jpm

Stock futures were higher this morning, indicating stocks could have a positive start to the session as oil prices continued to decline, sinking below $127 a barrel. Weekly inventories numbers reported later today could have an impact on oil prices. Then there is continued optimism in the financial sector, which caused the rally Tuesday. Also, a bill aimed at helping the housing market will reach the House floor. But once again earnings will likely have investors' attention with Costco already giving a profit warning.

Costco Wholesale Corp. (NASDAQ: COST) shares are plunging over 8% in premarket trading after the wholesale retailer warned its August-ending quarter's profit would miss analyst estimates. This is most surprising as Costco had been one of the retailer that seemed to have benefited from consumers trying to save and buy lower-cost items. But Costco blamed the lower profit on rising energy costs, saying it will earn less than $1 per share.

Stockholders of publicly traded companies, as well as the general public, have recently become outraged with executive compensation and their hefty bonuses, especially in light of the mounting losses at some companies. It seems that no matter what happens or what they do, executives somehow always win. They win big during their employment, and sometimes even more as they retire. With all that money, you'd think that haggling over some perks in their package would be beneath them . . . but it isn't.

The recent outrageous perk award goes to Continental Airlines (NYSE: CAL) CFO Jeffrey Misner who asked for and was granted a free lifetime parking spot at Jacksonville International Airport. As long as the 54-year-old retiree lives within 200 miles of Jacksonville Airport, and providing Continental has operations at the airport, Misner will have a free parking place. Of course, that's just a perk that goes with a $2,997,000 retirement pay.

At the beginning of the year, many were shocked to hear that Countrywide Financial Corp. -- the poster child of the subprime mortgage meltdown, which has been bought by Bank of America (NYSE: BAC) -- CEO Angelo Mozilo was going to receive a $36.4 million cash severance payments, $400,000 per year for consulting services, and perks including the use of a private airplane. He walked away from most of these after a public outcry. Don't feel bad though, he still left with at least $23.8 million.

It just doesn't cease to amaze me how some people have the nerve to ask for certain perks in addition to their very fine salaries and severance pays. Here are some more examples:

• Hanmi Financial (NASDAQ: HAFC) President and CEO Dr. Sung Won Sohn requested and got a 2005 Mercedes Benz 430S, as well as the transfer of his membership to the Wilshire Country Club and the Jonathan Club. This was in addition to his $1,298,000 lump sum retirement pay.

Stocks futures are lower Tuesday morning, indicating U.S. stock markets will start on a down note following weak outlooks and disappointing financial results from several companies including Apple and American Express. With oil steady and no economic data out today, Wall Street will focus on earnings.

Apple Inc. (NASDAQ: AAPL) reported after the close Monday a record quarter that beat analyst estimates, posting a 31% surge in earnings. Mac and iPod sales satisfied investors, while iPhone sales were somewhat on the lighter side. What concerned investors most was the very weak guidance Apple gave, which was weak even by Apple's standards of lowballing. Other issues included margin squeeze and Jobs health. Apple shares were 10% lower in Frankfurt and premarket trading.

American Express (NYSE: AXP), said late Monday its second-quarter results fell 38% due to the weakening economy. The company, which missed projections, caters to the more affluent who have good credit, and yet even this company felt the pains from the slowing economy. AmEx earned 56 cents per share compared to estimates of 83 cents per share. The company's stock tumbled AXP shares are down over 12% in premarket trading.

Also reporting Monday after the close were Merck & Co., Inc. (NYSE: MRK), Texas Instruments (NYSE: TXN) and SanDisk (NASDAQ: SNDK). MRK shares are down over 6.6% in premarket trading as the company said it would stop give guidance of results. TXN shares are also declining over 10.5% in premarket trading after it gave a disappointing forecast. SNDK shares are plunging over 16% in premarket trading after it swung to a Q2 loss, missing analyst estimates.

