Google just released their 3rd quarter earnings today, after the bell. Their third quarter profit increased (now get this) sevenfoldto $381 million, or $1.32 a share. Excluding one-time charges, Google earned $437 million, or $1.51 a share. Analysts were looking for eps of $1.37. I'd say they beat that estimate. Sales for the third quarter grew to $1.578 billion, which is the first time their sales has exceeded the billion dollar mark.
Analysts are already applauding Google, with Goldman Sachs' Anthony Noto noting, "Based on these results, estimates for 2006 will likely lead to an implied value that is slightly above the aggressive scenario we provided of $398 [a share]." Before earnings were released, Google ended today's trading down $5.40 to $303.30. By the time after hours trading ended, shares hit a new 52-week high of $335.75.
If Goldman Sachs is right, it's current price is still a discount to it's implied value.
Earlier this week, Imperial Sugar (IPSU) announced a special dividend of $2.50 a share. At the time of announcement, IPSU was trading at $13.40. The special dividend yielded around 18%. That's a pretty good deal. Other people thought so, and in the past two days, IPSU has risen +$2.08 to trade around $15.50 now. Although this current runup may discourage people, the price now still reflects a 16% yield for the dividend. I think it's still worth the risk..
To be on record as a shareholder, purchase before November 1st, to receive payment around November 11th.
Have you ever noticed how video games nowadays are becoming more and more like interactive movie plots? Watching friends play certain games is practically like watching a movie. Then I guess it's not so surprising that video game giant, Electronic Arts (ticker: ERTS), hired Steven Spielberg to aid in their video game story telling for three all-new original games. (As many may not know, Spielberg sold his video gaming unit of Dreamworks to EA around five years ago.)
I hope this union brings about good results. I'm sure most people aren't as skeptical as I am. It's only because the past few Spielberg movies I can think of (off the top of my head) are War of the Worlds, Minority Report, and AI, and very sadly I barely enjoyed those. But EA knows what it's doing. And the rest of the world may enjoy Spielberg movies a hair more than me. Shareholders are apparently happy, sending the shares up almost 3% in before the bell trading.
If hiring Spielberg to collaborate on your video games isn't the ultimate sign that gaming is moving more towards cinematic appeal, I don't know what is. But I do know that it's probably not a good idea to bet against EA. Their decisions usually are pretty solid, even if a small shareholder like myself doesn't totally approve.
(ARO) used to be one of my favorite stocks in my portfolio. It was one of those that you consistently ignore, but always managed to stay positive. Until now. ARO hit a new 52-week low yet again (it was at a 52-week low just on Friday too), stemming from yet another downgrade. Prudential downgraded ARO's shares this morning, saying "[ARO] has too much inventory, is over-assorted and is coming off of historically high operating margins".
Compared to last year, Aeropostale is a completely different company. Last year, it consistently beat estimates and had higher and higher same-store sales percentages. This year, same store sales are on the decline - massively. On one hand, I understand certain pressures Aeropostale might be feeling to perform well. But on the other hand, (as a shopper of Aeropostale too) I want to scream "If your clothes aren't selling, CHANGE THE DESIGNS!"
It must be hard being a teen retailer. They have to cater to a generation of people whose styles change faster than a speeding bullet. Sure, it can be hard. Their stale designs (in my opinion) of the season can be seen from the horrific 81.5% increase in inventory from April to July. But if the fickle teen mind is to be blamed for Aeropostale's stale sales, than why aren't more teen retailers suffering like Aeropostale is suffering?
While Aeropostale reported September same store sales down 4.2%, their competitor American Eagle Outfitters (AEOS) saw same store sales increase 13%. When comparing both companies, their P/E's are relatively the same - ARO is 13.80 and AEOS is 13.90. Although American Eagle is relatively a hair more expensive, I think it can offer more right now. Not only does AEOS pay some dividends, but their board just completed a 3.5 million share buyback and already authorized to buyback another 2.5 million shares.
I complain about Aeropostale a lot, but that's because I expect a lot out of my companies. And for now, I'm not giving up on it. While it may not be time for me to sell my shares, it might be a good opportunity to start looking at the current enemy...
I realize that out of any companies I write about, I probably complain about Sony the most. And by now, it may seem like I go out of my way to pick on Sony. But in reality, they're just doing stupid things that I just have to comment on.
I'm referring to Sony's advertising campaign to celebrate PlayStation's 10th anniversary. Sony launched a series of ads that featured a young man, wearing a crown of thorns (with the thorns made up of the symbols on a PlayStation's control) and the motto, "Ten years of passion." Aside from immediately pulling the ad after adverse reactions, Sony Italy released a statement saying that the "spirit of the message was misunderstood." I guess my two major question is: (1) How was the spirit of the message supposed to be understood? (2) How do you make an advertising campaign based on the premise of religion, and not expect anyone to be offended? A lesson Sony execs could've learned is: People fight wars over religion. It is a serious topic that shouldn't be thrown around without consideration. The Fool's Rich Smith speculated that Sony could've offended up to 2.1 billion potential customers with this ad campaign - potential customers that could very easily turn their gaming preferences over to Microsoft's Xbox 360 for their next generation gaming needs. With Sony already in somewhat of a decline, they really cannot afford to offend anyone else.
I cannot even begin to fathom Sony's thought process in this whole situation. Like they've already forgotten about Urban Outfitter's infamous "Jesus Dress Up" magnet and all the controversy that started. Or it's own blunder months ago regarding their use of fake critics to sell movies. Or the fact that their LCD TV sales are on a mass decline. Irregardless, someone at Sony needs to massively turn around and clean up their public image.
