Archive for April, 2012

  • Stryker Earns 99 Cents Per Share
    , April 17th, 2012 at 4:11 pm

    Stryker ($SYK) earned 99 cents per share for the first quarter which matched Wall Street’s estimate:

    For the latest quarter, Stryker reported a profit $350 million, or 91 cents a share, up from $307 million, or 78 cents a share, a year ago. Excluding items, earnings were 99 cents a share, matching the estimate from analysts polled by Thomson Reuters.

    Revenue increased 7.2% to $2.16 billion, above analysts’ expectations of $2.12 billion.

    Sales at Stryker’s MedSurg unit, which makes products including surgical equipment, hospital beds and stretchers, increased 7.5% to $821 million.

    Gross margin rose to 67.2% from 65.8%.

    Shares of the company, which affirmed its forecast for 2012, rose 1.1% to $55.50 in after-hours trading. The stock has risen 10% so far this year.

    Stryker reiterated its full-year forecast of earnings growth of “double-digit levels” over 2011.

  • Forgotten Stock Makes Man Millionaire
    , April 17th, 2012 at 2:06 pm

    Most of us would be better investors if we were like this guy:

    A man who believed he had sold all his shares in a high-flying computer data storage company found himself nearly $4 million richer after discovering he still owned 1,000 shares of the firm’s stock.

    The man, who asked that his name not be published, said he had no idea he still owned stock in Hopkinton, Mass.-based EMC until he was contacted by the state treasurer’s office last month.

    “I’m no accounting genius,” the 62-year-old salesman told The Associated Press on Wednesday.

    The man, who lives in Boston, said he purchased 3,000 shares of stock in 1987 on the advice of a cousin. Sometime during the 1990s he sold 2,000 shares of the stock to pay for his children’s college tuition and forgot about the remaining 1,000 shares.

    Some 13 years later, the value of 1,000 shares had ballooned to nearly $4 million.

    The forgotten shares were discovered by the treasury’s Abandoned Property Division. By law, brokerage firms must turn over to the state stocks which show no activity by their owners after three years.

    This is an old story. EMC had a difficult time from 2000 to 2002, although it’s done pretty well over the last 10 years. During the 1990s, it gained 80,575%.

  • Q1 Earnings Season So Far
    , April 17th, 2012 at 10:56 am

    It’s still very early but we have some stats for Q1 earnings season. Of the 500 companies in the S&P 500, 40 have reported so far. Twenty-nine stocks beat estimates, five reported inline and six companies missed estimates. Earnings are tracking at $24.34 which is a 3.62% increase over the first quarter of 2011.

  • Goldman Raises Dividend
    , April 17th, 2012 at 10:35 am

    Goldman Sachs ($GS) reported quarterly earnings of $3.92 per share which beat (lowered) estimates of $3.55 per share. Their net dropped 23% from last year.

    But what really caught my attention is that the bank raised its quarterly dividend from 35 cents to 46 cents per share. Goldman was one of the few financials that didn’t slash its dividend during the financial crisis. They managed to keep it at 35 cents since 2006.

    With the dividend increase, the bank now yields about 1.56% which isn’t a whole lot. I think it’s important that such a high-profile financial stock is willing to increase its dividend. Hopefully, this will encourage other financials to follow.

  • Sluggish Economic News
    , April 17th, 2012 at 10:03 am

    We got some sluggish economic news this morning. The Federal Reserve said that industrial production was flat last month, and the Commerce Department said that housing starts fell by 5.8%. Manufacturing dropped by 0.2%.

    For industrial production, economists were expecting an increase of 0.3%. The weakness is probably due to the problems in Europe. Capacity utilization, which tells us how much of a plant is being used, now stands at 76.7%.

    The drop in manufacturing output, which accounts for about 12 percent of the U.S. economy, in March was the first since November. The figure was restrained by a decrease in consumer durable goods such as furniture and appliances. Construction supply production slumped 1.3 percent in March after a 1.9 percent jump.

    Still, first-quarter factory output climbed at a 10.4 percent annual rate, the most in almost two years, the Fed said.

    Auto production rose in March at a slower pace, climbing 0.6 percent after a 0.8 percent rise. Factory output minus production of vehicles and parts fell 0.3 percent in March.

