April 22nd, 2007
The Week Ahead (22 April 2007)
The Economic Calendar is relatively light this week. Potential market movers include:
- Wednesday’s Durable Goods report (consensus 2.2%)
- Friday’s advance report on Q1 GDP (consensus 1.8%)
Earnings are another story. We are in the peak part of earnings season this week. A few of the stocks we follow:
Monday
- Altera (ALTR) - valuation is rich but looks set up to beat on earnings.
- Texas Instruments (TXN - Annual Report) - March and June quarters have both had significant downward revisions. Will day of reckoning be forestalled?
Tuesday
- AU Optronics (AUO) - Forecasting losses, but panel business may have bottomed out.
- CDW Corporation (CDWC) - 14.6% sales growth doable given Berbee acquisition.
- CH Robinson (CHRW - Annual Report) - Could beat.
- CSG Systems (CSGS) - earnings should be a piece of cake. If private equity buyers don’t take them out they’ll do it themselves the slow way.
- Lexmark (LXK) - Estimates are doable but we’re always waiting for this company to trip up.
- ST Microelectronics (STM) - Doing the right thing. Hopefully will pay off.
- AT&T (T - Annual Report) - Estimates and stock both keep rising.
Wednesday
- Apple (AAPL) - Hunch: company will blow away earnings, issue horrible guidance and blame it on iPhone build.
- Arkansas Best (ABFS) - We’re staying away from truckers who own trucks.
- Corning (GLW - Annual Report) - current quarter ok, guidance at risk.
- LSI Logic (LSI) - May blame their poor guidance on Agere.
- Maxim (MXIM) - Company is out of gas but focus will be on whether they might sell out.
- Qualcomm (QCOM) - Nokia Nokia Blah Blah Nokia ad nauseam (excerpt from pending conference call transcript)
- Silicon Laboratories SLAB - Sold wireless just when biggest customer began to recover. What other surprises may be in store?
- UPS (UPS) - They shouldn’t have trouble beating the estimates (but that doesn’t mean they won’t).
- Xilinx (XLNX) - Altera with more risk to the earnings target.
Thursday
- Curtiss Wright (CW - Annual Report) - PPI data suggests they should beat big, but it suggested the same last quarter.
- KLA Tencor (KLAC) - Another place we’d rather not be right now.
- Microsoft (MSFT - Annual Report) - Vista is still not living up to expectations.
- MEMC Electronics (WFR) - Earnings surprises have been getting bigger each quarter. Now that we’ve put a semiconductor name on our Large Cap Watch List (Track at Marketocracy) it will probably stop just to spite us.
- YRC Worldwide (YRCW) - See Arkansas Best.
- Sandisk (SNDK - Annual Report) - Will take more than one quarter to clear the channel inventory.
Friday
- Dassault Systemes (DASTY) - We like Ansys (ANSS) better but don’t see why this name wouldn’t beat.
- Ceradyne (CRDN) - Earnings could be anywhere and don’t really matter.
Enjoy!
Disclosure: William Trent has a long position in SMH.
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Topics: STMicroelectronics (STM), Curtiss Wright (CW), KLA-Tencor (KLAC), Arkansas Best (ABFS), Maxim Integrated Products (MXIM), Qualcomm (QCOM), AU Optronics (AUO), CH Robinson Worldwide (CHRW), Dassault Systemes (DASTY), Sandisk (SNDK), Watch List, Xilinx (XLNX), LSI Corp. (LSI), Altera (ALTR), YRC Worldwide (YRCW), MEMC Electronic Materials (WFR), Lexmark (LXK), ANSYS (ANSS), Ceradyne (CRDN), Microsoft (MSFT), United Parcel Service (UPS), AT&T (T), CSG Systems (CSGS), CDW Corp (CDWC), Corning (GLW), McAfee (MFE), Apple (AAPL), Texas Instruments (TXN), Silicon Laboratories (SLAB), Stock Market | RSS
[…] The Week Ahead (22 April 2007) […]
[…] When we previewed earnings this week we said “Lexmark (LXK) - Estimates are doable but we’re always waiting for this company to trip up.” Right on cue, the company tripped up. […]
[…] In our weekly earnings preview, we said “We’re staying away from truckers who own trucks.” Let’s see how that strategy is working out now that Arkansas Best Corporation (ABFS) Announces 1st Quarter 2007 Results: Arkansas Best Corporation (Nasdaq: ABFS - News) today announced first quarter 2007 revenue of $422.6 million compared to $425.0 million in the first quarter of 2006. Arkansas Best’s first quarter 2007 income from continuing operations was $4.8 million, or $0.19 a share, compared to $5.8 million, or $0.23 a share, in the first quarter of 2006. […]
[…] The consensus estimate called for LSI to report $0.09 per share on $443 million in sales. Guidance for the next quarter, however, was disappointing. The $0.00 - $0.03 per share (excluding the $0.43-$0.49 that the company says are one-time items related to the acquisition of Agere) is well below the $0.10 consensus. The company only expects sales of $715-$745 million, compared to the $836 million consensus target. When we previewed the earnings report we said “LSI Logic (LSI) - May blame their poor guidance on Agere.” Were we right? On the conference call, management said: Clearly we are in a challenging demand environment, as evidenced by recent announcements by our customers and peers. We have a significant amount of revenue directly or indirectly tied to IT spending, with half of this tied to US consumption. IT spending was soft in the March quarter and is expected to remain soft through the June quarter. […]