Friday, October 16, 2009

Halliburton Questions on Marketable Securities

Halliburton (HAL) announced similar earnings and revenues when compared to previous quarters. The market likes it and pops the stock about 3.5% by midday. Of course it could be all about the price of oil.

But check out this fundamental tidbit. Receivables are 86% of revenues as at quarter end. Seems like a very basic biz school issue but the turn rate seems very slow. Halliburton works for the big boys who can all pay. They just took on a big hunk of long term debt. The slow receivable just drag.

They also have acquired $1.5 billion of marketable securities. No information was provided in the press release as to what has been invested in. If an investor wants to buy a financial institution he is not looking at Halliburton. So why not explain where you have parked the cash.

Thursday, October 15, 2009

Charles Schwab Talks Big -- Delivers Not Big

Charles Schwab (SCHW) came out with a three tier press release designed to pump up the market. Chairman Chuck leads off by saying that investors can depend on Schwab. CEO Walt Bettinger drills down and says that investors have not given up on the market and are working with Charles Schwab. We finally get to CFO Joe Martinetto who reports that “Q3 revenues were down 19% from the year-earlier period, reflecting the headwinds we’ve been discussing for some time.”

Everyone knows the markets are off. Depending on which range of products and services a firm offers you will either create wealth or destroy wealth over the long run. It sounds like the top guys want to beat their drum while the CFO has to report lower earnings. The message is cloudy and therefore will disappoint investors. Management needs to be true to themselves first.

Wednesday, October 14, 2009

JPMorgan Chase Double Messages

JP Morgan Chase (JPM) announced positive Q3 results and excited the market. Net income of some $3.6 Billion vs a mere $527 million for same quarter last year. But here is the sleeping problem. $2 billion for anticipated credit losses. Jamie Dimon, Chairman and Chief Executive Officer, offered the opinion that delinquencies and loan losses will remain elevated "for the foreseeable future" in its consumer and credit-card operations. He also has noticed that business clients are reticent about using available credit lines. This all means tough sailing in the future. The bad clients will cost you and the good clients will not use you.

Tuesday, October 13, 2009

Intel CFO Commentary

Intel (INTC) announced interesting changes to its disclosure program. They will now include a CFO commentary with the press release announcing earnings. This is designed to shorten long and tedious prepared remarks on conference calls.

Interesting very interesting.

So a company issues a press release that supposedly discloses requisite information. Then we go to the conference call to hear the good stuff. Now Intel wants to get efficient and shorten the conference call. Are we not admitting that the press release is inadequate in the first place? Why not just include the CFO commentary in management discussion and analysis MD&A and then go straight to questions on the conference call.

Have we come full circle?

Black & Decker Reg FD Challenged

Black & Decker (BDK) issued a Reg FD challenged communiqué. Ignoring what some would describe as a quiet period they issued a press release announcing the almost certain probability of higher EPS. Quite frankly the EPS will be double of previous guidance. The real numbers come out in just nine days on Oct 22, 2009 In the meantime we are asked to pay attention to Nolan D. Archibald, Chairman and Chief Executive Officer when he says that sales are better than forecasted. Then he goes on to say that much of the sales were expected to occur in Q4 and they actually came in on Q3. What he does not say is what the plan is in Q4 now that we know significant parts of it fast forwarded into Q3.

This is not really guidance. It plays to short term trading and does nothing for long term investors.

Sunday, October 11, 2009

Google Goof's in Toronto Canada

Google (GOOG) got it very wrong in Toronto Canada. Google new Street View offering was not edited properly and Google thinks there are two CN Towers. The CN tower is one of the tallest structures in the world and one of them is quite enough. So the two questions are 1) When will it be fixed? 2) What does this mean in terms of product integrity? What else is wrong?

Conference Calls vs Press Releases

Stephen T McClellan CFA just posted an excellent piece on his blog. A former Wall Street Analyst basically tells investors that the real info is in the conference call and not in the wire service press release. if you want to read the piece.

The problem with conference calls vs press releases is that you can drive a truck between the two and somehow the SEC is OK with that.