MORNING COFFEE

Apple To Report EPS After Close. Apple (AAPL) is scheduled to release their earnings after the close today.  Analysts’ estimates are for the company to report EPS of $5.36 and revenues of $23.3 billion, a 61% and 73% increase respectively over year ago results. Analysts will also be looking to see at how the Japanese earthquake may have affected their supply chain and demand for its products in the country going forward.  Reports also say that Apple will begin shipping its next generation iPhone in September. Pre-market: 342.36 +4.50 (1.33%)

Earning Reports

Altria (MO): Reported Q1 EPS of $0.44 in-line on revenue of $3.94 billion, beating estimates by +$).05 billion. Pre-market: 26.50 +0.12 (0.45%)

Autoliv (ALV): Reported Q1 EPS of $1.92 Beating estimates by +$0.16 on revenue of $2.10 billion, beating estimates by +$0.08 billion. Pre-market: 77.62 +5.00 (6.89%)

Cree (CREE): Reported FQ3 EPS of $0.27 missing estimates by -$0.02 on revenue of $219 million, beating estimates by +$1.8 million. Pre-market: 38.30 -2.51 (-6.15%)

CSX (CSX): Reported Q1 EPS of $1.06 beating estimates by +$0.02 on revenue of $2.8 billion, beating estimates by +$0.06 billion. Pre-market: 76.51 +0.47 (0.62%)

Eaton (ETN): Reported Q1 EPS of $0.84 beating estimates by +$0.04 on revenue of $2.10 billion, beating estimates by +$0.08 billion. Pre-market: 53.50 +0.87 (1.65%)

Elan (ELN): Reported Q1 EPS of -$0.01 beating estimates by +$0.04 on revenue of $310 million, beating estimates by +$13 million. Pre-market: 8.34 +0.17 (2.08%)

IBM (IBM): Reported Q1 EPS of $2.41 beating estimates by +$0.11 on revenue of $24.6 billion, in-line with estimates. Pre-market: 163.50 -1.90 (-1.15%)

Intel (INTC): Reported Q1 EPS of $0.56 beating estimates by +$0.10 on revenue of $12.8 billion, beating estimates by +$0.8 billion. Pre-market: 21.06 +1.20 (6.04%)

Juniper Networks (JNPR): Reported Q1 EPS of $0.32 in-line with estimates on revenue of $1.1 billion, in-line with estimates. Pre-market: 39.42 +0.95 (2.47%)

Nasdaq (NDAQ): Reported Q1 EPS of $0.61 in-line on revenue of $415 million, beating estimates by +$6 million. After Hours: 27.76 +0.36 (1.31%)

United Technologies (UTX): Reported Q1 EPS of $1.13 beating estimates by +$0.06 on revenue of $13.34 billion, beating estimates by +$490 million.

Stryker (SYK): Reported Q1 EPS of $0.90 in-line on revenue of $2 billion, in-line with estimates. Pre-market: 61.20 +0.10 (0.16%)

VMware (VMW): Reported Q1 EPS of $0.48 Beating estimates by +$0.06 on revenue of $844 million, beating estimates by +$28 million. Pre-market: 97.00 +11.03 (12.83%)

Wynn Resorts (WYNN): Reported Q1 EPS of $1.38 beating estimates by +$0.65 on revenue of $1.26 billion, beating estimates by +$0.1 billion. Pre-market: 145.02 +6.09 (4.38%)

Yahoo (YHOO)): Reported Q1 EPS of $0.17 beating estimates by +$0.01 on revenue of $1.06 billion, in-line with estimates. Pre-market: 16.69 +0.57 (3.54%)

Upgrades

Intel (INTC): FBR Capital raised their rating from Market Perform to Outperform and raised their target price from $25.00 to $27.00.

Downgrades

Adobe Systems (ADBE): FBR Capital lowered their rating from Market Perform to Underperform and lowered their target price from $33.00 to $28.00.

Juniper Networks (JNPR): Ticonderoga lowered their rating from Buy to Neutral.

Cree (CREE): Kaufman Bros lowered their rating from Hold to Sell and lowered their target price from $40.00 to $29.00.

Cree (CREE): Wunderlich lowered their rating from Buy to Hold and lowered their target price from $80.00 to $40.00.

