MORNING COFFEE

Microsoft’s Profits Fall.  For the first time in 20 years Microsoft (MSFT) reported a smaller quarterly profit than Apple (APPL).  The company reported EPS of $0.61 on revenue of $16.4 billion.  The surprise was that revenues from Windows fell -4.4% as consumers flock to tablet computers such as Apple’s iPad and other tablets that run Google’s (GOOG) Android operating systems. Microsoft said that PC shipments saw a -8% decline in the quarter, while Netbooks plunged -40%. Pre-market: 26.44 -0.27 (-1.01%)

Downgrades

Oshkosh Truck (OSK): The Benchmark Company lowered their rating from Buy to Hold and lowered their target price from $45.00 to $35.00.

Oshkosh Truck (OSK): Robert W. Baird lowered their rating from Outperform to Neutral and lowered their target price from $47.00 to $34.00.

Ingram Micro (IM): Brean Murray lowered their rating from Buy to Hold.

Constellation Energy (CEG): Wunderlich lowered their rating from Buy to Hold.

Coverage Reiterated/Price Target Changed

Coinstar (CSTR): The Benchmark Company reiterated their Buy rating and raised their target price from $60.00 to $70.00.

Cerner (CERN): Auriga U.S.A reiterated their Buy rating and raised their target price from $121.00 to $130.00.

Cerner (CERN): FBR Capital reiterated their Outperform rating and raised their target price from $121.00 to $131.00.

Norfolk Southern (NSC): Longbow reiterated their Buy rating and raised their target price from $81.00 to $85.00.

Nabors Industries (NBR): FBR Capital reiterated their Market Perform rating and raised their target price from $30.00 to $36.00.

Varian Semi (VSEA): Needham reiterated their Buy rating and lowered their target price from $57.00 to $53.00

Earning Reports

Calpine (CPN): Reported Q1 EPS of -$0.61 missing estimates by  -$0.48.

Coinstar (CSTR): Reported Q1 EPS of $0.46 beating estimates by +$0.24 on revenue of $424 million, beating estimates by +$15 million. Pre-market: 56.65 +5.24 (10.19%)

Eastman Chemical (EMN): Reported Q1 EPS of $2.52 beating estimates by +$0.59 on revenue of $1.76 billion, beating estimates by $230 milion. After Hours: 110.50 +7.57 (7.35%)

Expedia (EXPE): Reported Q1 EPS of $0.25 missing estimates by -$0.01 on revenue of $822 million, beating estimates by +$27 million.

Microsoft (MSFT): Reported EPS of $0.61 beating estimates by +$0.05 on revenue of $16.4 billion, beating estimates by +$0.20 billion.

Newell Rubbermaid (NWL): Reported Q1 EPS of $0.30 beating estimates by +$0.02.

Varian Semiconductor (VSEA): Reported FQ2 EPS of $1.07 beating estimates by +$0.01 on revenue of $330 million, beating estimates by +$9 million.

Weyerhaeuser (WY): Reported Q1 EPS of $0.18 missing estimates by -$0.03 on revenue of $1.57 billion, missing estimates by -$0.09 billion.

·         Futures at 7:00: Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude -0.15% to $112.69. Gold +0.4% to $1537.20.

·         Europe: London closed. Paris -0.1%. Frankfurt +0.3%.

·         Asia: Japan +1.6% to 9850. Hong Kong -0.4% to 23721. China +0.9% to 2912. India -0.8% to 19136.

MORNING COFFEE

Berkshire Hathaway’s Sokal May Have Broken Law. 

In an announcement yesterday Berkshire Hathaway (BRK.A/BRK.B) said former executive David Sokol did break the company's insider-trader laws and deceived the company about his purchase of Lubrizol (LZ), just before Sokol recommended the deal to Warren Buffett.  The Berkshire’s audit committee also said Sokol failed to meet his disclosure obligations under Delaware state law. Pre-market: 82.75 -0.24 (-0.29%)

Upgrades

Flagstar Bancorp (FBC): FBR Capital raised their rating from Market Perform to Outperform and raised their target price from $1.75 to $2.00.

Downgrades

Stericycle (SRCL): Robert W. Baird lowered their rating from Outperform to Neutral.

Coverage Initiated

Huntington Ingalls (HII): Morgan Keegan initiated coverage with an Outperform rating and placed a target price of $50.00 on the company.

Coverage Reiterated/Price Target Changed

Xilinx (XLNX): Auriga U.S.A reiterated their Buy rating and raised their target price from $36.00 to $39.00.

Novellus (NVLS): Needham reiterated their Buy rating and lowered their target price from $45.00 to $41.00.

