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Apr-08-2009Alcoa Shares Down; Bed Bath & Beyond Up(topic overview)
CONTENTS:
- Analysts expected the company to earn $1.53 per share for the year on revenue of $7.2 billion. (More...)
- Bed Bath & Beyond shares are down 50% over the last two years as the recession and the housing market dragged down profits. (More...)
- If that's the case, congratulations. (More...)
- Apple ( NASDAQ:AAPL ) has launched its new multi-level pricing structure, breaking away from the $0.99 cent per song model. (More...)
- Revenues rose year-over-year, reflecting higher U.S. comparable store sales and net sales, offset in part by a drop in International sales. (More...)
- I calculate fair value on BBBY to be between $15 and $18 a share currently at current estimates. (More...)
- General Electric ( NYSE:GE ) will expand its wind energy footprint and place $10 million in the hands of Southwest Windpower, a small company that makes small turbines designed for one to three kilowatts of output. (More...)
- If the company only reports a so-so quarter in terms of expectations, maybe meeting or missing by a penny, and then rallies, then it might be very telling. (More...)
- Mosaic ( NYSE:MOS ) reported fiscal Q3 EPS of 18 cents, ex-items, missing consensus estimates of 24 cents. (More...)
- Kym McNicholas, 04.07.09, 08:35 PM EDT This is a transcript of the After Hours Market Update. (More...)
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Analysts expected the company to earn $1.53 per share for the year on revenue of $7.2 billion. During 2008, Bed Bath & Beyond opened 67 new stores, but Eisenberg said the company will likely open fewer this year because of the "tumultuous" real estate market. [1] "Despite the challenges of the macroeconomic environment we were a significant competitor," said company co-chairman Warren Eisenberg. For the full year, Bed Bath & Beyond earned $425.1 million, or $1.64 per share, down almost 25 percent from fiscal 2007, when its profit was $562.8 million, or $2.10 per share.[1] For the three months that ended Feb. 28, Bed Bath & Beyond earned $141.4 million, or 55 cents per share. That compares with a profit of $172.9 million, or 66 million, during the same period last year.[1]
Bed Bath & Beyond posted net earnings of $141.4 million or $0.55 per share for the fourth quarter, down from $172.9 million or $0.66 per share in the prior year quarter.[2] UNION, N.J. - April 7: Bed Bath & Beyond Inc. (NASDAQ:BBBY) reported net earnings of $.55 per diluted share ($141.4 million) in the fiscal fourth quarter ended February 28, 2009, compared with net earnings of $.66 per diluted share ($172.9 million) in the same quarter a year ago.[3]
For the fiscal year ended February 28, Bed Bath net profit of $1.64 per diluted share was 21.9% below EPS of $2.10 in the prior year. (Profit of $425.1 million was down 24.5% from $562.8 million one year ago.)[4]
The company reported a 6.8% decline in same-restaurant sales and 50 fewer restaurants in operation than in the prior year. Ruby Tuesday also said it paid down $40 million in debt, bringing its year-to-date total to just above $80 million. The company's same-restaurant sales are expected to decline 8% to 9% for the year, versus its prior guidance of a 9% to 10% decline. The diluted loss per share for the full-year 2009 is projected to be in the range of 40 cents to 50 cents, vs. estimates of a 28-cent loss, but down from its prior guidance of a loss of 45 cents to 55 cents.[5] Looking ahead, Horvers said that once the economy begins to recover, shoppers are unlikely to buy home furnishings and more likely to purchase clothes, accessories, and certain electronics. The Union, N.J. -based company reported its third-quarter earnings fell more than 36 percent to $87.7 million, or 34 cents per share, from $138.2 million, or 52 cents per share, a year earlier.[6] The Union, New Jersey-based company's third-quarter net income fell to $87.7 million or $0.34 per share from $138.2 million or $0.52 per share in the previous year.[7] Net income for the fourth quarter ended on Feb. 28 fell to $141.4 million, or 55 cents per share, from $172.9 million, or 66 cents per share, a year earlier.[8] Excluding items, non-GAAP net income for the quarter increased to $169.02 million or $0.32 per share from $151.47 million or $0.27 per share in the fourth quarter of fiscal 2007.[9]
