How Will Q1 Earnings Compare To Q4?

After Monday’s NYSE close, Alcoa (A) reported a 54% earnings miss, blaming soaring energy costs and the weak dollar, reporting .37 (ex-items .44); .50 to .53 was expected.

For those who believe technology is non-cyclical, i.e., immune from recession, AMD missed Q1 revenue forecasts. The company said sales declined 22%, falling to ~$1.5B (AMD dropped 7% in after-hour trading). In response, the firm is cutting 10% of its workforce (1,600). PALM also issued an earning miss, saying its Q3 loss would increase to .53 vs. a forecast .30. 

Which leads directly to this:

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  1. American ZIRP commented on Apr 8

    Ummm, it’s pretty lame that I am reading posts at 5 a.m., but are you REALLY posting at 3 a.m.–or do you have some Europeans working for you?

  2. Remy Piwowarski commented on Apr 8

    Technology stocks will go up? How come?

    I would say that when recession comes people usually limit their spending on electronic devices… These are not essential goods…

  3. Remy Piwowarski commented on Apr 8

    I live in the Netherlands… I remember talking to friends and parents while on exchange at Cal – that was crazy:-)

  4. PrahaPartizan commented on Apr 8

    I found her comments about how even consumer staples like Wal-Mart and Proctor & Gamble were automatically assumed to experience earnings increases. Just how do they arrive at that conclusion?

    Wal-Mart has enormous energy costs to run their operations. The last time I looked, energy costs weren’t declining anywhere. Most of what P&G makes involves petroleum or some derivative of petroleum. Even the other materials they use involve paper or foodstuffs, with the huge increases they’ve seen.

    Few firms have been able to pass along this cost increases willy-nilly, so earnings must have taken a hit somehow. Happy news reporting is starting to get so boring it borders on the insane.

  5. Wayne Mulligan commented on Apr 8

    I don’t know about the AMD example — AMD is suffering from a bit more than the pressures of a recession. It’s a company that produces an inferior product to Intel and swallowing up Canadian companies just didn’t do the trick for it.

    These guys are going to have to scale back and become a niche player in the chip space. It was like a scrappy little fighter getting a sucker punch in on the world champ — Intel wasn’t going anywhere and AMD thought they had the fight won after the first round.

    However, I don’t disagree that tech is going to be feeling it this year. When two of the largest B2B companies (Oracle and Cisco) BOTH say business is gonna be slow, that’s a clear sign that everybody else will feel it at some point.


  6. Bob A commented on Apr 8

    … reminds me of Cody Willard and his oft-stated reasoning that MSFT and other tech was a buy because of the upcoming ‘Vista upgrade cycle’.

  7. Tom F. commented on Apr 8

    Bob A:

    Ha! Yeah, that one sure collapsed like a house of cards, didn’t it?

  8. Pat G. commented on Apr 8

    How long have I heard that a weak dollar is good for a multi-national like Alcoa? Boy those energy costs must hurt. We feel your pain.

  9. Preston G. commented on Apr 8

    Re Stacey Delo (yes I made the mistake of watching the video) – remember that her job is just to smile a lot and read what’s on the cards. If she is good at it then she can go into politics in a few years.

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