  • Johnson & Johnson Earns $1.37 Per Share
    , April 17th, 2012 at 9:14 am

    This morning, Johnson & Johnson ($JNJ) reported first-quarter earnings of $1.37 per share. That beat Wall Street’s consensus by two cents per share. On the top line, J&J’s revenue fell 0.2% to $16.14 billion which was short of Wall Street’s consensus of $16.28 billion. But the best news is that the healthcare giant raised its full-year forecast by two cents per share. The new EPS range is $5.07 to $5.17.

    Revenue rose 1.2 for prescription drugs, to $6.13 billion from $6.06 billion, as sales from new medicines made up for lower sales from two medicines that got generic competition last spring, Levaquin for serious infections and Concerta for attention deficit disorder.

    But revenue was down in J&J’s other two businesses. Sales of medical devices and diagnostic equipment, the company’s biggest segment, slumped 0.3 percent to $6.41 billion. Consumer product sales fell 2.4 percent, to $3.6 billion, due to the many products still not back in stores due to product recalls.

    This earnings report is good news for J&J. The company has run into a mess of problems recently with a seemingly endless series of recalls. I’m glad to see that a new CEO will be taking over at the shareholder meeting on April 26th.

    I also expect to see the company announce its 50th-straight dividend increase. The current quarterly dividend is 67 cents per share. I think the new dividend will be 70 cents per share.

  • Morning News: April 17, 2012
    , April 17th, 2012 at 5:12 am

    Spain Pledges Action Against Argentina Over YPF Seizure

    Merkel Offers Spain No Respite as Debt Cuts Seen As Key

    Japan Vows $60 Billion to Boost IMF Firepower

    Fitch’s Pant Says India Rate Cut Will Raise Corporate Spending

    Emerging-Market Drift From World Bank to Test Kim

    For Two Economists, the Buffett Rule Is Just a Start

    U.S. Retail Sales Climb More Than Forecast on Jobs

    Danone Revenue Beats Analysts’ Estimates on Water, Baby Food

    Mattel’s 1Q Net Down On Acquisition Costs, Lower Sales

    Rio Tinto’s Iron Ore Production Misses Analyst Estimates

    Burberry Eyes More Flagship Stores as Sales Rise Again

    Citigroup Shares Advance as Revenue From Bond Trading Climbs

    Apple Shares Lose Shine

    IBM May Raise Full-year Software Demand Forecast

    Cullen Roche: Europe’s Balance Sheet Recession is a Symptom

    Joshua Brown: Was it the Trillion Dollar Market Cap Calls or the Thousand Dollar Price Targets?

    Be sure to follow me on Twitter.

  • IBM Vs. Microsoft
    , April 16th, 2012 at 11:17 am

    Here’s a look at IBM’s ($IBM) stock compared with Microsoft’s ($MSFT). This is a race that hasn’t gone the way many people would have thought.

    If you had asked most experts on December 31, 1999, which is a better buy—IBM or Microsoft, I’m pretty sure the majority would have sided with Microsoft. Instead, IBM has won the contest hands down with an 88% gain compared with a 47% loss for Microsoft.

    If we were to measure from Microsoft’s IPO in March 1986 until the end of the century, that’s a very different story. Microsoft would have won with a 600-fold gain to IBM’s triple. Over most of the last ten years, Microsoft’s stock has been flat. IBM has been an especially strong stock in the last three years.

    The lesson here is that companies left for dead can turn themselves around, while companies that have seemingly won the race can quickly lose their edge.

  • Retail Sales Report to Life Stocks
    , April 16th, 2012 at 9:06 am

    After dropping sharply late Friday, the stock market looks to open higher this morning. The good news is that the Commerce Department reported that retail sales rose by 0.8% this morning. Economists were expecting an increase of 0.3%. Today’s news could lead economists to raise their forecast for Q1 GDP growth. The consensus is currently at around 2.5%.

    Stop me if you’ve heard this before but there are still in concerns in Europe. The yield on the 10-year Spanish Treasury bond is back over 6%. Although that is higher, it’s below the 6.7% peak it reached in November.

    Earnings season rolls on. Citigroup ($C) reported Q1 earnings of 95 cents per share which was seven cents below estimates. The bank is trying to recover, but it’s been lagging the sector.

  • Market Timing
    , April 16th, 2012 at 8:19 am

    Via Greg Mankiw: