Company Earnings: Qualcomm, Akamai, NutriSystem, Anheuser-Busch

Qualcomm Shares Rise
Qualcomm QCOM reported Q2 net income rose 22% to $726 million. EPS totaled $0.50, ahead of analysts estimates of $0.47. Revenues increased 21% to $2.22b, again beating analysts' expectations. Qualcomm also raised its full-year EPS guidance on sales of $8.4b - $8.7b (from $8.1b - $8.6b). Shares of Qualcomm gained 2.2% to $45.34 during normal trading and added 0.90% to $45.75 in after-hours activity on volume near 2.6m.

Akamai Shares Tumble
Akamai AKAM reported Q1 net income climbed 67% to $19.2 million. Revenues grew 53% to $139.3m, compared to analysts' estimates of $138.8 - $139m. Akamai forecast Q2 sales of $149m - $153, compared to analysts' consensus estimate of $150.3m. In a conference call, Akamai reiterated its full-year revenue growth guidance of $610m - $625m. However its shares fell 10.3% to $48.97 during normal trading and last traded down 0.35% to $48.80 in the after-hours, having dropped as low as $46.46 (-5.1%), on volume of more than 1.1m. Analysts had very high expectations, especially with Akamai beating in the several quarters prior.

NutriSystem Beats Street
NutriSystem's NTRI revenues soared 62% to $238m in Q1'07 vs. $146m in Q1'06. Net income rose 70% to $38m in Q1'07, vs. $22m in Q1'06, beating analyst's expectations. Operating income almost doubled from $35m in Q1'06 to $60m in Q1'07. Despite a 92% rise in marketing costs, revenue per customer grew and returning customers should bring in $93m in 2007 compared to $38m in 2006. NutriSystem grew its online market and its men's market grew faster than the traditional woman's market increasing cash flow. Strong Q1 comes from New Year's weight loss program. NutriSystem forecasts Q2 revenues of $190-$200m, a 43% increase. Full year revenues are expected between $790-$805m, as NutriSystem continues to focus on the men, women and senior markets, returning customers and new products. Shares rose $7.41 to $65.65 after hours Wednesday.

Anheuser-Busch Shares Down
Anheuser-Busch BUD shares fell 2.8% yesterday, their biggest drop in almost two years, after the company posted a Q1 profit miss on advertising expenses for Bud Light and imported beers. Net earnings were $517.5 million in the quarter, up 3.7% from $499.2 million a year ago. Net revenue rose 2.7% to $3.86 billion from $3.76 billion in the year-ago quarter. Analysts were expecting revenue of $3.94 billion. Marketing and administration expenses were up 8.1% to $665.7 million in a bid to keep consumers away from rival Miller Lite. Advertising costs were also increased. Sales were up 2.7% to $3.86 billion for Q1 from $3.76 billion a year earlier. The company's U.S. market share dropped to 50.2% from 50.9% a year ago. Shipments to U.S. wholesalers rose 0.5% from a year ago, but international shipments to wholesalers were up 8.7% to 5.2 million barrels, primarily on sales to China and Canada.

(Source: Seeking Alpha)

Recent Earnings: Ups & Downs

Sun Shares Drop 6.5%

Sun Microsystems swung to a profit in its fiscal Q3, but a small sales gain fell short of analyst forecasts; shares fell over 6.5% in after-hours trading. Net income was $67 million vs. a loss off $217 million last year. Sales rose 3% to $3.28 billion, less than the $3.42 billion analysts expected.

Amazon.com Shares Up
Amazon.com reported strong first quarter earnings Tuesday after the bell, beating Wall Street's expectations and sending shares higher by nearly 13% in after-hours trading. Amazon also raised its full-year sales guidance. Q1 net income more than doubled on improved electronics and clothing sales, as well as a lower tax rate, to $111 million, good for EPS of $0.26; sales jumped 32% to $3.02 billion. Amazon issued guidance for the next quarter, with revenue in the range of $2.7-$2.85 billion, annual sales of $13.4-$14 billion, and an operating income projection for the year of between $463 and $593 million.

McClatchy Posts Steep Profit Drop
Shares of newspaper publisher McClatchy Company fell to a 7-year low yesterday after the company posted a sharp drop in Q1 net income on slumping classified print ads. Q1 net profit came in at $9 million, a 67% drop from $27.7 million in the year-ago quarter. Ad revenue dropped 5.3% from last year to $477 million in Q1. Three main categories of classifieds: automotive, real estate and employment suffered double-digit percentage declines. Internet revenue grew over 5% in the quarter, but was insufficient to compensate for poor print ad performance. McClatchy's shares lost 3% after the report to close at $30.55.

Reuters Posts Revenue Beat but Sales Drop on Weak U.S. Dollar
Reuters Group posted a forecast-beating 6.5% rise in Q1 revenue, but said actual revenue fell 1.1% after accounting for currency fluctuations including a weak U.S. dollar. Actual revenue fell to €626 million from €633 million a year ago, during which the dollar fell 12% against the pound. Nonetheless analysts were impressed with the underlying growth

Western Union Posts 12% Drop in Q1 Earnings
Shares of payment transfer company Western Union fell 4.5% in AH trading to $21.90 yesterday after the company posted a drop in Q1 profit on overhead and interest expenses. Q1 net income fell to $193.2 million from $219.8 million a year earlier. The EPS result met analyst expectations. Revenue was up 8% from a year ago to $1.13 billion. International transactions rose 21%, with India showing solid growth. However the results reflect $15 million of expenses to add staff and replace services. The company has lowered its 2007 revenue growth forecast to 10-11% from 11-13%.

IBM Shares Up 3.5%

IBM announced Tuesday it is expanding its stock-buyback program by $15 billion, potentially reducing outstanding shares by 10%, and increasing its dividend from $0.30 to $0.40 a share. IBM said that as a result of the share repurchase, 2007 EPS growth will be 12%-14%, 1%-3% higher than previously expected. Treasurer Jesse Greene said IBM has been "very underleveraged" with only $700 million in core debt, and $10.8 billion in cash. He would not disclose how much new debt the company would take on to fund the buyback. Moody's and Standard & Poor's said the plan would not affect IBM's debt ratings, but Fitch Ratings placed IBM on Rating Watch Negative following the announcement. CEO Samuel J. Palmisano said the moves "underscore the strength of IBM's business model and our strategy" saying its fiscal strength, "gives us significant financial flexibility to use our capital to drive growth through investments in acquisitions and capital expenditures, and to increase returns to shareholders through dividends and stock repurchase." The company said it may complete a substantial portion of the repurchases during the next several months. Shares rose $3.28 (3.5%) to close at $98.49.

Biggest Drop in 18 Years

The dollar fell and treasury yields declined on news that existing-home sales sank 8.4% in March, their steepest drop since January 1989, on poor demand hampered by bad weather. The National Association of Realtors reported that March sales came in at 6.12 million, shy of economists' expectations of 6.5 million. The decline follows a 3.7% rise in February. March sales were down 11.3% from the year-ago period. The median home price in March dropped 0.3% from a year ago to $217,000, while inventories rose to 7.3 months of supply from 6.8 months in February. The Conference Board's consumer confidence index declined to to 104, its lowest level in eight months, from 108.2. "The housing downturn is now weighing increasingly heavily on the U.S. economy," said Mark Zandi, chief economist at Moody's Economy.com. It is "starting to have an impact on consumers' psyche and also their spending. The second quarter is going to be no better than the first.'' The yield on the 10-year Treasury note fell to 4.61% from 4.64% yesterday, while the dollar fell 0.3% against the euro to $1.3621.

(Source: Seeking Alpha)