Coverage Reiterated/Price Target Changed

Juniper Networks (JNPR): Auriga U.S.A reiterated their Buy rating and lowered their target price from $54.00 to $50.00.

Seagate Tech (STX): Brean Murray reiterated their Buy rating and raised their target price from $18.00 to $22.00.

VMware (VMW): FBR Capital reiterated their Market Perform rating and raised their target price from $83.00 to $97.00.

VMware (VMW): ISI Group reiterated their Buy rating and raised their target price from $110.00 to $115.00.

·         Futures at 7:00: Dow +1.1%. S&P +1.3%. Nasdaq +1.2%. Crude +1.1% to $109.50. Gold +0.6% to $1503.90.

·         Europe: London +2.3%. Paris +2.3%. Frankfurt +2.8%.

·         Asia: Japan +1.8% to 9607. Hong Kong +1.6% to 23896. China +0.3% to 3008. India +1.8% to 19471.

MORNING COFFEE

S&P Cuts U.S. Debt Outlook.  World market sold off yesterday after the rating agency Standard & Poor’s downgraded the U.S. debt outlook from “Stable to Negative.” The negative outlook rating means that the United States AAA credit rating is in jeopardy of being lowered.  In a news conference S&P said that the reason for the negative outlook is due to the massive spending and debt the U.S. has accumulated in the last few years.  Currently the company said the U.S. has a 33% chance in having their AAA credit rating lowered in the next 6 months to 2 yrs.  This rating warning comes as the government just finished battling over the 2011 budget and will begin battling over the 2012 budget and we approach the debt ceiling.  If the U.S. loses its gold standard AAA rating, borrowing cost will rise hurting the economy and making our debt problem worse.

Goldman Sachs Pays Back Berkshire. Goldman Sachs (GS) repurchased the $5 billion in preferred shares it sold Berkshire Hathaway (BRKA/BRKB) during the financial crisis back in 2008. Warren Buffett joked that he knew they would be repaying, so he tried to avoid answering the phone.  The preferred shares were paying a 10% dividend, yielding the company about $1,369,863 per day. GS Pre-market: 156.28 +2.50 (1.63%) BRKB Pre-market: 80.56 +0.26 (0.32%)

Earning Reports

Texas Instruments (TXN): Reported Q1 EPS of $0.55 missing estimates by -$0.03 on revenue of $3.4 billion, in-line with estimates. Pre-market: 34.15 -0.64 (-1.84%)

Zions Bancorp (ZION): Reported Q1 EPS of $0.08 beating estimates by +$0.10. Pre-market: 24.30 +1.34 (5.84%)

Companies to Report Earnings Today

Harley-Davidson (HOG): Analysts estimates are for the company to report Q1 EPS of $0.53 on revenue of $1.05 billion.

Johnson & Johnson (JNJ): Analysts estimates are for the company to report Q1 EPS of $1.27 on revenue of $2.66 billion.

Goldman Sachs (GS): Analysts estimates are for the company to report Q1 EPS of $0.82 on revenue of $10.18 billion.

Intel (INTC): Analysts estimates are for the company to report Q1 EPS of $0.46 on revenue of $11.61 billion.

IBM (IBM): Analysts estimates are for the company to report Q1 EPS of $2.30 on revenue of $24.02 billion.

CSX (CSX): Analysts estimates are for the company to report Q1 EPS of $1.04 on revenue of $2.74 billion. 

Upgrades

Eaton (ETN): Oppenheimer raised their rating from Perform to Outperform and placed a target price of $63.00 on the company.

Zions Bancorp (ZION): FBR Capital raised their rating from Market Perform to Outperform and raised their target price from $22.00 to $30.00.

Coverage Initiated

HCA (HCA): Oppenheimer initiated coverage with an Outperform rating and a target price of $40.00.

HCA (HCA): Robert W. Baird initiated coverage with an Outperform rating and a target price of $37.00.

McDermott (MDR): Morgan Keegan initiated coverage with an Outperform rating and a target price of $31.50.

Coverage Reiterated/Price Target Changed

WW Grainger (GWW): Oppenheimer reiterated their Outperform rating and raised their target price from $158.00 to $175.00.

Dolby Labs (DLB): Collins Stewart reiterated their Buy rating and lowered their target price from $75.00 to $55.00.

