BloggingStocks

What to Do With Your Investments in Today's Iffy Market
When the financial world is panicking, you probably will, too. The best advice, though, is this: When you're nervous, don't actually do anything with your investments - and, most especially, don't throw all your money into whatever investment is soaring at the moment.
What should you do about investments? - USATODAY.com

Don't Put All Your Dollars in One Bank
Spread your money among several banks, and several FDIC-insured accounts, to stay protected.
Spread your money among several banks to stay fully protected - MarketWatch

Housing Rebound: When to Spot One
Nationally, there's still a dark cloud hanging over housing. But to check the health of your local region, look for a few key clues.
Housing rebound: When to spot one - CNNmoney

What Your Gadget Really Costs
Market researcher iSuppli digs into your Xbox, iPod, and more to find out how much they cost the makers to make. You may have paid less for it. The cost to make an iPod, Xbox, and other electronics has big bottom-line implications at Apple, Microsoft, and their peers. Some companies are willing to swallow losses on some gadgets-for instance, gaming consoles-in hopes that they'll make up the difference, and then some, on sales of related gear, such as video game software. Other companies, including Apple, are able to sell many products for a healthy profit from the get-go.
http://images.businessweek.com/ss/07/01/0118_teardown/index_01.htm?technology+slideshows

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Before the bell: Futures lower ahead of data, earnings, despite Intel

Melly Alazraki — 2008-07-16T07:39:00+00:00

Filed under: Before the bell, Earnings reports, eBay (EBAY), Intel (INTC), Market matters, Economic data, Wells Fargo (WFC), Oil, Delta Air Lines (DAL), Federal Reserve

The plunge in oil prices and Intel's good earnings report from Tuesday were not enough to lift mood on Wall Street this morning. Investors, worried about a wave of data, earnings and Bernanke's second day of testimony, pushed U.S. stock futures lower. However, after yesterday's wild swings in the market, we may yet see futures change directions several times before the open.

On Tuesday, the session was marred by wild and volatile trading, induced by concerns over financials in general and Fannie Mae and Freddie Mac in particular. The steep drop in oil prices -- over $6 a barrel -- offset somewhat Federal Reserve Chairman Ben Bernanke's bleak testimony. Sill, the Dow Jones Industrial Average ended 92 points, or 0.84%, lower to close under the 11,000 mark. The S&P 500 dropped 13 points, or 1.09%, while the Nasdaq Composite, in anticipation of Intel's earnings, rose 2 points, or 0.13%.

Today, more economic data and earnings will affect the Street's sentiment.
At 8:30 a.m. EDT, consumer price index -- inflation at the consumer level -- for June is due out. Again, there is a big difference between expected CPI and core CPI, which excludes food and energy prices.
At 9:00 a.m., May net foreign purchases will be reported and shortly after, June industrial production and capacity utilization.
At 2:00 p.m., investors could go over the released minutes from the last Federal Reserve meeting.

Meanwhile, Bernanke will continue his testimony that is due to start at 10 a.m. EDT.

So far today, oil prices are steady after crude futures decline Tuesday, plunging more than $6 a barrel - the biggest one-day drop in 17 years. But at 10:30 a.m. EDT, the U.S. Department of Energy is due to release its weekly report on crude inventories. Traders could react to the report.

Earnings:
Chipmaker Intel (NASDAQ: INTC) reported solid profit gains Tuesday after the close, topping Wall Street's estimates. INTC shares are marginally higher in premarket trading so far despite rising 2% in Frankfurt.

Reporting this morning: Delta Air Lines, Inc. (NYSE: DAL) and Wells Fargo (NYSE: WFC), both could give more insight into two very troubled sectors.

Online auctioneer, eBay Inc. (NASDAQ: EBAY) will report earnings after the close and is expected to see second quarter revenue growth of 18% and earnings of 42 cents per share.

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The week in preview: Expectations as the earnings crunch begins

Trey Thoelcke — 2008-07-13T12:30:00+00:00

Filed under: Earnings reports, Forecasts, Google (GOOG), Microsoft (MSFT), eBay (EBAY), Coca-Cola (KO), Intel (INTC), International Business Machines (IBM), Schlumberger Limited (SLB), Nokia Corp. (NOK), Johnson and Johnson (JNJ), Advanced Micro Dev (AMD), Abbott Laboratories (ABT), Baxter Intl (BAX), Safeway Inc (SWY), Gannett Co (GCI), Yum Brands (YUM), Mattel, Inc (MAT), Nucor Corp (NUE), Contl Airlines'B' (CAL), Harley-Davidson (HOG), Economic data, Honeywell Intl (HON), United Technologies (UTX), Eaton Corp (ETN), Delta Air Lines (DAL)

As the second quarter earnings crunch begins in earnest this week, the bear market has investors jittery and prognosticators spinning out dire warnings. In the wake of mixed results from Alcoa (NYSE: AA) and General Electric (NYSE: GE) kicking things off last week, here's a look at what Wall Street is expecting from many of the companies scheduled to report this coming week.

