Rite Aid Corp. (NYSE: RAD): Q4 Earnings Preview 2009

Rite Aid Corp. (NYSE: RAD), the third-largest drugstore chain, is scheduled to release financial results for the fiscal fourth quarter 2009 before the opening bell on Thursday, April 1, 2010. Analysts, on average, expect the company to report a loss of 19 cents per share on revenue of $6.49 billion. In the year ago quarter, the company posted a loss of 14 cents per share on revenue of $6.71 billion.

Rite Aid Corporation, through its subsidiaries, operates retail drugstores. Its drugstores primarily provide pharmacy services. The company sells prescription drugs and front-end products. The drug retailer has lost money in each quarter since its June 2007 acquisition of Brooks & Eckerd as it is still struggling with integration issues. So far, total losses have amounted to more than $4.3 billion amid massive write-downs.

In the preceding third quarter, the Camp Hill, Pennsylvania-based company reported narrower net loss of $86.1 million or $0.10 per share, compared to a loss of $248.7 million or $0.30 per share, in the prior-year quarter. Quarterly revenues totaled $6.35 billion, down 1.8% from the previous year's revenue of $6.47 billion. Analysts, on average, expected the company to post a loss of $0.18 per share on revenue of $6.47 billion.

For fiscal year 2010, the company expects to report net loss between $413 million and $542 million, or $0.50 and $0.66 per share. Previously, the company had expected full-year net loss in the range of $390 million to $615 million or $0.48 to $0.74 per share.

The company has reported decrease in same-store sales during the each month of the quarter. Early this month, Rite Aid Corp. announced an eighth straight monthly decline in same store sales. Rite Aid Corp. said its same store sales for the five weeks ended February 27, 2010, decreased 3.2% over the prior-year period. Same store sales for the 13-week quarter ended February 27, 2010 declined 2.4% over the prior-year period. Total drugstore sales for the quarter decreased 3.7% to $6.438 billion compared to $6.683 billion in the previous year period. Similarly, for the four weeks ended January 23, 2010, same store sales decreased 2.1% over the prior-year period. Same store sales decreased 1.8% in the four weeks ended December 26, 2009, compared to the prior-year period.

The company has been closing stores and cutting debt in response to poor corporate performance, but these moves haven't proved fruitful so far. Rite Aid's trouble has been compounded by intense competition from its larger rivals, Walgreen (NYSE: WAG) and CVS (NYSE: CVS), as they continue to add stores to their chains. Rite Aid's name has often turned up in various bankruptcy risk list. The turnaround still remains elusive and the company has been struggling to integrate Brooks & Eckerd. Since the Eckerd acquisition in June 2007, Rite Aid has closed more than 400 stores, laid off more than 10% of the workforce, and has restructured its debt. It has closed more than 115 stores in the past year, reduced inventories, brought in new senior managers and. During the third quarter, the company opened 3 stores, relocated 13 stores, remodeled 3 stores and closed 14 stores. Stores in operation at the end of the third quarter totaled 4,801. As of February 27, 2010; the company operated 4,780 stores compared to 4,901 stores in the like period a year ago.

The retailer is now hoping that a change in leadership will help reverse its fortunes. Current COO John T. Standley will replace CEO Mary Sammons, who has led the company since 2003, effective June 24th.

Rite Aid is also being seen as a potential takeover target. According to industry experts, Wal-Mart Stores Inc., CVS Caremark Corp. and Walgreen may be interested in Rite Aid’s stores.

Among other developments during the quarter, Rite Aid Corp. in February announced that it will expand its own exclusive Rx Suncare line with two new products - Rx Suncare Sport SPF 70 and Rx Suncare HairGuard. The company has priced all Rite Aid Rx Suncare products under $10.

In terms of stock performance, Rite Aid shares are up 528% over the past year.

Full Disclosure: None.

Oracle Corp. (NASDAQ: ORCL): Q3 Earnings Preview 2010

Oracle Corp. (NASDAQ: ORCL), the world's largest enterprise software company, is scheduled to release financial results for the fiscal third quarter 2010 after the closing bell on Thursday, March 25, 2010. Analysts, on average, expect the company to report earnings of 37 cents per share on revenue of $6.36 billion. In the year ago quarter, the company reported earnings of 35 cents per share on revenue of $5.50 billion.

Oracle Corporation engages in the development, manufacture, distribution, servicing, and marketing of database, middleware, and application software worldwide. Oracle is organized into two businesses: software and services.