The Paris, France-based company reported an adjusted net loss, group share, of EUR 1.321 billion or EUR 0.58 per share, which widened from the net loss of EUR 48 million or EUR 0.02 per share for the fourth quarter of the previous year.[9]
Analysts' estimate typically excludes special items. The Union, New Jersey-based company had earlier estimated its earnings to be in the range of $0.40 to $0.46 per share for the fourth quarter.[2] While announcing third quarter results, the company said it expects earnings to range between $0.40 and $0.46 per share for the fourth quarter.[7]
Wall Street analysts have a consensus earnings estimate of $0.44 per share on revenues of $1.92 billion for the quarter.[7] Analysts on average were expecting earnings of 44 cents per share and revenue of $1.915 billion, according to Reuters Estimates.[8]
Analysts are expecting a loss of 57 cents per share on revenues of $4.08 billion, versus the comparable period a year-ago when it posted a 44-cent profit on revenues of $7.38 billion. The price of aluminum has fallen more than 50% from its July peak of $3,380 per tonne on the NYMEX. Meanwhile, Alcoa shares have plunged more than 82% from its 52-week high of $44.77, reached in May of 2008.[5] Analysts surveyed by Thomson Reuters predicted the Union, N.J. -based retailer would earn 44 cents per share on revenue of $1.92 billion.[1]
The home decor chain says it earned $141.4 million, or 55 cents per share, during the three months that ended Feb. 28. That compares with a year-ago profit of $172.9 million, or 66 million, during the same period last year.[10] Q4 net earnings per diluted share of 55 cents fell 16.7% from 66 cents EPS in the same period one year ago. (Net earnings of $141.4 million fell 18.2% from $172.9 million.)[4] Net income fell to $141.4 million, or 55 cents a share, in the three months ended Feb. 28 from $172.9 million, or 66 cents, a year earlier, the Union-based company said today in a statement distributed by PR Newswire.[11]
The Net earnings for the fiscal year ended February 28, 2009 were $1.64 per diluted share ($425.1 million), compared with net earnings per diluted share of $2.10 ($562.8 million) a year ago.[3] Earlier, the company had projected fiscal year earnings per share to decline in a low double-digit percentage to mid teens percentage from the $2.10 per share reported in the previous year.[7]
On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.44 per share.[12] On average, 18 analysts polled by Thomson Reuters expected the company to earn $0.44 per share for the fourth quarter.[2]
On average, twenty-five analysts polled by Thomson Reuters estimated earnings of $0.17 per share for the quarter.[9] Non-GAAP earnings per share increased 44% from $0.19 per share reported for the first quarter of 2007.[9]
The Sunnyvale, California-based company raised the lower range of non-GAAP earnings by a notch to the range of $0.16 to $0.17 per share from the previously issued guidance range of between $0.15 and $0.17 per share.[9] Full year earnings are currently projected in the range of $1.50 - $1.56 per share.[7] Analysts are looking for earnings of $1.53 per share for the full year.[7]
Now, the market isn't expecting any earnings growth. According to this source, the decline could be as severe as 33% if the retailer matches expectations and delivers $0.44 per share.[13]
Castagna said the company "was comfortable" with Wall Street expectations for first-quarter profit of 23 to 24 cents, and that Wall Street's expectation for a full-year profit of $1.50 per share "appears reasonable."[8] NEW YORK (Reuters) - Bed Bath & Beyond Inc ( BBBY.O ) reported a quarterly profit on Tuesday that easily topped Wall Street estimates, as sales were not as bad as feared, helping to send shares of the home furnishings retailer up 13.7 percent in after-hours trading.[14] Shares up 13.7 pct after the bell (Recasts, adds outlook) By Martinne Geller NEW YORK, April 7 (Reuters) - Bed Bath & Beyond Inc (BBBY.O: Quote, Profile, Research ) reported a quarterly profit on Tuesday that easily topped Wall Street estimates, as sales were not as bad as feared, helping to send shares of the home furnishings retailer up 13.7 percent in after-hours trading.[8]
