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profit

How Amazon Will Fare Today…

by Jason Wilk on January 29, 2009

Amazon.com is scheduled to release fourth-quarter 2008 earnings results today in a conference call at 5:00 PM ET. You can catch the live webcast here.
Amazon supposedly had the best holiday season ever, beating out many of the major retailers. They were selling 72.9 items per second during the holiday shopping season. Thomson Reuters expect Amazon to report a profit of $0.39 per share, compared to $0.48 per share in the same period of the previous year. Although the holiday sales season was a monster hit for Amazon, revenue for the quarter is expected to total $6.4 billion, down 13.5% from a year ago.
As BloggingStocks points out, Amazon is notorious for blowing earnings reports out of the water, beating some quarterly reports by as much as 43%. As I have said before, Amazon is fine in the down economy. It comes down to a simple equation to define their success: There is a much greater increase in online shopping adoption compared to the decrease in consumer spending this year. Some investors realize this. The share price has risen more than 30% from its 52-week low back in November. It is still down 33% from a year ago, but expect things to continue trending upward for the online retail giant. Keep in mind, the Kindle 2 hasn’t even come out yet.

Earnings Are Out:

Highlights:

Operating cash flow was $1.70 billion in 2008, compared with $1.41 billion in 2007.
Free cash flow increased 16% to $1.36 billion in 2008, compared with $1.18 billion in 2007.
Common shares outstanding plus shares underlying stock-based awards outstanding totaled 446 million on December 31, 2008, compared with 435 million a year ago.
Net sales increased 18% to $6.70 billion in the fourth quarter, compared with $5.67 billion in fourth quarter 2007.
Operating income was $272 million in the fourth quarter, compared with $271 million in fourth quarter 2007.
Net income increased 9% to $225 million in the fourth quarter, or $0.52 per diluted share, compared with net income of $207 million, or $0.48 per diluted share, in fourth quarter 2007.

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Bad Economy, No iPhone: No Worries For Verizon

by Jason Wilk on January 27, 2009

Verizon posted Q4 revenue of $24.6 billion and profits of 61 cents a share, right in line with Wall St. predictions of $24.7 billion and 61 cents. Stock was down on the news as investors still bearish on the economy, increasing mobile competition for 2009, faulty RIM products and major infrastructure expenses about to be shelled out to build the new wireless spectrum.
Stats: The company added 1.4 million net new wireless customers in the quarter, increasing the total to 72.1 million. That was up 9.9%, and does not include Alltel customers from the acquisition, which closed January 9.
303,000 new FiOS TV customers and 282,000 new FiOS Internet customers.
Revenue was up 3.4% from a year ago, or 4.6% on an adjusted, non-GAAP basis.
At least we’re getting a good idea of who to invest in the next time the economy crashes: Verizon, Google, Apple, very impressive earnings reports.

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Why eBay Won’t Sell Skype

by Jason Wilk on January 26, 2009

eBay CEO John Donahue is rumored to be selling Skype. In a recent interview with Wall St. analysts, he described the world’s most popular VoIP service as a“great stand-alone business”. When asked about how eBay contributes value to Skype, he said “the synergies between Skype and the other parts of our portfolio are minimal. We’re going to continue to run and operate the business. It’s not a distraction currently. And at such time when we have further announcements on that, we’ll let you know.”
eBay revenue was down 30% this past quarter, despite being the most high-trafficked shopping destination on the internet this holiday seasons. Meanwhile, Skype revenues continued to rise by 26% and membership continues to grow with it. Latest figures showing that Skype has 405 million user accounts worldwide, adding 30 million subscribers every quarter.
It’s tough to say whether or not eBay will actually unload Skype. As loyal auctioneers become continually frustrated with the company’s client service, fees and scams, eBay will continue to lose market share to niche destinations or Amazon. This means they want to surround themselves with as many rising opportunities in close proximity that they can. Donahue said that Skype is a great standalone business, then again so is StubHub, Kijiji and Craigslist which survive entirely on their own and are all strong eBay investments. Skype just happened to be an investment that eBay saw bright hopes for in the midst of their default operation and it flopped. They imagined everyone from major retailers down to Joe Plumber to have a shop set up on eBay, waiting for customers to enter their store and talk via Skype for customer service. Kind of like a weird reinvention of the 1950’s without brick & mortar. Nonetheless, it didn’t happen, but they are hit a home run anyways by turning Skype profitable. Skype is still groundbreaking, recession-happy and if I had to make my pick, I’d say it will not be sold until eBay is desperate.

