Forget about Yahoo! (NASDAQ: YHOO)'s Jerry Yang being pushed out. His firm is an internet company. CEOs in the heart of the tech industry may begin losing their jobs in greater number as the recession takes hold and boards seek new management that can contain costs and hold investors.
Symantec (NASDAQ: SYMC)'s CEO stepped down yesterday. He said the move had been planned. Maybe. Maybe not.
According toThe Wall Street Journal, "Symantec Corp. said Chief Executive John W. Thompson will retire at the end of the company's fiscal year in April."
Not mentioned in the announcement was the fact that the company's stock is off 45% in the last three months. SYMC's direct competitor McAfee (NYSE: MFE) is only down 25%, about the same as the DJIA. Symantec recently announced net profits lower than those in the two immediately previous quarters.
The sacking of execs may be moving from finance to tech.
Douglas A. McIntyre is an editor at 247wallst.com.
General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F) and Chrysler LLC and the head of the United Auto Workers union will testify at a Senate Banking Committee hearing as they seek $25 billion in aid. While the democrats generally support their request, the Bush administration and Republican are against the proposed bailout. GM shares traded about 7.5% lower by midday.
The Home Depot Inc. (NYSE: HD) reported better-than-expected quarterly financial results Tuesday -- 45 cents per share profit vs. estimates of 38 cents per share according to Thomson Reuters. Sales, however, continued to decline -- 6.2% in the quarter -- amid ongoing weakness in the housing, construction and retail sectors and the home improvement retailer warned that sales could plunge 8% for the year. HD shares are up 2.25% in premarket trading (8:04 am). HD shares traded about 6.5% lower by midday.
Yahoo Inc. (NASDAQ: YHOO) founder and CEO Jerry Yang has finally decided to step aside as chief executive. Apparently, he's too emotionally involved to run the struggling internet portal properly. The new CEO will face the same problems Yang faced when Semel left and he was made CEO, boosting earnings and facing skeptic investors. But now the job will be that much harder in the current economic downturn. This could clear the way for Yahoo selling to Microsoft Corp. (NASDAQ: MSFT). YHOO shares are jumping nearly 12% in premarket trading (8:04 am). Shares of MSFT are up 1.2% in premarket trading as well (8:08 am). YHOO shares gained nearly 13% by midday.
[Added 8:32: Hewlett-Packard Co. (NYSE: HPQ) shares are soaring 12.75% in premarket trading (8:17 am) after the company said it expects fiscal fourth-quarter results above Wall Street's expectations due to its global reach, diverse customer base and cost-cutting measures, and despite the bad economy.] HPQ shares gained 12.75% by midday.
This post was written by Minyanville contributor Adam Katz.
Regarding Symantec Corporation (NASDAQ: SYMC) earnings, the company is having a tough time in this environment for several reasons. First, its consumer business saw a massive slowdown starting in September. Digital River, Inc. (NASDAQ: DRIV) reported earnings a day before SYMC and tipped the hand of SYMC's consumer business stating that its core business grew 27% sans SYMC, yet the business overall grew at 17% YoY.
Secondly, currency helped SYMC over the past two years and the strength in the dollar has created a stiff headwind.
Third, the company is losing market share in the enterprise to McAfee, Inc. (NYSE: MFE) which, due to more efficient R&D as well as smart acquisitions, can now outstack SYMC.
So what to do here? The stock is cheap, and given the amount of recurring revenue that it has, along with the number of pure play software companies that have technology SYMC needs, the company will likely assemble a competitive response. Then it becomes a function of management execution. Ultimately, I think MFE presents the better risk reward for growth investors, while SYMC is more appropriate for a value investor looking to buy discounted cashflow.
Despite a negative GDP report coming in at -0.3% to begin that start of the recession, stocks actually spent most of the day in the black. The Treasury has finally started paying TARP funds out to large banks, and the second tier banks are next in line. Oil is contained, and an old and haggard looking T. Boone Pickens gave an interview this morning saying he was out of oil but thinks oil will go back to $100.00 next year.