This morning we'll have another wave of earnings, and already started were DuPont and Wachovia.

Merck & Co., Inc. (NYSE: MRK) reported earnings per share of 82 cents, but excluding restructuring charges, the pharmaceutical company said it earned 86 cents per share, topping analyst estimates of 83 cents per share. Revenue came in at $6.1 billion for the quarter, a decrease of 1% from the second quarter of 2007, but in line with estimates. Yet the stock is plummeting 10% in after-hours trading, after closing at $35.33, down 6.24% during the session.

This shouldn't really be surprising, Merck is not providing 2008 equity income guidance and any long-term financial performance guidance while it is assessing the effects on the Vytorin/Zetia drugs after the failed study result. It also lowered sales guidance for Gardasil, which may not be surprising. But what is surprising is that the drugmaker also lowered sales estimates for its allergy-fighting Singulair.

If investors thought Merck has its work cut out for it, this earnings report underscored the issue even more. Already punished 35% year-to-date, Merck shares will likely continue to be soft until a clear outlook can be seen. Right now, with so many open question and even the company not willing to make educated predictions, many will likely stay away.

Apple Inc. (NASDAQ: AAPL) announced financial results for its fiscal 2008 third quarter ended June 28, 2008, reporting a record quarter. But Apple shares are down over 4% in after-hours trading.

Sure enough, Apple beat analyst estimates. It posted revenue of $7.46 billion and net quarterly profit of $1.07 billion, or $1.19 per share, up from revenue of $5.41 billion and net quarterly profit of $818 million, or $.92 per diluted share, in the year-ago quarter. Analysts had expected Apple to report net income of $972.6 million, or $1.08 per share, on sales of $7.4 billion.

While Mac and iPod shipments were in-line or better than what was expected with nearly 2.5 million Macs shipped and over 11 million iPods sold during the quarter, the number of iPhones sold came in a little light at 717,000.

Also, gross margin was 34.8%, down from 36.9% in the year-ago quarter. Specifically, the realized prices for iPods and Macs were lower.

Finally, Apple's guidance was well below analyst estimates. While this is normal for Apple, the company said it expects revenue of about $7.8 billion and earnings per diluted share of about $1.00. This is well below what analyst hoped it would guide (not what they estimate -- the average Wall Street target was $1.25 earnings per share and $8.3 billion revenue, according to Reuters Estimates).

Apple shares remain down about 4.4% at $158.82, and Apple will likely open lower Tuesday.

[Update: The shares are dropping 9.2% in after-hours to below $150. Apple said fiscal 2009 gross margin will shrink to 30% as it moves to higher reliance on phone sales over Macintosh sales, and this seems to concern investors. Another issue that came up is Steve Jobs health, to which Apple's CFO said it was a private matter. Many would beg to differ.]

Stock futures were higher this morning after Bank of America joined recent financials and topped Wall Street estimates. Also pushing futures higher is a deal in the pharma sector with Roche bidding nearly $44 billion for the rest of Genentech. However, both Merck and Schering-Plough said they'll postpone reporting their financial results after the close; Apple will also be reporting results then. Finally, oil prices came off a six-week low and are trading back above $130 a barrel due to escalating Middle East tensions. Higher oil prices could dampen the mood on the Street.

Bank of America Corp. (NYSE: BAC), the biggest U.S. consumer bank and home lender, said profit fell 41% to $3.41 billion, or 72 cents a share, much better than analysts estimates of 21 cents according to Bloomberg. The bank curtailed loan losses, adding $2.2 billion to loan loss reserves. The bank has completed the purchase of Countrywide Financial Corp. on July 1. With these results, BAC joins other big banks that have recently reported better-than-expected results. BAC shares are up 8.6% in premarket trading.

Roche Holding on Monday said it was offering $43.7 billion to take over the remaining 44.1% shares of Genentech Inc. (NYSE: DNA) for $89 per share, 8.8% above DNA's closing price Friday. DNA shares are up nearly 18% in premarket trading to $96.50.

