The Events of Sept 11 rocked the Nation at its very foundation. Three jet aircraft set off a tidal wave who's ripple affected every sector of life in America. The economy was crippled, and consumer confidence took years to recover. One of the industries hardest hit was, not surprisingly, the airlines industry. Americans responded to the "need" of the airline industry and then-President Bush signed the Air Transportation Safety and System Stabilization Act (Public. Law 107–42). This bill effectively bailed out the entire air travel industry, and was funded by the US taxpayers.
Its important to note that the airlines lost millions of dollars due to mandatory ground stops and were powerless to do anything about that. Not to mention the fact that many were too scared to fly. The bill also provided the airlines compensation for grounded flight and lost revenue. The Air Transportation Safety and System Stabilization Act is a great example of Americans supporting America.
Six years later, rising fuel prices "forced" many major air travel providers to begin charging a surcharge for checked luggage. The rationale behind this was that the additional weight of the baggage caused the aircraft to burn more fuel, and the price of fuel was affecting the profit margins of the airlines.
Not to quietly, the American air traveler accepted this new practice and understood that business much make money -- for the greater good.
In 2008 the USA was again under attack, not by a violent foe, but by a recession the likes of which most American's have never seen. Through no fault of Main Street America citizens were robbed of their homes, jobs, pensions, and dignity. The culprits wore business suits and not a ski mask, but teh results were the same. In our time of need, how does the Airline Industry repay its once generous lenders? By increasing fees, cutting flights, eliminating meals and other services.
Gas prices are stable again, yet baggage fees are still being charged... why? In fact now there is an inverse corrilation with the baggage fees: fuel prices are down, yet the price that the airlines charge for checked luggage is going up? In additional to this sckewed accounting, Spirit Airlines has reported that it will now charge as much as $45 for carry-on luggage. This is ridiculous,and orders on criminal.
If we, The People, treated the airlines the way they treated us, there would be no more airlines.
Tuesday, April 20, 2010
Thursday, April 1, 2010
RIM is rough around the edges
Research In Motion (RIM.TO) (RIMM.O) shares fell 6 percent on Thursday after the company posted quarterly results that magnified market jitters about rivals stealing market share from the BlackBerry smartphone.
RIM reported quarterly profit, revenue, and phone shipments that were below expectations after markets closed on Wednesday, but it also posted forecast-beating gross margins and subscriber growth.
The company, which has promised that analysts will be "blown away" by product launches it has planned for the year ahead, said a one-time customer inventory adjustment hurt both sales and shipments in its fourth quarter.
But questions linger about the health of RIM's North American operations and its high-profit corporate customer base. Corporate demand sagged during the recession and executives are now slower to replace phones with new models that boast extra features.
"What I see going on here is that RIM is encountering an increasingly competitive landscape in the U.S. and that's to be expected with Android starting to gain traction and the iPhone doing well," said Needham & Co analyst Charles Wolf in an interview.
RIM reported quarterly profit, revenue, and phone shipments that were below expectations after markets closed on Wednesday, but it also posted forecast-beating gross margins and subscriber growth.
The company, which has promised that analysts will be "blown away" by product launches it has planned for the year ahead, said a one-time customer inventory adjustment hurt both sales and shipments in its fourth quarter.
But questions linger about the health of RIM's North American operations and its high-profit corporate customer base. Corporate demand sagged during the recession and executives are now slower to replace phones with new models that boast extra features.
"What I see going on here is that RIM is encountering an increasingly competitive landscape in the U.S. and that's to be expected with Android starting to gain traction and the iPhone doing well," said Needham & Co analyst Charles Wolf in an interview.
Wednesday, March 24, 2010
Stock picks
Adobe Systems Inc.: Standard & Poor's equity analyst Zaineb Bokhari maintained a strong buy recommendation on shares of Adobe Systems Inc. (ADBE) on Mar. 24.
Adobe, the world's biggest maker of graphic-design programs, jumped the most in 11 months in Nasdaq trading on Mar. 24 after saying it will introduce a new version of its most profitable software on Apr. 12. Adobe said on Mar. 23 that it will host an event next month to unveil Creative Suite 5, also called CS5, comprising design products including Photoshop, Dreamweaver and Illustrator. The suite will ship late this quarter, Adobe said.