In the preceding fiscal second quarter, the Redwood Shores, California-based company reported that its net income rose to $1.5 billion or $0.29 per share, compared to $1.3 billion or $0.25 per share, in the year-earlier quarter. Excluding employee stock options expense, amortization of intangible assets, restructuring charges and other items, non-GAAP net income for the second quarter was $2.0 billion or $0.39 per share, compared to $1.7 billion or $0.34 per share in the prior year quarter. Revenue rose 4% to $5.86 billion from $5.61 billion a year ago. Analysts, on average, expected the company to report earnings of $0.36 per share on revenue of $5.69 billion.

The company is attempting to reinvest itself as a "systems" company, one that has a complete "stack" of products, both hardware and software. Oracle has purchased more than 60 companies in the past five years to reposition itself in the technology industry.

In January, Oracle completed the acquisition of Sun Microsystems Inc, a Santa Clara-based manufacturer of servers and storage equipment. Oracle CEO Larry Ellison recently said that the company expects Sun to add $1.5 billion to its operating profit this year.

Last month, Oracle Corp. announced that it has agreed to acquire Israel-based Convergin, a catalyst in developing J2EE-based Service Broker and network integration software for the communications industry. The acquisition will enable Oracle to step up the deployment of next-generation pre-paid and value-added services in the communications industry besides lowering the total cost. The company said that the transaction is expected to close in the first half of 2010. The financial details of the deal were not disclosed.

In February 2010, Oracle agreed to acquire AmberPoint Inc, an Oakland-based developer of visibility, management and security software. Oracle said that the addition of AmberPoint’s software will help diagnose and manage the performance of business applications, provide monitoring for application performance and will enrich SOA design time with run-time metrics for SOA governance.

The company's stock currently trades at a forward P/E (fye 31-May-11) of 13.30 and PEG Ratio (5 yr expected) of 1.15. In terms of stock performance, Oracle shares are up 62% over the past year.

Full Disclosure: None.

Sequenom Inc. (NASDAQ: SQNM): Q4 Earnings Preview 2009

Sequenom Inc. (NASDAQ: SQNM) is scheduled to release financial results for the fiscal fourth quarter after the closing bell on Monday, March 15, 2010. Analysts, on average, expect the company to report a loss of 25 cents per share on revenue of $9.10 million. In the year ago quarter, the company reported a loss of 25 cents per share on revenue of $12.16 million.

Sequenom, Inc. is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets.

In the preceding third quarter, the San Diego, California-based company reported wider loss of $14.9 million or $0.24 per share, compared with $10.4 million or $0.18 per share, in the year ago quarter. Revenue decreased to $1.83 billion $9.2 million, compared with $11.6 million in the year-earlier period. Analysts, on average, expected the company to report a loss of $0.28 per share. Gross margin for the third quarter was 71%, compared with 61% for the previous year quarter, reflecting higher consumable sales as a percentage of the company's product sales.

During February, Sequenom launched two tests that will be offered through its CLIA lab, the Sequenom Center for Molecular Medicine. Sequenom Inc. unveiled its fetal test for sex determination based on its SEQureDx technology. Earlier, it also launched a test to detect any incompatibility between the mother's and the fetus' blood type.

Sequenom’s share price collapsed last year after mishandling of some research data led to the ouster of the CEO and other senior executives and cast doubt on the company’s ability to develop a non-invasive diagnostic test for Down Syndrome.

In January, Sequenom said it would pay $14 million plus stock to settle a class action securities lawsuit over the mishandling of study data on a potential test for Down syndrome. Sequenom admitted to no liability in the settlement.

Shares of the genetics analysis and testing firm have surged this year on analyst upgrades. Recently, Cantor Fitzgerald analyst Pamela Bassett boosted her rating on the company, citing settlement of a recent lawsuit and progress in the diagnostic test maker's pipeline of products. Bassett also cited the company's pipeline of products as potential drivers for the company. Those products include diagnostic systems for cystic fibrosis, genotyping and molecular diagnostics. "We think Sequenom's commitment to launching its next-generation MassARRAY platform will be a key driver of long-term growth," she said. "We expect the company to expand its portfolio of molecular diagnostics and think the next-generation MassARRAY could be a beacon for attracting new molecular diagnostics."

However, many industry experts are still skeptical of the huge rally witnessed in Sequenom stock in past couple of months. In terms of stock performance, Sequenom shares are down 28% over the past year.

Full Disclosure: None.

