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Thursday, November 6, 2008

Microsoft should just let Yahoo twist in the wind

Yang is basically begging for a deal. And maybe Microsoft would like to own Yahoo. However, Yahoo is very far along on negotiations to merge with AOL. It's their back-up back-up plan. They hate the idea. Time Warner hates the idea. It's the last thing they want to do. But here's the catch. It's exactly what Microsoft should let happen.

If Microsoft said they don't want Yahoo here, the stock would fall apart. And Yahoo would reluctantly merge with AOL. Yahoo stock would implode -- I think $8 would be likely considering all the speculators that are long it here.

I think if Microsoft is patient... and they are patient... they get AOL along with Yahoo for half the price the market wants them to pay for Yahoo.

Wednesday, November 5, 2008

Cisco (CSCO) 1Q:2009 results (2)

Running it through the model $1.40 might be aggressive. We'll see what analysts say in the morning. A bear like me could use a number like $1.25 but I'm short, I don't want to start painting worst case scenarios for myself.

Cisco (CSCO) - 1Q:2009 results

Current quarter was ok. Orders weaker -- US and UK were both down -- keep in mind, typically they're growth quarters for the company.

The guidance started about 20 minutes before he gave a number. He talked about rapid realignment of costs, of worldwide economic weakness, of Europe starting to roll over, his guidance being unreliable because he's only had visibility worse than this once before... then the bomb. Revenue for next quarter will be down 5-10% year over year. That's approximately 8.9 - 9.35 bil in dollar terms. The street has 10.3 bil modeled but thats a fuzzy number in my mind -- surely I'm not the only one that thought they were having a rough time.

The stock is down 6% after-hours. Now comes the test. Can investors look through this quarter? Is it going to stay bad or did September and October's worldwide market shocks create unsustainably low spending levels?

Unfortunately I think the answers aren't clear and my crystal ball is equally fuzzy. I think its unlikely we see IT spending roar back this year. Cisco did not cut their long-term revenue forecast of 12-17% (which surprised me a bit). I suspect until they capitulate on that the stock isn't going anywhere. Expect numbers to come down for next year. I'd guess $1.40 - $1.50 is the first cut. I'd also say the stock ought to trade at the low end of their long-term forecast with visibility as poor as it is. That'd be a hair under $17 at the low end of where I envision consensus going (12 * 1.40 = $16.80). It's fairly valued here... if you think $1.40 is as low as the numbers for next year are going. My guess is they go lower eventually but it's probably dead money here either way.

Dell: Unpaid vacations or job cuts, you decide.

Dell is asking employees to help them save costs by taking unpaid vacations. They're implementing a hiring freeze, cuts to contract employees and a voluntary severance program. They are buckling down for a tougher year end.

Sticking with Dell short.

Monday, November 3, 2008

Earnings Estimate Cheat Sheet – Nov 3 & Nov 4, 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 

11/3/2008 

ALVR 

80.6  

3.1  

0.06  

5.8  

81.0  

0.48% 

2.4  

0.05  

4.6  

292.6  

5.6  

0.16  

-- 

354.4  

19.2  

0.35  

31.5  

11/3/2008 

AMT 

401.6  

157.0  

0.14  

265.6  

409.1  

1.87% 

161.6  

0.14  

270.7  

1,586.8  

615.1

0.49  

1,055.2  

1,702.6  

699.3  

0.70  

1,151.8  

11/3/2008 

AUDC 

46.5  

3.9  

0.09  

-- 

47.9  

2.99% 

4.4  

0.10  

-- 

183.7  

15.1  

0.35  

-- 

205.1  

19.6  

0.42  

-- 

11/3/2008 

AXTI 

18.0  

(0.0)

(0.02)

-- 

22.0  

22.11% 

3.1  

0.06  

-- 

79.6  

7.4  

0.13  

-- 

87.0  

8.4  

0.19

-- 

11/3/2008 

BLKB 

83.1  

18.2  

0.25  

-- 

86.9  

4.59% 

20.2  

0.28  

-- 

312.0  

71.1  

0.97  

-- 

364.2  

82.4  

1.13  

-- 

11/3/2008 

CRAY 

54.3  

(1.8)

(0.05)

-- 

142.6  

162.33% 

21.0  

0.69  

-- 

269.8  

2.1  

0.19  

-- 

255.0  

3.9  

0.21  

-- 

11/3/2008 

EXTR 

92.7  

3.3  

0.04

4.8  

94.5  

1.93% 

3.6  

0.05  

5.0  

380.1  

13.7  

0.20  

23.1  

404.7  

23.6  

0.30  

-- 

11/3/2008 

GLBC 

663.5  

(22.0)

(1.39)

