaCola (CCE) Q1 profit -6.2% on soaring prices for aluminum cans and high fructose corn syrup. North American operating income -14%, case volume -2%; cost of sales +7.5%; net pricing +4%
CCE: "North American marketplace conditions remain challenging due to significant cost of goods increases and the market impact of necessary pricing actions."
Wendy's International(WEN) #3 US hamburger chain reported a 71% drop in Yoy Q1 profit; revenues +2%.
Wendy's: "rising commodity prices, driven by demand for ethanol, will result in higher-than-expected food costs for the balance of the year, specifically, produce and chicken."
Bristol Myers Squibb (BMS) pharmaceuticals, net income -3.3% on -4% net sales decline, US sales -5% offset by +5% favorable currency exchange.
Dow Chemical (DOW) Q1 profit -19% due to higher costs +8%; +3% revenue on 2% higher prices; EPS -25%; US sales -13%.
"Double-digit sales improvements in Europe, Asia Pacific and Latin America more than offset continued weakness in North America, particularly in the housing and automotive sectors."
3M (MMM) Q1 net profit +52%; EPS +58% on a divestiture gain; revenue +6%. Adjusted for the divestiture net profit was +5.2% on sales +6% (+2.5% of the gain on foreign currency exchange).
Newmont Mining (NEM) Q1 Yoy net income -67%; revenues +12%; NEM was hurt by higher operating costs and startup challenges at the Nevada mine, increased waste removal costs and adverse exchange rate.
Alaska Air (ALK) net loss ($10M) vs Q106 ($79M); mainline passenger traffic -0.3%, and load factor -2.3%. Bill Ayer CEO: "higher fuel costs, increased competition, and a softer revenue environment in Q1."
US Air (LCC) EPS -7.8%; net income +1M; operating income -7.4%; operating expenses +4.4% Yoy; load factor +1.5%; express passenger revenue -0.3%; cargo revenue flat.
Doug Parker, CEO observed, "Looking forward, the recent rise in fuel prices is once again having a material effect on our outlook."
Daimler Chrysler (DCX) Q1 earnings -30%; EPS -40%; Mercede sales -7%; Chrysler revenue -7%; US production -3%. Daimler Benz makes no bones that it wants to dump the Chrysler unit.
Ford (F) Q1 net loss ($282); loss from continuing operations ($171M) vs Q106 profit $223M. Pre tax operating income declined -60% despite revenue +5.4% on favorable currency exchange and lower sales.
North American Automotive Pre tax Q1 LOSS excluding items +39% on US sales -13%; cars -22%; trucks -8%. During Q1 Ford reduced its North American workforce by 18,000.
ExxonMobil (XOM) Q1 net income +10%; adjusted EPS +18% on share repurchases. Total revenue -2% as upstream earnings (exploration & production) declined on lower Yoy prices and volumes.
Saving the day...downstream earnings (refining) increased 50% with higher refining and marketing margins.
Valero (VLO) #1 US refiner, Q1 net income +41% on higher refining margins, showing that downstream is the place to be.
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