Analysts surveyed by Thomson Financial are expecting the following companies to report a rise in earnings when compared to the same period of the previous year.

Nucor Corp. (NYSE: NUE): $1.80 EPS (36.6%) on sales of $6.4 billion (+53.0%)
Google Inc. (NASDAQ: GOOG): $4.74 EPS (24.9%) on sales of $3.9 billion (+41.6%)
Nokia Corp. (NYSE: NOK): 56 cents EPS (23.2%) on sales of $19.9 billion (+17.8%)
CSX Corp. (NYSE: CSX): 90 cents EPS (21.1%) on sales of $2.9 billion (+12.8%)
Altera Corp. (NASDAQ: ALTR): 27 cents EPS (18.5%) on sales of $346.7 million (+8.4%)
IBM (NYSE: IBM): $1.82 EPS (+17.6%) on sales of $25.9 billion (+9.0%)
eBay Inc. (NASDAQ: EBAY): 41 cents EPS (17.1%) on sales of $2.2 billion (+18.0%)
W.W. Grainger Inc. (NYSE: GWW): $1.46 EPS (17.1%) on sales of $1.7 billion (+8.0%)
Microsoft Corp. (NASDAQ: MSFT): 47 cents EPS (17.0%) on sales of $15.7 billion (+17.0%)
Honeywell International Inc. (NYSE: HON): 94 cents EPS (17.0%) on sales of $9.2 billion (+7.9%)

Eaton Corp. (NYSE: ETN): $1.95 EPS (12.8%) on sales of $4.1 billion (+27.5%)
Intel Corp. (NASDAQ: INTC): 25 cents EPS (12.0%) on sales of $9.3 billion (+7.4%)
Abbott Laboratories (NYSE: ABT): 79 cents EPS (12.7%) on sales of $7.2 billion (+13.2%)
Baxter International Inc. (NYSE: BAX): 82 cents EPS (12.2%) on sales of $3.1 billion (+7.7%)
Coca-Cola Co. (NYSE: KO): 96 cents EPS (11.5%) on sales of $8.9 billion (+15.6%)
Danaher Corp. (NYSE: DHR): $1.06 EPS (11.3%) on sales of $3.2 billion (+18.4%)
United Technologies Corp. (NYSE: UTX): $1.30 EPS (10.8%) on sales of $15.3 billion (+9.9%)
Schlumberger Ltd. (NYSE: SLB): $1.12 cents EPS (8.9%) on sales of $6.5 billion (+14.8%)
Illinois Tool Works Inc. (NYSE: ITW): 97 cents EPS (7.2%) on sales of $4.6 billion (+9.9%)
Yum! Brands Inc. (NYSE: YUM): 42 cents EPS (7.1%) on sales of $2.6 billion (+7.6%)
Johnson & Johnson (NYSE: JNJ): $1.12 EPS (6.3%) on sales of $16.0 billion (+5.7%)
Safeway Inc. (NYSE: SWY): 52 cents EPS (5.8%) on sales of $10.2 billion (+3.9%)
Genuine Parts Co. (NYSE: GPC): 79 cents EPS (3.8%) on sales of $2.9 billion (+2.8%)

Analysts are looking for a number of the big financials reporting next week to post declines in earnings, but I've focused on those companies in a separate post (see Financials expected to post earnings declines, losses this week). The companies below are also expected to post declines in profit.

Novellus Systems Inc. (NASDAQ: NVLS): 4 cents EPS (-91.1%) on sales of $251.5 million (-39.6%)
Delta Air Lines Inc. (NYSE: DAL): 11 cents (-84.3%) on sales of $5.4 billion (+8.3%)
Mattel Inc. (NYSE: MAT): 3 cents EPS (-50.0%) on sales of $1.0 billion (+3.9%)
Harley-Davidson Inc. (NYSE: HOG): 76 cents EPS (-33.3%) on sales of $1.4 billion (-12.4%)
Gannett Inc. (NYSE: GCI): $1.02 EPS (-17.7%) on sales of $1.7 billion (-10.0%)
Sherwin-Williams Co. (NYSE: SHW): $1.39 EPS (-8.6%) on sales of $2.2 billion (-0.3%)

Continental Airlines Inc. (NYSE: CAL) is expected to swing to a loss of 52 cents (from $2.10 EPS last year) on $4.1 billion (+9.3%). And Advanced Micro Devices Inc. (NASDAQ: AMD) is expected to narrow its loss to 52 cents per share (from 95 cents per share last year) on sales of $1.5 billion (+5.2%).

With expectations listed out this way Wall Street seems pretty optimistic about earnings (other than for financial companies; see Financials expected to post earnings declines, losses this week). But we'll see this week whether the companies above can live up to these expectations. Do you think they will?

