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Friday, August 8, 2008

The Nine (NCTY) 2Q:2008 results

Revenues were slightly better due to World of Warcraft strength. WoW grew to 91% of total revenues. Other sources of revenue at the company have failed to materialize. EPS came in 12 cents better entirely on non-operational items: better forex, lower tax rate, better interest income. In fact, they missed operating income estimates slightly.

Citigroup and Credit Suisse downgrade this morning citing dependence on WoW and lack of bargaining power at the license renegotiation table.

Thursday, August 7, 2008

The Nine (NCTY) reporting tonight

They do online games but none really matter to revenue outside of World of Warcraft which makes up 90 percent of NCTY revenue. Their license for WoW ends pretty soon. Its expected that Activision Blizzard (ATVID) is going to negotate much less favorable terms for NCTY. Don't see why they wouldn't -- NCTY has no negotating power at all -- they're completely dependent. All the analyst models have WoW assumptions for 2009 -- though expectations have been scaled back somewhat.

In theory the olympics will be a drag on online gaming revenue for the month of August which could lead to a shortfall in near-term guidance.

To recap: The license expires at the end of the year. It's already in the models. If ATVID doesn't renew the license at all, NCTY would eventually go to zero.

Seems like bad risk/reward?

Wednesday, August 6, 2008

Freddie Mac (FRE) still sounds insolvent

Fair value of assets: -5.6 billion.
Dividend cut: 80%.
Proposed capital raise: $5.5 billion.
Value: Worthless.

There are some things money shouldn't buy.

Cisco Systems (CSCO) 4Q:2008 results

Cisco beat by a little on the top and the bottom line. They were constructive on enterprise spending and some analysts have suggested their tone is better. Service provider orders grew at 5%, down from last quarter's 6% and the high teens last year. They said book to bill was comfortably above 1 but drew on deferred revenue which shrunk by 165 mil. They also lowered growth forecasts by a percentage point on a year to year basis for the next two quarters and indicated economic uncertainty will be their bedfellow for the next several quarters.

The stock is rallying on this. I'm not going to be buying it. Good company. Now at that $40 billion dollar threshold -- its a lot harder to grow a 40 billion dollar company. I don't think their claims of 12-15% long-term growth are realistic.

Tuesday, August 5, 2008

Potash (POT) revisited

Rackable Systems (RACK) 2Q:2008 results

Though revenue was slightly better, gross margins plummeted to the single digits from last quarters mid 20s. The company indicated this was a one-time occurrence and maintained gross margin guidance of 18-21% for the year. They stuck to their full year revenue guidance, too.

They have an outrageous amount of volatility in their model. Last quarter's results seemed to indicate they had stopped seeking low margin business and were content to walk away from business to maintain profitability. This quarter seems to show the exact opposite. IBM, Dell and HP are all targeting the rack server space. The stock at $10 (where its trading pre-opening) is roughly $3 over book so the downside is somewhat limited. Seems like dead money. I keep thinking they make sense as an acquisition for a larger player looking to grow share. Maybe one day I'll be right about that... but not today. Today it gets flogged.

Monday, August 4, 2008

Earnings Estimate Cheat Sheet – August 4, August 5, August 6, August 7, August 8 2008

Estimated Reporting Date

Symbol

Revenue Estimate Current Q

Operating Profit Estimate Current Q

EPS Estimate Current Q

EBITDA Estimate Current Q

Revenue Estimate Next Q

Sequential Revenue Growth Estimate, Percent

Operating Profit Estimate Next Q

EPS Estimate Next Q

EBITDA Estimate Next Q

Revenue Estimate Full Year

Operating Profit Estimate Full Year

EPS Estimate Full Year

EBITDA Estimate Full Year

Revenue Estimate Next Year

Operating Profit Estimate Next Year

EPS Estimate Next Year

EBITDA Estimate Next Year

8/4/2008

ACTS

23.8

4.5

0.10

--

26.7

11.95%

5.3

0.12

--

111.1

30.2

0.48

44.9

112.5

33.7

0.34

29.1

8/4/2008

ACTU

34.0

6.7

0.07

7.6

34.8

2.42%

7.8

0.08

8.8

137.9

27.2

0.30

30.1

154.2

35.0

0.38

38.3

8/4/2008

BLKB

72.7

17.7

0.24

19.7

79.2

8.98%

19.4

0.26

21.8

302.0

72.5

0.98

81.8

350.3

86.9

1.17

93.6

8/4/2008

CMVT

335.1

34.5

0.18

48.5

369.3

10.18%

37.2

0.18

51.7

1,192.4

110.4

0.60

173.6

1,589.7

135.7

0.68

203.8

8/4/2008

DISH

2,920.1

499.9

0.54

771.2

2,986.9

2.29%

513.2

0.54

768.0

11,656.8

2,028.3

2.23

3,147.7

12,439.1

2,198.4

2.51

3,363.8

8/4/2008

MIPS

28.2

4.0

0.07

5.3

29.0

2.87%

4.6

0.07

5.9

104.2

10.4

0.14

14.0

125.4

24.3

0.39

31.2

8/4/2008

RACK

76.2

(1.8)