Bed Bath & Beyond's fourth-quarter profit fell more than 18 percent but still topped Wall Street estimates even as same-store sales dipped, the company reported Tuesday.[1]
The retailer was impacted from discounting at department stores, as well as the liquidation sales at Linens 'n Things. J.P. Morgan analyst Christopher Horvers says the Street's estimates for the coming year are still too high, and they expect too much from the demise of Linens. Analysts expect Bed Bath & Beyond's same-store sales to fall around 2% during the fiscal year ended February 28, and believe profits will stay almost flat in the coming fiscal year, with quarterly earnings beginning to pick up later this year.[15] Bed Bath & Beyond Inc. reported fiscal fourth-quarter net income dropped 18% on higher expenses, but shares jumped in after-hours trading as earnings at the housewares retailer topped a prior estimate.[16]
Retailer Bed Bath & Beyond ( BBBY - news - people ) managed to exceed expectations, with profits of 55 cents a share. It was a strong beat, but same-store sales fell 4%.[17] Analysts were expecting 24 cents per share. Even worse, its profit fell 89% from a year ago as sales dipped 36%.[18]
In the year-ago period, the company earned $0.66 per share on net sales of $1.93 billion.[7] The retail giant's fourth-quarter net income was $3.79 billion or $0.96 per share, compared to $4.096 billion or $1.02 per share in the previous year.[7] In U.S. dollars, net loss widened to $0.81 per share from $0.03 per share in the previous year.[9]
Granted, the stock was last trading at just more than 32 cents per share. Now, as part of the settlement, Samsung will pay Spansion $70 million while the two will have exchanged rights in their patent portfolios.[18]
Shares are up more than 14% in extended trading. Juniper Networks ( JNPR - news - people ) shares jumped nearly 7% after the company raised its profit guidance as it cut expenses--but it warns of lower quarterly revenue due to lower expected sales to service providers.[18] A little optimism from F5 Networks ( FFIV - news - people ) sparked an after-hours rally. Shares jumped more than 6% after the network-equipment maker raised its second-quarter profit outlook but said revenue would fall below prior guidance.[18]
Bed Bath & Beyond shares are down 50% over the last two years as the recession and the housing market dragged down profits. It could easily fall further in the months ahead, Barron's Online said in February. [15] BBB opened 67 new units last year, including 49 Bed Bath & Beyond stores. Across the U.S., Puerto Rico and Canada the company currently operates 931 BBBs, 52 Christmas Tree Shops, 16 Buy-Buy Baby stores and one freestanding Harmon unit, plus two Mexico City stores in its joint venture there. BBB made $216 million in capital expenditures during fiscal 2008 - $142 million less than 2007 cap ex - but plans to ramp up to roughly $250 million this year, said ceo Steven Temares. Both executives touched on the bridal, baby, and online businesses as segments driving the continued expansion of Bed Bath & Beyond.[4] Since the first quarter began, the company has opened one Bed Bath & Beyond store and one buybuy BABY store. Bed Bath Chief Financial Officer Eugene Castagna said the company is expecting capital expenditures of about $250 million this year. Castagna also said he does not expect the overall business climate to show any marked improvement this year.[8]
ANALYST TAKE: SunTrust Robinson Humphrey David Magee told investors last week that he expects Bed Bath & Beyond's same-store sales — an important retail industry metric of sales in stores open at least a year — to slide six percent during the quarter. "While seeing some signs of life in certain segments of retail, including video gaming, footwear and consumer electronics, we suspect that this has not yet extended into the home furnishings sector," he wrote at the time.[6] Same-store sales - an important retail industry metric of sales in stores open at least a year - fell 4.3 percent. Industry observers have said Bed Bath & Beyond stands to benefit the most from the liquidation of its biggest competitor, Linens N Things, which closed its stores this winter after drastically marking down items left on its shelves.[1]