Other economic data coming out next week include:

Producer price index (June 2008), Tuesday, 8:30 a.m. ET
Business inventories (May 2008), Tuesday, 10:00 a.m. ET
Consumer price index (June 2008), Wednesday, 8:30 a.m. ET
NAHB housing market index (July 2008), Wednesday, 1:00 p.m. ET
Housing starts (June 2008), Thursday, 8:30 a.m. ET

Visit AOL Money & Finance for more earnings coverage.

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Newspaper wrap-up: Google has a difficult time getting ad revenue from YouTube

Laurie Pasternack — 2008-07-09T08:00:00+00:00

Filed under: Newspapers, Magazines, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Delta Air Lines (DAL)

MAJOR PAPERS:

Corporate advertisers are not flocking to YouTube despite the fact that the video sharing site attracts one billion views a day, upsetting Google Inc's (NASDAQ: GOOG) expectations for a strong revenue stream, according to the Wall Street Journal. Total ad revenue for Google this year will be about $200M from the site, where the company is counting on growth beyond its text ads from Web searches.
A day after Microsoft Corporation (NASDAQ: MSFT) said it would be interested in reopening talks to acquire some of all of Yahoo! Inc (NASDAQ: YHOO) if Carl Icahn's proxy battle succeeds, the Wall Street Journal reported that Yahoo! CEO Jerry Yang accused Microsoft of "trying to destabilize" the company "without a real desire to complete a deal".

OTHER PAPERS:

The Atlanta Journal Constitution reported that Comair, a subsidiary of Delta Air Lines Inc (NYSE: DAL), is set to cut 300 pilots and 220 flight attendants from its staff. The paper said the layoffs will go into effect in September when Comair cuts its flight schedule as part of Delta's capacity cuts and will affect crew members based at Cincinnati/Northern Kentucky International Airport and New York's John F. Kennedy International Airport.

WEB SITES:

Iran successfully test-launched a long-range version of its Shahab-3 missile, according to Iranian news service Al-Alam. The missile can reach U.S. military bases in the Persian Gulf and Israel.

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AeroVironment (AVAV): Share price cycles in bullish 'flag' formation

Larry Schutts — 2008-07-02T13:55:00+00:00

Filed under: Earnings reports, Ford Motor (F), Lockheed Martin (LMT), Technical Analysis, Delta Air Lines (DAL), Stocks to Buy

AeroVironment (NASDAQ: AVAV) is engaged in the design, development and production of unmanned aircraft systems and electric energy technologies for various industries and governmental agencies. The company's small aircraft are used by U.S. Department of Defense customers to deliver real-time reconnaissance, surveillance, and target acquisition to tactical operating units. Its electrical products include recharge systems for industrial vehicle batteries and power processing test equipment. Ford Motor (NYSE: F) and Delta Air Lines (NYSE: DAL) are on the company's commercial customer list. Lockheed Martin (NYSE: LMT) is a major competitor.

The firm pleased investors last week, when it reported fiscal Q4 EPS of 30 cents and revenues of $64.3 million. Analysts had been expecting 27 cents and $59.3 billion. In discussing the successful quarter, the CEO pointed to strength in demand for unmanned aircraft and related support services. Management also guided FY09 revenues to about $258.9-$269.7 million, versus Street consensus of $259.44 million. Funded backlog at the end of Q4 was up 35% from the same point last year.

The stock popped on the news and then began defining a bullish "flag" consolidation pattern. Stocks often leave flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.

Brokers recommend the shares with four "strong buys", one "buy" and four "holds". Analysts see a 22% average annual growth rate, through the next five years. The AVAV Price to Sales ratio (2.60), Price to Book ratio (3.30), Sales Growth rate (26.82%), Operating Margin (13.18%), Return on Assets (11.53%) and Return on Investment (13.90%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 45% of the outstanding shares. Over the past 52 weeks, the stock has traded between $17.97 and $28.70. A stop-loss of $23.75 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold positions in any of the stocks mentioned above.

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For airlines, every pound saved is a dollar earned

Joseph Lazzaro — 2008-06-11T16:56:00+00:00

Filed under: Consumer experience, Southwest Airlines (LUV), AMR Corp (AMR), Contl Airlines'B' (CAL), UAL Corp (UAUA), Delta Air Lines (DAL)

No, the airlines haven't started charging by the pound. At least not yet...

Jokes aside, nobody told the airlines there'd be days like these, to paraphrase John Lennon.

Jet fuel costs -- up 84% in the past year alone -- have skyrocketed, along with the cost of just about every other product derived from the world's most vital commodity, and the airlines are looking for every conceivable way to reduce weight, reduce wind/resistance drag, and increase operational efficiency, The New York Times reported Wednesday.

The major carriers are replacing heavier seats with lighter ones, cleaning engines and planes more often, reducing the fresh water available on flights, and plugging into electric outlets instead of idling engines at the gate, among other changes, in order to cut fuel consumption.