(0.01)

2.8

91.1

19.52%

(0.3)

0.02

2.6

352.9

2.1

0.16

14.0

399.9

4.8

0.22

--

8/4/2008

RTEC

36.9

(2.3)

(0.03)

--

38.6

4.40%

(0.9)

(0.01)

--

154.6

(4.8)

(0.01)

11.0

186.2

16.0

0.45

--

8/4/2008

SMTL

65.3

4.6

0.10

--

64.5

-1.33%

5.0

0.12

--

241.4

11.1

0.26

18.1

282.3

29.7

0.62

62.5

8/4/2008

STEC

53.1

5.3

0.08

7.0

59.4

11.83%

7.0

0.10

8.2

229.4

26.1

0.37

33.1

283.6

47.4

0.70

48.6

8/4/2008

TMA

71.8

--

0.07

--

79.9

11.29%

--

0.01

--

(1,338.3)

--

(12.00)

--

388.9

--

0.27

--

8/4/2008

VSH

739.7

64.7

0.25

119.2

740.6

0.13%

64.0

0.26

121.1

2,957.2

243.4

0.93

462.2

3,048.6

291.6

1.11

517.4

8/5/2008

AMKR

697.9

87.2

0.28

161.0

740.3

6.07%

106.8

0.35

187.0

2,893.5

405.1

1.34

695.0

3,048.2

453.0

1.38

743.6

8/5/2008

CHKP

200.4

101.7

0.44

104.0

221.2

10.41%

116.2

0.49

123.0

812.0

416.8

1.78

421.0

873.2

448.4

1.94

453.5

8/5/2008

CSC

4,292.9

242.0

0.76

562.7

4,290.3

-0.06%

270.7

0.90

610.5

17,667.6

1,286.9

4.30

2,596.6

18,479.8

1,388.7

4.68

2,738.9

8/5/2008

CSCO

10,309.9

2,968.8

0.39

3,402.4

10,390.2

0.78%

3,001.4

0.40

3,454.7

39,488.9

11,557.4

1.55

13,155.4

43,712.3

12,741.8

1.69

14,439.4

8/5/2008

GLBC

649.5

--

(1.25)

56.0

660.3

1.67%

--

(1.23)

73.0

2,622.9

(70.6)

(4.01)

275.6

2,843.5

5.9

(2.98)

356.4

8/5/2008

INSP

34.9

(1.5)

(0.01)

3.8

36.3

3.97%

(2.8)

(0.01)

4.4

153.0

(3.9)

(0.04)

21.0

158.6

(2.1)

0.26

24.4

8/5/2008

JCOM

61.0

25.8

0.40

28.4

63.2

3.63%

26.9

0.41

29.3

248.1

104.3

1.61

115.6

283.3

124.2

1.87

132.2

8/5/2008

LEAP

477.6

35.3

0.03

130.0

504.3

5.60%

19.9

(0.25)

119.0

1,977.5

99.5

(0.76)

486.1

2,507.3

143.1

(0.05)

605.5

8/5/2008

LOOK

18.2

(0.2)

0.01

1.3

18.3

0.55%

0.0

0.02

1.4

73.5

(0.3)

0.05

5.5

81.3

0.7

0.11

6.9

8/5/2008

MFLX

165.3

12.8

0.36

18.9

179.7

8.72%

13.1

0.36

18.9

693.0

60.9

1.67

86.5

804.5

57.2

1.40

84.7

8/5/2008

MVL

131.0

64.6

0.44

64.9

171.7

31.06%

80.2

0.55

79.6

556.2

291.4

1.99

287.4

608.7

275.8

1.97

284.7

8/5/2008

MOLX

869.4

101.5

0.41

165.1

878.2

1.01%

101.1

0.40

164.3

3,325.9

351.6

1.42

597.1

3,569.8

439.3

1.75

688.0

8/5/2008

NILE

74.5

4.3

0.17

5.9

74.3

-0.22%

4.1

0.17

6.0

350.5

23.3

1.03

31.7

404.4

28.4

1.25

37.7

8/5/2008

NNDS

198.0

40.9

0.57

50.6

215.2

8.68%

49.3

0.72

63.6

831.1

191.2

2.66

226.6

919.3

212.5

2.90

244.0

8/5/2008

OPWV

58.9

(2.9)

