Getcher Conference Call write-ups! Earnings Central now includes Conference Call reports for McAfee Associates, Olympic Financial, and First Data, which reported today. Foolish investors might also want to check out the recently-updated IPOzone for coverage of the latest scheduled offerings.
MF Merlin's Economic News today discusses the Labor Department's report on changes in U.S. import and export prices during June. You'll find the Economic News, as well as all our Special Sections, FoolWires, and earnings reports, on either the Evening News or Stock Research screens. In tonight's Fool on the Hill, MF Templar focuses on calling the market with Elaine Garzarelli. Enjoy!
07/23/96 (Tuesday)
First Data Corporation <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FDC)") else Response.Write("(NYSE: FDC)") end if %>
1-800-779-9005 (code: 1996)
07/24/96 (Wednesday)
Genzyme Tissue Repair <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: GENZL)") else Response.Write("(NASDAQ: GENZL)") end if %>
1-402-220-6029 -- replay
Investors had a sweet tooth for HERSHEY FOODS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HSY)") else Response.Write("(NYSE: HSY)") end if %> today, as the stock zoomed up $4 5/8 to $77 1/4. The manufacturer of "consumer grocery items" crushed analyst's estimates for the second quarter, earning $0.53 per share compared to First Call estimates of $0.43 per share. The company attributed its results to an increase in unit volume and candy bar prices, combined with tightened cost controls and a decrease in shares outstanding.
While airline stocks as a whole have been getting slammed as a result of last week's TWA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: TWA)") else Response.Write("(NASDAQ: TWA)") end if %> disaster, CONTINENTAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CAIB)") else Response.Write("(NYSE: CAIB)") end if %> today reversed the trend and had a smashing day. The company beat First Call estimates of $1.82 per share, coming in at $2.04 per share. CEO Gordon Bethune stated, "Quite frankly, it's going to be a banner year for us." The stock was up $1 3/8 to $24 7/8. In addition, UNITED AIRLINES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UAL)") else Response.Write("(NYSE: UAL)") end if %> beat estimates of $2.15 EPS with a figure of $2.18 EPS and closed up $2 5/8 at $47 7/8. CEO Gerald Greenwald indicated that the company expects to beat analyst estimates of $3.15 for the third quarter as well.
PERCLOSE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PERC)") else Response.Write("(NASDAQ: PERC)") end if %> cut its losses and ended up beating estimates of a loss of $0.17 per share, coming in at ($0.15) for the quarter. The maker of "minimally invasive" medical products used to close arterization and catherization incisions yesterday received a Comformetee Europene (CE) Mark, which will allow the company to ship products manufactured at its U.S. plants directly to European Union (EU) countries. On this news, the stock closed up $2 7/8 to $18 5/8.
QUICK TAKES: VON'S COMPANIES INC. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VON)") else Response.Write("(NYSE: VON)") end if %>, an operator of supermarkets throughout Southern California and Nevada, reported earnings per share of $0.51, compared to consensus estimates of $0.42, and closed up $1 7/8 to $36 7/8 ... MEDAPHIS CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: MEDA)") else Response.Write("(NASDAQ: MEDA)") end if %> rose $3 3/8 to $37 7/8 after it reported earnings that fell well short of estimates, but clarified that it would have met expectations had it not been for expenses related to its recent rash of acquisitions ... SYBRON CHEMICALS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SYCM)") else Response.Write("(NASDAQ: SYCM)") end if %>, which manufactures biorganic water and waste treatment chemicals, beat earnings by $0.14 and closed up $1 1/4 at $15.
Fault tolerant computers do not make for fault tolerant stocks. STRATUS COMPUTER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SRA)") else Response.Write("(NYSE: SRA)") end if %> tumbled $5 1/2 to $19 3/8 today after the company reported second quarter operating earnings and revenues that were way below estimates. Stratus blamed it sins on a shortfall in its non-telecommunications business in the U.S. and Europe, stating that its Asian and telecommunications business was doing fine. Investors expressed frustration with the fact that the company did not issue a profit warning earlier in the quarter, given the tremendous shortfall revealed today.
