Qualcomm Bombs
Posted by Eddy Elfenbein on November 5th, 2015 at 11:46 am

I honestly didn’t think Qualcomm‘s (QCOM) earnings and guidance were that bad. Nevertheless, the shares are taking a beating today. QCOM is currently down $8.41 to $51.85. That’s a loss of 14%. Ouch!

At the current price, QCOM yields 3.7%. And remember that they increased their dividend by 14% in March.

Morning News: November 5, 2015
Posted by Eddy Elfenbein on November 5th, 2015 at 7:08 am

In Pacific Trade Deal, Vietnam Agrees to U.S. Terms on Labor Rights

BOE Stays Cautious on Rate-Hike Timing as Inflation Outlook Cut

Bonds Tumble Around the Globe as Fed Rate Odds Climb Past 50%

Bitcoin Surges, Emerging From a Lull in Interest

Puerto Rico’s Debt Crisis and the 1975 Law Complicating Matters

Regulators Ramp Up Debt-Collection Crackdown

Toyota to Spend Record $6.6 Billion on Buybacks as Profit Climbs

Facebook Sales Top Estimates, Fueled by Mobile Advertising

Media Stocks Dip After Time Warner Cuts Profit Expectations

Kraft to Slash 2,600 More Jobs, Close Seven Plants

Sanofi, Hanmi Seal Diabetes License Deal For Up To $4.2 Billion

Denver-Based Molson Coors Nearing Deal for MillerCoors

Qualcomm Forecasts Show Struggle for License Deals in China

Cullen Roche: Private Sector Saving Is Not Saving Net of Investment

Roger Nusbaum: Does 60/40 Need to Evolve?

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Qualcomm Earns 91 Cents per Share
Posted by Eddy Elfenbein on November 4th, 2015 at 4:14 pm

After the closing bell, Qualcomm (QCOM) reported earnings of 91 cents per share. That was five cents more than estimates. This was for their fiscal fourth quarter.

For the full year, Qualcomm earned $4.66 per share which is a big drop from the $5.27 they made last year.

“Our fiscal fourth quarter revenues and EPS were at the high end of our expectations, with stronger-than expected MSM chipset shipments offsetting slower than expected progress concluding new license agreements in China. We executed a major increase in our capital return program in fiscal 2015, returning a record $14 billion of capital to stockholders,” said Steve Mollenkopf, CEO of Qualcomm Incorporated. “We are encouraged by customer reaction to our flagship Snapdragon 820, are on track to deliver on our fiscal 2016 cost reduction targets and expect to exit fiscal 2016 on an improving financial trajectory.”

For Q1, they sees earnings of 80 to 90 cents per share on revenue of $5.2 billion to $6.0 billion. That compares with earnings of $1.34 per share and revenue of $7.1 billion in last year’s Q1.

Value Stocks and Interest Rates
Posted by Eddy Elfenbein on November 4th, 2015 at 2:47 pm

Here’s an interesting chart I made at FRED. This shows the relative strength of value stocks (in blue) compared with the three-month Treasury yields (in red).

The blue line is the Russell 3000 Value Total Return Index divided by the Russell 3000 Total Return Index.

Cognizant Earns 76 Cents per Share
Posted by Eddy Elfenbein on November 4th, 2015 at 12:39 pm

I have to apologize for the lack of posting this week but I’ve had a number of projects to attend to. Nevertheless, earnings season rolls on.

This morning, Cognizant Technology Solutions (CTSH) reported Q3 earnings of 76 cents per share. That hit Wall Street’s forecast on the nose. Previously, the company had told us to expect earnings of “at least” 75 cents per share. Don’t be fooled. Matching expectations for CTSH is impressive. The company grew its revenues by 23.5% last quarter. I like this company a lot.

“Our balance sheet remains very healthy. Cognizant recorded another quarter of strong cash generation, resulting in an increase of almost $500 million in cash and short term investments,” said Karen McLoughlin, Chief Financial Officer. “Additionally, during the quarter, we repaid the $100 million balance of our revolving credit facility and repurchased over $156 million of shares under our existing stock repurchase program. Year-to-date, we have repurchased 5.3 million shares for $334 million, reflecting the confidence in our business, commitment to drive shareholder value and ability to generate strong cash flows.”

