• Abbott Labs Earns $1.12 Per Share
    Posted by on July 20th, 2011 at 7:57 am

    Abbott Laboratories ($ABT) just reported second-quarter earnings of $1.12 per share which topped Wall Street’s forecast by one penny per share. This report extends Abbott’s streak of beating Wall Street’s consensus by one penny per share to seven straight quarters.

    The best news is that Abbott is raising its full-year guidance by four cents per share at each end. The old range was $4.54 to $4.64 per share; the new range is $4.58 to $4.68 per share.

    Diluted earnings per share, excluding specified items, were $1.12, at the high end of Abbott’s previous guidance range and reflecting 10.9 percent growth. Diluted earnings per share under Generally Accepted Accounting Principles (GAAP) were $1.23, reflecting growth of 48.2 percent, including specified items.

    Worldwide sales increased 9 percent to $9.6 billion, including a favorable 4.6 percent effect of foreign exchange. Sales were led by a 13 percent increase in Proprietary Pharmaceuticals sales. Durable Growth Business sales increased 7.5 percent, driven by double-digit growth in International Nutritionals, Point of Care Diagnostics and Established Pharmaceuticals. Innovation-Driven Device Business sales increased 3.1 percent, including double-digit growth in Molecular Diagnostics.

    Emerging markets sales were nearly $2.6 billion, up 23.2 percent from the prior year, with strong growth across all of Abbott’s operating divisions.

    The gross margin ratio was 60.2 percent in the second quarter, driven by favorable product mix.

    Abbott is raising its previous ongoing earnings-per-share guidance range for the full-year 2011 to $4.58 to $4.68, confirming its outlook for double-digit growth over 2010 at the midpoint of the range. The previously issued guidance range was $4.54 to $4.64.

    “Abbott is well-positioned for a strong second half of the year as we remain on track for double-digit EPS growth in 2011,” said Miles D. White, chairman and chief executive officer, Abbott. “We’re also pleased with our growth in emerging markets, as well as the progress of our broad-based pipeline, including several new product approvals, regulatory submissions and clinical trial initiations.”

    The stock looks to open higher this morning.

  • Morning News: July 20, 2011
    Posted by on July 20th, 2011 at 7:23 am

    China’s Yuan Advances to 17-Year High on Record Fixing, Inflation Concern

    Pound Pares Weakness as BOE Minutes Signal Less Push for Bond Purchases

    Crude Oil Advances a Second Day on Decline in U.S. Supplies, Europe Talks

    US Debt Hopes Boost European Shares

    Bank Boon: Business Loans?

    Home Construction Plays Catch Up

    Strong Sales Help Extend Apple Streak

    Profit Rises at Yahoo, but Ad Sales Are Softer

    Bank of America Swings to Loss Amid Mortgage Troubles

    Profit Up 13%, UnitedHealth Raises Outlook

    Goldman’s Safer Positions Eat Deeply Into Its Profit

    Energy Transfer to Buy Southern Union for $5.7 Billion to Counter Williams

    Cnooc to Buy OPTI Canada for $2.1 Billion

    U.S. to Close 800 Computer Data Centers

    Ex-trader Admits Threatening to Kill U.S. Regulators

    Stone Street: Book Review: Fatal Risk – A Cautionary Tale of AIG’s Corporate Suicide

    Todd Sullivan: Housing & Foreclosure Stats Paint Improving Picture

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  • Stryker Earns 90 Cents Per Share
    Posted by on July 19th, 2011 at 4:04 pm

    Right in line with expectations.

    Second Quarter Highlights

    Net sales increased 11.9% on a constant currency basis (16.3% as reported) to $2.05 billion

    Sales of Reconstructive products increased 1.8% on a constant currency basis (7.4% increase as reported)

    Sales of MedSurg products increased 11.9% on a constant currency basis (15.0% as reported)

    Sales of Neurotechnology and Spine products increased 49.0% on a constant currency basis (52.6% as reported)

    Adjusted net earnings increased 10.4% from $319 million to $352 million and adjusted diluted net earnings per share increased 12.5% from $0.80 to $0.90
    Reported net earnings decreased 3.1% from $319 million to $309 million and reported diluted net earnings per share decreased 1.3% from $0.80 to $0.79

    “Our second quarter results validate the strength of our diverse sales footprint, enabling us to deliver on our commitments despite ongoing macro-economic challenges,” commented Stephen P. MacMillan, Chairman, President and Chief Executive Officer. “We are excited about our ability to leverage the breadth of our product offering through continued investments in R&D coupled with selective acquisitions, share repurchases and dividends in order to maximize shareholder value.”