Urban Outfitters (UBRN): Needham reiterated their Strong Buy rating and lowered their target price from $51.00 to $48.00.

Moody's (MCO): The Benchmark Company reiterated their Buy rating and raised their target price from $38.00 to $43.00. 

Earning Reports

Aetna (AET): Reported Q1 EPS of $1.43 beating estimates by +$0.46 on revenue of $8.34 billion, missing estimates by -$0.04 billion. Pre-market: 43.65 +3.84 (9.65%)

AFLAC (AFL): Reported Q1 EPS of $1.63 beating estimates by +$0.11. Pre-market: 54.92 0.00 (0.00%)

Ball (BLL): Reported Q1 EPS of $0.58 beating estimates by +$0.10 on revenue of $2.01 billion, beating estimates by +$0.12 billion. Pre-market: 37.01 0.00 (0.00%)

Baidu.com (BIDU): Reported Q1 EPS of $0.47 beating estimates by +$0.02 on revenue of $372 million, beating estimates by +$5 million. Pre-market: 152.66 +1.55 (1.03%)

Colgate-Palmolive Company (CL): Reported Q1 EPS of $1.16 in-line with estimates on revenue of $3.99 billion, beating estimates by +$0.08 billion. Pre-market: 80.25 -0.81 (-1.00%)

Dow Chemical (DOW): Reported Q1 EPS of $0.82 beating estimates by +$0.15 on revenue of $14.73 billion, beating estimates by +$0.71 billion. Pre-market: 40.50 +0.58 (1.45%)

eBay (EBAY): Reported Q1 EPS of $0.47 beating estimates by +$0.01 on revenue of $2.54 billion, in-line. Pre-market: 34.80 +0.77 (2.26%)

International Paper (IP): Reported Q1 EPS of $0.78 beating estimates by +$0.19 on revenue of $6.38 billion, beating estimates by +$0.02 billion. Pre-market: 30.40 +0.42 (1.40%)

Intersil (ISIL): Reported Q1 EPS of $0.11 in-line with estimates on revenue of $199 million, bearing estimates by +$2 million. Pre-market: 14.80 0.00 (0.00%)

Iron Mountain (IRM): Reported Q1 EPS of $0.26 missing estimates by -$0.01 on revenue of $799 million, beating estimates by +$8 million. . Pre-market: 31.67 0.00 (0.00%)

Medco Health Solutions (MHS): Reported Q1 EPS of $0.91 beating estimates by +$0.03 on revenue of $17.01 billion, missing estimates by -$0.05 billion. Pre-market: 54.94 0.00 (0.00%)

Norfolk Southern (NSC): Reported Q1 EPS of $1.00 beating estimates by +$0.10 on revenue of $2.6 billion, beating estimates by +$1 billion. Pre-market: 70.76 +2.35 (3.44%)

Potash (POT): Reported Q1 EPS of $0.84 beating estimates by +$0.04 on revenue of $2.20 billion, beating estimates by +$0.19 billion. Pre-market: 57.92 +0.73 (1.28%)

Starbucks (SBUX): Reported FQ2 EPS of $0.34 in-line with estimates on revenue of $2.8 billion, in-line. Pre-market: 36.25 -0.94 (-2.53%)

Starwood Hotels (HOT): Reported Q1 EPS of $0.30 beating estimates by +$0.05 on revenue of $1.29 billion, beating estimates by +$0.02 billion. Pre-market: 60.68 0.00 (0.00%)

Xilinx (XLNX): Reported FQ4 EPS of $0.59 beating estimates by +$0.07 on revenue of $588 million, beating estimates by +$10 million. Pre-market: 33.00 +0.14 (0.43%)

·         Futures at 8:01: Dow -0.09%. S&P -0.12%. Nasdaq -0.17%. 10-yr +0.21%. Euro +0.1% vs. dollar. Crude -0.15% to $112.59. Gold +1.0% to $1532.

·         Europe: London -0.19%. Paris +0.46%. Frankfurt +0.43%.

·         Asia: Japan +1.6%. Hong Kong -0.4%. China -1.3%. India -0.8%.

MORNING COFFEE

Bernanke To Give Press Conference. 

For the first time ever a Fed Chairman will give a scheduled press conference.  Fed Chairman Ben Bernanke today at 2:15 is scheduled to give a news conference. During the conference he is expected to announce that the FOMC will keep interest rates unchanged at 0-0.25% for an "an extended period," and continue with its $600 billion bond-buying program. The FOMC will also release its quarterly growth and inflation estimates which are expected to be revised lower from 3.4-3.9% to 2.9%. After his statements he will be answering questions from the press.