Bank transaction software developer HNC SOFTWARE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: HNCS)") else Response.Write("(NASDAQ: HNCS)") end if %> dropped $7 3/4 to $23 3/4 after reporting quarterly earnings that a penny ahead of the consensus expectations of $0.05 per share. So what was the problem? Operating margins were only up slightly and a full third of the company's bottom line profits came from "other income," which includes any money earned that does not come from operations. Earnings from operations for HNC Software were only $0.04 EPS, a penny below consensus. With cash balances of little more than a million, where the company could have earned $555,000 in "other income" was unexplained in the press release.
CIDCO <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CDCO)") else Response.Write("(NASDAQ: CDCO)") end if %>, down $6 15/16 to $18 7/8, missed its quarterly estimates last night, reporting $0.42 EPS versus expectations $0.47 EPS. The caller-ID concern dragged down competitor COLONIAL DATA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CDTX)") else Response.Write("(NASDAQ: CDTX)") end if %> with it, which lost $1 3/8 to $9 1/4 today. CIDCO blamed its problems on a late entry into the California caller-ID market and some delayed product introductions, stating that it sees the second half of the year as flat when compared to the first half. This was below current estimates and the descent in the stock reflects this. Companies like CIDCO and Colonial Data always suffer systematic "regulatory" risk, though, as they depend on legislation to open new markets. As a result, their fair values tend to end up below companies with similar growth prospects but no regulatory risk.
EARNINGS DEBACLES: LA QUINTA INNS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LQI)") else Response.Write("(NYSE: LQI)") end if %> slipped $3 3/8 to $17 3/8 today after it disappointed Wall Street estimates of $0.46 EPS; the company stated that it will buy back up to $18 million worth of its shares today ... APPLIED MAGNETICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: APM)") else Response.Write("(NYSE: APM)") end if %> was crippled for $1 to $8 7/8 today after reporting earnings of $0.10 EPS, 33% below consensus estimates ... GULF SOUTH MEDICAL <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: GSMS)") else Response.Write("(NASDAQ: GSMS)") end if %> was munched for $10 7/8 to $17 5/8 after reporting lower-than-expected earnings on terrible gross margins ... Oilfield services and equipment concern TIDEWATER <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TDW)") else Response.Write("(NYSE: TDW)") end if %> blew its quarter, dropping $4 3/8 to $37 5/8 after it reported $0.37 EPS versus estimates of $0.45 EPS ... Electronic component manufacturer BEL FUSE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: BELF)") else Response.Write("(NASDAQ: BELF)") end if %> joined the rest of the industry in producing terrible earnings, slumping $4 1/2 to $11 1/8 today ... NETCOM ONLINE <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: NETC)") else Response.Write("(NASDAQ: NETC)") end if %> reported a wider-than-expected loss, sending the shares down $4 9/16 to $17 7/16 ... The market treated shares of USDATA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: USDC)") else Response.Write("(NASDAQ: USDC)") end if %> mercilessly today when the company missed its quarter, shaving $2 3/4 off to $11.
QUICK CUTS: CADENCE DESIGN <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CDN)") else Response.Write("(NYSE: CDN)") end if %> was mashed for $2 1/4 to $23 prior to reporting earnings after the bell that were 3% ahead of consensus expectations ... Remote access provider SHIVA CORP. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SHVA)") else Response.Write("(NASDAQ: SHVA)") end if %> received some attention from the Wall Street Journal's Heard on the Street column, slipping $9 to $52 3/4 ... SCIENTIFIC GAMES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SGIH)") else Response.Write("(NASDAQ: SGIH)") end if %> made its quarter but forecast slowing growth, and got knocked down $9 5/8 to $19 5/8 ... News that ORTHOLOGIC <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: OLGC)") else Response.Write("(NASDAQ: OLGC)") end if %> would acquire Sutter Corp. yesterday weighed on the shares today, falling $1 5/8 to $7 1/8 ... CARDIOVASCULAR DIAGNOSTICS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CVDI)") else Response.Write("(NASDAQ: CVDI)") end if %> warned today that second quarter earnings would not be up to snuff, and slipped $1 1/4 to $5 1/2.