    Stryker has also reaffirmed its guidance for 2011:

    2011 Outlook

    The financial forecast for 2011 includes a constant currency net sales increase of 11-13% as a result of growth in shipments of Reconstructive products, MedSurg products and Neurotechnology and Spine products as well as sales growth through acquisitions. If foreign currency exchange rates hold near current levels, the Company anticipates net sales will be favorably impacted by approximately 2.5-3.5% in the third quarter of 2011 and by approximately 2.0 to 3.0% for the full year of 2011. Excluding the expected impact from foreign currency as well as acquisitions, sales growth is projected to be 5-7% for the full year of 2011.

    The Company continues to project that adjusted diluted net earnings per share for 2011 will be in the range of $3.65 to $3.73, an increase of 10% to 12% over adjusted diluted net earnings per share of $3.33 in 2010. In 2011, the Company anticipates acquisition and integration-related charges of approximately $0.33 to $0.35 per share (net of income tax benefits), including transaction costs, integration-related charges and additional cost of sales for inventory sold that was stepped-up to fair value, as a result of the acquisitions of the Neurovascular and Orthovita businesses. This increase from the previously communicated range of $0.28 to $0.30 is a result of the closing of the Orthovita, Inc. and Memometal Technologies S.A. acquisitions.

    No surprises here. This is a good report.

  • Pie Fawkes Day!
    Posted by on July 19th, 2011 at 12:35 pm

    Rupert Murdoch is attacked with a pie while testifying before Parliament.

  • Johnson & Johnson Earns $1.28 Per Share
    Posted by on July 19th, 2011 at 9:34 am

    The stock market looks to open higher this morning. I had mentioned before that a lot of banks and financial institutions had been looking weak recently. Goldman Sachs ($GS) reported earnings this morning of $1.85 per share. Even though that doubled the earnings from last year’s second quarter, it still fell 50 cents per share shy of Wall Street’s forecast. The stock looks to gap down to a new 52-week low.

    The good news today for our Buy List is that Johnson & Johnson ($JNJ) reported second-quarter earnings of $1.28 per share. Wall Street’s consensus was for $1.24 per share and I thought it could come in as high as $1.30 per share. Still, this is a very strong report. The company also reiterated its full-year earnings forecast of $4.90 to $5 per share.

    Second-quarter earnings of $1.28 a share, excluding a charge for closing J&J’s heart-stent business, beat by 4 cents the average estimate of 17 analysts in a Bloomberg survey. Sales rose 8.3 percent from a year earlier to $16.6 billion, overcoming losses from increased generic-drug competition, the New Brunswick, New Jersey-based company said in a statement.

    Chief Executive Officer William Weldon won U.S. approvals for drugs to treat AIDS and prostate cancer during the quarter, after adding psoriasis medication Stelara in 2009. That helped offset declines for artery-clearing stents and dozens of recalled over-the-counter brands, led by Tylenol and Motrin.

    It was “a decent quarter for J&J,” said Matt Miksic, a Piper Jaffray & Co. analyst in New York, in an e-mail today. “In pharma, the strength in new products offset greater-than- expected generic pressure” to existing drugs.

    The weaker dollar clearly gave a boost to JNJ’s bottom line. For the first half of the year, JNJ has earned $2.63 compared with $2.50 one year ago. Given today’s earnings report, I think the company has a very good chance of beating their full-year earnings forecast. In fact, the company could probably raise both ends of the range by five cents per share. Naturally, you wouldn’t want to do this unless you’re absolutely sure it’s going to happen.

    JNJ remains a very good buy. The next thing to watch is how well it responds to the earnings report. The stock has had a lot of trouble staying over $70 per share. But now we know that that’s only 14 times earnings.