More air travel changes ahead

Moreover, the changes -- and charges -- have only just begun, so says stock analyst C. Leonard Bauer. "Everyone knows about the added bag charges, a pain in the neck, for sure. But it could get worse," says Bauer, who also flies on a major carrier about 5-7 times per year. "In the winter you could see a per pound baggage charge, or something along those lines. So don't pack that extra winter coat when you fly this December."

To be sure, weight is no laughing matter, for the airlines, Bauer said. Weight may very well determine which carriers survive the current oil shock. "Reduction in weight can mean the difference between a flight that turns a $20,000 profit or loses $30,000," Bauer said. "Add that up over thousands of flights and you begin to grasp the airline's perspective." Bauer added that he does not have a rating on nor own shares in any airline.

Another likely sector-wide change, according to Bauer, could be slower flying speeds, which means longer travel times between points. "The practice has already started, and it has to occur, at least until airlines can phase-in new planes, which are more fuel efficient," Bauer said. "The airlines will determine the optimum speed per plane and flight, then see how close they can come to it, and still comply with safety and schedule requirements."

Of course, none of the above applies, Bauer said, if oil drifts back towards saner price levels.

"Oil and sane price levels?" Bauer added. "That's an oxymoron."

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Companies that vanished: Pan Am, cultural icon

Eric Buscemi — 2008-06-11T10:12:00+00:00

Filed under: Consumer experience, Delta Air Lines (DAL)

This post is part of a series on some of the most memorable companies that have disappeared.

Pan American World Airways, or Pan Am, was an international airline that was in business from 1927 through 1991, when it ceased its operations after over a decade of mounting financial losses and having to declare for bankruptcy.

The company, despite being defunct for seventeen years, is still well remembered in pop culture. The blue circular logo has made such an impression that it is put on designer travel bags to signify traveling in luxury today.

Beyond that, Pan Am will always be remembered as the airline that brought the Beatles to New York City in 1964, as well as the airline that con man Frank Abagnale, Jr., passed himself off as a pilot for, which was later immortalized in the 2002 film Catch Me If You Can.

Pan Am was featured prominently in a number of other films. One of the most notable appearances was the Pan Am "space clipper" in Stanley Kubrick's science fiction masterpiece 2001: A Space Odyssey. The Pan Am brand was also displayed in the movie Blade Runner, and the company is said to be one of many, along with Atari, Cuisinart, and others, that suffered from the "Blade Runner curse" -- companies whose logos were featured in the movie experienced disasters and have since gone defunct.

Unfortunately, there is also one infamous incident for which Pan Am will be remembered: Pan Am Flight 103. The transatlantic flight from London's Heathrow airport to New York's JFK airport on December 21, 1988 was destroyed by a bomb as it flew over the UK, killing 270 people. The tragic event led to Britain's largest criminal inquiry and marked the beginning of the end for the iconic airline. The airline, which was still facing financial difficulties from the energy crisis a decade earlier, had already suffered a terrorist attack in 1986, the hijacking of Pan Am Flight 73 in Pakistan, which resulted in 20 deaths. The combination of both terrorist events in such a short span of time made consumers wary of the once pristine company.

Pan Am declared bankruptcy on January 8, 1991, and its profitable remains were bought out by Delta Air Lines (NYSE: DAL). Then, later that year, on December 4, operations of the airline ceased. What most people will remember and miss about Pan Am is the nostalgic and timeless feel of traveling in style and luxury, when just the taking of a flight itself was an event. That, and the stewardesses' pearly Pan Am smiles.

Let us know in the comments what you miss about Pan Am. And be sure to check out other Companies That Have Vanished.

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Before the bell: CAL, DAL, LCC, LTD, RIMM, ETFC, BA

Melly Alazraki — 2008-06-05T08:25:00+00:00

Filed under: Before the bell, Apple Inc (AAPL), Boeing Co (BA), Research in Motion (RIMM), US Airways Group (LCC), Limited Brands (LTD), Delta Air Lines (DAL)

Before the bell: Futures up on oil, Verizon's possible deal, retail sales

Starting with an aggregate of recent airlines news:

Continental Airlines (NYSE: CAL) said it would cut 3,000 of its 45,000 jobs, about 6.5%, and cut capacity 11% in the fourth quarter. The company will eliminate 67 planes and the company's chief executive and president say they will not take a salary for the rest of this year and will decline bonuses.

Delta Airlines (NYSE: DAL) May traffic rose 4.2% from the year-earlier month to 10.51 billion revenue passenger miles. Delta's May capacity increased 1.5% to 12.67 billion available seat miles. Load factor, or the percentage of seats filled with passengers, in May rose to 82.9% from 80.9%.