An Investment Perspective
by Randy Befumo (MF Templar)
FOOL ON THE HILL
Garzarelli Is At it Again
It seems that the market is looking for bad news to react to these days.
When news broke that gooroo Elaine Garzarelli told her private clients in a conference call today to raise cash to the "highest levels," a wave of selling hit the already unstable market, dragging most stocks down with the tide. Garzarelli could not be reached for comment by any news organization on the planet, but there were plenty of people willing to tell you what she reportedly said.
In no particular order, Garzarelli: (a) was reputed to have said her market indicators had turned "bearish" because of cash outflows, dropping from 40-some percent to a mere 28 percent in the past few days; (b) the S&P could fall as much as 15% to 25% from its high of 681.10 in late May; and (c) investors should load up on cash for the short term, also looking to utilities, gold and similar investments until her indicators improve.
Formerly of Lehman Brothers, Garzarelli is one of a host of people who came to prominence in late 1987 by reportedly predicting the 1987 stock market crash. A sector strategist, she left Lehman Brothers to start her own firm a few years ago when the firm apparently determined that she was too expensive for them to keep -- at least according to their version. Garzarelli has begun to actively promote a line of products for institutions and individual investors in which she will share with them all the hip, cool sectors in which they should be putting their money, refraining from making calls on individual stocks.
The pullback in the market on the word of one high-profile gooroo, thought by many to be a thing of the past, brings to mind the early '80s when negative comments by people like Joe Granville could cause 5% to 10% one-day sell-offs. The late '80s brought an increasing institutionalization of the U.S. equity markets, decreasing the impact of individual investors. The much bally-hooed mutual fund boom of the '90s pales in comparison to the level of institutional ownership -- even after years of tremendous growth, mutual funds still only own about 15% of the total market, even though they manage to account for 80% or so of the average daily volume.
Does Elaine know something other people don't? Without really knowing what she said, it is really hard to refute or confirm the logic of it. Without a doubt, more money is leaving the market than is coming in these days ... because the market is going down. That is how it works. Although reporters have made a lot of hay over the news that individual investors withdrew $4 billion from equity mutual funds last week after pumping in $140 million in the first few months of the year, this hardly explains the volatility that we have seen in the past few weeks. Individual redemptions would have to continue at about the same pace for the remainder of the year to cause inflows to fall below the break-even point for the year.
Short-term volatility is choppy, stomach-turning, scary and downright confusing for the individual investor. Despite attempts by the media to make this all make sense, there is no making sense of it. The market is composed of millions of buy-sell transactions every single day. To extrapolate a general theme from all of these transactions is like finding an absolute pattern by which stars are distributed throughout the heavens -- this is the kind of thing only the divine, deities and demigods get to know. The task of a Fool is to buy quality companies at good prices and have the patience to see it all through.
For the past 40 years, this would have served the investor well time after time over any five to ten year period -- particularly those periods where the correction was short and valuation-related rather than protracted and linked to economic woes. Two-thirds of all blue chip companies have reported earnings above or in-line with expectations along with overall growth at comfortable levels. And despite the fact that the S&P is weighed down by 20 utilities and 80 slow-growing banks, it has shown considerable earnings growth in this quarter. These conditions would indicate a downtrend not based on fundamentals. A short-term down market would just seem to offer some opportunities on the short side.
Iomega in Fooldom Today!
Do you wish you could scour our voluminous Iomega message folders each day, but for some ridiculous reason, find that you just don't have the time? Or do you actually take the time to read every Iomega post, but find yourself somehow surrounded by people urging you to get a life? Rejoice! The Motley Fool has heard the cry of those feeling overwhelmed by the folder, and has begun offering a daily digest of it. Sporting the best posts from the last 24 hours, "IOMG in Fooldom Today" can be e-mailed to you five times a week. And the price? At the moment, it's quite reasonable -- it's free. If you'd like to sign up, simply send an e-mail to [email protected] from the address where you'd like to receive the reports. Make sure you type "subscribe" in the *body* of the message. (MFiomg is an automated account, not a person.)