MSFT: Income Statement Analysis for the December 2009 Quarter

Microsoft (NASDAQ: MSFT) earned $0.74 per diluted share, on a GAAP basis, in the quarter that ended 31 December 2009, which was the second quarter of Microsoft's fiscal 2010.  Earnings soared from $0.47 in the December quarter of the previous year.

This post examines Microsoft's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates.  Our target for Net Income in the latest quarter was only $0.58 per share, an embarrassingly large $0.16 less than the reported amount.

The principal sources for the income statement analysis were the earnings announcement, the conference call presentation [ppt] and transcript (available from Seeking Alpha and Microsoft [doc]), and the formal 10-Q report.

In a second article, we will report Microsoft's scores as measured by the GCFR financial gauges.  The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.

Read the rest of this article

NOK: Income Statement Analysis for the December 2009 Quarter

Nokia Corp. (NYSE: NOK) earned €0.26 per diluted share in the fourth quarter of 2009, which ended on 31 December, up from €0.15 in the same quarter of 2008.

This post examines Nokia's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates.  Our Net Income target had been only €0.17 per share, a substantial €0.09 less than the reported amount.

Our principal sources for the income statement analysis were the earnings announcement [pdf], the conference call presentation [pdf], and the transcript (available from Seeking Alpha). 

In a second article, we will report Nokia's scores as measured by the GCFR financial gauges.  The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.

Read the rest of this article

COP: Income Statement Analysis for the December 2009 Quarter

ConocoPhillips (NYSE: COP) earned $0.81 per diluted share, on a GAAP basis, in the fourth quarter of 2009, which ended 31 December.  This result includes non-cash impairment charges totaling $573 million ...

"primarily related to certain mature natural gas properties in western Canada and the company’s equity investment in Naryanmarneftegaz."

If these charges and a small gain are excluded, adjusted earnings in the quarter were $1.16 per share. 

In the fourth quarter of 2008, charges of almost $35 billion caused Conoco to report a GAAP loss over $21 per share.

This post examines ConocoPhillips' Income Statement for the latest quarter and compares the entries on each line to our "look-ahead" estimates.  Our target for Net Income in the latest quarter was $1.22 per share, $0.06 more than actual adjusted earnings.

Read the rest of this article

AAPL: Income Statement Analysis for the December 2009 Quarter

Apple (NASDAQ: AAPL) reported earnings of $3.67 per diluted share in the quarter that ended 26 December 2009, which was the first quarter of Apple's fiscal 2010. 

In this quarter, Apple revised, in a very substantial way, how it accounts for Revenue due to sales of the iPhone™ (and the less important Apple TV).  This change, which complies with
the latest standards issued by the Financial Accounting Standards Board, enables Apple to recognize "substantially all" iPhone and Apple TV Revenue in the period that the sale to a consumer took place.  Apple had been required to recognize Revenue from these products over each product's two-year estimated economic life.  This "subscription accounting" method resulted in substantial amounts of deferred Revenue and costs, reducing the reported values for each.

Apple restated its results (required for "retrospective adoption") for each quarter of fiscal 2007, 2008, and 2009 to be consistent with the latest, non-subscription approach.  For example, earnings for the first quarter of fiscal 2009 (quarter ending December 2008) were revised from $1.78 per share to $2.50 per share. 

It would have been helpful if Apple had also provided before-and-after data for the December 2009 quarter, but the results for the latest period were only prepared in accordance with the new accounting principles.  Therefore, the latest results cannot easily be compared with analyst estimates, or even our own "look-ahead" estimates, because most analysts assumed the continued use of subscription accounting.

This post examines Apple's Income Statement for the latest quarter.  The principal sources for the analysis were the  earnings announcement, the formal 10-Q report, and the transcript (available from Seeking Alpha) from the conference call.  We used the restated data provided by Apple for all historical results.

Read the rest of this article

INTC: Financial Gauge Analysis for the December 2009 Quarter

Intel (NASDAQ: INTC) earned $0.40 per diluted share in the fourth quarter of 2009, which ended on 26 December, up from $0.04 in the same quarter of the previous year. 

We have already reported on the Income Statement for the quarter and compared the figures on each line to our "look-ahead" estimates.  We subsequently updated the Cash Management, Growth, Profitability and Value metrics for Intel.

