Oracle Earns 75 Cents Per Share
Posted by Eddy Elfenbein on June 23rd, 2011 at 4:07 pm

Oracle ($ORCL) just reported earnings of 75 cents per share which beat the Street by four cents. Revenue came inline at $10.8 billion which Wall Street won’t like. The shares are down about 6% after-hours which probably won’t last until tomorrow’s open.

Yes, hardware sales dropped by 6% but that makes up about one-tenth of Oracle’s overall business.

Let’s remember that Wall Street was originally expecting 66 cents per share. Only after the company gave us guidance of 69 cents to 73 cents did the Street go up to 71 cents. And we learned today that the company delivered 75 cents per share. Folks, this was a good report.

Oracle Corporation today announced fiscal 2011 Q4 GAAP total revenues were up 13% to $10.8 billion, while non-GAAP total revenues were up 12% to $10.8 billion. Both GAAP and non-GAAP new software license revenues were up 19% to $3.7 billion. Both GAAP and non-GAAP software license updates and product support revenues were up 15% to $4.0 billion. Both GAAP and non-GAAP hardware systems products revenues were down 6% to $1.2 billion. GAAP operating income was up 32% to $4.4 billion, and GAAP operating margin was 40%. Non-GAAP operating income was up 19% to $5.2 billion, and non-GAAP operating margin was 48%. GAAP net income was up 36% to $3.2 billion, while non-GAAP net income was up 27% to $3.9 billion. GAAP earnings per share were $0.62, up 34% compared to last year while non-GAAP earnings per share were up 25% to $0.75. GAAP operating cash flow on a trailing twelve-month basis was $11.2 billion.

For fiscal year 2011, GAAP total revenues were up 33% to $35.6 billion, while non-GAAP total revenues were up 33% to $35.9 billion. Both GAAP and non-GAAP new software license revenues were up 23% to $9.2 billion. GAAP software license updates and product support revenues were up 13% to $14.8 billion, while non-GAAP software license updates and product support revenues were up 13% to $14.9 billion. Both GAAP and non-GAAP hardware systems products revenues were $4.4 billion. GAAP operating income was up 33% to $12.0 billion, and GAAP operating margin was 34%. Non-GAAP operating income was up 27% to $15.9 billion, and non-GAAP operating margin was 44%. GAAP net income was up 39% to $8.5 billion, while non-GAAP net income was up 34% to $11.4 billion. GAAP earnings per share were $1.67, up 38% compared to last year while non-GAAP earnings per share were up 33% to $2.22.

“In Q4, we achieved a 19% new software license growth rate with almost no help from acquisitions,” said Oracle President and CFO, Safra Catz. “This strong organic growth combined with continuously improving operational efficiencies enabled us to deliver a 48% operating margin in the quarter. As our results reflect, we clearly exceeded even our own high expectations for Sun’s business.”

Medtronic Raises Dividend By 8%
Posted by Eddy Elfenbein on June 23rd, 2011 at 12:56 pm

For the 34th year in a row, Medtronic ($MDT) is raising its quarterly dividend. The company is increasing it from 22.5 cents per share to 24.25 cents. That’s an 8% increase. Annualized, the dividend rises from 90 cents per share to 97 cents per share.

Going by the price as of 1 pm today, that comes to a yield of 2.56%.

Last month, MDT told us to expect earnings for this year between $3.43 per share and $3.50 per share. Their fiscal year ends in April. This means the stock is going for 11 times the low-end of the company’s own forecast.

Google Still Goes Lower
Posted by Eddy Elfenbein on June 23rd, 2011 at 11:57 am

Last month, I asked the question, “How much is Google really worth?”

So how much should Google be worth? That’s hard to say. Let’s take a very basic look. Wall Street currently expects Google to earn $33.90 per share this year.

The S&P 500 is currently trading at 13.85 times this year’s earnings estimate. If Google were carrying that multiple, it would be about $470 per share.

However, Google is projected to grow its earnings faster than the overall market. Wall Street currently expects Google to earn $39.49 per share in 2012. The S&P 500 is going for 12.2 times next year’s estimate. So if Google carried that multiple, it would be $481 per share.