US Airways Group Inc. (NYSE: LCC) said its May mainline traffic rose 0.6% to 5.39 billion revenue passenger miles from last year. May mainline capacity was flat at about 6.54 billion available seat miles. Mainline load factor in May rose to 82.3% from 81.9% a year ago. It also said Wednesday it is cutting up to 1,100 more jobs, about 3% of its workforce.

Limited Brands Inc. (NYSE: LTD) May same-store sales fell 6%. Analysts, on average, had expected same-store sales to fall 5.5%, according to Thomson Reuters.

E*Trade Financial Corp. (NASDAQ: ETFC) is adding a mobile application -- the first of its kind -- to Research in Motion's (NASDAQ: RIMM) BlackBerry, giving its account holders the ability to see real-time stock quotes and trade on their phones. Again we see the BlackBerry being considered as a more business application, even Apple (NASDAQ: AAPL)'s iPhone tries to be considered as such as well.

Boeing (NYSE: BA) said it received an order for three 737-900ER jets from the Romanian low-cost carrier Blue Air. The order is list-priced at $238.5 million.

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Airlines as penny stocks

Douglas McIntyre — 2008-06-01T15:40:00+00:00

Filed under: Forecasts, Industry, AMR Corp (AMR), Delta Air Lines (DAL)

Many institutional funds shy away from stocks that sell below the $5 mark. It is assumed that most low-priced shares are a sign of trouble. In many cases that is true.

As some airlines become small caps, driven down as the price of oil comes up, several could drop below the $5 threshold. That may hinder these stocks from rebounding by eliminating them from some fund portfolios.

It is hard to imagine that AMR's (NYSE: AMR) stock trades at $7.19 and has been as low as $6. That puts the company's market cap at $1.8 billion. Some biotech companies with almost no revenue are worth as much. Delta's (NYSE: DAL) are at $6.15 and its market cap is about the same as AMR's.

Airline stocks are now the province of speculators and day traders. Since some may face Chapter 11, the gamble on owning the stocks is high now.

The shares of these companies have been swept into the dustbin.

Douglas A. McIntyre is an editor at 247wallst.com and author of Ten Stocks Under $10.

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Military couple are millioniares in making, more trouble ahead for fliers & incredible parking garages - Today in Money 5/23

Allan Halprin — 2008-05-23T08:45:00+00:00

Filed under: Yahoo! (YHOO), Walt Disney (DIS), Money and Finance Today, Gap Inc (GPS), Southwest Airlines (LUV), US Airways Group (LCC), AMR Corp (AMR), Contl Airlines'B' (CAL), UAL Corp (UAUA), JetBlue Airways (JBLU), Delta Air Lines (DAL)

In the News:

· $4 Gas Forecast for Coming Week

· The Gap Weathers Sales Slump as 1Q Profit Surges 40% Thanks to Cost Management

· Airlines Running Short on Options

· Deal Reached in Tainted Pet Food Case

· Mesa Air's Future in Doubt

· Home Prices Post Record Decline

· Yahoo Nominates Existing Board for Re-Election

· High Gas Prices Force Cops to Walk the Beat More

· Disney Recalls Sleeping Bags, Toy Wands

Military Couple are Millionaires in the Making
If you're brave enough and willing, the Army can be a lucrative career. Just ask U.S. Army Captains Matthew and Kristen Shifrin. This military couple's plan is to save one paycheck and live off the other. That has them well on their way to meeting their financial goals.
Millionaires in the Making Millionaires in the Making: The Shifrins «

Safeguard Your Home Before a Storm Strikes
Disaster has stormed through homes from the Gulf of Mexico to the Atlantic Ocean, with 1,005 tornadoes reported so far this year and AccuWeather.com forecasts 12 named hurricanes this year. Take these steps now to protect your house and valuables -- plus, what to do after disaster hits.
Safeguard Your Home Before a Storm Strikes - Kiplinger.com

More Trouble Ahead for Fliers
Other carriers are likely to mirror American's plans to add checked-bag fee and cut seats.
Other Airlines Likely to Follow American's Lead -SmartMoney

Steps to Take to Avoid Having Your Car Stolen
Every 26.4 seconds, another car is stolen in the United States. Don't be part of this statistic. You can avoid starring as a car-heist victim in a real life "Gone in 60 Seconds" scenario by following these steps.
Putting the brakes on auto theft - Bankrate.com

Most Incredible Parking Garages
Parking structures are rarely sexy. But these nine buildings were built to accommodate automobiles in an architecturally sophisticated manner.
http://images.businessweek.com/ss/08/05/0521_beautiful_parking/index_01.htm?technology+slideshows

World's Best Vodka
Some drinkers say vodka has no taste. Discerning martini drinkers disagree. BusinessWeek's in-house bon vivant David Kiley thought it a good time to evaluate some of the top brands on the bar shelf. Ketel One and Ciroc tied for the top.
In Pictures: Best Vodkas World's Best Vodka? It's Anybody's Guess

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S&P may downgrade nine airlines

Douglas McIntyre — 2008-05-23T08:30:00+00:00

Filed under: Analyst reports, Forecasts, AMR Corp (AMR), UAL Corp (UAUA), Economic data, Oil, Delta Air Lines (DAL)

S&P and Moody's (NYSE:MCO) do not have the best reputation these days. They missed most of the calls on the danger of subprime paper. Some of that has been blamed on computer problems. And, the dog ate my papers.