Sales slipped 0.5 percent to $1.923 billion, as sales at stores open at least a year, a key retail measure, fell 4.3 percent.[8]
Net sales for the fourth quarter were $1.923 billion, down 0.5% from $1.933 billion last year.[12] Net sales for the fiscal fourth quarter of 2008 were approximately $1.923 billion, a decrease of approximately 0.5% from net sales of approximately $1.933 billion reported in the fiscal fourth quarter of 2007.[3]
Net sales for fiscal 2008 were approximately $7.208 billion, an increase of approximately 2.3% from the prior fiscal year.[3]
The company is forecasting net sales to increase by a low single-digit percentage rate in the current first quarter and the full year, while same-store sales are expected to decline at a low single-digit percentage rate during the same periods.[8] The company expects that fiscal 2009 will see BBB sales growth in the low-single-digit range, while comps are expected to decline by a low-single-digit percent rate.[4]
The company's shares rose 11 cents, or 17 percent, after it gave an encouraging margin outlook for the current fiscal year.[8] The company still sees room for at least 400 new Bed Bath locations in the U.S., and plans to open 35 or so during the current fiscal year.[4] LOOKING AHEAD Bed Bath & Beyond, based in Union, New Jersey, has sought to battle the difficult environment in part by cutting costs and scaling back expansion. It has also worked to boost its online and gift registry businesses. The company said it expects to open between 50 and 54 new stores this year under the Bed Bath & Beyond, Christmas Tree Shops, buybuy BABY and Harmon Face Values names. That would be down from the 67 it opened last year.[8] As of February 28, 2009, the Company had a total of 1,037 stores, including 930 Bed Bath & Beyond stores (9 of which were opened during the fiscal fourth quarter, including a fourth store in Canada) in 49 states, the District of Columbia, Puerto Rico and Canada, 52 Christmas Tree Shops stores (4 of which were opened during the fiscal fourth quarter), 15 buybuy BABY stores (4 of which were opened in the fiscal fourth quarter), and, after the closing of 1 store, 40 stores under the names of Harmon or Harmon Face Values.[3] Bed Bath & Beyond Inc. and subsidiaries (the "Company") is a chain of retail stores, operating under the names of Bed Bath & Beyond, Christmas Tree Shops, Harmon, Harmon Face Values and buybuy BABY. Through a joint venture, the Company also operates retail stores in Mexico under the name "Home & More."[3]
Union, N.J. - Dominant home furnishings specialty retailer Bed Bath & Beyond turned in a respectable if not spectacular 2008, as sales were off 0.5% and profits shrank in a turbulent marketplace.[4] Bed Bath & Beyond Inc., the largest U.S. home-furnishings retailer, said fourth-quarter profit fell for the sixth straight quarter as consumers held back on purchases of curtains and towels amid the recession.[11] UNION, N.J. Bed Bath & Beyond says its fourth-quarter profit fell more than 18 percent as recession-weary shoppers dragged down results.[10]
Bed Bath & Beyond shares climbed $3.42, or 13.4 percent, to $28.93 in after-hours trading.[1] Investors lifted Bed Bath and Beyond ( BBBY - news - people ) shares, as fourth-quarter results topped estimates.[18] Eighteen analysts predicted Bed Bath & Beyond would earn 44 cents a share, according to Bloomberg data.[11]
Bed Bath & Beyond ( NASDAQ:BBBY ) reported fiscal Q4 EPS of 55 cents, ex-items, beating consensus estimates of 44 cents.[5] Pier 1 Imports ( NYSE:PIR ) reported an adjusted fiscal Q4 loss of 26 cents per share, ex-items, missing consensus estimates of a 17-cent loss.[5] Alcoa ( NYSE:AA ) reported a Q1 loss of 59 cents per share from continuing operations, missing consensus estimates of a 57-cent loss.[5]
