Thursday, May 22, 2008

Lenovo’s Mantra v2.0.

Lenovo (LNVGY) announced its Q4 results as at Mar 31, 2008. The results are pretty good and management bonuses seem to be in order. Results all over the world are up and the US division continues to struggle. This is in line with most corporate results across a broad range of industries.

Lenovo waxed eloquently about the “worldsourcing business model” according to President and CEO William J. Amelio. He continued with this comment “A complete approach to doing business in a new global economy, worldsourcing transcends boundaries, cultures and structures. It enables us to leverage our cultural and geographic strengths to manage costs, increase efficiency and harness the power of innovation from across the global organization.”

These are the key comments attributable to the President and CEO and sound more like a commencement address at a prestigious university. There were no comments about new products, new technologies, partnerships or acquisitions. This from a technology company who knows they need to have the goods to survive. You can have the most efficient sourcing and manufacturing system known to man. If your product does not have a compelling value proposition your efficiencies are for nothing.

Wednesday, May 21, 2008

Intuit Bare Bones Reporting

Intuit announced Tuesday after market close its Q3 earnings. Revenue of $1.3 billion, a 15 percent increase over the year-ago quarter was reported. Earnings per share were up 28 percent. Growth was driven by excellent performance in the consumer and professional tax segments. End of qualitative comments. I am getting to sound like a broken record but I am becoming alarmed at how many companies are issuing press releases with just the basic numbers with little or no explanation.

Intuit had some great results. When you increase revenues by 15% and EPS grows by 28% that deserves a great pat on the back. But management does not want to offer any comments about results in the press release. They will say that they have just authorized another whopping share repurchase program.

The conference call was scheduled for 16:30 ET Tuesday about thirty minutes after the press release was issued. The company cautioned that the replay tape stays up on the web site for about a week. They also indicate that the conference call transcript will be posted on the IR portion of their website.

How different will the information be on the conference call from the press release? Are the investors interests served? Given that it is usually sell side analysts who are attempting to tease out information while protecting investment banking fees the conference call may not be as rigorous as one would expect.

Monday, May 19, 2008

Lowes Skips The Explanation

Lowes (LOW) announced poor results early Monday morning. At this stage of the recession no one is surprised that a building supplies company that is dependent on the state of the housing market did not make a lot of money.

Robert A. Niblock, Lowe's chairman and CEO. Did say "The generally poor economic outlook, including well-known housing pressures, rising food and fuel prices and a more negative employment picture eroded consumer confidence and impacted discretionary purchases for the home.”

Niblock then continued. "Fiscal 2008 will be a challenging year on many fronts, but we remain focused on what we can control and will continue managing for long-term success and pursuing opportunities as they arise in the current environment."

That’s it. Sorry the economy stinks and we do not have to explain anything more so that’s all we are going to say. The investor understands that it’s rough out there so you do not have to sugar coat it. But Full Disclosure this is not. We need to understand the thinking from the executive to determine if this is a stock to keep.