This post reports on the metrics and the associated financial gauge scores.  The metrics were calculated using the financial statements in the earnings announcement.

Because the announcement did not include a complete Cash Flow statement, we had to estimate a few values to compute the gauge scores.  We will make any necessary adjustments after Intel files a complete 10-K report with the SEC.

Intel Corporation is the foremost manufacturer of integrated circuits for computers, servers, hand-held devices, and communication products.  Some background information about Intel and the business environment in which it is currently operating can be found in the beginning of the look-ahead.

In summary, Intel's latest quarterly results has produced the following changes to the gauge scores:

• Cash Management: 17 of 25 (up from 7 in September)
  
• Growth: 6 of 25 (up from 1)
• Profitability: 13 of 25 (up from 9)
• Value: 1 of 25 (up from 0)

• Overall: 32 of 100 (down from 17)

Although 32 points is not a particularly wonderful score, the increase from the previous quarter could be more significant. 

Read the rest of this article

PRGN: Prospectus Supplement

The insightful Footnoted.org has observed that some companies submit interesting regulatory filings with the SEC late on Fridays, especially before a holiday weekend.

We had this thought in mind as we perused the Form F-3, Registration statement by foreign private issuers, that the SEC accepted from Paragon Shipping, Inc., (NASDAQ: PRGN) on Friday, 15 January 2010, at 4:33 PM.  The F-3 provides a preliminary supplement to the company's shelf-registration prospectus.

Read the rest of this article

AAPL: Look Ahead to December 2009 Quarterly Results

Apple (NASDAQ: AAPL) earned $1.82 per diluted share in the fourth quarter of fiscal 2009, which ended on 26 September, up from $1.26 in the same quarter of the previous year.

In October, we examined Apple's Income Statement for the September quarter.  We later performed a financial gauge analysis of Apple, which produced a GCFR Overall gauge score of 41 of the 100 possible points.  A subsequent adjustment in how scores are calculated increased the figure to 45 points.

Despite blowout earnings in the September quarter, the score remained modest because iPhone accounting negatively affected certain Balance Sheet ratios, some growth rates were not as robust as in the previous year, and a soaring share price pressured the Value gauge.

We have now modeled Apple's Income Statement for fiscal 2010's first quarter, which ended on 26 December 2009.  The intent of this exercise was to produce a baseline for identifying deviations, positive or negative, in the actual data the company will announce on 25 January.  GCFR estimates are derived from trends in the historical financial results and guidance provided by company management.

Let's be clear: There are an extraordinary number of sources of information about Apple, its business, and its finances.  Professional and amateur analysts compete to predict the company's earnings.  We lack that in-depth company-specific expertise.  We have tapped what sources we could find, and synthesized the information as best we could, but readers won't have any difficulty finding more complete and authoritative information about Apple.

Read the rest of this article

INTC: Income Statement Analysis for the December 2009 Quarter

Intel Corporation (NASDAQ: INTC) earned $0.40 per diluted share in the fourth quarter of 2009, which ended on 26 December, up from $0.04 in the same quarter of the previous year.

This post examines Intel's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates.  Our target for Net Income in the latest quarter was $0.29 per share, $0.11 less than the reported amount.

Our principal sources for the income statement analysis were the earnings announcement, the CFO's commentary [pdf], and the post-release conference call transcript available from Seeking Alpha.

In a second article, we will report Intel's scores as measured by the GCFR financial gauges.  The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.

Read the rest of this article

HD: Look Ahead to January 2010 Quarterly Results

The Home Depot, Inc. (NYSE: HD) earned $0.41 per share in the third quarter of fiscal 2009, which ended 1 November 2009, down from $0.45 in the same quarter of last year. 

In November, we examined Home Depot's Income Statement for the third quarter and compared the entries on each line to our "look-ahead" estimates.  We later performed a financial gauge analysis of Home Depot, which determined that the GCFR Overall gauge edged up from 27 to 29 of the 100 possible points.

We have now modeled Home Depot's Income Statement for the fourth quarter of fiscal 2009, which will end on 31 January 2010.  The intent of this exercise was to produce a baseline for identifying deviations, positive or negative, in the actual data the company will announce on 22 February.  GCFR estimates are derived from trends in the historical financial results and guidance provided by company management.