Emerson Electric ( NYSE:EMR ) trimmed its full-year 2009 EPS outlook to a range of $2.40 to $2.60, down from its previously given range of $2.70 to $2.95, but inline with consensus estimates of $2.47 per share.[5]
The current consensus earnings projection of $1.50 per diluted share would be 8.5% under the year just ended.[4] The new guidance implies earnings per share to decline by 25% to nearly 29%, worse than the originally expected drop.[7]
On a reported basis, the net loss, group share, was EUR 3.892 billion or EUR 1.72 per share, compared to a loss of EUR 2.579 billion or EUR 1.14 per share in the year-ago quarter.[9]
STOCK PERFORMANCE: During the quarter, which ended in late February, shares climbed about 5 percent to end the period at $21.30.[6]
Fifteen analysts had a consensus revenue estimate of $1.92 billion for the fourth quarter.[2] Revenues in the quarter fell 36% year-over-year to $1.38 billion, and came in short of consensus estimates of $1.89 billion.[5]
Revenues in the quarter fell 9.6% year-over-year to $317 million, but came in ahead of estimates of $311 million.[5]
Total net revenues for the quarter increased 14% to $923.49 million from $809.18 million in the comparable period last year.[9] Net revenues for the first quarter of 2008 rose 31% on a year-over-year basis to $822.9 million.[9]
The tightening was attributed to non-GAAP operating margin of approximately 16% achieved by previously communicated expense reduction initiatives, which resulted in lower total non-GAAP operating expenses for the quarter in the range of $375 and $380 million, better than the company's prior guidance of approximately $408 million. Juniper Networks also lowered its first-quarter revenue outlook to a range of $760 million to $765 million from the prior guidance of between $800 million to $830 million.[9]
Operating profit was $231.28 million, down from $259.44 million recorded in the prior year quarter.[2] Gross profit for the quarter declined to $785.06 million from $799.10 million in the year-ago quarter.[2]
Analysts are looking for a profit of 44c on revenue of $1.92B. The consensus range is 41c-46c for EPS, and revenue of $1.89B-$1.93B, according to First Call.[15] Revenues in the quarter slipped 0.5% year-over-year to $1.92 billion, and was inline with estimates.[5] Revenues for the fourth quarter dropped 5.4% to EUR 4.954 billion from EUR 5.234 billion reported in the year-ago period.[9] Among others in the industry, Paris, France-based Alcatel-Lucent (ALU) reported a wider net loss for the fourth quarter, hurt by a hefty asset impairment charge.[9]
Comparable store sales in the fiscal fourth quarter of 2008 decreased by approximately 4.3%.[3] Potash customers, however, continue to be cautious and the Company expects fourth quarter potash sales to remain weak."[5]
At the end of the fourth quarter, the company had 1,037 stores in North America.[8]
The company also said it was comfortable with analysts' estimates for the current quarter, and that Wall Street estimates for the full year "appeared reasonable."[8] The Federal Reserve reported Tuesday that consumer borrowing fell to an annual rate of $7.48 billion in February, or 3.5% from the previous month. That drop was much higher than Wall Street's expected decline of only $1 billion. "Consumers don't want to borrow as much, they want to build up their savings," said Zach Pandl, an economist at Nomura Securities International.[5] The good news, though, is that Bed Bath & Beyond actually has a decent history in terms of beating Wall Street expectations.[13] While speaking at a meeting of the Council of Institutional Investors, Goldman Sachs' ( NYSE:GS ) CEO Lloyd Blankfein called for new standards to govern Wall Street executive compensation as well as new laws to regulate private equity funds and large hedge funds. He also condemned the financial industry for trusting ratings agencies too heavily. Midway through his speech he was interrupted by protestors who came chanting, "We want our money back."[5]
Though underlying earnings declined year-over-year, Wal-Mart surprised Wall Street and went beyond expectations.[7]
