4Q Profit, Outlook Drive CVS Shares Shares of CVS Caremark Corp. jumped Thursday after the nation's largest pharmacy chain said its fourth-quarter profit more than doubled.
Woonsocket, R.I.-based CVS Corp. bought Caremark Rx last March for $26.5 billion. Wall Street is keeping a watch on the combined company's financial performance, with analysts considering it a test model for future combinations. The mix of a retail pharmacy with a pharmacy benefit manager has not been duplicated, though retailers including Wal-Mart Stores Inc. (nyse: WMT - news - people ) have expressed interest in moving into the sector.
"In the fourth quarter, core CVS performed decently while Caremark did exceptionally well," said Goldman Sachs (nyse: GS - news - people ) analyst John Heinbockel, in a note to investors, specifically citing sales and profit gains for Caremark. http://www.forbes.com/feeds/ap/2008/01/31/ap4601381.html
Google's Earnings Below Consensus; Google Unfazed What happens when the Internet's cash cow stops giving milk? If investors weren't already spooked about this country's macroeconomic woes creeping into the tech economy, they might be now.
The after-hours sell-off has begun, as Google released fourth-quarter earnings that fell below analysts' expectations despite exhibiting substantial growth and a hopeful outlook for the future.
"We're optimistic about 2008," Google Chairman and CEO Eric Schmidt told analysts on a conference call following the earnings release. "We have growing revenue streams across a broad range of verticals and markets."
Google reported fourth quarter net income of $1.21 billion, or $3.79 per diluted share, up from $1.03 billion, or $3.29 per diluted share, in the same quarter last year. Excluding special items, earnings per share amounted to $4.43, falling below analysts' estimates of $4.47 per share.
Total Q4 revenues were $4.83 billion, a 51 percent increase over the same period the previous year, and up 14 percent from the third quarter of 2007.
Shares rose $16.03 (2.92 percent) to close at $564.30, but fell more than 7 percent in after-hours trading as investors looked askance at the disappointing earnings and the slowing growth in paid ad clicks.
Predictably, the key revenue drivers were Google's core operations of search and advertising, with a growing contribution from the Web-based software applications Google knows simply as "apps."
These were the three areas that Chief Financial Officer George Reyes identified as Google's main businesses, for both last quarter and the future, but it was in one of these areas that Google had to report one of its most disappointing metrics.
The number of aggregate paid clicks, which includes clicks on ads on Google's sites and the sites of its AdSense affiliates, increased nine percent over the third quarter, disappointing many analysts.
The executives on the call offered two explanations. The third quarter was aberrantly successful on that front, they said, suggesting that a sequential comparison makes Google a victim of its own success.
The second answer to the mild disappointment of the AdSense clickthroughs could well become an opportunity.
"Social networking inventory is not monetizing as well as we had expected," Reyes said.
Sergey Brin, one of Google's founders and its current president of technology, echoed Reyes' admission.
"We have had a challenge in Q4 with social networking challenges as a whole," he said, repeating the operative word. "It didn't pan out as well as we had hoped."
The executives would not answer specific questions about Google's $900 million ad deal with MySpace, noting that the AdSense program serves advertisements to many social networks, and that Google, just like everyone else, is still tinkering with the monetization strategy for the social sites.
In a momentary digression from the murky financials of the social Web, Brin touted the November launch of the OpenSocial common developer standard, which he said has been adopted by at least 20 social networks.
Schmidt was also buoyantly optimistic about Google's international expansion and the emerging opportunities of the mobile market.
"More than half of our search traffic is outside the United States," Schmidt said, but that's just the beginning. "The international market is still nascent."
A significant portion of Google's new employees are being hired abroad, as it continues to open in new markets and expand operations in existing ones. YouTube is available in 17 languages, Brin noted.
On the mobile front, Schmidt's enthusiasm was unbridled. Though he wouldn't offer any short-term growth projections, he said that down the road – 10 or 20 years from now – people would conduct more searches on mobile devices than on PCs. He heralded Apple's iPhone as the "first of its generation," referring to mobile devices that offer a Web experience of comparable quality to a computer.