•Futures at 8:18: Dow +0.23%. S&P +0.13%. Nasdaq +0.13%. Crude -0.75% to $106.36. Gold +0.18% to $1495.60.
•Europe: London +0.64%. Paris +0.75%. Frankfurt +0.45%.
•Asia: Japan -1.21% to 9441. Hong Kong -1.3% to 23520.. China -1.91% to 2999. India +0.16% to 19121.

MORNING COFFEE

Halliburton Q1 Profit Up.  Halliburton's reported net income that more than doubled in the first quarter, as drilling activity in North America picked up.  The company reported Q1 earnings of $511 million, or $0.56 per share, compared with $206 million, or $0.23 per share, in the same period last year. Revenue rose 40 % to $5.28 billion.  Halliburton said it earned $0.61 per share after taking a $46 million charge related to international sanctions on oil operations in Libya. Halliburton Co. posted nice revenue gains despite a slowdown in offshore drilling in the Gulf of Mexico and political turmoil in North Africa.   President and CEO Dave Lesar said "We remain very optimistic about this market and expect to be profitable in 2011." Pre-market: 47.38 +0.56 (1.20%)

J&J In Talks With Synthes. Johnson & Johnson (JNJ) confirmed they are in acquisition talks with Zurich based Synthes (SYST.VX).  An acquisition of Synthes would give J&J substantial access to the $5.5 billion trauma sector, which grew 8% last year. Synthes manufactures products in five main areas - Trauma, Spine, Cranio-Maxillofacial (CMF), Biomaterials, Power Tools and veterinary. JNJ Pre-market: 60.40 -0.16 (-0.26%) SYST 149.90 +11.20 (+8.07)

Upgrades

Hyatt Hotels (H): FBR Capital raised their rating from Market perform to Outperform and placed a target price of $49.00 on the company.

Downgrades

Best Buy (BBY): KeyBanc Capital Markets lowered their rating from Buy to Hold.

Papa John's (PZZA): Stifel Nicolaus lowered their rating from Buy to Hold.

Community Health (CYH): Oppenheimer lowered their rating from Outperform to Perform.

Coverage Reiterated/Price Target Changed

EMC (EMC): Brean Murray reiterated their Buy rating and raised their target price from $30.00 to $33.00.

Qualcomm (QCOM): FBR Capital reiterated their Outperform rating and raised their target price from $60.00 to $62.00.

Earning Reports

Citigroup (C): Reported EPS of $0.10 beating estimates by +$0.01 on revenue of $19.7 billion. Pre-market: 4.48 +0.06 (1.36%)

Eli Lilly (LLY): Reported Q1 EPS of $1.24 beating estimates by +$0.08 on revenue of $5.84 billion, beating estimates by +$0.2 billion. Pre-market: 35.42 -0.59 (-1.64%)

Halliburton (HAL): Reported Q1 EPS of $0.61 beating estimates by +$0.03 on revenue of $5.28 billion, beating estimates by +$0.3 billion. Pre-market: 47.38 +0.56 (1.20%)

KeyCorp (KEY): Reported Q1 EPS of $0.21 beating estimates by +$0.05. Pre-market: 8.85 +0.03 (0.34%)

·         Futures at 7:00: Dow -0.6%. S&P -0.7%. Nasdaq -0.6%. Crude -1.1% to $108.45. Gold -0.1% to $1484.50.

·         Europe: London -1.0%. Paris -1.5%. Frankfurt -1.1%.

·         Asia: Japan -0.4% to 9557. Hong Kong -0.7% to 23830. China +0.2% to 3057. India -1.5% to 19091.

MORNING COFFEE

Google Gives Mixed Report.  After the close yesterday Google (GOOG) reported Q1 earnings that missed Wall Street estimates.  The street was looking for EPS of $8.10 and reported EPS of $8.08, a 20% increase.  Operating costs at the company rose 54% to $2.84 billion and revenues climbed 29% to $6.54 billion beating estimates.  Google's higher spending came in the form of the hiring of over 1,900 people, as well as from higher R&D and sales and marketing costs. Some analysts are saying that the current spending increases should fuel future growth at the company.