Read the rest of this article

WMT: Look Ahead to January 2010 Quarterly Results

Wal-Mart Stores (NYSE: WMT) earned $0.84 per share in the third quarter of fiscal 2010, which ended on 31 October 2009, up from $0.80 in the same quarter of last year.  Sales at the company's eponymous U.S. stores increased 1.2 percent, but same-store sales slipped 0.5 percent.

In November, we examined Walmart's Income Statement for the October quarter and compared the entries on each line to our "look-ahead" estimates.  One month later, we performed a financial gauge analysis of Walmart, which determined that the GCFR Overall gauge rose from 25 to 32 of the 100 possible points. (Year-end adjustments added a point to the results.)

We have now modeled Walmart's Income Statement for the fourth quarter of fiscal 2010, which will end on 31 January.  The intent of this exercise was to produce a baseline for identifying deviations, positive or negative, in the actual data that the company will announce on 18 February.  GCFR estimates are derived from trends in the historical financial results and guidance provided by company management.


First, we set the stage with some background information about Walmart and the business environment in which it is currently operating. 

Read the rest of this article

EIX: Look Ahead to December 2009 Quarterly Results

Edison International (NYSE: EIX) earned $1.22 per share in the third quarter of 2009, down from $1.34 in the same quarter of last year.  On a non-GAAP ("pro forma," "ex-items," or, Edison's preferred term, "Core") basis, earnings fell from $1.46 to $1.09 per share.  
In November, we examined Edison's Income Statement for the September quarter and compared the entries on each line to our "look-ahead" estimates.  We later performed a financial gauge analysis of Edison, which determined that the GCFR Overall gauge fell negligibly from 23 to 22 of the 100 possible points.

We have now modeled Edison International's Income Statement for the fourth quarter of 2009, which ended on 31 December.  The intent of this exercise was to produce a baseline for identifying deviations, positive or negative, in the actual data that the company will announce in February.  GCFR estimates are derived from trends in the historical financial results and guidance provided by company management.

First, we set the stage with some background information about Edison International and the business environment in which it is currently operating. 

Read the rest of this article

NVDA: Look Ahead to January 2009 Quarterly Results

NVIDIA (NASDAQ: NVDA) earned $0.19 per share in the third quarter of fiscal 2010, which ended on 25 October 2009, up from $0.11 in the same quarter of last year.  On a non-GAAP ("pro forma" or "ex-items") basis, earnings fell from $0.20 to $0.19 per share.  A $25 million insurance reimbursement, a $23 million stock-based compensation expense, and the tax impacts of these two items are excluded from non-GAAP Net Income in the October 2009 quarter.

In November, we examined NVDIA's Income Statement for the October quarter and compared the entries on each line to our "look-ahead" estimates.  We later performed a financial gauge analysis of NVIDIA, which determined that the GCFR Overall gauge rose from 20 to 31 (recomputed) of the 100 possible points.

We have now modeled NVIDIA's Income Statement for fiscal 2010's 14-week fourth quarter, which will end on 31 January 2010.  The intent of this exercise was to produce a baseline for identifying deviations, positive or negative, in the actual data that the company will announce in February.  GCFR estimates are derived from trends in the historical financial results and guidance provided by company management.

First, we set the stage with some background information about NVIDIA and the business environment in which it is currently operating.

Read the rest of this article

CSCO: Look Ahead to January 2010 Quarterly Results

Cisco Systems (NASDAQ: CSCO) earned $0.30 per share in the first quarter of fiscal 2010, which ended 24 October 2009, down from $0.37 in the same quarter of last year.  Non-GAAP (i.e., "pro forma" or "ex-items") earnings per share slid from $0.42 to $0.36.  Share-based compensation and amortization of acquisition-related intangible assets were the most significant differences between the GAAP and non-GAAP results.

In November, we examined Cisco's Income Statement for the October quarter and compared the entries on each line to our "look-ahead" estimates.  We later performed a financial gauge analysis of Cisco, which determined that the GCFR Overall gauge fell from 36 to 25 of the 100 possible points.

We have now modeled Cisco's Income Statement for fiscal 2010's second quarter, which will end on 23 January 2010.  The intent of this exercise was to produce a baseline for identifying deviations, positive or negative, in the actual data that the company will announce on 3 February.  GCFR estimates are derived from trends in the historical financial results and guidance provided by company management.

First, we set the stage with some background information about Cisco Systems and the business environment in which it is currently operating. 

Read the rest of this article