Company Earnings September 2008

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SMF Blogs > Company Earnings > September 2008

C Citigroup Conference Call on WB

Sees $3 bln pretax charge on FDIC loss protection pact... says had other opportunities prior to this that they passed on because they were not compelling; 'this deal is compelling'... believes operating risk is a minimum... says capital ratios will remain strong... combined assets will be approx $2.9 trillion... 6% dividend will be paid on preferred stock issued to FDIC.

Citigroup sees about $100 bln of WB assets to be saleable, adds depth to U.S. franchise; will have a deposit share of 9.8%... will expense FDIC over next three years; says will be more than 10% accretive in 2009 and expect deal to be even more accretive going forward... says losses are capped.C says insurance buying up front cuts off the tail risk... Year 1- approx 1.3 bln in pre-tax expense synergies offset by rev dis-synergy... $3 bln pre-tax charge related to loss protection with FDIC.

Citigroup Year 2-4- fully loaded pre-tax impact of annual expense synergies of ~$2.8-3.2 bln, offset by revenue dis-synergies of $1.5-1.7 bln; restructuring charge of $600 mln; ~$3.0 bln pre tax annual charge related to loss protection; 6% div on $12 bln face value of preferred stock and accretion of discount on the pre stock... Pro Forma Balance Sheet- GAAP Assets $2.9 trl, risk-weighted assets $1.4 trl, Tier 1 Cap ~$130 bln, Total Capital ~$170 bln; Ratios- Tier 1 8.8%, TCE/RWMA 7.0%, Leverage Ratio 5.2%, Total Cap Ratio 11.8%... sees a significant improvement of structural liquidity; ~71% of total assets on a pro forma basis.Book Value after purchase accounting is approx ($1 bln)... $448 bln WB deposits compliment existing $804 bln Citi deposits... plan to fold retail bank into the Wachovia platform.

Citigroup trying to get operating leverage by 'getting fit' and repositioning services... asset reduction plan 'continues in full force'... believes this will be a high return transaction... releasing Q3 results on 10/16; notes that this quarter so historical Q3 slowdown; combined with market activity had a substantial slowdown; expect subprime marks of $1.5 bln; saw widening on credit of SIVs despite quality remains strong, expects SIV markdowns of $1.7 bln; expect markdown loss in card to be $2 bln.

Total credit cost will be $9-10 bln in Q3 compared to $7 bln in Q2, mostly due to loan loss preserves; expect unemployment and housing deterioration to impact card business into 2009; seeing progress on headcount in credit card buisness... Preferred to a discount to par?: still finalizing warrants and preferred, discount to par is due to the coupon; says that is just the way the conversion came around.

Citigroup aggregate of just over $100 bln in debt being assumed... says very impressed with WB's technology... Not taking the WB preferred... says no strategic need to be in the asset mgmt business... Tier 1 ratio at end of Q4 is 'expected to be very strong'; have a deposit base that is 'truly unassailable'; will be the strongest in the country.

The Trust Preferred are coming along in the deal... $312 bln of protected loss is a piece of what they are bringing over; took over $800 bln but after going through on a line by line item basis felt that the $312 bln was the amount that they 'needed help on'... call has ended.

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Posted: 9/29/2008 11:53:24 AM by Global Administrator | with 0 comments

BBBY Bed Bath & Beyond reports EPS in-line, revs in-line (30.71 +0.31)

Reports Q2 (Aug) earnings of $0.46 per share, in-line with the First Call consensus of $0.46; revenues rose 4.9% year/year to $1.85 bln vs the $1.86 bln consensus.

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Posted: 9/24/2008 4:52:39 PM by Global Administrator | with 0 comments

NKE Nike beats by $0.11, beats on revs; worldwide futures orders up 10% from same period last year (59.27 -1.56)

Reports Q1 (Aug) earnings of $1.03 per share, $0.11 better than the First Call consensus of $0.92. NKE reported worldwide futures orders scheduled for delivery from Sept 2008 through Jan 2009, totaling $6.8 bln, up 10% from same period last year.

Changes in currency exchange rates increased reported orders growth by 1 percentage point. By region, futures orders for the U.S. were up 3%; Europe ( includes the Middle East and Africa) increased 4%; and Asia Pacific and the Americas each grew 27%.

"Nike's first-quarter results reflect the strength of our brands and our global business," said NIKE, Inc. President and CEO Mark Parker. "Our relentless focus on product innovation and premium consumer experiences generated balanced growth across every region and market share gains in key categories."

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Posted: 9/24/2008 4:48:46 PM by Global Administrator | with 0 comments

NKE Nike: Earnings Preview

After the markets close NKE is expected to report 1Q09 results at ~ 16:15 ET with a conference call following at 17:00 ET. Heading into these results, analysts expect 1Q09 EPS of $0.92 with revenues of $5.19 bln. For FY09, analysts expect EPS of $3.90 with revs of $20.29 bln.

Last quarter NKE beat Street expectations by $0.02. Revs for the quarter rose 16.1% YoY. Co also reported worldwide future orders for footwear and apparel from June 2008 -- November 2008 totaled $8.8 bln, 11% higher than reported a year ago. Co did note that changes in currency exchange increased reported orders growth by 3%. Last quarter the company guided while on the call, noting they expect to see full year revenues to be high single digits with modest improvement in gross margins.

Co noted that 1/3 of their revs came from the U.S. and that both China and the Americas surpassed $1 bln in revenue. Future orders in the U.S. were flat while Europe, Asia/Pacific, and the Americas saw a 10%, 31% and 30% increase respectively ... Historically, NKE has not missed Street expectations for the past eight quarters.

NKE has beaten Street expectations the past four quarters by an average of $0.0575. In addition, revenue growth for the past four quarters has been +10% on a YoY basis (Q4 +16.1%, Q3 +15.4%, Q2 +13.5%, Q1 +12.1%)... Recent Stock Action: Following last quarters results (June 25, 2008), NKE shares gapped down ~8%. The next day (June 26, 2008) shares were down 2.2%. Over that two day span, NKE shares were down ~10%.

The prior quarter (3/19/2008), shares gapped down ~5%, but finished the day (3/20/2008) up 8.8%. Over that span, shares were up ~9%. Back on January 22, 2008, NKE hit 52 week lows at $51.50. Recently, shares showed considerable strength (September 18-19), gaining ~13.5% over that two day span. Nevertheless, shares have given up those gains heading into tonight's results.

Secondary Plays: DECK, CROX, BOOT, SKX.. (length of horizontal line correlates with strength of support and resistance level ).

Posted: 9/24/2008 3:54:01 PM by Global Administrator | with 0 comments

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