• Dell’s Earnings Restatement
    Posted by on October 31st, 2007 at 12:15 pm

    Dell (DELL) has finally restated its earnings for the past few years. As you can see blow, the difference between the restatement and the original isn’t very much. Profits for FY ’06 were revised a little higher and the years before that were a little lower.
    Original

    Year………Sales……..Oper. Income…..EPS
    2003………$35,404………$2,844………..$0.80
    2004………$41,444………$3,544………..$1.01
    2005………$49,205………$4,254………..$1.18
    2006………$55,908………$4,347………..$1.46
    2007………$57,420………$3,070………..$1.14

    Updated

    Year………Sales……..Oper. Income…..EPS
    2003………$35,262………$2,738………..$0.77
    2004………$41,327………$3,525………..$1.00
    2005………$49,121………$4,206………..$1.18
    2006………$55,788………$4,382………..$1.47
    2007………$57,420………$3,070………..$1.14

    Note that Dell’s fiscal year ends in late-January or early February so we’re currently in FY ’08.
    Two things stand out. First, is the large amount of shares that Dell has bought back. In FY ’07, there were 14% fewer diluted shares than there were in FY ’03.
    The other is the decline and fall of Dell’s operating margins. This is the key stat to watch in Dell. Not too long ago, Dell’s operating margins were around 11%. Today, they’re around 6%. In other words, you sell twice as much just to stand still.

  • Slate to Launch Business Site
    Posted by on October 31st, 2007 at 10:40 am

    The New York Observer has the details:

    Slate deputy editor David Plotz told The Observer he believes there’s a clear opening for Slate’s distinctive editorial voice. He argued that while political journalism has diversified with the arrival of blogs and other independent sites, business journalism is “still dominated by the big brands. We think there’s an opening for a really smart, analytical, opinionated Web site that could be Webby and fast and agile.”
    Mr. Plotz cautioned that the new project is still awaiting final authorization from Post company executives. Assuming it goes forward, it will likely capitalize on the Slate brand with a logo at the top of the home page. He would not comment on the projected budget for the site.
    According to a source at Washingtonpost.Newsweek Interactive, the publishers of Slate, the new site, which does not yet have a name, could go live as early as next summer. It was born in part out of the recent launch of Slate’s newly branded video Web site, SlateV, which Post executives are pleased with. Plans call for it to follow the same basic staffing model that has helped make Slate a success—using a few editors and assistants to run the operation, while relying for content mostly on freelancers.
    No one’s been hired yet. According to a different source, Slate editors offered the top job to Elizabeth Spiers, the founding editor of both Gawker and the business blog DealBreaker, who now writes for New York magazine, but were turned down. They’ve since asked both Ms. Spiers and Daniel Gross, Slate’s regular business columnist, among others, to write for the site.

  • Today’s GDP Report
    Posted by on October 31st, 2007 at 10:02 am

    Today’s report on GDP growth for the third-quarter was a surprisingly strong 3.9%. This is nearly identical to the 3.8% for the second quarter. My only warning is that these numbers are subject to endless revisions.
    image541.png
    It’s very likely that nominal GDP for 2007 will be over 25% more than 2003.
    Update: BR calls BS.

  • Fair Isaac’s Earnings
    Posted by on October 31st, 2007 at 9:46 am

    It’s no secret that Fair Isaac (FIC) has been a disappointment this year. Yesterday’s earnings report appears to be a small bright spot.

    Fair Isaac Corp.’s profit climbed 28 percent in the fiscal fourth quarter, as the business advisory reserved much less to pay taxes, the company said Tuesday.
    Fair Isaac earned $28.2 million, or 52 cents per share, in the quarter ended Sept. 30, compared with profit of $22.1 million, or 35 cents per share, in the fourth quarter last year.
    Analysts polled by Thomson Financial forecast profit of 41 cents per share.
    Revenue was roughly flat at $207.2 million, versus analysts’ expectations for $201 million.
    Fair Isaac sells financial advice and business analysis. The primary difference between the fourth quarter and the comparable period a year earlier was the provision for income taxes. That provision was $2.8 million in the fourth quarter, compared with $11 million in the fourth quarter last year.

    The stock is doing well this morning, but it still has a long way to go to make up for its poor performance this year.

  • Will the 90s Ever End?
    Posted by on October 30th, 2007 at 4:47 pm

    Cool!

    March 14, 2007: BigBand Networks Announces Pricing of Initial Public Offering

    Wow!

    May 3, 2007: BigBand Networks Reports First Quarter 2007 Financial Results with 62% Increase in Year over Year Revenues and Expanding Gross Margins

    Um…

    Sept. 27, 2007:
    BigBand Networks Announces Revised Revenue Outlook for Third Quarter of 2007

    Oh.

    October 30, 2007: BigBand reports Q3 loss, to cut workforce by 15 pct

    No fair. I’m suing!!

  • Becky and Dylan on Wing Women
    Posted by on October 30th, 2007 at 3:52 pm

  • Gender Differences and Mutual Fund Managers
    Posted by on October 30th, 2007 at 1:35 pm

    What I’m saying is – and this is not a come-on in any way, shape, or form – is that men and women can’t be friends, because the sex part always gets in the way.
    – When Harry Met Sally…

    academic study has found that the gender of a mutual fund manager might have an impact on its returns.
    Not that men are better or worse managers than women. Instead, an all-male or all-female team might be better than a mixed gender team.
    Perhaps Harry was right.

  • Management Matters
    Posted by on October 30th, 2007 at 11:36 am

    Some numbers to consider:
    Both Merrill Lynch (MER) and Bear Stearns (BSC) are 33% below their 52-week high.
    Lehman Brothers (LEH) is 28% off its high.
    Goldman Sachs (GS) made a new high today. The stock is up over $46 a share this year.
    Of those 4,600 pennies, Lloyd Blankfein’s pay last year was $53.4 million or about 13 cents a share.
    Remember that next time someone complains about executive compensation.

  • Wall Strip on Agrium
    Posted by on October 30th, 2007 at 10:56 am

    Howard and Lindsay hit the links to talk Agrium (AGU):

  • ADP’s Earnings
    Posted by on October 30th, 2007 at 10:28 am

    Last month, I highlighted Automatic Data Processing (ADP):

    ADP is starting to catch my eye as a good contrarian stock. (The first step, however, is to ignore their notoriously inaccurate monthly employment reports.)
    The stock is down to $44 from $50 in early June. I’m not claiming any great insight on its business, but it’s simply a good stock at a good price. In the last three years, earnings are up 56%. Gross margins are around 50% and the company has a solid balance sheet.
    The company also raised guidance for FY 08. ADP is now looking for 12% sales growth and profit growth of 18% to 21%. I like those numbers.

    The company reported earnings today of 45 cents a share, two cents more than expectations. Last year, ADP earned 39 cents a share. Revenues were up 13.5%% to $1.99 billion.
    The company also nudged up its guidance for next year. ADP sees earnings coming in at the high end of its earlier forecast of $2.12 to $2.18 a share. Sales growth is now projected at 12%-13% instead of just 12%.
    The stock is up about 3% this morning to $48.64.
    As with many contrarian picks, ADP does face some serious problems. Scott Rothbort, my colleague at Real Money, summarized the headwinds facing ADP:

    First is the slowing growth in payrolls. While employment growth remains positive, the rate of growth has declined over the last year. Second are declining interest rates. ADP makes a considerable amount of money on the float, which is due to the timing between the employer payment of payrolls to ADP and the clearing of the individual employee checks. Furthermore, with more people opting for direct debit, ADP’s float base is also declining.