Archive for January, 2008

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Reusable grocery bag Whole Foods Market (NASDAQ: WFMI) is banning plastic bags from its 270 locations. The switch to a choice between reusable bags and paper will take effect on Earth Day, April 22.

It’s certainly a bold move and demonstrates a lot of concern for the environment. It will also spruce up Whole Foods’ image as an environmentally-conscious retailer and generate a ton of free publicity for the company, starting with the New York Times story.

Whole Foods has served as a trend-setter for the bigger grocery chains, and this move could inspire stores like Kroger (NYSE: KR) and Safeway (NYSE: SWY) to make similar switches, depending on how it works out.

During its trial runs, Whole Foods found that eliminating plastic only led to a 10% increase in paper bag use, demonstrating that consumers tend to switch to the reusable bags.

That’s good for the environment, and it also cuts costs: Even Wal-Mart (NYSE: WMT) has taken notice by phasing in reusable bags as a third option. The plastic bag seems destined for obsolescence.

The 21st century may be the end of the “Plastics, young man!” era.

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While the runaway success of the Nintendo Wii showed that gamers are willing to try a very different kind of gaming system and that non-gamers were willing to try gaming in a more user-friendly format, Electronic Arts (NASDAQ: ERTS) is hoping that they’ll be equally receptive to a new way to receive and pay for their games.

The next installment in the game maker’s Battlefield series will be available for download on the internet — for free. According to the New York Times, “Rather than being sold at retail, the game is meant to generate revenue through advertising and small in-game transactions that grant players to spend a few dollars on new outfits, weapons and other virtual gear.”

Battlefield Heroes will be released this summer. It marks a big departure from the traditional method of delivery for video games. Of course, the question one everyone’s mind is, “Will it work?” Electronic Arts is betting that while most people will play the game for free, a cadre of hardcore gamers will spend money each month on new products. Meanwhile, the expanded audience will boost ad revenue.

This is the first time the company will try this delivery in the western world, and the choice of Battlefield, one of the company’s core franchises, indicates that it is serious.

Electronic Arts as a company has so far failed to capitalize on the industry’s recent strengths, but this innovative step could change that.

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E-commerce giant eBay (NASDAQ: EBAY) will be reporting its fourth-quarter numbers this Wednesday, and analysts are looking for a strong quarter from the company, but then again, the fourth quarter has typically always been strong for the company. What analysts will most likely be more interested in, even more so than fourth-quarter numbers, will be the company’s 2008 outlook.

For the fourth quarter, the company is expected to show earnings of 41 cents per share. For its fourth quarter 2006, the company only showed 31 cents per share, so if it were to report 41 cents for its most current fourth quarter, we’ll be seeing earnings growth of slightly over 32 percent year over year, but will that be enough to bring buyers into EBAY shares?

2008 should prove to be a very pivotal year from eBay, which is struggling to get its auction business back on the right track. One thing that we could see this week is eBay announcing that it will be lowering its “insertion” fees. These are fees that the company charges its users to list items, and would lift the commission that users receive for selling their goods.

eBay users have been calling for the company to lower its fees, and maybe the company is starting to listen. Higher fees are blamed as part of the reason why the company has been in such a tight battle with its main e-commerce competitor, Amazon.com (NASDAQ: AMZN), lately.

A spokesman for eBay said that the company will continue to experiment with its fee structure in order to find the sweet spot that both company and users can be content with. The company realizes that there’s a point of “friction” for its big user base and the company is working to find this point, and work within those boundaries.

While its auction business has been faltering, other components of the company have been growing nicely, including PayPal and Skype. Unfortunately, these aspects of its business offer lower profit margins, so the company has to figure out a way to get its auction business back on the right track.

So basically, when the company reports this Wednesday following the market close, earnings will probably not be the main thing that Wall Street is listening for. Of course, earnings are important, but for this precise moment in time, they will take a back seat to the company’s 2008 forecasts and the company’s plans to regain some lost ground in its auction business.

After the official numbers come in, BloggingStocks will be sure to update you with the figures as well as the market reaction to the quarterly numbers.

Here is a 12-month chart for the struggling EBAY stock to give you a better idea of just how badly the stock could use some good news:

What are your thoughts? Should we expect to see the company show strong numbers for its most current quarter? What about 2008… will we hear positive guidance, or hear news of a tough year to come? What announcements would you most like to hear from the company this week? Let us hear your thoughts!

Enjoy the rest of your long holiday weekend.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the web investment advisory service Investor’s Observer

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New York Giants vs. New England Patriots Far away from prying TV cameras, News Corp (NYSE: NWS) Chief Executive Rupert Murdoch and NFL honcho Roger Goodell probably hooted and jumped for joy when the New York Giants and New England Patriots made it into the Super Bowl. Maybe they made “ka-ching!” noises or exchanged high-fives with their underlings.