LDK Solar Co.Ltd. (NYSE: LDK): Q4 Earnings Preview 2009

LDK Solar Co.Ltd. (NYSE: LDK),the world's largest maker of multicrystalline wafers, is scheduled to release financial results for the fiscal fourth quarter before the opening bell on Tuesday, March 30, 2010. Analysts, on average, expect the company to report earnings of 12 cents per share on revenue of $301.11 million. In the year ago quarter, the company reported a loss of $1.2 per share on revenue of $426.61 million.

LDK Solar Co., Ltd., through its subsidiaries, engages in the manufacture and sale of multicrystalline solar wafers to the manufacturers of solar cells and solar modules in the People's Republic of China and internationally. The company offers multicrystalline solar wafers between 180 and 220 microns in thickness.

In the preceding third quarter, the Xinyu City, China-based company's net income attributable to shareholders was US$29.4 million or US$0.27 per ADS, compared to a net income of US$88.4 million or US$0.77 per ADS in the previous year. Revenue declined to US$281.9 million from US$541.8 million in the same quarter last year. Analysts, on average, expected the company to report earnings of US$0.10 per share on revenue of US$277.20 million.

LDK Solar shipped 320.5 MW of wafers during the third quarter, up 26.8% year-over-year.

Recently, the solar wafers maker lifted its fourth quarter revenue guidance, as well as wafer and module shipments forecast. LDK Solar Co.Ltd. said it now expects fourth quarter revenue in the range of $300 to $310 million, compared to its previous forecast in the range of $280 to $310 million.The company also tightened its wafer shipments to a range of 330 MW - 340 MW and module shipments between 20 MW and 25 MW. Previously the company had projected wafer shipments between 320 and 340 MW and module shipments between 20 and 30 MW.

Further, for the fiscal year 2010, the company expects revenue in the range of $1.35 billion to $1.45 billion. Wall Street analysts expect revenues of $1.37 billion. The company projects wafer shipments to be in the range of 1.3 GW to 1.4 GW, and module shipments between 300 MW to 400 MW.

LDK said it expects production of 4,500 metric tonnes (MT) to 5,500 MT of polysilicon in 2010, and sees gross margin of 15 to 20 percent for the same period. Separately, LDK Solar said it signed photovoltaic module guarantee cover with Munich Re's Special Enterprise Risk unit, which will cover the performance warranty of LDK Solar modules for a period of 25 years.

The Chinese company mended its relationship with German photovoltaic cell maker Q-Cells after a brief supply deal dispute. In December, LDK Solar announced that it has reached an agreement with Qcell to continue their supply contract for solar wafers from 2009 to 2018.

Last month, LDK Solar announced that it has agreed to acquire Best Solar's crystalline module manufacturing plant at cash consideration of $21.5 million. The deal will significantly enhance LDK Solar's position in the downstream PV market.

Among other developments during the quarter, LDK closed FPO of 16,520,000 American depositary shares (ADSs), each representing one ordinary share, at a price to the public of $7.00 per ADS. The company said that it intends to use the proceeds to pay its debts and expand its solar module business.

Thanks to better cost advantages, Chinese solar module maker have grabbed more market share from their international competitors. Local solar companies have also benefited from China's well-developed supply chain, cheap electricity, supportive policies and even low environmental standards. In fourth quarter, Chinese makers won 46% of the new installations in California.

The demand for solar power products has picked up after a difficult 2009, when the turmoil in the credit market forced financial players to abandon U.S. solar energy projects. The 2008 collapse of top solar financier Lehman Brothers and the freeze-up in the global credit markets drove nearly all banks to halt funding for major new solar projects, forcing the makers of systems that turn sunlight into electricity to cut prices for their products and sending their stocks crashing. The problems of solar companies had been further compounded by an oversupply of polysilicon, a material used in solar panels.

The solar industry is poised to benefit from growing attention to global warming, skyrocketing oil prices, cheap financing and technological advances. At the Copenhagen Summit held in December 2009, the five major polluters of the world agreed to take action to reduce CO2 aggressively, with $100B per year pledged to help developing nations adopt green energy technology to cut greenhouse gas. Meanwhile, the US, China, Brazil and India continue to invest heavily in wind and solar energy with China's $454B in the next 5 year period as the most aggressive one. As part of the stimulus bill signed last year, the federal government approved around $60 billion in loan guarantee authority and $30 billion in energy grants for renewable energy and transmission companies. Congress has also granted a 30% renewable-investment tax credit to help expand the development of alternative sources of energy.