Upgrades

Emerson (EMR): Oppenheimer raised their rating from Perform to Outperform and raised their target price from $65.00 to $74.00.

First Solar (FSLR): Kaufman Bros raised their rating from Hold to Buy placed a target price of $165.00 on the company.

Downgrades

Lexmark (LXK): Brean Murray lowered their rating from Buy to Hold.

Roper Inds (ROP): Oppenheimer lowered their rating from Outperform to Perform.

Coverage Reiterated/Price Target Changed

Broadcom (BRCM): Kaufman Bros reiterated their Buy rating and lowered their target price from $48.00 to $46.00.

Broadcom (BRCM): Auriga U.S.A reiterated their Buy rating and lowered their target price from $50.00 to $47.00.

U.S. Steel (X): Dahlman Rose reiterated their Buy rating and lowered their target price from $85.00 to $65.00.

Altera (ALTR): Auriga U.S.A reiterated their Buy rating and raised their target price from $51.00 to $54.00.

Amazon.com (AMZN): Oppenheimer reiterated their Outperform rating and raised their target price from $200.00 to $220.00.

Amazon.com (AMZN): The Benchmark Company reiterated their Buy rating and raised their target price from $200.00 to $212.00.

3M (MMM): FBR Capital reiterated their Outperform rating and raised their target price from $99.00 to $105.00.

Earning Reports

Amazon.com (AMZN): Reported Q1 EPS of $0.44 missing estimates by -$0.16 on revenue of $9.86 billion, beating estimates by +$0.3 billion. Pre-market: 180.30 -2.00 (-1.10%)

Baker Hughes (BHI): Reported Q1 EPS of $0.87 beating estimates by +$0.09 on revenue of $4.52 billion, beating estimates by +$0.24 billion. Pre-market: 78.08 +4.02 (5.43%)

Broadcom (BRCM): Reported Q1 EPS of $0.40 beating estimates by +$0.05 on revenue of $1.81 billion, in-line. Pre-market: 37.00 -3.41 (-8.44%)

Nabors Industries (NBR): Reported Q1 EPS of $0.29 missing estimates by -$0.05 on revenue of $1.4 billion, beating estimates by +$1 billion. Pre-market: 32.17 +0.11 (0.34%)

National-Oilwell (NOV): Reported Q1 EPS of $1.00 in-line with estimates on revenue of $3.14 billion, beating estimates by +$0.02 billion. Pre-market: 80.60 +0.00 (0.00%)

Whirlpool (WHR): Reported Q1 EPS of $2.11 beating estimates by +$0.47 on revenue of $4.40 billion, beating estimates by +$0.14 billion. Pre-market: 90.99 +3.13 (3.56%)

·         Futures at 7:28: Dow +0.34%.  S&P +0.36%. Nasdaq +0.64%. Crude +0.4% to $112.61. Gold +0.2% to $1505.90

·         Europe: London 0.0%. Paris +0.5%. Frankfurt +0.7%.

·         Asia: Japan +1.4%. Hong Kong -0.5%. China -0.5%. India -0.5%.

MORNING COFFEE

Ford Post Great Earnings. Ford (F) is on a roll as the company posted a great earnings report. In fact it was the best Q1 report in 13 years.  Ford reported Q1 earnings of $0.62 up 24% from year ago earnings of only $0.50.   Revenues at the company rose 18% to $33.1 billion.  The company also reported that they had decreased their debt levels by $2.5 billion brining their debt to $16.6 billion. Pre-market: 15.94 +0.40 (2.57%)

Upgrades

Netflix (NFLX): Maxim Group raised their rating from Sell to Hold.

Downgrades

Altria (MO): Argus lowered their rating from Buy to Hold.

Peet's Coffee (PEET): Robert W. Baird lowered their rating from Outperform to Neutral and lowered their target price from $53.00 to $48.00.

Coverage Initiated

Allscripts-Misys Healthcare (MDRX): Oppenheimer initiated coverage with a Outperform rating and placed a target price of $25.00 on the company.

Coverage Reiterated/Price Target Changed

Netflix (NFLX): Oppenheimer reiterated their Outperform rating and raised their target price from $230.00 to$280.00.

Viacom (VIA.B): Wunderlich reiterated their Buy rating and raised their target price from $52.00 to$56.00.

