Hitt og þetta 21. apríl 2006

DJ MARKET TALK: Fords Problems At Home Are, Well, Problems

9:16 (Dow Jones) Citigroup analyst Jon Rogers looks for investor sentiment to sag on Ford's (F) rapid deterioration in its home market, as demonstrated by its $457M pretax loss in North American auto operations. F lost $1.2B in the quarter, due to restructuring charges, and its continued operations EPS of 24c fell a penny below expectations. "We expect shares to trade soft this morning on low quality earnings versus consensus. Ford faces major headwinds in 2006-2008, including NA restructuring, lower financial earnings, and an aging product," Rogers says. F down 2.4% in premarket at $7.76. (JDS)

9:07 (Dow Jones) McDonald's (MCD) 1Q numbers on the mark, but management indicates it's got work to do overseas. Franchised and affiliate sales in Europe down 6%, and 1% in Asia/Pacific, Mideast and Africa. Weak yen was one factor but CEO Skinner says in news release company will remain focussed on "further strengthening the contribution from both of these critical business segments." In Latin America, MCD eliminates thorn, buying out some litigating Brazilian franchisees for $29M. (RLG)

9:00 (Dow Jones) The three remaining quarterly 2006 Eurodollar futures contracts each up 1 BP, showing minimal change in interest rate expectations. The market remains fully priced for a 25 BP rate hike to 5% in the 2Q, with June recently trading at 94.78. Sept prices in about a 48% chance for a 5.25% 3Q rate, down from about 52% odds on Thursday. Sept recently at 94.73. (HLP)

8:53 (Dow Jones) Affymetrix's (AFFX) 1Q was "worse than we anticipated," Merrill Lynch says. Slower revenue growth and higher costs limited EPS growth, firm notes. Deutsche Bank cuts the stock to hold, saying that after several quarters of poor execution, the firm's move to shake up its executive ranks is "too little and too late" and it's lost "significant ground" in the genotyping market. "While AFFX is busy fixing its internal issues, its main competitor is well positioned to build off recent success," Deutsche says. AFFX off 14% in premarket at $29. (PJV)

8:45 (Dow Jones) Speeding up growth was what 3M (MMM) CEO George Buckley said was a top priority when he was hired in December, and the conglomerate did that in the 1Q. Local currency sales were up 10.4% with the Safety & Security and Industrial & Transport segments leading the way for the Dow Industrials component. However, the addition of water filtration company Cuno represented more than half the growth increase at Industrial & Transport. Health Care, as expected, had the slowest growth, up 4.9%. MMM up 2.1% in premarket at $84.35. (CJS)

8:41 (Dow Jones) The last couple of days have been tough for Treasurys and it's a bear market, but there's some relief buying that's helping to lift prices right now. Gains are modest, with the two year yield down 1.2 basis points to 4.88% and the 10-year note down 2.5 BPS to 5.01%. (MSD)

8:31 (Dow Jones) Dollar back at yesterday's closing levels ahead of G7 meeting later today, recouping most of the losses seen in the wake of Swedish CB's news that it has over past four weeks shifted currency reserves, cutting dollar reserves to 20% vs 37% and boosting euro reserves to 50% vs 37%. That sent EUR/USD up to 1.2350 overnight and USD/JPY to low of 117.09; currently EUR/USD at 1.2313 vs Thu's 1.2315 and USD/JPY at 117.25 vs 117.60. (ML)

8:25 (Dow Jones) The biggest cause for concern in F5 Networks' (FFIV) 2Q report was the unusually weak U.S. federal revenue, Goldman Sachs says, which fell to 2.3% of overall revenue from 6% in the 1Q. "The sequential decline appears to be a temporary dip, as management described it as order 'slippage,' rather than cancellations," firm says. "The other troubling part of the quarter was that book-to-bill was less than one, the first time this has happened in the eight quarters we've have been tracking." FFIV down 16% in premarket at $54.95. (PJV)

8:17 (Dow Jones) The most interesting metric in Google's (GOOG) 1Q report, Stifel Nicolaus says, was the breakdown of domestic compared to international growth. Sequentially, gross revenue rose 17%, with 30% growth in international markets and 9.5% in the U.S., firm says, compared to 4Q when international growth was 19% and domestic 24%. "Our guess is that the company both corrected the issues it was having in the UK in 4Q and also had very strong monetization improvements generally in international markets," firm says. (PJV)

7:59 (Dow Jones) Halliburton (HAL) should be able to close the valuation gap between itself and Schlumberger (SLB) and Baker Hughes (BHI) with the solid 1Q execution of its energy-services group and the IPO of KBR, Goldman Sachs says. Energy-services results were very strong, firm notes, and weakness at KRB will be overlooked since HAL has a clear strategy to split KBR from ESG. "ESG results confirm our view that oil-services fundamentals remained solid through the 1Q," Goldman says. HAL up a fraction in premarket at $83.30. (PJV)

7:47 (Dow Jones) Sandisk's (SNDK) 1Q results were basically in line, but the 2Q outlook was mixed, Merrill Lynch says. "We think management has set a reasonable bar for 2Q's pricing decline, but there could still be risks to our assumption if contract prices do not stabilize," firm says. "We note that investors seem particularly forgiving about near-term headwinds in pricing, and appear to be focusing more on the second half recovery story." SNDK down 3.6% in premarket at $63.12. (PJV)

7:38 (Dow Jones) "Hard to argue with these numbers," Morgan Stanley says of Google's (GOOG) 1Q report. "So far, it seems for Google, the law of large numbers means that the numbers just keep getting larger." Firm notes GOOG continued its "massive ramp" in capex spending, $345M vs $246M in 4Q, but says that spending has so far correlated into future revenue. "We continue to believe our revenue growth assumptions may prove conservative over the next few years," firm says. GOOG up 8.3% in premarket at $449.65. (PJV)