Wednesday, March 10, 2010

Wednesday Morning 3/10/10 (BAC, AEO, TRK, JCG)

US indexes opened up, but not by a lot. The DJIA is +21points, with Bank of America (BAC) leading the way after a good PR move.

Attempting to get out ahead of regulators, Bank of America (BAC) is doing away with $35 overdraft fees on debit card customers.
"As part of its commitment to provide more control, choice and clarity for its customers, Bank of America today announced that beginning this summer it will only authorize single debit card transactions at the point of sale if a customer has enough money in their account at the time.
This change will help customers by reducing the likelihood they may inadvertently overdraw their account and thus eliminate unexpected overdraft fees on these transactions. Customers will still have the choice to link their checking account to another account through Overdraft Protection to cover these types of transactions."

American Eagle (AEO) reported revenue and earnings in line with expectations, and guided the current quarter a little above expectations.

The United Nations will announce an investigation into the research practices of the International Panel on Climate Change. No word on the possibility of them handing back their Nobel Peace Prize awarded in 2007.

Chevron (CVX) shares were downgraded by BofA/Merrill to Neutral from Buy, based on flat near-term production.

Mining equipment firm Bucyrus (BUCY) shares are +2.4% after being added to Goldman Sachs' Conviction Buy List. Goldman sees upside from a big capital expenditure cycle from the mining industry.

Speedway Motorsports (TRK), owner of multiple NASCAR tracks, missed EPS expectations by 4cents. Much worse than that was their guidance for 2010 of 1.00-1.40 per share, versus the 1.60 consensus estimate. While weather wasn't helpful, pricing seems to have entered a "new normal" for this company, and it's not pretty.
"SMI believes admissions and many event related and other operating 2009 revenue categories were negatively impacted by declines in consumer and corporate spending from the ongoing impact of weak economic conditions, including difficult credit and housing markets, and poor weather surrounding certain NASCAR racing events in the second quarter. Also, reduced admission revenues reflect significantly lower average ticket prices from special promotions and reduced ticket prices at NASCAR-sanctioned racing events held in 2009 as compared to 2008. In 2010, SMI is again reducing many ticket prices and continues to utilize innovative promotional campaigns to help foster fan support and mitigate near-term ticket sales weakness."

Fabled Metro-Goldwyn-Mayer Inc. is having trouble finding a bidder for its iconic studio. Their creditors are owed $4billion and are having a hell of a time finding a potential buyer, with the WSJ reporting that the price might eventually be under $1.5billion.

J. Crew (JCG) is down 4% today, despite reporting a fabulous quarter last night driven by stronger same store sales. That's the trouble when you're bumping up against the highest valuation in the sector...Citigroup downgraded the shares to Hold from BUY, based on that lofty valuation.

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