Earning Reports

Coach (COH): Reported FQ3 EPS of $0.62 beating estimates by +$0.02 on revenue of $951 million, beating estimates by $4 million. Pre-market: 56.50 -0.58 (-1.02%)

Express Scripts (ESRX): Reported Q1 EPS of $0.66 missing estimates by -$0.03 on revenue of $11.09 billion, missing estimates by -$0.46 billion. Pre-market: 53.70 -1.67 (-3.02%)

Ford (F): Reported Q1 EPS of $0.62 beating estimates by +$0.12 on revenue of $33.1 billion, beating estimates by +$3.41 billion. Pre-market: 15.94 +0.40 (2.57%)

Masco (MAS): Reported Q1 EPS of -$0.05 missing estimates by -$0.08 on revenue of $1.77 billion, beating estimates by +$0.02 billion. Pre-market: 13.00 -0.38 (-2.84%)

Netflix (NFLX): Reported Q1 EPS of $1.11 beating estimates by +$0.03 on revenue of $719 million, beating estimates by +$16 million. Pre-market: 239.81 -11.86 (-4.71%)

Office Depot (ODP): Reported Q1 EPS of -$0.05 missing estimates by -$0.07 on revenue of $2.97 billion, in-line with estimates. Pre-market: 4.06 -0.08 (-1.93%)

Plum Creek Timber (PCL): Reported Q1 EPS of $0.23 missing estimates by -$0.01 on revenue of $275 million, beating estimates by +$20 million. Pre-market: 42.89 0.00 (0.00%)

·         Futures at 7:00: Dow +0.2%. S&P +0.4%. Nasdaq +0.3%. Crude -0.3% to $111.99. Gold -0.3% to $1504.50.

·         Europe: London +0.3%. Paris +0.3%. Frankfurt +0.4%.

·         Asia: Japan -1.2% to 9559. Hong Kong -0.5% to 24007. China -0.9% to 2939. India -0.2% to 19545.

MORNING COFFEE

Nintendo To Replace Wii.  Nintendo (NTDOY) said this morning that the will be releasing a new system to replace the very popular Wii gaming system some time in 2012.  The game maker plans to "show a playable model of the new system" at the E3 Expo in Los Angeles from June 7 to 9. And said it would release more information about the new game system at that time.  Nintendo said it has sold more than 86 million units of the Wii, a system since its launch in 2006.

Upgrades

Brocade (BRCD): Robert W. Baird raised their rating from Neutral to Outperform and placed a target price of $8.00 on the company.

Marriott (MAR): FBR Capital raised their rating from Market Perform to Outperform and placed a target price of $43.00 on the company.

Legg Mason (LM): Ticonderoga raised their rating from Sell to Neutral.

SunTrust Banks (STI): Oppenheimer raised their rating from Underperform to Perform.

Downgrades

BB&T Corp (BBT): Oppenheimer lowered their rating from Outperform to Perform.

Coverage Reiterated/Price Target Changed

ITT Educational (ESI): RBC Capital Markets reiterated their Sector Perform rating and raised their target price from $76.00 to $80.00.

Honeywell (HON): RBC Capital Markets reiterated their Outperform rating and raised their target price from $66.00 to $69.00.

Laboratory Corp (LH): Avondale reiterated their Market Perform rating and raised their target price from $85.00 to $105.00.

Marathon Oil (MRO): Howard Weil reiterated their Market Perform rating and raised their target price from $60.00 to $68.00.

YUM! Brands (YUM): RBC Capital Markets reiterated their Outperform rating and raised their target price from $56.00 to $59.00.

Travelers (TRV): RBC Capital Markets reiterated their Outperform rating and raised their target price from $62.00 to $67.00.

SunTrust Banks (STI): RBC Capital Markets reiterated their Outperform rating and lowered their target price from $36.00 to $33.00.

Newmont Mining (NEM): RBC Capital Markets reiterated their Underperform rating and lowered their target price from $62.00 to $67.00.

Earning Reports

Johnson Controls (JCI): Reported FQ2 EPS of $0.56 beating estimates by +$0.01 on revenue of $10.14 billion, beating estimates by +$1.07 billion. Pre-market: 40.25 -0.48 (-1.18%)

Kimberly-Clark (KMB): Reported Q1 EPS of $1.09 missing estimates by -$0.08 on revenue of $5.02 billion, beating estimates by +$0.04 billion. Pre-market: 64.50 -1.55 (-2.35%)

·         Futures at 7:00: Dow +0.3%. S&P +0.3%. Nasdaq +0.3%. Crude +0.3% to $112.65. Gold +0.9% to $1517.20.

·         Europe, London closed, Paris closed, Frankfurt closed.

·         Asia, Japan -0.1% to 9672. Hong Kong closed. China -1.5% to 2965.