Here are today's closing bell levels: DJIA: 9,180.69 (+2.11%) NASDAQ: 1,698.52 (+2.49) S&P 500: 954.09 (+2.58)
Biogen Idec Inc. (NASDAQ: BIIB) shares were down over 5% at $39.68 right before the close, but that is better than the -1% at one point after yesterday's close. The biotech giant disclosed a US-case of PML that was detected early via MRI in one of its TYSABRI patients.
Merrill upgraded Kraft Foods (NYSE: KFT) to Buy from Neutral citing progress in the company's turnaround plan, execution, and 2009 earnings growth.
Thomas Weisel raised Express Scripts (NASDAQ: ESRX) to Overweight from Market Weight and believes the company's core business remains strong and that valuation is attractive.
Friedman Billings upgraded shares of Symantec (NASDAQ: SYMC) to Outperform from Market Perform on valuation after checks indicated the company should meet Q2 expectations.
NeuStar (NSR) was upgraded to Outperform from Neutral at Baird.
Friedman Billings downgraded shares of Zions Bancorp (NASDAQ: ZION) to Market Perform from Outperform and lowered its target to $33 from $43 following the company's Q3 results, as they believe near-term credit trends and concerns surrounding its securities portfolio will limit upside. Shares were also downgraded at JP Morgan to Neutral from Overweight due to deteriorating credit trends.
Banc of America cut Monster (NASDAQ: MNST) to Neutral from Buy to reflect a lack of margin stability and their belief consensus estimates remain too high.
Barclays downgraded Avis Budget Group (NYSE: CAR) to Equal Weight from Overweight citing the global economic slowdown and refinancing risk.
Luxottica was also downgraded at HSBC to Neutral from Overweight.
JP Morgan cut AuthenTec (NASDAQ: AUTH) to Underweight from Neutral.
Analyst initiations:
Janney Montgomery believes Gladstone Capital's (NASDAQ: GLAD) management team and lower portfolio investment risk profile warrant a premium valuation. The firm started shares with a Buy rating and $13 target.
CommVault (NASDAQ: CVLT) was initiated with a Buy rating and $14 target at Cantor, as the firm finds the stock attractively valued given its secular growth rate potential.
KeyBanc is positive on Papa John's (NASDAQ: PZZA) management team, growth potential, cost initiatives, and differentiation. Shares were assumed with a Buy rating and $30 target.
Arris (NASDAQ: ARRS) was initiated at Jefferies with a Hold rating and $7 target.
Rigel Pharmaceuticals (NASDAQ: RIGL) was initiated at Banc of America with a Neutral rating and $21 target.
Morgan Stanley started Hansen Natural (NASDAQ: HANS) with an Equal Weight rating.
Jefferies upgraded shares of Safeway (NYSE: SWY) to Hold from Underperform on valuation as they believe the company's pricing pressure and sluggish sales trends are now priced in. The firm raised its target to $23.50 from $21.
Merrill upgraded Pfizer (NYSE: PFE) to Buy from Underperform citing attractive dividend yield and stabilizing businesses.
Banc of America upgraded shares of Apollo Group (NASDAQ: APOL) to Neutral from Sell and raised APOL's target to $60 from $48 on valuation as they see a balanced risk/reward at current levels.
Nucor (NYSE: NUE) was raised to Overweight from Equal Weight at Morgan Stanley.
TheStreet.com's Jim Cramer says false correlations can lead you to despair -- you need to see through them.
At moments like this, you have to figure out what will be affected and what won't be, and you need to recognize that the interrelation of all stocks to these events is a false one.
There is no doubt that anything mortgage is troubled. So even though I like Wells Fargo (NYSE: WFC) (Cramer's Take) a great deal, it is unlikely that WFC can stay anywhere near up here now that Lehman (NYSE: LEH) (Cramer's Take) collapsed. I don't want to hazard a guess, because it would be a guess, about where that stock can trade. Obviously it is a buy at some price, but that's a difficult issue.
Stocks like Schwab (NASDAQ: SCHW) (Cramer's Take) and Capital One (NYSE: COF) (Cramer's Take) are difficult to figure out, too. Schwab has nothing to do with this mess, but maybe trading will slow. People might look at the numbers Capital One put out about defaults, and while they seem pretty darned good, does anyone care? That stock had been on a rampage; probably stops today.