Now, S&P says it may downgrade its ratings on nine airlines and review one more. According to The New York Times, "In total, 10 airlines, including all the major carriers, are now under the CreditWatch negative designation." The companies include AMR (NYSE: AMR), Delta (NYSE: DAL) and United (NASDAQ: UAUA).

S&P says some of the airlines may even face Chapter 11.

It would be fair to ask where the ratings agency has been. Jet fuel prices are close to doubling in a year. Every airline faces huge losses throughout the rest of 2009. Some carriers have lost nearly 80% of their market value in a year. AMR now trades just above $6, down from almost $30. Its market cap is only 7% of annual revenue. In other words, the company trades close to its liquidation value.

S&P has image problems for a reason. It either gets its calls wrong, or it gives them out way too late.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

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BA to ground planes to save fuel

Douglas McIntyre — 2008-05-19T10:10:00+00:00

Filed under: Industry, AMR Corp (AMR), Oil, Delta Air Lines (DAL)

In a move that may be imitated by large US carriers like AMR (NYSE: AMR), Delta (NYSE: DAL) and Northwest (NYSE: NWA), British Airways will ground part of its fleet to save money because of the rising cost of fuel.

According to The Times of London, "The airline would park its oldest, least fuel-efficient aircraft."

Analysts are concerned that British Airways may loss money for the next two years. By taking some aircraft out of service, the carrier could ameliorate some of that.

Wall Street may watch to see if big American companies have the sense to do the same thing. Most have debt loads large enough to move them toward Chapter 11, if fuel costs stay high and a rough economy hurts passenger traffic. Major airline mergers, some of which are fairly far along, will not solve the gas price problem. Taking jets out of service may, at least in part.

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Douglas A. McIntyre is an editor at 247wallst.com.

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Flying just got a little more expensive

Michael Fowlkes — 2008-05-08T16:30:00+00:00

Filed under: Bad news, Products and services, Management, Consumer experience, Competitive strategy, Marketing and advertising, AMR Corp (AMR), UAL Corp (UAUA), Oil, Delta Air Lines (DAL)

In reaction to surging fuel costs, several major airlines announced today that they were raising their fares in order to recoup some of their rapidly increasing flying costs.

The increase this time around is $20 and effects passengers traveling on UAL Corporation (NASDAQ: UAUA), Delta Air Lines, Inc. (NYSE: DAL), and AMR Corporation (NYSE: AMR)'s American Airlines. The $20 jump in prices will be added to the airline's fuel surcharges, and consequently, these charges are now running at $130 round trip on most flights that you will book through the airlines.

The current rate hike was first initiated by Delta, and marks the second time in just over a week that the airline has been forced to raise fares in order to combat record high fuel costs. Times are definitely tough for airlines, and they are doing everything they can to combat fuel prices, but regardless of the rate increases most analysts are still expecting to see huge losses this year from most, if not all, airline carriers.

The airlines are definitely in a tough situation right now. They are being forced to raise their rates to cover their costs, but at some point you have to assume that passengers are going to cut back on flying in reaction to the rising costs, and this would really put a crunch on the carriers that are already struggling to keep their heads above water.

With oil prices continuing to trade at record high levels, do not be surprised if you see more rate hikes coming in the months to come. Definitely a tough year for travelers: whether you are driving to your vacation spots or flying, the costs just keep on rising.

How do you think current fuel prices will impact your travel plans for the summer? Will you continue to take your vacations as normal, or scale things back a bit in reaction to the rising costs?

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

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Analyst downgrades: Airlines, CHTP and CLWR

Eric Buscemi — 2008-05-08T11:50:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, Kellogg Co (K), US Airways Group (LCC), AMR Corp (AMR), Contl Airlines'B' (CAL), UAL Corp (UAUA), Delta Air Lines (DAL)

MOST NOTEWORTHY: Airlines, Chelsea Therapeutics and Clearwire were today's noteworthy downgrades:

Merrill downgraded AMR Corp (NYSE:AMR), Delta Air Lines (NYSE:DAL), Continental Airlines (NYSE:CAL), US Airways (NYSE:LCC) and UAL Corp (NASDAQ:UAUA) to Neutral from Buy citing earnings risk this year from higher energy costs.
Oppenheimer downgraded shares of Chelsea Therapeutics (NASDAQ:CHTP) to Perform from Outperform after their survey suggested physicians believe currently available generic treatments are adequate in neurogenic orthostatic hypotension, which could impact the company's lead drug Droxidopa.
Clearwire (NASDAQ:CLWR) was cut to Sell from Hold at Citigroup on valuation, as they estimate fair value at $13.