They couldn’t have asked for a superior outcome if they’d scripted it. There are so many compelling story lines, including whether the Patriots will be the first undefeated NFL team in more than 30 years. The New York — as in the top media market — Giants are no slouch for drama either. Who would have thought that Indianapolis Colts quarterback and ubiquitous pitchman Peyton Manning would be watching brother Eli lead the Giants in the sports spectacle to end all sports spectacles.

All this is a huge plus for News Corp’s Fox network. A San Diego-Green Bay game — which would have been great — wouldn’t have drawn the ratings the network needed to meet its guarantees to advertisers. Television commercials are sold based on ratings guarantees. When the programs don’t meet the targets, the networks have to “make good” by giving away commercial time on other programs.

The one problem for Fox might be the Super Bowl game itself, which have at times been blowouts. This one won’t be much different. Sorry Giants fans, the Patriots are going to go undefeated. News Corp shareholders are probably hoping that the game is at least interesting enough for people to watch the $1 million commercials.

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Nigeria: Intercontinental Bank Targets Global E-Banking Market - AllAfrica.com

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Jerry Yang of Yahoo! Yahoo Inc. (NASDAQ: YHOO) Chief Executive Jerry Yang this day promised good things to patient investors. Wall Street, though, wanted more immediate gratification from the fourth-quarter results and sent shares slumping in after-hours trading.

“While we will continue to face headwinds this year, we believe that the moves we’re making will help us exit 2008 stronger and more competitive and return to higher levels of operating cash flow growth in 2009,” said Yang, who replaced Terry Semel last year, in the earnings release.

Results in the latest quarter were, as expected, pretty bad. Net income was $206 million, or 15 cents per share, compared with $269 million, or 19 cents, a year earlier. The results beat the 11-cent average estimate of analysts surveyed by Thomson Financial. Revenue excluding so-called traffic acquisition costs rose 14% to $1.4 billion, a tad below analysts’ estimates of $1.41 billion.

Once again, Yahoo is promising that things will get superior. “We still have a tremendous amount of work to do, but we’re confident we have the ability to substantially improve our users’ experiences and achieve meaningful incremental monetization opportunities for Yahoo!’s own ad inventory and that of our partners,” said the company’s well-regarded President Sue Decker.

Wall Street has heard this story before.

Yahoo now must walk the walk as well as it talks the talk.

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A surprising rise for durable goods
Baltimore Sun - When you have more than 70 percent of the economy [consumers] in retrenchment mode and a banking sector shutting down the lending window, the prospects of a recession are still very real.” The continuing housing slump was reflected in a key index

Oslo shares TFN at a glance outlook
CNBC - OSLO (Thomson Financial) - Oslo shares are expected to open lower this morning, as more gloom in the banking sector, losses in Asia and investor nervousness ahead of today’s US interest rate decision overshadow gains on Wall Street overnight, dealers

Daiwa Profit Falls 35% on Investment Banking Slump (Update4)
Bloomberg - Jan. 30 (Bloomberg) — Daiwa Securities Group Inc., Japan’s second-largest securities firm, said third-quarter profit fell 35 percent as investment-banking fees plunged. Net income fell to 17.3 billion yen ($162 million) in the three months ended Dec

Business Digest
Baltimore Sun - PNC Financial Services Group Inc. named Louis Cestello, the Pittsburgh-based bank’s executive vice president in corporate banking, as regional president of its greater Baltimore operations yesterday. Cestello succeeds J. Marshall “Mike” Reid, who

UBS posts fresh subprime losses; sees FY net loss 4.4 bln sfr UPDATE
CNBC - Last year, the bank reported a profit from continuing operations — excluding those private banking operations sold to Julius Baer Holding AG — of 11.491 bln sfr. The bank added that it reduced its balance sheet and risk weighted assets during the

Mizuho subprime losses could hit $2.8 billion: reports
CNBC - During the same period Tokyo’s index of bank stocks <.IBNKS.T> lost 28 percent. Shares of Mizuho shut 1.6 percent lower at 495,000 yen in Tokyo, while the banking index fell 0.21 percent. ($1=106.92 Yen) (Additional reporting by Edwina Gibbs

McCain, Clinton win in Florida
Miami Herald - Florida voters propelled John McCain to the front of the race for the Republican presidential nomination on Tuesday with a breakthrough victory in a pivotal primary before next week’s Super Tuesday contests. “Florida has always been a special place

UBS Reports Record Loss After $14 Billion Writedown (Update2)
Bloomberg - I’m not ruling out further writedowns but it’s safe to state that the worst is now behind them,” stated Madeleine Hofmann, senior banking analyst at Julius Baer in Zurich. “I’m anticipating things to get superior from now on.” Walter Kielholz

