Garmin Ltd. (GRMN) topped analysts' fourth-quarter earnings expectations this morning, but the GPS guru opened with a thud after warning that it expects both gross and operating margins to decline in fiscal 2010. "The margin declines will be primarily driven by an ongoing price decline of approximately 10 percent in the [personal navigation device] industry and increasing R&D investment across our segments," said the company in a statement.

Aside from that cautious note, Garmin's fourth-quarter results and forward-looking guidance were actually much more robust than Wall Street expected. The firm swung to a quarterly profit of $1.43 per share, excluding items, compared to analysts' consensus forecast of 95 cents per share. Gross margin ticked four percentage points higher to 46%, while revenue arrived at $1.06 billion.

Continue reading Garmin Gaps Lower on Margin Warning

Garmin Gaps Lower on Margin Warning originally appeared on BloggingStocks on Wed, 24 Feb 2010 10:30:00 EST. Please see our terms for use of feeds.

Delta Air Lines (NYSE: DAL) was on the upswing Monday after the firm raised its forecast for third-quarter margins. The airline issue now expects operating margin of 3% to 4% for the current quarter, compared to its midsummer outlook of 1% to 3%. Third-quarter fuel prices are now expected to average $2.14 per gallon, down from a prior prediction of $2.17.

The update comes courtesy of a regulatory filing, wherein Delta noted that many of its financial metrics are improving on both a sequential and a year-over-year basis. Load factor for September and October is pegged at 82%, narrowly above last year's level. Meanwhile, revenue per available seat mile is expected to decline in the third quarter, but less so than in the second quarter.

Continue reading Delta Air Lines call volume rises after 3Q update

Delta Air Lines call volume rises after 3Q update originally appeared on BloggingStocks on Mon, 14 Sep 2009 11:40:00 EST. Please see our terms for use of feeds.

Continue reading Did leverage play a role in oil's recent bubble?

Did leverage play a role in oil's recent bubble? originally appeared on BloggingStocks on Mon, 10 Nov 2008 14:17:00 EST. Please see our terms for use of feeds.

Barron's takes a look at what could be a bad omen for the future of the stock market (subscription required), at least in the short-term: "Even after a recent drop, margin debt remains within spitting distance of the all-time high it hit in July, and 43% higher than it was a year ago. At a current level of 2.4% of the market's adjusted market cap, margin debt is 3.4 times its 62-year average.

Why worry? For starters, high margin debt could result in widespread margin calls in the wake of rapid market decline, leading to a domino effect prolonging the market decline. For evidence of this phenomenon, please see The Great Crash of 1929.

But high margin levels are also a very bearish contrarian indicator. They show that many investors are maxed out -- even if they wanted to, they simply couldn't buy more stock -- they're already borrowing at near-record levels to do just that! New money is often a prerequisite for a bull market, and already-high margin levels could make it hard for new money to come in. The bullishness of the investment community is a very bearish indicator for contrarian analysts.

Is margin debt setting up the market for a fall? originally appeared on BloggingStocks on Sun, 21 Oct 2007 17:10:00 EST. Please see our terms for use of feeds.