62.0  

661.3  

-0.33% 

(18.0)

(1.34)

66.3  

2,613.5  

(94.2)

(5.59)

230.2  

2,786.9  

(58.3)

(4.81)

291.7  

11/3/2008 

JCOM 

62.9  

27.0  

0.41  

29.5

64.1  

1.89% 

27.5  

0.42  

29.9  

246.3  

104.5  

1.61  

115.7  

270.0  

118.3  

1.77  

126.1  

11/3/2008 

LOOK 

16.3  

-- 

0.00  

0.5  

18.9  

15.98% 

-- 

0.05  

1.4  

69.8  

-- 

0.10  

4.0  

78.7  

-- 

0.29  

7.1  

11/3/2008 

MFLX 

193.7  

12.2  

0.37  

19.3  

206.2  

6.44% 

14.3  

0.39  

22.1

709.4  

57.0  

1.66  

83.2  

829.1  

55.6  

1.56  

85.7  

11/3/2008 

MSPD 

39.4  

2.2  

0.07  

-- 

40.0  

1.48% 

2.6  

0.09  

-- 

149.0  

6.3  

0.18  

-- 

164.2  

11.7  

0.40  

-- 

11/3/2008 

MXWL 

20.1  

(3.8)

(0.21)

(2.9)

20.8  

3.11% 

(3.6)

(0.20)

(2.8)

78.0  

(14.9)

(0.93)

(10.7)

96.6  

(8.2)

(0.46)

(3.8)

11/3/2008 

PBI 

1,602.3  

288.0  

0.70  

361.0  

1,721.4  

7.43% 

328.0  

0.79  

401.0  

6,493.2  

1,168.0  

2.85  

1,529.3  

6,732.9  

1,223.6  

3.11  

1,591.9  

11/3/2008 

RACK 

70.5  

(4.3)

(0.07)

0.8  

86.0  

21.95% 

(1.8)

(0.02)

6.1  

281.5  

(12.3)

(0.15)

4.6  

322.5  

(4.2)

0.03  

-- 

11/3/2008 

RDWR 

25.4  

(3.7)

(0.14)

-- 

27.3  

7.65% 

(1.6)

(0.04)

-- 

98.9  

(18.4)

(0.78)

-- 

113.1  

(6.0)

(0.01)

-- 

11/3/2008 

TKLC 

108.9  

13.7  

0.16  

-- 

123.3  

13.23% 

19.6  

0.23  

-- 

467.5  

79.2  

0.85  

83.2  

496.3  

86.3  

0.95

87.9  

11/3/2008 

TRID 

33.3  

(5.7)

(0.11)

(4.3)

30.1  

-9.45% 

(7.5)

(0.12)

(6.6)

118.0  

(30.6)

(0.49)

(35.9)

124.9  

(32.7)

(0.57)

(35.3)

11/3/2008 

VIA/B 

3,318.3  

692.5  

0.55  

788.4  

4,409.1  

32.87% 

1,026.1  

0.90  

1,132.3  

14,669.8  

3,082.0  

2.51  

3,462.5

14,946.1  

3,149.1  

2.64  

3,524.4  

11/4/2008 

AMSC 

41.1  

(3.1)

(0.09)

(1.1)

45.7  

11.02% 

(2.0)

(0.07)

(0.2)

178.5  

(8.0)

(0.34)

3.5  

255.0  

14.3  

0.11  

19.4  

11/4/2008 

ACLS 

51.3  

(22.3)

(0.23)

(17.9)

55.4  

7.98% 

(20.1)

(0.21)

(15.0)

266.7  

(66.8)

(0.73)

(48.8)

240.2  

(73.7)

(0.67)

(52.9)

11/4/2008 

DMRC 

4.7  

(3.3)

0.10  

0.8  

4.6  

-2.13% 

(0.4)

0.10  

0.8  

19.5  

-- 

0.63  

4.9  

21.6  

0.7  

0.62  

5.4  

11/4/2008 

NILE 

68.8  

3.2  

0.16  

4.8  

117.7  

70.99% 

10.7  

0.48  

12.5  

330.8  

21.3  

1.00  

27.2  

364.0  

23.7  

1.13

34.4  

11/4/2008 

SPSS 

74.6  

12.1  

0.44  

-- 

80.5  

7.96% 

15.7  

0.55  

-- 

309.0  

52.5  

1.91  

72.8  

318.2  

61.1  

2.08  

81.6  

11/4/2008 

VNO 

660.6  

302.2  

0.32  

361.6  

674.8  

2.15% 

321.1  

0.40  

385.4  

2,647.0  

903.1  

3.97  

1,498.6  

2,737.0  

1,118.0  

2.18  

1,510.7

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