Yahoo! Inc. (NASDAQ: YHOO) said Monday morning it settled its fight for control of the board with billionaire investor Carl Icahn. The board will expand to 11 members to include Icahn and the remaining two seats will be filled by the board upon the recommendation of its nominating and governance committee. In addition, Icahn, who owns about 5% on Yahoo common shares, agreed to withdraw his nominees for consideration at the annual meeting and to support the board's nominees. YHOO shares are declining 2% in premarket trading.

Merck & Co. (NYSE: MRK) is set to report earnings Monday, July 21, ahead of the opening bell. According to First Call, analysts are looking for a profit of 83 cents on revenue of $6.05 billion, an improvement over the 82 cents per share it reported in the same quarter last year, but a decline over the $6.1 billion in sales. Last quarter, the company beat per-share earnings estimates, but disappointed in sales.

Merck has suffered some bad news this quarter:

• The biggest blow was no doubt the FDA rejection of Merck's new cholesterol drug, Cordaptive. With so many drugs coming off patent, the drug company was relying on Cordaptive to contribute as much as $2 billion a year in sales.
• Also, prescriptions for Vytorin, co-marketed with Schering-Plough (NYSE: SGP), kept falling. While this was to be expected following the January released study suggesting Vytorin and Zetia may not work well as older generic statins, the impact could be larger than expected.
  
• As for its cervical-cancer vaccine Gardasil, recently an analyst report from UBS questioned whether sales of the vaccine have met Wall Street estimates for the second quarter. UBS has proceeded to downgrade Merck to Neutral from Buy.
• Then, only Thursday, Merck announced a program to resolve and fund the $4.85 billion settlement stemming from the Vioxx 50,000 lawsuits. More than 97 percent of eligible claimants now have initiated enrollment in the program and will start receiving checks beginning late next month. In a way, though, this is a good news/bad news sort of thing. Investors like it when outstanding issues are resolved.

Apple Inc. (NASDAQ: AAPL) is reporting its fiscal third quarter financial results Monday, July 21, after the close. The question is not only what Apple will report, but also how the Street will react, and most important, is it a buy ahead of earnings?

In terms of numbers, according to Thompson Financial's survey of analysts, Apple is expected to report net income of $972.6 million, or $1.08 per share, on sales of $7.4 billion. That's an 18.9% profit growth and a 37% sales growth.

Investors will be interested in the following:

iPhone sales numbers for Q3 may not interest investors that much, as the new 3G iPhone was released in fiscal Q4, and that is expected to be the main driver of iPhone sales going forward. The launch, despite its technical glitches was very successful, but investors might be concerned over Apple's ability to supply the demand. Already German and many U.S. stores have experienced shortages.

Before the bell: Citi earnings push futures higher despite MER, GOOG, MSFT disappointments

Advanced Micro Devices (NYSE: AMD) stock is down 6.6% in premarket trading after the company posted its seventh consecutive quarterly loss of $1.19 billion, or $1.96 per share, missing Wall Street estimates. The operating loss would have been 60 cents a share, heftier than the loss of 52 cents a share from analysts polled by Reuters Estimates. Following the report, AMD also announced that CEO Hector Ruiz would be replaced by COO Dirk Meyer. Ruiz will stay on as executive chairman.

The Wall Street Journal reports that Freddie Mac (NYSE: FRE) is considering raising capital by selling as much as $10 billion in new shares to investors. FRE stock is down again this morning after the recent wild swings in share price. This morning FRE shares are trading over 5.7% lower in premarket action.

Mattel Inc. (NYSE: MAT) shares rose nearly 4% in after-hours trading following second-quarter financial results. The toy maker's profit fell by nearly half, but results still beat Wall Street expectations. Global Barbie sales dropped off 6%.