(0.03)

(1.0)

55.8

-5.37%

(1.6)

(0.01)

2.4

243.2

(16.0)

(0.17)

--

231.2

6.0

0.07

19.7

8/5/2008

PCLN

495.7

87.2

1.41

91.1

550.8

11.10%

128.9

2.05

133.8

1,880.7

343.8

5.54

363.2

2,228.1

456.7

6.95

475.0

8/5/2008

SMSI

23.0

4.1

0.11

5.1

26.5

15.46%

6.5

0.18

7.4

101.1

22.8

0.63

27.4

119.6

31.5

0.83

32.6

8/5/2008

SNCR

24.6

4.5

0.09

6.4

29.2

18.79%

6.5

0.12

8.4

117.0

26.5

0.48

34.5

140.1

36.6

0.66

41.7

8/5/2008

UNTD

120.2

21.4

0.28

35.8

120.0

-0.22%

20.7

0.29

36.6

483.6

86.5

1.18

151.1

466.3

79.2

1.08

148.4

8/5/2008

WBMD

89.1

7.0

0.09

14.2

99.6

11.80%

14.7

0.16

20.9

382.4

46.8

0.55

--

437.9

61.9

0.72

94.1

8/5/2008

WFMI

1,911.2

80.3

0.31

136.7

1,927.4

0.85%

70.3

0.27

129.3

8,164.4

301.9

1.15

558.1

9,453.9

395.1

1.52

690.7

8/6/2008

AIRN

20.6

(7.7)

(0.14)

(6.9)

23.8

15.33%

(6.1)

(0.11)

(5.4)

90.1

(28.2)

(0.50)

(25.0)

128.2

(17.5)

(0.20)

(8.7)

8/6/2008

ALTI

1.6

(7.8)

(0.09)

(7.5)

6.2

279.48%

(5.0)

(0.07)

(7.1)

18.4

(25.5)

(0.31)

(28.3)

23.5

(30.4)

(0.35)

(23.1)

8/6/2008

ANEN

33.0

1.7

0.13

4.0

33.3

0.89%

3.1

0.18

--

130.2

12.6

0.78

--

140.6

15.3

0.88

16.0

8/6/2008

AVT

4,606.9

191.6

0.80

208.2

4,434.0

-3.75%

176.7

0.74

191.8

17,878.7

742.3

3.14

801.2

18,648.6

805.9

3.35

874.3

8/6/2008

BBBB

76.4

9.7

0.12

12.3

82.6

8.13%

14.2

0.19

16.4

314.0

48.2

0.65

57.6

385.1

81.6

1.28

93.0

8/6/2008

CECO

423.2

2.0

0.06

23.8

415.4

-1.83%

9.2

0.10

32.7

1,737.2

71.0

0.62

159.7

1,769.1

95.3

0.72

188.4

8/6/2008

FRE

2,184.9

--

(0.53)

--

2,319.0

6.14%

--

(0.51)

--

8,591.7

--

(2.00)

--

11,166.2

--

0.58

--

8/6/2008

HILL

68.2

(4.9)

(0.12)

--

65.6

-3.81%

(4.2)

(0.10)

--

267.2

(16.6)

(0.36)

--

333.0

13.7

(0.04)

--

8/6/2008

KLIC

182.6

0.4

0.00

--

188.5

3.24%

3.0

0.05

--

773.7

--

0.25

--

778.3

27.7

0.55

--

8/6/2008

MXWL

17.7

(2.9)

(0.17)

(1.9)

18.1

2.67%

(2.5)

(0.16)

(1.4)

72.4

(10.8)

(0.73)

(6.9)

92.9

(4.2)

(0.32)

(1.9)

8/6/2008

ONNN

552.5

90.9

0.19

122.4

567.9

2.80%

99.5

0.21

131.6

2,117.7

359.5

0.81

440.5

2,306.2

429.8

0.95

526.9

8/6/2008

PLNR

71.9

(4.5)

(0.26)

--

74.9

4.17%

(3.8)

(0.20)

--

297.2

(15.0)

(0.94)

--

314.2

(11.4)

(0.64)

--

8/6/2008

QSII

52.0

15.8

0.37

17.9

56.0

7.73%

17.4

0.41

19.5

230.1

72.9

1.69

80.9

268.8

89.0

2.00

96.4

8/6/2008

S

9,167.0

(244.7)

0.03

1,919.4

8,989.1

-1.94%

(266.0)

0.02

1,868.3

36,388.2

(1,138.3)

0.07

7,508.2

35,279.1

(376.7)