"We hope that this is going to make mobile [Internet] as frictionless as it is on your desktop," Brin echoed, taking the opportunity to "give a shout-out to Android." Brin also touted the transformative potential of the Open Handset Alliance, which Google launched last year to encourage interoperability of applications on mobile devices.
The executives declined to answer any questions about the ongoing wireless spectrum auction.
In response to a question regarding the pending acquisition of DoubleClick, currently under review by the European Commission, Reyes simply said that Google was working with regulators to address their concerns. "We're certainly hopeful that it will get cleared," he said.
In response to the question that is inevitably asked at least once on every earnings call this season – the one about the imminent, sustained economic downturn – Senior Vice President Jonathan Rosenberg was pointed, explaining that he did "not necessarily agree with the thesis" of the question.
ImmunoGen Posts Wider Loss In Q2 On Lower Revenues And Higher Costs; Revises FY08 Prediction [IMGN]
1/31/2008 7:30:40 PM Thursday after the bell, ImmunoGen, Inc. (IMGN), a developer of antibody-based anticancer therapeutics, said that its net loss for the second quarter of fiscal 2008 widened on lower revenues and higher operating expenses. The company also updated its outlook for the fiscal year 2008.
ImmunoGen's net loss for the second quarter widened to $6.2 million or $0.15 per share from $3.0 million or $0.07 per share in the same quarter of the previous year. On average, five analysts polled by First Call/Thomson Financial projected a loss of $0.15 per share.
The company's loss from operations for the second quarter was $6.9 million, wider than $3.9 million in the same quarter of the earlier year.
ImmunoGen reported that its second quarter total revenues of $9.8 million were lower than $12.1 million in the same quarter of the prior year. Four analysts, on average, anticipated the company to report revenues of $8.49 million.
Total operating expenses for the second quarter increased to $16.7 million from $15.9 million in the same quarter of last year.
Of the total expenses, research and development expenses were $10.7 million, down from $11.8 million in the year-ago quarter. General and administrative expenses rose to $3.5 million from $2.6 million in the previous year quarter.
For the six-month period, ImmunoGen's net loss of $7.2 million or $0.17 per share was narrower than $9.3 million or $0.22 per share in the corresponding period of the previous year.
The company's total revenues for the year-to-date period improved to $21.2 million from $19.8 million in the equivalent period of the earlier year.
Looking ahead, ImmunoGen now targets fiscal year 2008 net loss to be $28-$31 million, compared to its prior outlook of $30-$33 million. Five analysts, on average, estimate the company to report a loss of $0.59 per share.
The company now expects cash used in operations to be between $14-$17 million, compared with previous guidance of $30-$33 million. The company expects capital expenditures to be between $20-$21 million, compared with previous guidance of $8-$9 million for its 2008 fiscal year.
IMGN closed Thursday's regular trading session at $3.48, down 9 cents or 2.52%.
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Elizabeth Arden Q2 Profit Up On Strong International Sales [RDEN]
1/31/2008 7:30:29 PM Elizabeth Arden, Inc. (RDEN), a beauty product company based in Miramar, Florida, on Thursday reported increase in second quarter earnings, on 20% rise in international sales. The company issued third quarter outlook and confirmed fiscal 2008 forecast.
Net income for the second quarter rose to $33.8 million or $1.15 per share from $25.9 million or $0.91 per share. On average, seven analysts polled by First Call/Thomson Financial expected earnings of $1.15 per share.
Net sales increased 2.8% to $422.4 million from $410.8 million in the same period last year. The company attributed the rise to increase in sales in international markets across all brand categories and the global launch of the M by Mariah Carey fragrance. Wall Street expected revenues of $434.50 million.
For the first six months, net income, excluding restructuring charges, was $34.9 million or $1.18 per share, up from $25.8 million or $0.91 per share for the year-ago period. On a reported basis, net income was $34.1 million or $1.16 per share, an increase from $24.5 million or $0.86 per share for the prior year period. Net sales rose 4.3% to $694.2 million from $665.6 million.