German Stocks Fall; Volkswagen, Continental, Deutsche Bank Drop
Bloomberg - Banking shares declined across Europe after UBS AG, the region’s biggest bank by assets, said it had a record loss and France’s BNP Paribas SA reported earnings that missed analysts’ estimates. The following stocks also rose or fell in

Taiwan candidate’s loyalty questioned
Miami Herald - The Taiwanese presidential front-runner’s past residency status in the United Says has become a top election issue, with his opponent charging that he tried to cover it up and questioning his loyalty to the island. Ma Ying-jeou didn’t tell the

European stocks fall in early trade
International Herald Tribune - PARIS : European equities fell in early trade on Wednesday, as banking shares dropped after UBS posted an additional $4 billion (2 billion pounds) in write-downs, while investors turned cautious ahead of a U.S. interest rate decision. Shares in UBS

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gDocsBar is a new sidebar extension for Firefox that gives you instant, always-on access to your entire collection of Google Documents. With built-in search and filtering, and easy browsing of your on the internet documents, gDocsBar will quickly become a “how did I do anything before this?” Firefox add-on.

Once installed, you’ll be prompted to login to your Google account (you do have one by now, don’t you?). Don’t worry about the vulnerability of your login information; the credentials are sent to Google directly over SSL.

Now that you’re logged in, you’ll see a list of your Google Documents, including Spreadsheets and Presentations. You’ve the option to sort them by date, title, or author, in ascending or descending order. There are also tabs for each type of Google Doc, so that, if you so select, you can see only one type of document at a time. All your documents are instantly searchable by name, author, or content.

Uploading documents to Google Docs has never been easier than with gDocsBar. Simply drag and drop a file to the upload section at the bottom of the gDocsBar sidebar, and the file is instantly uploaded. Word to the wise: it has to be a file type that Google Docs supports, or else you’ll run into errors.

If you’re a steady user of Google Docs and Firefox, this is a no-brainer.

[via Webware]

Read

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Yahoo! Inc. (NASDAQ: YHOO) Chief Executive Jerry Yang is going to have to convince investors that the company he helped found in 1995 still matters when it reports fourth quarter results later today. It’s not going to be simple.

The most visited Web site is expected to report its eighth straight quarter of declining profit. according to Bloomberg News. Analysts surveyed by Thomson Financial are expecting an average profit of 11 cents on revenue of $1.41 billion. Expectations, to put it kindly, are real low.

The view of Sanford Bernstein analyst Jeffrey Lindsay quoted by Bloomberg that Yahoo “just isn’t generating anything like the resources they need to really stay in the game” is typical. Yahoo shares have plunged more than 27% over the past year.

Unfortunately, Google Inc. (NASDAQ: GOOG) isn’t the only company taking a bite out of Yahoo which trails the search engine giant in every conceivable metric. Social networking sites such as Facebook continue to siphon away young users coveted by advertisers as are smaller niche sites, forcing Yahoo to offer rate discounts to advertisers.

But there are a few reasons to remain optimistic.

Yahoo continues to attract a big audience which advertisers can’t ignore. In an economic downturn, advertisers may shift dollars away from traditional media to the portal because it is so cost effective. Any improvement in its search market share would help its bottom line even if it continues to fall short of Google. Yahoo also is in the midst of trimming costs including layoffs.

Maybe, a leaner more focused Yahoo will emerge once the dust settles. Then again, investors have waited for a Yahoo turnaround for a long time and their patience is wearing thin.

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The market’s choppy / consolidating pattern continues, suggesting the need for an additional defensive play or two (or perhaps more), and with this as a backdrop, Ecolab is worth a review.

Ecolab (NYSE: ECL) is a global supplier of cleaning, sanitizing, and maintenance products and services for the hospitality, institutional, and industrial markets.

Analysts anticipate the company’s domestic institutional, Kay, food & beverage, health care, and pest elimination units to continue to expand. Revenue is expected to increase a healthy 10-13% in 2008.

Further, international sales should continue to be strong, with better-than-adequate margins. Overall costs remain reasonable, even with higher raw material costs. In short, it’s a largely positive commercial landscape for ECL, bolstered by favorable international economic conditions. The Reuters F2007/F2008 EPS consensus estimates for Ecolab are $1.66/$1.90.

The risks? Ecolab remains vulnerable to unexpected slowdowns in the hospitality, travel, and food service sectors. Analysts also have their on those aforementioned raw material costs, and ECL’s capability to launch successful new products.

The First Call mean rating for ECL is: Purchase. [16 firms.] Mean 2008 target: $56.00. [high: $60, low: $51.]

Stock Analysis: Ecolab is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from ECL’s shares. Sell / Stop Loss if you were to buy shares in this company: $28.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

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