U.S. stock futures turned higher Friday morning after earnings from Citigroup that beat expectations offset disappointment from Merrill, Google and Microsoft. There was also some pressure from oil as prices rebounded to above $131 a barrel, following Nigeria cutting output.

Many on Thursday started wondering if we have seen the bottom. Stocks rallied for a second straight session as oil continued its price drop. Better -than-expected earnings for JPMorgan Chase (NYSE: JPM) again lifted banks. The Dow Jones Industrial Average gained 207.38 points, or 1.9%, the S&P 500 index rose 15.7 points, or 1.2%, and the Nasdaq Composite Index gained 27.45 points, or 1.2%.

Without any economic releases today, the market will continue to focus on earnings, and investors have a lot to mull, especially after Thursday's wave of financial results releases after the close, and with financials and techs being in the center of attention.

After JPMorgan Chase brought on some optimism with its results Thursday morning, Merrill Lynch (NYSE: MER) reported after the close a wider-than-expected loss of $4.65 billion, or $4.9 a share, on $9.7 billion of credit-market writedowns. The loss per share was larger than any analyst had expected according to Bloomberg survey. MER shares are declining over 4.8% in premarket trading.

Before the bell: Futures higher ahead of housing data and a wave of earnings; JPM, KO already reported

Nokia Corp. (NYSE: NOK) shares are up over 7.4% in premarket trading after the world's largest maker of handsets said second-quarter profit fell 61% to $1.75 billion, or 46 cents per share, while sales rose 4% to $20.87 billion. Excluding items, Nokia's profit rose 8% to $2.18 billion. Nokia beat estimates of earnings of 56 cents per share on $20.05 billion in revenue, according to Thomson Financial. The mobile phone maker slightly raised its forecast for the mobile phone industry, saying volume would grow 10% or more in 2008.

Continental Airlines (NYSE: CAL) are up again this morning after climbing 38% Wednesday with the rest of the airline stocks. Continental swung to a second-quarter loss, hurt by record high fuel prices and weakening economic conditions. Still the losses of $3 million, or 3 cents per share, or excluding one-time items totaled $25 million, or 25 cents per share, beat expectations of a loss of 49 cents per share.

Yum Brands (NYSE: YUM) shares are down 4.3% in premarket trading after it reported a second-quarter profit of $224 million, or 45 cents a share. Revenue rose to $2.65 billion from $2.37 billion a year ago. While this beat estimates, and while the company raised its earnings growth forecast for the full year to 12% from 11%, investors were concerned about rising food costs which hurt profit margins in the second quarter.

It seems that Apple Inc. (NASDAQ: AAPL)'s new 3G iPhone was sold out in Germany after less than a week. Deutsche Telekom AG's T-Mobile division sold 15,000 iPhones and it's not clear when Apple will be able to deliver more iPhones for the German market, Financial Times Deutschland reported.

U.S. stock futures edged higher Thursday morning, a day after market staged a big rally. Investors this morning are bracing for some housing data, but more importantly, a wave of earnings. Already better-than-expected earnings from J.P. Morgan Chase boosted stock index futures from earlier declines this morning.

On Wednesday, bulls finally came back in drove to but equity as oil price continued its decline and airlines and Wells Fargo (NYSE: WFC) reported results that Wall Street found encouraging, sending airline and financials stocks through the roof. The Dow Jones Industrial Average ended a three-day losing streak, jumping 276.74 points, or 2.5%. The S&P 500 climbed 30.45 points, or 2.5%, and the Nasdaq Composite gained 69.14 points, or 3.1%.

Still, all this sentiment might yet evaporate, or be seriously damped after housing data is released at 8:30 a.m. EDT. Building permits and housing starts for June are due out at that time. Also, weekly jobless claims will continue to paint the picture of the goings on in the labor market. At 10:00 a.m., the Philadelphia Fed index for July will be reported.