For Q4, Cognizant sees earnings of at least 77 cents per share. Wall Street had been expecting 77 cents per share. Cognizant also expects full-year earnings of at least $3.03 per share. That’s an increase from the previous guidance of at least $3 per share.

They also raised their revenue guidance to at least $12.41 billion. That would be a 21% increase over last year. Not too shabby. This is the third time CTSH has raised its revenue guidance this year.

The shares have pulled back today around 3%.

Morning News: November 4, 2015
Posted by Eddy Elfenbein on November 4th, 2015 at 7:10 am

Greece May Win 2 Billion-Euro Payout by Monday, EU Official Says

Saudi Wells Running Dry — of Water — Spell End of Desert Wheat

Japan Post Shares Surge on Debut After Year’s Biggest IPO

Oil Holds Above $50 on Brazil Worries

San Francisco Voters Reject ‘Airbnb Initiative’

U.S. Auto Industry Posts Best October Sales in Decade

Time Warner Inc Revenue, Profit Beat Estimates

Takata’s Survival in Doubt as Top Customer Deserts Air-Bag Maker

SoftBank’s Profit Gains as Son Bets on a Sprint Turnaround

High-Frequency Trader Convicted in First U.S. Spoofing Case

VW Sinks Deeper Into Woe as Scandal Spreads to More Cars

Michael Kors Sales, Profit Beat Estimates; Buyback Raised

’Bank’ Is Not a Four-Letter Word

Joshua Brown: Simon Lack on Non-Traded REITs

Jeff Carter: How Do You Segment a Market?

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Morning News: November 3, 2015
Posted by Eddy Elfenbein on November 3rd, 2015 at 7:02 am

Xi Says China Needs at Least 6.5% Growth in Next Five Years

China’s Money Exodus: How the Chinese Send Billions Abroad to Buy Homes

Here’s Why Activision Spent $5.9 Billion on the Creator of Candy Crush

TreeHouse Buys ConAgra’s Private-Label Unit for $2.7 Billion

Getting a Charge Out of Visa’s Big Deal

Amazon Is Opening An Actual, Real-Life Bookstore

Keystone XL’s Builder Faced Darkening Prospects

Shell Steams Ahead With BG Takeover With Promise of More Savings

BMW Sees `Fierce’ Competition Holding Back 2015 Profit Gains

Sprint Signs Deal to Offer Roaming Service in Cuba

Sprint Loss Deeper Than Expected

UBS Investment Bank Swings to Profit on Cuts, Fixed Income

Monster Beverage Corporation: The Heart-Thumping Growth Story

Roger Nusbaum: Markets Party Like It’s 2011

Cullen Roche: A Bull Market Built on Endless Financial Crisis Fears

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Morning News: November 2, 2015
Posted by Eddy Elfenbein on November 2nd, 2015 at 6:28 am

China Expands Cheap Loans to Policy Banks for Favored Projects

U.K. October Manufacturing Grows at Fastest Pace in More Than a Year

FBI Takes a Bullet in Banks’ $50 Billion Fee War With Retailers

Visa Agrees to Buy Visa Europe for as Much as $23.4 Billion

Nissan Raises Full-Year Profit Forecast as Demand Rises in U.S.

Meg Whitman Seeks Reinvention for HP as It Prepares for Split

HSBC Costs Drop Faster Than Revenue as Domicile Call Postponed

Sprint Says Aims to Slash Costs Up to $2.5 Billion, Layoffs Loom

The Corporate Tax Political Divide

Commerzbank CEO Blessing Won’t Extend His Contract Beyond

Shire Agrees to Buy Biotech Firm Dyax for at Least $5.9 Billion

Lionsgate Seeks to Build on Its Library of Film Properties With Theme Parks

General Motors Recalls 9,354 Opel Meriva-B Cars in Russia

Joshua Brown: a hands-on market

Jeff Carter: SEC Approves Crowdfunding for Everyone

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Let’s Talk Consumer Stocks
Posted by Eddy Elfenbein on October 30th, 2015 at 5:16 pm

Update on Moog
Posted by Eddy Elfenbein on October 30th, 2015 at 11:58 am

In today’s newsletter, I indicated that Moog (MOG-A) would be reporting earnings later today. That doesn’t appear to be the case.

Moog hasn’t yet said when they’ll report, but it’s usually on a Friday near the end of the month. I’m assuming the report will come out next Friday. I’ll update you as I learn more.