    Stryker ($SYK) is due to report after the close.

  • Morning News: July 19, 2011
    Posted by on July 19th, 2011 at 7:05 am

    EU Struggles to Convince on Greek Deal

    Debt Worries Roil Markets

    China’s Treasury Holdings Make U.S. Woes Its Own

    Europe’s Economic Powerhouse Drifts East

    Gold May Snap Best Run in 31 Years as Advance to Record Price Spurs Sales

    Obama Vows Fight Over Efforts to Weaken Dodd-Frank

    Wall Street’s Newest Regulator a Longtime Foe

    Wynn Second-Quarter Profit Jumps on Return of Gamblers to Macau, Las Vegas

    I.B.M. Reports Strong Second-Quarter Earnings

    Borders Forced to Liquidate, Close All Stores

    Murdoch Struggles to Control News Corp. as Phone-Hacking Scandal Escalates

    Cisco Cuts 6,500 Workers, Record $1.3B in Costs

    Clorox Rejects Icahn’s $10.2 Billion Offer, Adopts Shareholder Rights Plan

    Joshua Brown: Caption Contest Monday: Debt Ceiling 101

    Howard Lindzon: The Cotton Crash…The Q-tip Bear Market of 2011

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  • Seven-Year TIPs Now Negative
    Posted by on July 18th, 2011 at 3:05 pm

    The yield on the seven-year inflation-protected bond dropped into negative territory today. This is very close to an all-time low yield.

    In February, the yield was just over 1%. Last October, the seven-year hit a low yield of -0.12%.

  • A Third Bounce For the 200-DMA?
    Posted by on July 18th, 2011 at 1:10 pm

    The S&P 500 has dipped below 1,300 today. It’s very possible that we’re headed for a third test at the 200-day moving average. The current 200-day moving average is close to 1,278.

  • Bank Of America’s Black Hole
    Posted by on July 18th, 2011 at 9:11 am

    Bank of America ($BAC) is even in worse shape than I thought:

    Bank of America Corp. (BAC) may have to build its capital cushion by $50 billion and renege again on Chief Executive Officer Brian T. Moynihan’s pledge to raise the firm’s dividend as mortgage losses drain funds.

    Expenses tied to soured home loans may total $20.4 billion in the second quarter, pulling the bank further from capital ratios demanded under new international standards, the Charlotte, North Carolina-based company said June 29. The gap may equal 2.75 percent of risk-weighted assets starting in 2013 — at about $18 billion for each percentage point — crimping Moynihan’s ability to raise dividends and repurchase shares.

    “They are likely to be in capital-building mode for longer than previously anticipated,” Jason Goldberg, a Barclays Capital analyst, said in an interview. For now, he said, “I’m hard-pressed to see meaningful capital redeployment.”

    Moynihan, 51, has booked about $30 billion in settlements and writedowns to clean up mortgage liabilities at the biggest U.S. bank since succeeding Kenneth D. Lewis last year. As the costs mounted, Bank of America’s stock declined 25 percent this year, the worst showing in the 24-company KBW Bank Index. The company reports second-quarter results tomorrow and has told investors to brace for a loss of as much as $9.1 billion.

    The stock is currently worth about twice what the bank earned in 2006.

  • Gold Breaks $1,600/Ounce
    Posted by on July 18th, 2011 at 8:57 am

    Gold is up for the 11th day in a row, and very likely, we’re heading for our 11th-straight yearly gain. Gold just broke $1,600 per ounce in London. Silver is up even more this year.

    I think the latest rally in gold is due to the realization that the Federal Reserve won’t be raising interest rates any time soon. In fact, with the election coming up in 15 months, we may not see an interest rate increase until 2013, at the earliest.

    Immediate-delivery gold gained as much as $9.85, or 0.6 percent, to $1,603.40 an ounce and traded at $1,602.05 by 1:04 p.m. in London. Prices are up for an 11th day, the longest streak of gains since July 1980. Gold for August delivery was 0.8 percent higher at $1,603 an ounce on the Comex in New York after reaching a record $1,603.80.