In the near term, the solar industry is facing an important challenge in the form of reduced government subsidies. Globally, solar industry depends upon government subsidies and incentives and support to remain competitive. However, recent developments suggest that subsidies will inevitably be reduced or phased out. According to media reports, the German government is planning to cut solar subsidies for new roof and open-field sites from April by 16 percent to 17 percent. Additional cuts to the subsidies will be made from 2011 if solar projects amount to more than 3,000 megawatts, and even more if they total more than 3,500 megawatts. Already, France in January slashed the tariffs for electricity produced from rooftop solar panels by 24 percent. Spain too has taken similar steps.

The company's stock currently trades at a forward P/E (fye 31-Jan-11) of 18.78. In terms of stock performance, LDK Solar shares are up 72% over the past year.

Full Disclosure: None.

GameStop Corp. (NYSE: GME): Q4 Earnings Preview 2009

GameStop Corp. (NYSE: GME), the world's largest video game retailer, is scheduled to release financial results for the fiscal fourth quarter before the market open on Thursday, March 18, 2010. Analysts, on average, expect the company to report earnings of $1.28 per share on revenue of $3.45 billion. In the year ago quarter, the company reported earnings of $1.34 per share on revenue of $3.49 billion.

GameStop Corp. sells new and used video game hardware; video game software; video game accessories, including controllers, memory cards, and other add-ons; PC entertainment software etc. The company operates 6,457 retail stores in 17 countries worldwide. The company also operates an e-commerce site, GameStop.com, and publishes Game Informer(R) magazine, a leading multi-platform video game publication. GameStop Corp. sells new and used video game software, hardware and accessories for video game systems from Sony, Nintendo, and Microsoft. GameStop dominates the lucrative used-game market. The video game retailer's gross profit margin for used games is nearly 50 percent, compared to around 20 percent for a new game sale.

In the preceding third quarter, the Grapevine, Texas-based company reported that its net income increased to $52.23 million or $0.31 per share from $46.67 million or $0.28 per share in the year-ago quarter. Revenue increased 8.2% to $1.83 billion from $1.70 billion in the year-ago period. Analysts, on average, expected the company to report earnings of $0.30 per share on revenue of $1.73 billion.

Despite gaining over 150 basis points in new video game market share during the quarter, GameStop's comparable store sales plunged 7.8% in the third quarter, primarily due to a decline in new video game hardware sales.

The economic slump and free games on social networking sites such as Facebook and MySpace from companies such as Zynga Game Network Inc. have hurt demand at video-game retailers. Moreover, there are concerns that GameStop’s model may be in trouble with the possibility of digital downloads grabbing an every larger slice of market share. Sales of video game gear and software in the United States slid 15 percent in February in their second straight monthly decline, but should bounce back starting in March on the back of new releases according to industry tracker NPD. In January, sales of video games, consoles and accessories fell 13 percent to $1.17 billion, according to NPD Group Inc.

In January, the company reported a 8.6% decline in comparable store sales for the November-December nine-week holiday period due to economic weakness in all global operating segments, winter storms at peak shopping periods in December, and unexpected shortages of key products such as New Super Mario Bros. Wii, Nintendo Wii and Sony's PlayStation 3 consoles. Total sales for the nine weeks ended Jan. 2 were about flat with a year earlier at $2.86 billion. The company also slashed its earnings forecast for the fourth quarter and the full year 2009. GameStop expects to report fourth quarter earnings in a range of $1.25 to $1.29 per share, down from its prior guidance of $1.47 to $1.65 per share.The company also anticipates comparable store sales for the fourth quarter to decline in a range of 8.5% to 9.5%. Earlier, the company expected a decline of 1.0%.

For fiscal 2009, the company now expect earnings in the range of $2.23 to $2.27 per share, sharply lower than the previous outlook of $2.45 to $2.63 per share.

In fourth quarter, the company authorized a $300 million stock buyback plan. GameStop said that its capital allocation plans also include $200 million for opening 400 stores and other expenditures. GameStop also said it would reserve $100 million for acquisitions. The firm said that it expects to end the 2010 fiscal year with $700 million in cash after it executes the new plans for its money.

Shares of the company surged on Thursday and trading of its bullish options jumped to a record on speculation that the company is a takeover target. GameStop declined to comment on the rumors.

The company's stock currently trades at a forward P/E (fye 31-Jan-11) of 7.44 and PEG Ratio (5 yr expected) of 0.67. In terms of stock performance, GameStop shares are down 28% over the past year.

Full Disclosure: None.