When I wrote that GOOG was at $535. Today it’s at $476.

The earnings estimates are basically unchanged. For 2011, Wall Street expects earnings of $33.88 per share, and $39.47 for 2012.

Google is now going for 14.1 times this year’s earnings and 12.1 times next year’s earnings. Compared with the S&P 500, this represents a value premium of 8.8% and 6.5%, respectively.

Double Bounce!
Posted by Eddy Elfenbein on June 23rd, 2011 at 11:05 am

Bed Bath & Beyond’s Earnings Trend
Posted by Eddy Elfenbein on June 23rd, 2011 at 10:15 am

Shares of Bed Bath & Beyond ($BBBY) jumped as much as 5.4% this morning. Here’s a look at the company’s earnings trend along with their updated earnings forecast. Just by looking at the chart, you see that the upper-end of the forecast is still well within the recent trend.

Year-over-year net profit margins have now increased for nine-straight quarters. For the last four quarters, net margins are running at 9.3% which is closing in on the company’s peak of 10% reached in 2005.

Courtesy of Seeking Alpha, here’s part of yesterday’s earnings call where the company details its forecast for the rest of this year:

The following are our major planning assumptions for the remainder of fiscal 2011.

One, including the 12 stores open so far this year, we anticipate that the total number of new store openings will be approximately 40 to 45 stores across all of our concepts. Currently, we believe that fiscal 2011 store openings by concept will be substantially similar to fiscal 2010 with a slight shift to several more buybuy BABY stores and slightly fewer Bed Bath & Beyond stores. As the year progresses and we gain greater visibility, the total number of stores that we will open may be updated. We will continue to place Harmon Face Values health and beauty care offerings in stores across all of our concepts. As always, we remain flexible to take advantage of real estate opportunities that may arise.

Two, we expect to continue our program of expanding, renovating and/or relocating a number of our stores in fiscal 2011.

Three, we are modeling a 2 to 4 percentage increase in comparable store sales for the second quarter and full fiscal year.

Four, based on these comparable store sales assumptions, we are modeling consolidated net sales to increase by 5% to 7% in the second quarter and full year of fiscal 2011.

Five, assuming these sales levels, in addition to planning the continuation of the shift in the mix of merchandise sold to lower margin categories, we are modeling our operating profit to be in the range of flat to slightly leveraged for the fiscal second quarter and to be slightly leveraged for the full year.

Six, interest income is expected to be relatively flat versus fiscal 2010.

Seven, the second quarter and full year tax provision are estimated in the mid- to high-30s percent range with expected variability as taxable events occur.

Eight, capital expenditures for fiscal 2011, principally for new stores, existing store refurbishments, information technology enhancements, including increased spending on our interactive platforms and other projects, continue to be planned at approximately $250 million, which of course, remains subject to the timing of projects.

Nine, depreciation for fiscal 2011 is estimated to be approximately $190 million.

Ten, we expect to generate positive operating cash flow in fiscal 2011 and continue to fund operations entirely from internally generated sources.

Eleven, in the first quarter, we completed our $1 billion share repurchase program and, thereafter, began our $2 billion program authorized in December 2010, which we continue to model to be completed in approximately 2 years. Our share repurchase program may be influenced by several factors, including business and market conditions.

Based on these and the other planning assumptions, we are modeling net earnings per diluted share to be in the range of approximately $0.77 to $0.82 for the fiscal second quarter of 2011. For all of fiscal 2011, we are modeling net earnings per diluted share to increase by approximately 15% to 20%.

Morning News: June 23, 2011
Posted by Eddy Elfenbein on June 23rd, 2011 at 8:05 am

Derivatives Cloud the Possible Fallout From a Greek Default

Selling $50 Billion in Greek Assets Is Herculean Task

Group of 20 Agrees on Steps to Mitigate Food Price Swings

Biggest Banks May Get Boost From Basel

High-Speed Rail Poised to Alter China

Chinese PMI Is On The Verge Of Contraction

Bernanke Leaves Door Open to Further Easing

S.E.C. Approves New Reporting Requirements for Hedge Funds

London Stock Exchange Bid on Knife Edge as TMX Battle Heats Up

Hulu Seen at 50 Times Earnings in Sale Seeking Netflix Multiple

Lennar Net Slides 65% on Lower Home Deliveries

Nissan CEO: Aiming For 10% U.S. Market Share, Seek To Buy Stake In Avtovaz

Brian Shannon: Stock Trading Ideas for 6/23/11

Josh Brown: Pitching RIM to Warren Buffett

Be sure to follow me on Twitter.