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Suntech, First Solar Receive 5MW Each In Masdar City Solar Contracts

by David Heyerman on January 19, 2009

masdarcity

If you haven’t heard about it yet, Masdar City is planned to be the first ever carbon neutral city located in Abu Dhabi, UAE. The project was started by the Abu Dhabi Future Energy Company (ADFEC) in 2006, and will supposedly cost around $22 Billion. The first phase of the project, however, is beginning this year with completion set for 2016. The city plans to house around 50,000 people within a 6.5 square kilometer area with an additional 40,000 people commuting to the city everyday for work. The city plans to house various manufacturing and commercial companies focusing on environmentally-friendly products.
Within the first year of construction, Masdar put two 5MW Solar contracts up for grabs from the most cost-efficient and quality producers. Not surprisingly, Arizona’s First Solar and China’s Suntech Power were just announced as the beneficiaries of those contracts.
The 10MW farm is projected to be finished by March, with the energy generated going towards the cities construction. What’s not clear is if there’s any future opportunities for the Suntech and FS with Masdar City.
I’ll tell you what, as interesting as it’s been to see the growth of Dubai over the last 5 or so years, it never made much sense to me, how these gigantic companies would ever profit off such lavish, over-the top construction. This, on the other hand, might eventually be the key to Abu Dhabi’s success; building a city with sustainability at the forefront of efforts, virtually guarenteeing unlimited future potential. Seems a whole lot better of an idea than building the tallest tower in the world (which will be overtaken in a matter of years, anyway).

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Solar Sector 2008 Wrap Up: Isn’t It Ironic, Don’t You Think?

by David Heyerman on January 5, 2009

solar

If it weren’t for the economy, Solar in 2008 would have been killing it, both in VC investments and stock prices. We saw large sums invested into CIGS (copper indium gallium diselenide) solar startups like Nanosolar, Miasole, and Solopower; bringing in over $200 million each. We also saw solar thermal (slightley less efficient than CIGS) startups like eSolar, Solel, and Brightsource bring in over $100 million a piece.
The state of California called for utilities to increasingly pull from clean energy sources. Brightsource took in 900MW, while SunPower and OptiSolar locked in 800MW worth of solar power purchase agreement from Northern California utility PG&E.
Where’s the irony you might ask? Take a look at the top six performing solar stocks and you’ll see why. Keep in mind, all six stocks more than doubled their price through 2007.
First Solar, despite their recent grid-parity milestone and impressive profit growth, came in 1st place, losing only 48% of their stock price since the beginning of 2008. Coming in second, SunPower lost 72% throughout the year.
The next four; Yingli Green Energy, Suntech Power, JA Solar, and Evergreen Solar all lost over 80% of their stock value through 2008. There is, however, an upside to this whole equation.
We’re already seeing bold moves from big players, some not even involved in solar power until recently. Conergy & GE are beginning investment into an India/Asia renewable energy trust that could potentially generate over $7 billion a year. Panasonic will be upping their solar game big time once they buy Sanyo for $9 Billion by way of a public tender offer. Most recenlty, Toshiba formed a group exclusively dedicated to building solar power plants. JA Solar will be supplying Solar Power, Inc. with 60MW worth of cells over 2009. Not to mention, Obama could potentially invest over $100 Billion into energy infrastructure and green job creation.
Although 2008 was rough, and 2009 quite possibly could be worse, Solar and all renewable energies might just be in luck. Joseph Muscat, Ernst & Young’s director of cleantech and venture capital, believes “…that the cleantech renewable energy sector will be the first to emerge when the market stabilizes.”