It would be interesting to see how the data and earnings play out. Already, J.P. Morgan Chase (NYSE: JPM) reported it profit sank 53% in the second quarter to $2.00 billion, or 54 cents per share. That beat estimates of 44 cents share. JPM shares are up over 5.5% in premarket trading.

It's funny how deadlines are sometimes so disconnected from what's really going on. Yes, eBay Inc. (NASDAQ: EBAY), the online auctioneer, beat analyst estimates coming in with earnings of 43 cents per share, compared to expectations of 41 cents. Yes, its earnings growth was a not-too-shabby 22%. And yes, PayPal remained its bright spot, with a 33% revenue growth. But eBay shares are trading down 7% in after-hours due to a soft outlook.

Is it just the soft outlook though? Most companies give a lower guidance these days as the weakening U.S. economy is hurting business. I'm sure some of eBay's softer outlook could indeed be attributed to the weakening economic conditions, but once they start digging deeper into the metrics, many on the Street aren't happy. For example, the 20% revenue growth -- or more specifically, the 13% revenue growth at eBay's Marketplace -- doesn't reflect the actual business very well, as advertising and increasing take rates have been contributing more and more. In fact, Silicone Alley Insider has no problem proclaiming that eBay growth is grinding to a halt, saying that "Transaction revenues grew just 9% year-over-year, vs. 14% y/y growth last quarter and 23% y/y growth during Q2 2007."

Then we have gross merchandise volume, or GMV, where analysts had been expecting a 12% growth. Not only did eBay post only an 8% year-over-year growth, but it posted a 2% decline sequentially. Another disappointment was the new listings numbers, which totaled 666.9 million, up 19% year-over-year and 3% sequentially.

Marketplace -- that's where the problems lie, and that's where investors would like to see improvements most; Skype and PayPal are growing well. Thing is, Marketplace isn't such a market place anymore. I'm not even sure how eBay can fix that. The internet and its users have evolved and I don't know that eBay fits the bill anymore. Just like Yahoo!, eBay is a mature company in the lifespan of the internet, and both have their glory days behind them. I wouldn't touch eBay stock as I don't see it going anywhere with its current business model.

Shares of eBay Inc. (NASDAQ: EBAY) are up about 2% today, ahead of the announcement of its quarterly financial results after the close. What to expect when the online auction site reports?

Well, if you're interested in numbers, eBay indicated that second-quarter earnings will be between 30 and 32 cents per share, or between 39 and 41 cents per share on an adjusted basis. The company also predicted revenue of $2.1 to $2.15 billion. Analysts polled by Thomson Financial expect eBay to be pretty much in-line with estimates, or just slightly better, and post adjusted earnings of 41 cents per share on revenue of $2.17 billion.

According to Jefferies & Co., eBay experiences "strong Marketplaces listings growth and ongoing strength in payments and non-gross merchandise value, or GMV, businesses." On Tuesday, RBC Capital Markets maintained its Sector Perform rating on eBay, but reduced the target price from $40 to $35 due to "continued transition of the company's platform and low visibility into the core marketplaces platform," and due to some misgivings about month-to-month worsening trends. However, Morgan Stanley, Citigroup and Banc of America actually raised estimates recently.

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

Sun Microsystems (NASDAQ: JAVA) shares are trading nearly 8% higher in premarket action after announcing earnings forecast that was better analysts had expected.

Seagate (NYSE: STX) shares, however, dropped over 9% in after-hours trading Tuesday, after it forecast first quarter earnings below Street's estimates.

Sprint Nextel (NYSE: S) saw its shares jump 9.44% Tuesday. Reports say that SK Telecom is in talks with Sprint over potential deals.

Cleveland-Cliffs (NYSE: CLF) said it's going to buy Alpha Natural (NYSE: ANR) for $10 billion in cash and stock, putting a 35% premium on Alpha's stock. ANR shares are trading 27% higher in premarket action. CLF's, 4.5% lower.