If that's the case, congratulations. Although I might say that Bed Bath & Beyond has a decent chance of beating estimates, I'll also state that I have no intention of buying ahead of earnings on this one. After such a run-up, it's possible that the stock could be getting frothy on a short-term basis. [13] Bed Bath & Beyond ( BBBY ) is expected to report Q4 earnings after the market close on Tuesday, April 7 with a conference call scheduled for 5:00 pm ET.[15]
The decline of the U.S. housing market and recession have eroded demand for home furnishings, affecting Bed Bath & Beyond and peers like Pier 1 Imports Inc ( PIR.N ) and Williams-Sonoma Inc ( WSM.N ). Earlier on Tuesday, Pier 1 reported a wider-than-expected quarterly loss as markdowns ate into its margins.[14] The following is a summary of key developments and analyst opinion related to the period. OVERVIEW: Home decor chain Bed Bath & Beyond Inc. likely stands to benefit from last year's liquidation of its biggest competitor, Linens N Things.[6]
Since the beginning of the fiscal first quarter on March 1, 2009, 1 additional Bed Bath & Beyond store and 1 additional buybuy BABY store have been opened.[3] Bed Bath & Beyond is also facing competition from discount store operators including Wal-Mart Stores Inc. (WMT) that have ramped up competition to attract budget conscious shoppers who opt to trade down for less pricey products.[2]
Bed Bath and Beyond stock has been showing support around 25.40 and resistance in the 27.98 range.[19] I questioned why the stock should be purchased. Well, the stock has been doing well as of late, and is up on the year-to-date frame as of this writing. A commenter named Rich set me straight and rightfully proposed that the liquidation of a competitor might have temporarily dampened things; once the competitor was gone, he said, Bed Bath & Beyond might prosper. Well, we'll see exactly how much prospering Bed Bath & Beyond has achieved, but I have to tip my hat to Rich and say that the market apparently agreed with him.[13]
The trade has a 228 day life and would provide 11.83% downside protection and a 30.43% assigned return rate for a 49.00% annualized return rate (for comparison purposes only). Bed Bath and Beyond does not pay dividends at this time.[19] Bed Bath & Beyond projects that the effects of the general economic downturn have not yet bottomed out.[4]
Apple ( NASDAQ:AAPL ) has launched its new multi-level pricing structure, breaking away from the $0.99 cent per song model. Labels have been fighting for flexibility in pricing for years, and have finally gotten their way. [5] According to new forecasts released by the International Monetary Fund (IMF), total global toxic debt netted by banks and insurers could exceed $4 trillion (USD). The IMF's January estimates indicated deterioration in US-based toxic assets reaching $2.2 trillion by the end of 2010, however, they are expected to raise that forecast to $3.1 trillion in their next assessment due out on April 21st. The IMF is expected to raise its reading on toxic assets based in Europe and Asia to $900 billion.[5] Research company IDC estimates that the stimulus package contains earmarks for more than $100 billion in IT spending. IBM ( NYSE:IBM ) has even developed software to help businesses and track their use of stimulus funds, and are only one of many companies designing products to be very stimulus-friendly.[5] Applied Materials ( NASDAQ:AMAT ) had a $1.9 billion contract with an unnamed company slashed to just $250 million, according to an SEC filing.[5] The businesses for sale serve 2.1 million customers in more than 20 states and has an estimated value of $3.5 billion.[5] Quarterly sales fell 0.7 percent to $1.78 billion from $1.79 billion.[6]
Revenues rose year-over-year, reflecting higher U.S. comparable store sales and net sales, offset in part by a drop in International sales. [7] The company said it sees fiscal Q4 phosphate sales volumes below the prior year's levels and added that it expects Q4 potash sales to remain weak.[5] The announcement comes in the wake of the first year in the company's history that it hasn't expected annual growth, cutting seat capacity by approximately 4% for the fiscal 2009 period.[5] The company's margins shrank to 44.3% from 48.1% as the company increased discounts in order to clear out bloated inventory. The company offered this statement, "We believe that we are well positioned heading into this fiscal year to meet the continuing challenges of this environment and to emerge on the other side of this recession a stronger, leaner, and more efficient Pier 1 Imports.[5]
