Blue Coat Systems (BCSI), WAN optimization software supplier based in Sunnyvale announced huge profits and revenue for its fiscal third quarter, ended December 31, 2007. The company’s sales jumped an incredible 73%, from $47.1 million during last year’s third quarter, to $81.4 million in this year’s third quarter. The remarkably strong sales performance helped take the company from a $42,000 net income during last year’s quarter (less than 1 cent per share) to a robust $10.5 million net income, or 26 cents per share, net income during this year’s third quarter.
Plano, Texas based JC Penney (JCP) announced a fourth quarter profit drop of 10% from the previous year’s fourth quarter, largely based on lower spending from its predominantly middle-class customer base. In addition to the fourth quarter loss, the company, like many retailers, said it’s cautious about earnings possibilities for 2008. During its late ending fiscal fourth quarter (February 2), the company says it netted $1.93 per share or $430 million in net income. This was slightly better than the company’s lowered estimate, and soundly bested analyst estimates of $1.77 per share. Last year’s fourth quarter earnings were $477 million or $2.09 per share. The numbers were somewhat misleading as the company had an extra week during its fourth quarter last year.
Counter to recent developments in the retail environment, Framingham, Massachusetts based off-price retailer TJX (TJX) saw a huge spike in its fourth quarter profits. The company, which operates such retail brands as TJ Maxx and Marshalls, says improvements in inventory management, cost controls, and marketing helped lead to the strong showing. The surprisingly strong report gave the company’s stock help and inspired stock trading that moved the shares forward nearly 5% following the announcement. The company’s earnings results barely beat estimates on Wall Street, but given the uncertain economic landscape, and several weak retail earnings reports already announced, the market responded strongly to the positive results.
SanDisk Corporation (SNDK), a Milpitas, California based company saw a huge fourth quarter profit boost. The company reported an income of $105.81 million for the fourth quarter, which amounts to 45 cents per share. The news was especially good for SanDisk who experienced a $35.14 million, 17 cents per share, loss during the fourth quarter last year. The company credited market demand for flash memory as the leading driver of the strong turnaround. Cell phones and digital cameras continue to evolve and see new generations of products, which require flash memory technology provided by companies like SanDisk.
The US Government and Central Bank are doing everything they can to help reduce the economic impact of a pending recession. Congress recently passed a $168 economic stimulus package consistently mostly of tax rebates to millions of Americans. The Fed has been cutting interest rates at lightening speed. In spite of recession concerns, floundering consumer confidence, stock trading uncertainty, and a sluggish holiday retail season, many TV makers are expecting strong growth during 2008. Sony (SNE) experience double-digit growth in the fourth quarter of 2007 in US electronics sales.
Occidental Petroleum (OXY) reported a very strong fourth quarter showing thanks in large part to $1.2 billion gain in gas and oil profit. Fourth quarter profit climbed 56% overall for the huge Los Angeles based oil company sparking some volatile stock trading recently. A leading contributor to the company’s success is its Dolphin project. The project based in the United Arab Emirates in the largest energy program ever in the Middle East. A big focus of the project is development of cleaner, more efficient fuel for the Southern Gulf.
It was a mixed bag for EMC Corporation (EMC) during its fourth quarter earnings announcement. The company boasted a 35% jump in fourth quarter profit from the previous year, thanks to widespread revenue growth. The company did warn that 2008 earnings would likely be below current analyst targets. EMC is a leading data storage vendor. Net income for the company was $525.7 million during the quarter, which is 24 cents per share. Their fourth quarter 2006 earnings were $388.8 million, or 18 cents per share.
As the US nears a potential recession, many consumer markets have seen dwindling demand. Leading printer maker Lexmark International (LXK) has certainly not been unaffected by the market struggles. The Kentucky based company saw sales decline during the fourth quarter. Despite the sales drop. The company did manage to post a 10% growth in profits, surprising the stock trading markets.
Specialty materials maker, Rohm & Haas Company (ROH) inspired stock buyers with surprisingly positive fourth quarter earnings news. The Philadelphia based chemicals company credited much of its earnings successes to impressive performances by their electronic materials and chemical businesses. Analysts had widely anticipated 78 cents per share earnings during the fourth quarter. Rohm & Haas easily beat those expectations by netting 91 cents per share, and a net income of $180 million. The news was somewhat surprising giving current economic conditions and last year’s 80 cents per share fourth quarter earnings for the company.
Prowling bear: A pesky bearish market has been prowling around as of late, and generally, covered call investing positions don’t fair too well in a bearish market. A method of covered call investing in bearish markets is to take a defensive strategy, i.e. selecting covered call positions for defensive stocks.