According to Scott Beattie, Chairman, President and Chief Executive Officer of Elizabeth Arden, ``The strength of our international business and our focus on operating efficiencies enabled us to achieve our earnings and operating margin targets this quarter despite a difficult holiday season in North America.” For the third quarter, the company expects earnings per share to be in the range of $0.04 - $0.08. Analysts expect earnings of $0.19 per share. Net sales are expected to increase in the low single digits, as compared to the prior year quarter
For fiscal 2008, the company confirmed its earnings per share guidance of $1.65 - $1.75. Analysts expect earnings of $1.69 per share. The company expects net sales for the full year to increase by 3% - 4%.
Taiwan's TSMC Q4 earnings/sales up on better than expected demand Taiwan Semiconductor Manufacturing Co Ltd (2330.TW) said consolidated net profit in the fourth quarter of 2007 rose 13.5 pct from the third quarter and sales grew 5.5 pct thanks to stronger-than-expected demand across all major product segments, including communication, computer and consumer.
The world's leading wafer foundry said consolidated net profit rose to 34.49 bln twd in the fourth quarter from 30.37 bln the quarter before as sales increased to 93.86 bln twd from 88.96 bln.
For full-year 2007, consolidated net profit fell to 109.18 bln twd from 127.01 bln in 2006 as gross margin shrank to 44.1 pct from 49.1 pct. Sales rose to 322.63 bln from 317.41 bln.
The company delivered 8.01 mln wafers in 2007 against 7.22 mln in 2006.
Fourth quarter shipments increased to 2.36 mln eight-inch-equivalent wafers from 2.23 mln in the third quarter.
Gross margin for the fourth quarter was 47.8 pct, up 2 percentage points from the previous quarter.
The improvement reflected a higher level of capacity utilization and continued cost cutting, though these efforts were partly offset by US dollar depreciation, chief financial officer Lora Ho told a quarterly briefing for investors.
It said the full-year goss margin declined 5 percentage points from the 2006 level, mostly due to lower overall utilization and price declines.
The chipmaker expects consolidated sales of 87-89 bln twd for the first quarter to March, compared with 93.86 bln twd in the fourth quarter of 2007, Ho said.
Gross margin is seen falling to 42-44 pct in the current quarter from 47.8 pct in the fourth, while the operating margin is likely to decline to 32-34 pct from 39.2.
Ho said both projections take account of the possible impact of new accounting rules that require bonus payments to employees to be expensed.
Employee bonuses are expected to shrink gross margin by 2.5 percentage points and erode operating margin by 4.7 points in the first quarter.
For 2008 as a whole, bonuses are likely to erode gross margin by 2.4-2.6 percentage points and reduce operating margin by 4.6-4.8 points.
TSMC said it sees capital expenditure of 1.8 bln usd this year, without specifying whether that is for the consolidated or parent level.
Its consolidated capex was 2.56 bln usd in 2007, while parent-level capex was 2.48 bln usd.
Chief executive Rick Tsai said the semiconductor industry should grow by "mid-single digits" in 2008 and the foundry sector is likely to outperform.
"TSMC will grow well," he added. "We have confidence that this foundry model will go on working for many years."
He said the main drivers of sales in the current quarter are the handset and personal computer segments. The consumer segment may be weaker because of the usual seasonal factors, he added.
In today's trade, TSMC shares closed up 1.70 twd or 2.94 pct at 59.50.
Bristol-Myers Squibb misses 4Q Wall St. view by penny; lowers FY08 view Bristol-Myers Squibb Co. Thursday reported a fourth-quarter loss of $89 million, or 5 cents a share, narrower than a year-ago equivalent loss of $134 million, or 7 cents a share.
On a continuing operations basis, the company lost $133 million, or 7 cents a share, in the latest quarter. Excluding a number of items, such as restructuring charges and an impairment related to auction rate securities, the company posted earnings from continuing operations of $654 million, or 33 cents a share in the latest quarter.
Net sales rose in the three months ended Dec. 31 to $5.38 billion from $4.06 billion in the same period a year earlier.
The mean estimate of analysts polled by Thomson Financial was for a profit of 34 cents a share in the December period on revenue of $5.24 billion.
For 2008, the drug giant lowered its adjusted earnings view to $1.60 to $1.70 a share from a prior projection for a profit of $1.65 to $1.75 a share.
Wall Street's current consensus estimate is for earnings of $1.71 a share in the period.