0.07

7,531.9

8/6/2008

SINA

89.5

22.1

0.40

26.8

98.3

9.80%

25.2

0.43

29.9

360.4

86.8

1.57

105.3

448.3

121.6

2.05

143.9

8/6/2008

TKLC

111.1

10.9

0.15

--

110.9

-0.17%

15.8

0.17

--

467.8

73.2

0.80

84.6

500.3

76.3

0.89

93.1

8/6/2008

TWC

4,329.7

787.8

0.32

1,562.0

4,353.4

0.55%

810.2

0.32

1,606.0

17,328.2

3,176.6

1.27

6,295.1

18,666.6

3,624.7

1.36

6,909.1

8/6/2008

UTSI

603.4

(31.2)

(0.28)

--

237.7

-60.61%

(22.6)

(0.29)

--

1,742.5

(91.2)

(0.44)

--

1,245.5

(24.0)

(0.31)

--

8/6/2008

VRSN

231.4

73.6

0.23

105.7

240.6

3.98%

81.1

0.26

113.7

947.4

312.0

1.00

446.7

1,122.0

447.7

1.59

581.6

8/7/2008

ACS

1,623.8

174.5

0.93

276.9

1,612.9

-0.67%

169.5

0.91

274.7

6,170.5

678.3

3.51

1,066.0

6,641.5

738.4

3.93

1,158.2

8/7/2008

ANSS

110.6

46.5

0.38

52.8

116.6

5.43%

49.1

0.37

51.4

467.2

201.8

1.57

228.3

554.6

244.6

1.84

271.9

8/7/2008

BRKS

132.4

(4.1)

(0.04)

5.0

133.8

1.02%

(1.4)

0.00

6.0

559.1

(7.6)

0.06

28.1

588.5

17.5

0.27

53.0

8/7/2008

CHINA

103.6

1.4

0.01

5.5

103.0

-0.62%

1.9

0.01

6.0

413.3

7.3

0.04

21.1

455.2

23.2

0.16

37.0

8/7/2008

DIOD

115.1

17.3

0.34

24.2

134.4

16.71%

20.7

0.40

28.3

498.0

75.8

1.55

105.0

596.0

104.8

1.92

131.2

8/7/2008

DIVX

21.3

3.3

0.10

5.0

24.8

16.52%

6.0

0.13

7.5

98.1

23.6

0.56

29.4

116.8

32.7

0.66

37.1

8/7/2008

ELX

114.0

24.8

0.21

--

116.3

2.05%

26.6

0.22

--

489.5

131.9

1.12

151.2

491.8

119.2

0.99

157.8

8/7/2008

EMKR

78.5

(3.8)

(0.03)

--

98.9

25.87%

1.4

0.03

--

280.6

(14.3)

(0.21)

--

459.6

25.8

0.38

--

8/7/2008

IDCC

58.5

6.3

0.12

10.8

58.8

0.42%

7.2

0.14

12.4

233.4

31.1

0.57

50.9

248.6

44.8

0.71

59.1

8/7/2008

ITWO

63.7

5.9

0.11

--

64.9

1.83%

7.9

0.23

--

254.4

29.5

0.75

--

261.2

38.3

0.92

--

8/7/2008

KNOT

31.2

3.8

0.09

6.1

28.6

-8.44%

2.5

0.07

5.0

111.4

8.3

0.23

18.3

127.6

19.2

0.43

29.8

8/7/2008

MVSN

149.3

37.6

0.22

47.1

165.9

11.11%

51.2

0.30

60.9

659.6

174.8

1.19

220.0

671.5

264.9

1.75

292.1

8/7/2008

NCTY

66.2

15.3

0.49

24.4

67.4

1.83%

14.8

0.48

25.1

270.8

62.8

1.89

97.0

331.2

63.7

2.08

107.1

8/7/2008

OPTV

26.1

(1.9)

(0.01)

1.7

25.3

-3.05%

(2.3)

(0.01)

1.4

111.1

(0.8)

0.04

13.7

131.1

11.0

0.10

26.8

8/7/2008

WEDC

20.6

1.7

0.07

2.9

21.5

4.38%

2.0

0.07

3.2

80.6

5.5

0.22

9.4

88.7

8.9

0.30

--

8/8/2008

ACLS

82.5

(11.3)

(0.12)

(6.4)

82.0

-0.67%

(11.2)

(0.11)

(7.6)

337.5

(41.9)

(0.39)

(24.1)

374.5

(18.4)

(0.11)

(5.2)

8/8/2008

MSTR

87.3

20.7

1.08

21.0

90.1

3.18%

22.3

1.18

22.0

362.9

84.8

4.46

89.0

400.3

97.2

5.42

110.0

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