But how about the stocks on the Nasdaq? The Nazz futures are indicating down huge. Does that make sense? Just because it is happening, does that make sense? Symantec (NASDAQ: SYMC) (Cramer's Take), positive article this weekend -- a buy? If the futures take it down, yes. Amgen (NASDAQ: AMGN) (Cramer's Take) with new data coming up? Yes. Celgene (NASDAQ: CELG) (Cramer's Take), which wouldn't come down last week? Yes.
Goldman upgraded shares of Novartis (NYSE: NVS) to Buy from Neutral as they believe the Alcon (NYSE: ACL) acquisition has diversified the company's business.
Tyson Foods (NYSE: TSN) was upgraded to Equal Weight from Underweight on valuation.
JP Morgan raised Albermarle (NYSE: ALB) to Overweight from Neutral.
BMO Capital upgraded Wynn Resorts (NASDAQ: WYNN) to Outperform from Market Perform.
Morgan Stanley downgraded Reynolds American (NYSE: RAI) to Underweight from Equal Weight based on the impact from Altria's (NYSE: MO) purchase of competitor UST (NYSE: UST), which may result in pricing pressure.
Goldman downgraded AstraZeneca (NYSE: AZN) to Sell from Neutral as they believe shares do not support near-term fundamentals.
Max Capital (NASDAQ: MXGL) was downgraded to neutral from Buy at Banc of America.
AudioCodes (NASDAQ: AUDC) was lowered at Merrill to Neutral from Buy.
MOST NOTEWORTHY: Symantec, Cardinal Financial and BP Plc were today's noteworthy upgrades:
ThinkPanmure upgraded Symantec (NASDAQ:SYMC) to Buy from Accumulate based on improved execution, stable growth in core business, and ramping competitive position in some high-growth businesses.
Baird upgraded Cardinal Financial (NASDAQ:CFNL) to Outperform from Neutral based on valuation, the company's favorable credit risk profile in Northern Virginia, and its excess capital position.
Societe Generale raised BP Plc (NYSE: BP) to Hold from Sell as it believes the bad news is priced into shares and earnings could be better than expected.
OTHER UPGRADES:
Alcatel-Lucent (NYSE:ALU) was upgraded at Merrill Lynch to Neutral from Underperform.
Jefferies lifted Hunsman (NYSE: HUN) to Hold from Underperform.
MOST NOTEWORTHY: International Rectifier, Wolseley and ProLogis were today's noteworthy downgrades:
Citigroup downgraded shares of International Rectifier (NYSE: IRF) to Sell from Hold after checks in Asia indicated LCD TV display weakness outside Sony/Samsung and signs of slowing China consumer demand.
Morgan Stanley downgraded shares of Wolseley (OTC: WOSLY) to Underweight from Equal Weight to reflect a more negative outlook for the company's Nordic business and U.S. housing starts.
Banc of America cut ProLogis (NYSE: PLD) to Neutral from Buy on long-term growth concerns given the economic slowdown.
EMC (NYSE:EMC) Cut To Market Perform from Outperform at Bernstein, according to24/7 Wall St. The financial website also reports that Netflix (NASDAQ:NFLX) Raised to Overweight at Lehman.
Thomas Weisel initiates Walgreen (NYSE:WAG) as "overweight" according to Briefing.com. Friedman Billings has taken Symantec (NASDAQ:SYMC) off its "best picks" list.
Symantec Corporation (NASDAQ: SYMC) provides software and services that address risks to computer security, information availability, policy compliance and system performance. Its programs protect against viruses, establish firewalls, filter content, detect intrusions, manage remote access and provide virtual private networking. The firm also offers security assessment, consulting and outsourced security management. Symantec has operations in more 40 countries. McAfee (NYSE: MFE) and Microsoft (NASDAQ: MSFT) are major competitors.
The company pleased investors last week, when it reported fiscal Q4 EPS of 36 cents and revenues of $1.55 billion. Analysts had been expecting 34 cents and $1.53 billion. Management also guided Q1 EPS to 34-36 cents (31 cent consensus) and Q1 revenues to $1.555-$1.595 billion ($1.5B consensus).
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