The company also forecast sales that beat analysts' estimates. Second-quarter sales will be at least $875 million, Adobe said. Analysts projected $862.2 million, the average of estimates compiled by Bloomberg. Excluding some costs, profit this quarter will be 39 cents to 44 cents a share, Adobe said. Analysts estimated 41 cents on average.
First-quarter net income fell 19 percent to $127.2 million, or 24 cents a share, from $156.4 million, or 30 cents, a year earlier, partly because of costs related to its October purchase of Omniture Inc. Excluding some costs, profit in the period ended March 5 was 40 cents, topping analysts' 37-cent average estimate. Sales rose 9.2% to $858.7 million. Analysts estimated $826.4 million.
In a posting on the S&P MarketScope service, Bokhari said she sees the release of Creative Suite 5 (CS5) driving fiscal 2010 (ending November) and fiscal 2011 sales for Adobe. She added that while the health of the economy will impact the strength of the upgrade cycle, she thinks market conditions are more favorable for CS5 than for its predecessor, CS4.
The analyst said she sees higher stock compensation and interest costs ahead for Adobe, and cut her fiscal 2010 earnings per share (EPS) estimate by 7 cents to $1.40; she kept her fiscal 2011 EPS projection at $1.79.
Bokhari lifted a target price on the shares to $44 from $43.
MF Global Holdings Ltd.: Sandler O'Neill equity analyst Richard Repetto kept a buy rating on shares of MF Global Holdings Ltd. (MF) on Mar. 24.
On Mar. 23, MF Holdings, the futures and options broker, announced that former New Jersey Governor Jon Corzine has accepted offers to lead the company and become an operating partner of buyout firm J.C. Flowers & Co.
Corzine, 63, who ran Goldman Sachs Group Inc. from 1994 to 1999, becomes chairman and chief executive officer immediately, MF Global said. He takes over from Bernard Dan, 50, who is leaving for personal reasons and will stay until May 16 to aid in Corzine's transition, the company said. MF Global shares gained as much as 13% in after-market trading on Mar. 23.
Corzine said MF Global's plans to become a primary dealer in government securities are a major part of his strategy to increase revenue. He will be paid an initial salary of $1.5 million and a $1.5 million signing bonus, the company said in a Mar. 23 regulatory filing.
Repetto said in a note that Corzine has an "impressive" resume: 24 years at Goldman Sachs, including serving as CFO and Chairman; Senator from New Jersey from 2001 to 2006; and Governor of New Jersey from 2006 to 2010. "Perhaps most significantly for MF, he began his career at Goldman Sachs as a fixed income trader," he wrote. In recent quarters, MF has been expanding its fixed income offering, and the company has applied for status as a primary dealer to the New York Federal Reserve Bank, Repetto said.
"[W]e suspect the relationship between J.C. Flowers and Corzine (both prior Goldman Sachs executives) facilitated the quick appointment of Corzine as CEO," the analyst wrote. Repetto noted that J.C. Flowers & Co. holds $150 million of MF Global's Series A convertible preferred shares, and played a significant role in the restructuring of MF Global's balance sheet in mid-2008.
"A former senator could have a useful set of experience in uncertain regulatory times," Repetto said. "With OTC derivatives legislation pending before the Senate and a host of other potential U.S. and international regulatory changes possible, the appointment of Corzine could be timely."
Repetto said that MF Global disclosed that fiscal fourth quarter net revenue would be $235 million to $245 million, which at the midpoint is $30 million below his prior forecast of $270 million. He lowered his fourth-quarter EPS estimate to 2 cents from 5 cents. He also reduced EPS estimates for fiscal 2010 (ending March) to 9 cents from 12 cents, and for fiscal 2011 to 37 cents from 40 cents.
The analyst raised a price target on the shares to $8.00 from $7.50.