Bank of America Misses On Earnings. Bank of America (BAC) reported Q1 EPS that missed estimates by -37%, coming in at just $0.17.  Although the results were partially offset by lower credit losses and higher banking fees these were not enough to offset other negative factors at the bank.  The bank continues to have issues with increased litigation expenses, higher mortgage-related costs, and lower sales and trading revenue from its Merrill Lynch unit.

Upgrades

Hasbro (HAS): Morgan Joseph raised their rating from Hold to Buy and placed a target price of $54.00 on the company.

Fifth Third (FITB): Robert W. Baird raised their rating from Neutral to Outperform and raised their target price from $16.00 to $17.00.

Downgrades

Cisco Systems (CSCO): Auriga U.S.A lowered their rating from Buy to Hold and lowered their target price from $23.00 to $19.00.

Coverage Reiterated/Price Target Changed

Google (GOOG): Stifel Nicolaus reiterated their Buy rating and lowered their target price from $775.00 to $750.00.

Google (GOOG): Oppenheimer reiterated their Outperform rating and lowered their target price from $715.00 to $650.00.

Tesla Motors (TSLA): Dougherty & Company reiterated their Buy rating and raised their target price from $30.00 to $40.00.

Earning Reports

Bank of America (BAC): Reported Q1 EPS of $0.17 missing estimates by -$0.10 on revenue of $27.1 billion, beating estimates by +$0.04 billion.

Infosys Technologies (INFY): Reported FQ4 EPS of $0.70 in-line with estimates on revenue of $1.6 billion, also  in-line with estimates.

Mattel (MAT): Reported Q1 EPS of $0.05 in-line with estimates on revenue of $951.9 million, beating estimates by +$48.2 million.

Google (GOOG): Reported Q1 EPS of $8.08 missing estimates by -$0.02 on revenue of $6.54 billion, beating estimates by +$220 million. 

·         Futures at 8:49: Dow -0.06%. S&P -0.05%. Nasdaq -0.29%. Crude 0.0% at $108.09. Gold +0.4% to $1477.80.

·         Europe: London +0.17%. Paris -0.35%. Frankfurt +0.31%.

·         Asia: Japan -0.7% to 9592. Hong Kong 0.0% at 24008. China+0.3% to 3051. India -1.6% to 19387.

MORNING COFFEE

President Obama Outlines Budget Cuts.  In a speech yesterday President Obama outlined his plan to tackle the $14 trillion national debt.  The plan covers 12 years versus the usual 10 years and hopes to reduce the deficit by $4 trillion.  In his speech, he said the plan includes a “debt fail-safe” trigger that would require Congress to pass across-the-board spending reductions if the nation’s debt-to-GDP ratio hasn’t stabilized by 2014. The savings outlined would come in the form of spending cuts including cuts to defense, Medicare and Medicaid. President Obama also said that Social Security should be reformed for long-term results.  Increased revenues would come by reforming the tax code, which would include tax increases, closing loopholes and ending some tax breaks including the home mortgage interest deduction.

Downgrades

Nabors Industries (NBR): Global Hunter Securities lowered their rating from Buy to Accumulate.

Coverage Initiated

Overstock.com (OSTK): The Benchmark Company initiated coverage with a Buy rating and target price of$18.00.

Coverage Resumed

Broadcom (BRCM): Auriga U.S.A resumed coverage with a Buy rating and placed a target price of $50.00 on the company.

Coverage Reiterated/Price Target Changed

Perrigo (PGRO): Caris & Company reiterated their Above Average rating and raised their target price from $93.00 to $103.00.

MetroPCS (PCS): Oppenheimer reiterated their Outperform rating and raised their target price from $17.00 to $19.00.

JPMorgan Chase (JPM): FBR Capital reiterated their Outperform rating and raised their target price from $53.00 to $56.00.

Earning Reports

Check Point Software (CHKP): Reported Q1 EPS of $0.64 beating estimates by +$0.02 on revenue of $281.3 million, beating estimates by +$4.6 million. Pre-market: 52.27 +0.29 (0.56%)

Hasbro (HAS): Reported Q1 EPS of $0.12 missing estimates by -$0.05 on revenue of $672 million, beating estimates by +$11.62 million. Pre-market: 45.22 -0.57 (-1.24%)

Progressive (PGR): Reported EPS of $0.55 beating estimates by +$0.11. Pre-Market: 21.45 +0.04 (0.19%)

Supervalu (SVU): Reported EPS of $0.44 beating estimates by +$0.10. Pre-market: 10.28 +1.20 (13.22%)

·         Futures at 7:00: Dow -0.4%. S&P -0.5%. Nasdaq -0.7%. Crude -0.4% to $106.70. Gold +0.2% to $1458.50.