The company claims that the turbines can produce forty to ninety percent of a home's power. Southwest predicted in December that orders will rise by ninety to one hundred percent this year, helped by international expansion and U.S. tax credits.[5] The company still faces a daunting challenge, especially as consumers — beset by falling home prices and rising unemployment — scale back on spending. That's because its core products, home decor items and other gadgets for the home, are among the worst segment in retail because of their ties to the housing market. In January, JPMorgan analyst Christopher Horvers cut his rating on the home furnishings retailer to "Underweight" from "Neutral," saying observers are overestimating gains from Linens N Things' decision to close stores.[6] Massive job cuts by companies have added to the gloom. This has led to a decline in sales at many retailers. With the mortgage crisis solution nowhere in sight, fewer people are changing homes, which mean difficult times for those selling home improvement products.[2]
According to a report from Bloomberg, General Motors ( NYSE:GM ) is increasing its efforts for bankruptcy preparations, despite scouting for more savings to avoid Chapter 11. The Bloomberg report, which cited inside sources familiar with the matter, indicated that GM would focus its efforts on forming a new company from its "best assets if court protection is needed." These sources, which remained unnamed, also said that there will be additional efforts for cost-cutting measures that would lower its debt by 46% and cut 47,000 jobs in 2009 and would include discussions with Treasury officials.[5]
Following the news, the company's shares gained more than 15% in the after-hours trading.[2] A big jump for a small-cap stock, Spansion ( SPSN - news - people ) shares soared in extended trading, up more than 136% on a patent litigation settlement with Samsung Electronics.[18] With less than an hour before it releases its quarterly results, Alcoa ( NYSE:AA ) shares are trading approximately 2% lower in anticipation of its second-consecutive quarterly loss as well as news from the London Metal Exchange that its aluminum inventories reached record highs.[5] The news sent shares of the home decor chain into overdrive in after-hours trading.[1]
Gold is currently trading at $875 an ounce on the Comex division of the New York Mercantile Exchange (NYMEX:GC.J).[5]
I calculate fair value on BBBY to be between $15 and $18 a share currently at current estimates. I don't believe those estimates will be met so I would say certainly on the low end of that estimate. [15] Newmont Mining ( NYSE:NEM ) shares closed down 2.5% to $42.80 while shares of Goldcorp Inc. ( NYSE:GG ) also fell 2.4% to $30.37.[5]
The aluminum producer recorded a loss of 59 cents a share, with a 27% drop in sales.[17] For the preceding third quarter, the company witnessed a 37% drop in profit, as consumers horded to liquidation sales held by now-defunct Linens 'n Things.[7] I'll be interested most in the company's same-store sales to see how customer traffic and the consumer's willingness to spend are faring, but mostly, I'll be watching the stock.[13] The company attributed the change to lower than expected sales to service providers.[9]
General Electric ( NYSE:GE ) will expand its wind energy footprint and place $10 million in the hands of Southwest Windpower, a small company that makes small turbines designed for one to three kilowatts of output. [5] Pfizer ( NYSE:PFE ) will create positions for two research chiefs upon its completion of the acquisition of smaller drug company Wyeth ( NYSE:WYE ), a deal valued at $68 billion.[5] In January the company forecast Q4 EPS 40c-46c and FY09 EPS $1.50-$1.56 versus First Call consensus of $1.53.[15]