Bed Bath & Beyond Raises Full-Year Forecast
Posted by Eddy Elfenbein on June 22nd, 2011 at 4:35 pm

Wowie! Bed Bath & Beyond ($BBBY) just had an outstanding earnings report for their fiscal Q1.

Let’s go over the numbers. For Q1, they earned 72 cents per share. When the last earnings report came out, they told us to expect earnings to range between 58 cents and 61 cents per share. I knew that was low and in last week’s CWS Market Review, I said I was expecting modest earnings of around 63 cents per share.

Turns out, I wasn’t optimistic enough. The shares are up about 2% after hours.

I also said that I was looking forward to Q2 guidance of 80 to 85 cents per share. They gave us guidance of 77 cents to 82 cents per share. So I was still in the ballpark.

This was a great earnings report. The best news of all is that the company also revised their full-year forecast higher. The numbers here aren’t as clear. At the start of the year, BBBY told us to expect an earnings increase for the entire year of 10% to 15%. For 2010, they earned $3.07 which came to $3.38 to $3.53 per share.

Now BBBY has upped that full-year forecast to 15% to 20%. That translates to a range of $3.53 to $3.68 per share.

Bed Bath & Beyond Inc. today reported net earnings of $.72 per diluted share ($180.6 million) in the fiscal first quarter ended May 28, 2011, an increase of approximately 38% versus net earnings of $.52 per diluted share ($137.6 million) in the same quarter a year ago. Net sales for the fiscal first quarter of 2011 were approximately $2.110 billion, an increase of approximately 9.7% from net sales of approximately $1.923 billion reported in the fiscal first quarter of 2010. Comparable store sales in the fiscal first quarter of 2011 increased by approximately 7.0%, compared with an increase of approximately 8.4% in last year’s fiscal first quarter.

During the fiscal first quarter of 2011, the Company repurchased approximately $245 million of its common stock representing approximately 4.8 million shares. This included the completion of the $1 billion share repurchase program authorized in 2007. As of May 28, 2011, the balance remaining of the share repurchase program authorized in December 2010 was approximately $1.892 billion dollars.

The Company is now modeling net earnings per diluted share to be approximately $.77 to $.82 for the fiscal second quarter of 2011 and to increase by approximately 15% to 20% for all of fiscal 2011.

Here’s a look at BBBY’s quarterly numbers for the past few years:

The Fed’s Projections
Posted by Eddy Elfenbein on June 22nd, 2011 at 2:19 pm

Here are the new economic projections from the Fed.

Bernanke LIVE!
Posted by Eddy Elfenbein on June 22nd, 2011 at 2:15 pm

Live TV : Ustream

Today’s Fed Statement
Posted by Eddy Elfenbein on June 22nd, 2011 at 12:29 pm

Here it is:

Information received since the Federal Open Market Committee met in April indicates that the economic recovery is continuing at a moderate pace, though somewhat more slowly than the Committee had expected. Also, recent labor market indicators have been weaker than anticipated. The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Inflation has picked up in recent months, mainly reflecting higher prices for some commodities and imported goods, as well as the recent supply chain disruptions. However, longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The unemployment rate remains elevated; however, the Committee expects the pace of recovery to pick up over coming quarters and the unemployment rate to resume its gradual decline toward levels that the Committee judges to be consistent with its dual mandate. Inflation has moved up recently, but the Committee anticipates that inflation will subside to levels at or below those consistent with the Committee’s dual mandate as the effects of past energy and other commodity price increases dissipate. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent. The Committee continues to anticipate that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee will complete its purchases of $600 billion of longer-term Treasury securities by the end of this month and will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

The Committee will monitor the economic outlook and financial developments and will act as needed to best foster maximum employment and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.