Adobe, the world's biggest maker of graphic-design programs, jumped the most in 11 months in Nasdaq trading on Mar. 24 after saying it will introduce a new version of its most profitable software on Apr. 12. Adobe said on Mar. 23 that it will host an event next month to unveil Creative Suite 5, also called CS5, comprising design products including Photoshop, Dreamweaver and Illustrator. The suite will ship late this quarter, Adobe said.
The company also forecast sales that beat analysts' estimates. Second-quarter sales will be at least $875 million, Adobe said. Analysts projected $862.2 million, the average of estimates compiled by Bloomberg. Excluding some costs, profit this quarter will be 39 cents to 44 cents a share, Adobe said. Analysts estimated 41 cents on average.
First-quarter net income fell 19 percent to $127.2 million, or 24 cents a share, from $156.4 million, or 30 cents, a year earlier, partly because of costs related to its October purchase of Omniture Inc. Excluding some costs, profit in the period ended March 5 was 40 cents, topping analysts' 37-cent average estimate. Sales rose 9.2% to $858.7 million. Analysts estimated $826.4 million.
In a posting on the S&P MarketScope service, Bokhari said she sees the release of Creative Suite 5 (CS5) driving fiscal 2010 (ending November) and fiscal 2011 sales for Adobe. She added that while the health of the economy will impact the strength of the upgrade cycle, she thinks market conditions are more favorable for CS5 than for its predecessor, CS4.
The analyst said she sees higher stock compensation and interest costs ahead for Adobe, and cut her fiscal 2010 earnings per share (EPS) estimate by 7 cents to $1.40; she kept her fiscal 2011 EPS projection at $1.79.
Bokhari lifted a target price on the shares to $44 from $43.
MF Global Holdings Ltd.: Sandler O'Neill equity analyst Richard Repetto kept a buy rating on shares of MF Global Holdings Ltd. (MF) on Mar. 24.
On Mar. 23, MF Holdings, the futures and options broker, announced that former New Jersey Governor Jon Corzine has accepted offers to lead the company and become an operating partner of buyout firm J.C. Flowers & Co.
Corzine, 63, who ran Goldman Sachs Group Inc. from 1994 to 1999, becomes chairman and chief executive officer immediately, MF Global said. He takes over from Bernard Dan, 50, who is leaving for personal reasons and will stay until May 16 to aid in Corzine's transition, the company said. MF Global shares gained as much as 13% in after-market trading on Mar. 23.
Corzine said MF Global's plans to become a primary dealer in government securities are a major part of his strategy to increase revenue. He will be paid an initial salary of $1.5 million and a $1.5 million signing bonus, the company said in a Mar. 23 regulatory filing.
Repetto said in a note that Corzine has an "impressive" resume: 24 years at Goldman Sachs, including serving as CFO and Chairman; Senator from New Jersey from 2001 to 2006; and Governor of New Jersey from 2006 to 2010. "Perhaps most significantly for MF, he began his career at Goldman Sachs as a fixed income trader," he wrote. In recent quarters, MF has been expanding its fixed income offering, and the company has applied for status as a primary dealer to the New York Federal Reserve Bank, Repetto said.
"[W]e suspect the relationship between J.C. Flowers and Corzine (both prior Goldman Sachs executives) facilitated the quick appointment of Corzine as CEO," the analyst wrote. Repetto noted that J.C. Flowers & Co. holds $150 million of MF Global's Series A convertible preferred shares, and played a significant role in the restructuring of MF Global's balance sheet in mid-2008.
"A former senator could have a useful set of experience in uncertain regulatory times," Repetto said. "With OTC derivatives legislation pending before the Senate and a host of other potential U.S. and international regulatory changes possible, the appointment of Corzine could be timely."
Repetto said that MF Global disclosed that fiscal fourth quarter net revenue would be $235 million to $245 million, which at the midpoint is $30 million below his prior forecast of $270 million. He lowered his fourth-quarter EPS estimate to 2 cents from 5 cents. He also reduced EPS estimates for fiscal 2010 (ending March) to 9 cents from 12 cents, and for fiscal 2011 to 37 cents from 40 cents.
The analyst raised a price target on the shares to $8.00 from $7.50.
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