CA Q3 Earnings Jump, Top Estimate; Boosts FY08 Outlook CA, Inc. (CA), formerly Computer Associates International, Inc., said Thursday after the markets closed that third quarter earnings more than tripled from last year, helped by higher revenue, better expense control as well as lower amortization and restructuring costs. The company's quarterly earnings per share, excluding items, breezed past Wall Street expectations. The company also raised its revenue and earnings forecast for the fiscal year 2008.
The Islandia, New York-based management software company reported GAAP net income for the third quarter of $163 million or $0.31 per share, compared to $50 million or $0.09 per share for the year-ago quarter.
GAAP income from continuing operations for the third quarter was $163 million or $0.31 per share, compared to $52 million or $0.10 per share in the prior year quarter.
Excluding purchased software and intangibles, amortization, restructuring and other costs, non-GAAP income from continuing operations for the third quarter was $192 million or $0.36 per share, compared to $133 million or $0.24 per share a year earlier.
On average, 13 analysts polled by First Call / Thomson Financial expected the company to earn $0.25 per share for the third quarter.
GAAP operating margin for the third quarter was 23%, compared to 9% in the prior year quarter. Non-GAAP operating margin for the third quarter was 27%, compared to 21% in the year-ago quarter.
Total expenses, before interest and income taxes, for the third quarter fell 6% to $851 million from $907 million a year ago, reflecting a decrease in amortization of capitalized software. Non-GAAP operating expenses for the quarter increased 1% to $800 million from $791 million in the prior year period.
Total revenue for the third quarter increased 10% to $1.100 billion from $1.002 billion in the same quarter last year. Eleven analysts had consensus revenue estimate of $1.04 billion for the company's third quarter.
Total North American revenue was increased 5% in the third quarter while revenue from international operations rose 17% as compared to the third quarter of last year.
Total product and services bookings in the third quarter were $1.23 billion, down 21% from $1.55 billion in the year-ago quarter.
Cash flow from operations for the third quarter was $233 million, compared to $587 million in the third quarter of last year.
“CA has recorded another solid quarter - our fifth in a row,” said John Swainson, CA's president and chief executive officer.
For the nine months, the company reported GAAP net income of $429 million or $0.80 per share, compared to $138 million or $0.25 per share for the same period last year.
GAAP income from continuing operations for the nine-month period was $429 million or $0.80 per share, compared to $141 million or $0.25 per share in the prior year period.
Non-GAAP income from continuing operations for the nine-month period was $524 million or $0.97 per share, compared to $390 million or $0.68 per share in the comparable year-ago period.
Total revenue for the nine-month period increased 9% to %3.19 billion from $2.94 billion last year.
Additionally, the company raised its revenue and earnings guidance for the fiscal year 2008. For the fiscal year 2008, the company now expects revenue of $4.25 billion to $4.28 billion, GAAP earnings of $0.99 to $1.03 per share and non-GAAP operating earnings of $1.22 to $1.26 per share. Previously, the company expected revenue of $4.15 billion to $4.2 billion, GAAP earnings of $0.87 to $0.91 per share and non-GAAP operating earnings of $1.06 to $1.10 per share.
Analysts currently expect the company to earn $1.09 per share on revenue of $4.19 billion for the fiscal year 2008.
The company reaffirmed its full fiscal year 2008 cash flow from operations outlook of $1.05 billion to $1.1 billion.
Among others in the industry, EMC Corp. (EMC) earlier this week reported a 35.2% surge in fourth quarter profit, buoyed by double-digit percentage growth across all its major business segments.
The Hopkinton, Massachusetts-based company's GAAP net income for the fourth quarter surged to $525.73 million or $0.24 per share from $388.77 million or $0.18 per share in the year-ago quarter. Non-GAAP earnings for the quarter increased to $668.45 million or $0.30 per share from $507.68 million or $0.24 per share a year ago. Total revenue for the fourth quarter increased to $3.83 billion from $3.21 billion in the year-ago quarter.
CA shares, which are trading in the range of $21.76 to $28.46 over the last year, closed Thursday's regular trading session at $22.00, down 30 cents or 1.35% and lost an additional 10 cents in after hours trading. http://www.rttnews.com/sp/todaystop.asp?date=01/31/2008&item=73
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