OTHER DOWNGRADES:

Goldman downgraded Kellogg (NYSE:K) to Neutral from Buy and Hershey Foods (NYSE:HSY) to Sell from Neutral.
Piper lowered Orbitz Worldwide (NYSE:OWW) to Neutral from Buy.

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Early analyst calls: DAL, CAL, UAUA, LCC, AMR, NWS

Douglas McIntyre — 2008-05-08T07:36:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, US Airways Group (LCC), News Corp'B' (NWS), AMR Corp (AMR), Contl Airlines'B' (CAL), UAL Corp (UAUA), Delta Air Lines (DAL)

Merrill Lynch downgraded shares of Delta (NYSE: DAL), United (NASDAQ: UAUA), US Airways (NYSE: LCC), AMR (NYSE: AMR), and Continental (NYSE: CAL) from "buy" to "neutral," according to Briefing.com.

Deutsche Bank maintained a "buy" on News Corp (NYSE: NWS) saying the company is less expensive than its peers, according to the AP.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

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United-US Airways merger would benefit sector, analyst says

Joseph Lazzaro — 2008-05-06T16:53:00+00:00

Filed under: Deals, Consumer experience, US Airways Group (LCC), UAL Corp (UAUA), Delta Air Lines (DAL)

Higher oil prices and the surging aviation fuel costs they imply may reduce the benefits of an airliner merger, such as the potential deal between United Airlines and U.S. Airways, but they don't eliminate a merger's long-term positives, an analyst argued Tuesday.

Further, C. Leonard Bauer, independent stock analyst, told BloggingStocks Tuesday the potential United-US Airways union would benefit the sector in that it would be the second merger this year among major airlines in the United States, also known as the legacy carriers.

Shares of UAL Corp. (NYSE: UAUA), parent of United Airlines, are down 88 cents to $14.10, while US Airways (NYSE: LCC) are down 55 cents to $7.79 in Tuesday trading.

Sector right-sizing

"The deal would take another legacy carrier off the table, after the Delta-Northwest merger, and that can only help the sector from an earnings standpoint," Bauer said. "The United States airline sector leads the league in airline route redundancy and duplicate hubs. This second deal would further tighten the sector."

And as travelers might sense, that elimination of redundancy would increase airfares, at least initially -- an unpleasant circumstance for travelers, but a positive, and needed, development for airlines, Bauer said.

"The unvarnished truth of the matter is that airfares [in the U.S.] have been under-priced due to a surplus of carriers. Fares have to go up to get airline margins where they should be," Bauer said. "Fuel costs will also add to fares, but long-term a better air travel system for the public will emerge." Bauer added that he does not have a rating on nor own shares in any airline.

Customer service impact

Some say a United-US Airways merger, immediately after the Delta-Northwest merger, would further hurt customer service by eliminating competition. That's a slightly simplistic assessment, says Bauer.

"The less competition, worse service logic applies in selected business cases, but not all," Bauer said. "With the airlines, you have to think slightly down the runway. Right now a considerable portion of an airline's resources is wasted in redundant, duplicate operations. The merger would allow the combined company to allocate resources more effectively to improve service." However, Bauer admitted that as part of the process certain flights would be phased-out, with large cutbacks possible at certain hubs.

However, amid the domestic airfare pain, Bauer said their will be pleasant surprises. The carriers may lower fares for international routes to attract customers, as they position themselves for the expected, large increase in international travel in the decade ahead.

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United (UAUA) and US Air (LCC) heat up merger talks

Douglas McIntyre — 2008-05-05T08:35:00+00:00

Filed under: Deals, Industry, US Airways Group (LCC), UAL Corp (UAUA), Delta Air Lines (DAL)

Reading the paper everyday means seeing a headline that another airline merger is in the offing. The most recent wave of articles is on a United Airlines (NASDAQ: UAUA) merger with US Air (NYSE: LCC). It is yet another example of two carriers hoping that they can get together and save costs, without alienating customers in the process.

According to The Wall Street Journal, "The companies have identified more than $1.5 billion in potential cost savings and revenue enhancements from joining forces." The word "potential" is the key.

Airline employees who are in unions have a good chance of shutting down a merged airline if they think they will loss a ton of jobs. Pilots, flight attendants, and mechanics all have plenty of leverage. A combination of United and US Air would have almost $10 billion in revenue a quarter. It would not take a very long strike to eat through $1.5 billion of that.

The number of pending mergers is also almost certain to get some of them canceled by The Justice Department. Members of Congress who have employees on airline payrolls are also likely to take a position. Today, the US has at least five major carriers. If Delta (NYSE: DAL) and Northwest (NYSE: NWA) get married, that cuts consumer choice down by a lot.