BBBY appears on the Investors Observer Analysts Favorites list. For a hedged play on this stock, look at a Nov '09 25 covered call (BHQ KE) for a net debit in the $21.77 area. That is also the break even stock price for this trade. This covered call has a 228 day duration, provides 17.44% downside protection and a 14.84% assigned return rate for a 23.75% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the BBBY Jan '10 17.50 Call (YBE AW) and selling the Nov '09 25 call (BHQ KE) for a $5.75 debit.[19] Analysts and investors will be listening for comments from the retailer, which has no long-term debt and plenty of cash on hand, and on new store openings and cost controls.[15]
The earnings docket will be slim, Family Dollar Stores ( FDO - news - people ), Constellation Brands ( STZ - news - people ) and Pep Boy ( PBY - news - people ) are on tap.[17] The company is facing competition from discount store operators including Wal-Mart Stores Inc. (WMT: News ) that have ramped up competition to attract budget conscious shoppers who opt to trade down for less pricey products.[7] The company filed for bankruptcy protection in May. Department stores and discount retailers have ramped up competition with promotions to lure consumers to their stores.[6]
The Company is in a joint venture which operates 2 stores in Mexico under the name "Home & More."[3]
If the company only reports a so-so quarter in terms of expectations, maybe meeting or missing by a penny, and then rallies, then it might be very telling. Remember, though, you don't need to be a hero as they say and trade ahead of any earnings report. [13] The company's quarterly earnings, however, exceeded analysts' expectations as well as its own estimates.[2]
Mosaic ( NYSE:MOS ) reported fiscal Q3 EPS of 18 cents, ex-items, missing consensus estimates of 24 cents. [5] Ruby Tuesday ( NYSE:RT ) reported fiscal Q3 EPS of 26 cents, ex-items, beating consensus estimates of 11 cents.[5]
Kym McNicholas, 04.07.09, 08:35 PM EDT This is a transcript of the After Hours Market Update. Alcoa shares were down modestly after hours following a worse than expected first-quarter report on weaker metal prices and lower demand for its products. [18]
SOURCES
1. Bed Bath & Beyond earns $141M in fourth quarter - Forbes.com
2. RTTNews - Latest Earnings,Upcoming Earnings, Pos Pre Announcements, Pos Pre Announcements , Positive Surprises, Negative Surprises, Hot Stocks, Stock Split Calendar, Stock Buybacks, Dividends, Negative, Positive PreAnnouncements,Surprises .
3. Bed Bath & Beyond Q4 net earnings at $0.55 per share, net sales at $1.923 billion - EquityBulls.com
4. Bed Bath & Beyond confident as profits crimped - 4/7/2009 4:13:00 PM - Home Textiles Today
5. News Briefs - Comtex SmarTrend Alert
6. The Associated Press: Earnings Preview: Bed Bath & Beyond Inc.
7. RTTNews - Latest Earnings,Upcoming Earnings, Pos Pre Announcements, Pos Pre Announcements , Positive Surprises, Negative Surprises, Hot Stocks, Stock Split Calendar, Stock Buybacks, Dividends, Negative, Positive PreAnnouncements,Surprises .
8. UPDATE 3-Bed Bath & Beyond profit tops view, shares rise | Reuters
9. Juniper Networks Slashes Q1 Revenue Outlook; Raises Lower Range Of Earnings Per Share View
10. Bed Bath & Beyond earns $141M in fourth quarter - BusinessWeek
11. Profit falls again for Bed Bath & Beyond | APP.com | Asbury Park Press
12. RTTNews - Latest Earnings,Upcoming Earnings, Pos Pre Announcements, Pos Pre Announcements , Positive Surprises, Negative Surprises, Hot Stocks, Stock Split Calendar, Stock Buybacks, Dividends, Negative, Positive PreAnnouncements,Surprises .
13. Earnings preview: Will Bed Bath & Beyond beat this week? - BloggingStocks
14. Bed Bath & Beyond shares rise as profit tops view | Reuters
15. Earnings Preview: Bed Bath & Beyond -- Seeking Alpha
16. Bed Bath & Beyond Profit Falls On Expenses, Beats Forecast - WSJ.com
17. Investors Watch Inventory Reports And Fed Minutes - Forbes.com
18. Alcoa Shares Down; Bed Bath & Beyond Up - Forbes.com
19. Bed Bath and Beyond (BBBY) PriceWatch Alert With 17.44% Downside Protection
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