·         Europe: London -1.0%. Paris -1.2%. Frankfurt -0.8%.

·         Asia: Japan +0.1% to 9654. Hong Kong -0.5% to 24014. China -0.2% to 3043. India +2.25%.

MORNING COFFEE

President Obama To Give Speech On Deficit. 

President Obama is scheduled to give a speech today at George Washington University that will lay out his plan for dealing with the deficit.  In the speech he is expected to propose cuts to entitlement programs, while increasing taxes.  This comes after the IMF said that the U.S.’s lack of a strategy to address the debt poses a risk of a new global economic crisis.

Coverage Initiated

Comerica (CMA): Morgan Keegan initiated coverage with a Market Perform rating and a target price of $38.00.

Coverage Resumed

Xilinx (XLNX): Auriga U.S.A resumed coverage with a Buy rating and target price of $36.00.

Altera (ALTR): Auriga U.S.A resumed coverage with a Buy rating and target price of $51.00.

Downgrades

Sunoco (SUN): The Benchmark Company lowered their rating from Hold to Sell and placed a target price of $34.00 on the company.

Coverage Reiterated/Price Target Changed

Iron Mountain (IRM): The Benchmark Company reiterated their Hold rating and raised their target price from $24.00 to $29.00.

Moody's (MCO): The Benchmark Company reiterated their Buy rating and raised their target price from $34.00 to $38.00.

Murphy Oil (MUR): Oppenheimer reiterated their Outperform rating and raised their target price from $82.00 to $90.00.

Earning Reports

JPMorgan Chase (JPM): Reported Q1 EPS of $1.28 beating estimates by +$0.12 on revenue of $25.8 billion. Pre-market: 47.24 +0.60 (1.29%)

ASML (ASML): Reported Q1 EPS of €0.90 beating estimates by + €0.07 on revenue of €1.45 billion.  Pre-market: 42.41 0.00 (0.00%)

·         Futures at 7:00: Dow +0.5%. S&P +0.5%. Nasdaq +0.6%. Crude+0.2% to $106.47. Gold +0.4% to $1459.60.

·         Europe: London +0.9%. Paris +0.9%. Frankfurt +1.0%.

·         Asia: Japan +0.9% to 9641. Hong Kong +0.7% to 24135. China +0.9% to 3050. India +2.3% to 19697.

MORNING COFFEE

Intel Releases Tablet Chips. Intel (INTC) announced that it has new chips designed for tablet computers.  The new chips manage functions important for tablets, such as extending  battery life. The new chips have been selected for 35 products, including those from Fujitsu (FJTSY), Lenovo (LNVGY) and other companies. INTC Pre-market: 20.03 -0.09 (-0.45%)

Downgrades

Abercrombie & Fitch (ANF): Argus lowered their rating from Buy to Hold.

Coverage Initiated

Diageo PLC (DEO): Jefferies initiated coverage with a Buy rating and target price of $91.00.

British American Tobacco (BTI): Jefferies initiated coverage with a Buy rating.

Imperial Tobacco (ITYBY): Jefferies initiated coverage with a Hold rating.

Coverage Reiterated/Price Target Changed

Halliburton (HAL): Argus reiterated their Buy rating and raised their target price from $48.00 to $56.00.

Earning Reports

Alcoa (AA): Reported Q1 EPS of $0.28 beating estimates by +$0.01 on revenue of $6.0 billion, missing estimates by -$0.1 billion. Pre-market: 17.08 -0.69 (-3.88%)

Fastenal (FAST): Reported EPS of $0.54 beating estimates by +$0.02. Pre-market: 66.63 -0.87 (-1.29%)

·         Futures at 8:27: Dow -0.45%. S&P -0.48%. Nasdaq -0.48%. Crude 0.0% at $109.73. Gold -0.3% to $1464.00.

·         Europe: London -1.0%. Paris -1.1%. Frankfurt -1.0%.

·         Asia: Japan -1.7% to 9555. Hong Kong -1.3% to 23976. China+0.0% to 3023. India closed.