Don't count on a United hook up with US Air. It is not likely to happen.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

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Cramer on BloggingStocks: Airlines can't survive oil at $120

Jim Cramer — 2008-04-29T09:09:00+00:00

Filed under: Industry, Apple Inc (AAPL), Market matters, Goldman Sachs Group (GS), Eaton Corp (ETN), Delta Air Lines (DAL), Stocks to Buy, Stocks to Sell, Cramer on BloggingStocks

TheStreet.com's Jim Cramer says they can't be profitable with this huge cost - it's time to move on.

Here's a revelation. The airline industry is disappearing right before our eyes. And it doesn't even matter. They can merge all they want, they can try to cut costs through synergy, but the business can't survive $120 oil. The variable cost is 35% of their expense. That's not tenable and it is going higher. Fares have to double to make it up. That's just not tenable. The Dreamliner's a nice savings, but this American industry won't get there in time to be saved by it.

Last week we saw the big give-up, the departure of even the longest-term investors. The stocks are signaling that most of them will have to restructure through bankruptcy. They have done it before, but this time it doesn't matter. The fare increases have to occur, and they are such that the airline structures can't be profitable. It is one of those industries that can't stay afloat without massive federal subsidies, and that can't happen.

I have hated the airline stocks ever since 1985 when I recommended Delta (NYSE: DAL) (Cramer's Take) and my clients promptly dropped 50%. I reiterate that after the tremendous declines these stocks have, they are still worth avoiding. Don't be tempted to pick up these stocks if oil "swoons" down to $115. The airlines will rally, but they will need to do every bit of financing possible if a rally occurs.

This group has held an endless fascination on Wall Street from the first days it traded, yet the industry itself has done nothing but accumulated losses since it started. Find another industry to invest in! This one is not investible!

Random musings: I continue to believe that Apple (NASDAQ: AAPL) (Cramer's Take) can go MUCH higher. It is a very strong story in a group without many good stories. ... I prefer industrial "techs" like Eaton (NYSE: ETN) (Cramer's Take) to any of these techs. ... I firmly believe that Goldman's (NYSE: GS) (Cramer's Take) having a moment where it might be taking huge share and that's why it is up nicely. ... People really are buying retail off the tax rebate checks. ... The McMahons got the bum rush in yesterday's New York Times. It said that the CEO and chairman of World Wrestling Entertainment (NYSE: WWE) (Cramer's Take) enriched themselves with a big dividend boost. WRONG! They boosted the dividend for the other shareholders only, not themselves. That's why I said they are so pro shareholder on the show! Ouch!

RELATED LINKS:

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long Goldman Sachs.

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United, US Airways reportedly will merge

Jonathan Berr — 2008-04-28T16:29:00+00:00

Filed under: Deals, US Airways Group (LCC), UAL Corp (UAUA), Delta Air Lines (DAL)

Another day. Another merger of two struggling airlines.

This time it''s UAL Corp.'s (NYSE: UAUA) United Airlines and US Airways Inc. (NYSE: LCC), which together lost more than $773 million in the first quarter are reportedly in are "advanced" merger talks, two sources familiar with the situation told The Associated Press. These "sources" may be public relations people who are leaking details of the deal at the direction of the investment bankers and the companies themselves.

Wall Street is reacting positively to the news sending shares of US Airways in mid-afternoon trading. I am not so sure a celebration is in order. For one thing, as Reuters and the Associated Press both have noted this is a marriage of necessity.

"The discussions intensified over the weekend after Continental Airlines Inc, which had been in negotiations with United, pulled out to explore a potential marketing alliance with AMR Corp's American Airlines and British Airways Plc," according to Reuters.

The combined company would have to compete against the combined Delta Airlines Inc. (NYSE: DAL) and Northwest Airlines Corp. (NYSE: NWA) which will create the largest airline.

Airline mergers have had such a lousy track record, what makes people think these will be any different?

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Continental (CAL) elects to go it alone

Douglas McIntyre — 2008-04-27T20:24:00+00:00

Filed under: Deals, Consumer experience, Competitive strategy, Contl Airlines'B' (CAL), Oil, Delta Air Lines (DAL)

While Northwest (NYSE:NWA) and Delta (NYSE:DAL) have decided to merge, Continental (NYSE:CAL) will take the road in the other direction by electing to stay independent.

According to The Wall Street Journal "Continental's statement comes as the industry faces soaring fuel prices." The trouble is that whether airlines merge or not, crude oil prices continue to rise.

Continental has probably made a wise decision. There is no guarantee that the marriage of NWA and DAL will help either company. Mergers mean lay-offs and that often means strikes. If there are labor walk-outs the new carrier could face weeks of being unable to fly and unable to collect revenue. Merged reservation systems can also take months to integrate.

Continental will be on its own, but if fuel continues it sharp ascent, it won't matter.

Douglas A. McIntyre is an editor at 247wallst.com.

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