Exxon Reports Mixed Q2 Earnings

Exxon-Mobil's second-quarter earnings report hit the wires before the market opened this morning.  The stock closed out the trading day down nearly 1 percent. Revenue was below analysts' consensus at $92.49 Bil, while EPS came in at $1.60 per share. I published my estimates of $1.29 in earnings and $89.86 Bil in revenue for the oil giant on June 8, along with a "Buy Puts" recommendation.  This is in comparison to analysts’ consensus of $1.47 in earnings and $98.49 Bil in revenue.   Much like Exxon’s previous quarter, Smithson Equity Analysis was significantly closer on top-line revenue (2.84% error vs 6.49% error) than Street consensus.  Given that market participants are more concerned about the top-line rather than the bottom-line this earnings season, the miss on EPS is not very alarming. 

Exxon’s Q2 Earnings Report

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See also:

1-Month Performance Report

The Street vs. Tyler Smithson:  Exxon Mobil

A Glimpse Into Exxon’s Future

Disclaimer:
· At the time of publication, I do not have any open positions.
· Opinions, estimates and projections contained in this report are of the author as of the date published and are subject to change without notice.
· This report is not, nor should it be construed as, an offer to sell or solicitation of an offer to buy any securities.
· Unless otherwise noted, all research reports provide information of a general nature and do not address the circumstances of any particular investor.
· It is important to do your own due diligence on any position you enter.

Ebay Shares Struggle for Direction

Ebay's second-quarter earnings report has just hit the wires and the stock is virtually neutral in after-hours trading. Revenue was above analysts' consensus at $2.22 Bil, while EPS came in at $0.40 per share. I published my estimates of $0.41 in earnings and $2.18 Bil in revenue for the online auction house on April 23.  This is in comparison to analysts’ consensus of $0.38 in earnings and $2.17 Bil in revenue.  Once again, it appears that Smithson Equity Analysis outperformed the big Wall Street research firms.

Ebay’s Q2 Earnings Report

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Disclaimer:
· At the time of publication, I do not have any open positions.
· Opinions, estimates and projections contained in this report are of the author as of the date published and are subject to change without notice.
· This report is not, nor should it be construed as, an offer to sell or solicitation of an offer to buy any securities.
· Unless otherwise noted, all research reports provide information of a general nature and do not address the circumstances of any particular investor.
· It is important to do your own due diligence on any position you enter.

Starbucks Q3 Earnings Report Disappoints

Starbuck’s third-quarter earnings report has just hit the wires and the stock has fallen slightly in after-hours trading. Revenue was above analysts' consensus at $2.61 Bil, while EPS came in at $0.29 per share. I published my estimates of $0.30 in earnings and $2.62 Bil in revenue for the premium coffee shop on July 14^th.

SBUX's Q3 Earnings Report

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Disclaimer:
· At the time of publication, I do not have any open positions.
· Opinions, estimates and projections contained in this report are of the author as of the date published and are subject to change without notice.
· This report is not, nor should it be construed as, an offer to sell or solicitation of an offer to buy any securities.
· Unless otherwise noted, all research reports provide information of a general nature and do not address the circumstances of any particular investor.
· It is important to do your own due diligence on any position you enter.

Comedic Relief

This is what Smithson Equity Analysis is trying to prevent:

IBM Earnings Dissappoint -- As Expected

IBM's second-quarter earnings report has just hit the wires and the stock has dropped over 3.25% in after-hours trading. Revenue was below analysts' consensus at $23.7 Bil, while EPS came in at $2.61 per share. I published my estimates for the Tech Giant on June 15th and advised my readers to "Buy Puts" just before today's market close. Once again, it appears that another Trading Recommendation has been proven accurate.  If the stock opens tomorrow's session at it's current after-market price, those who followed my advice would incur a gain on their option position of approximately 30%.

IBM's Q2 Earnings Report

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Disclaimer:
· At the time of publication, I do not have any open positions.
· Opinions, estimates and projections contained in this report are of the author as of the date published and are subject to change without notice.
· This report is not, nor should it be construed as, an offer to sell or solicitation of an offer to buy any securities.
· Unless otherwise noted, all research reports provide information of a general nature and do not address the circumstances of any particular investor.
· It is important to do your own due diligence on any position you enter.

Virtualization

VMware, Inc

Q2 Rev Est.:  $658.24 M

Q2 EPS Est.:  $0.33

On average, analysts are expecting second-quarter revenue for VMware, Inc (“VMW”) to come in at $654.02 M with earnings of $0.32 per share.  Both of these figures are lower than my estimates of $658.24 M in revenue and $0.33 in earnings.  Shares of the software maker have risen a shocking 70% year-to-date.  This is in comparison to the DJI being slightly negative over the same time period.  Even more spectacular is the 1-year chart, showing a 140% increase in VMW share price compared to a < 20% rise in the DOW.  With the estimates that I have generated, there is a 3.13% EPS surprise built in.  While this is a seemingly positive indicator, readers must be aware that this is in comparison to an average surprise of 14.7% over the previous four quarters.  As a result of these factors, I have decided to place a buy puts Trading Recommendation on the stock. 

Income Statement
For the three months ended June 30, 2010
Total Revenue	$658,239
Operating Ex:
Cost of License Rev	$13,436
Cost of Services Rev	$66,952
R&D	$128,622
S&M	$212,282
G&A	$60,140
Operating Income	$176,806
Investment Income	$926
Interest Ex.	-$991
Other Ex.	-$1,836
Income before Taxes	$174,906
Taxes	$36,730
Net Income	$138,175
Diluted EPS	$0.33

Trading Recommendation:  Buy Puts

For more on what a “Trading Recommendation” means, please click HERE.

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VMW Ownership

Author:   NO

Author’s Family:  NO

Disclaimer:
· Opinions, estimates and projections contained in this report are of the author as of the date published and are subject to change without notice.
· This report is not, nor should it be construed as, an offer to sell or solicitation of an offer to buy any securities.
· Unless otherwise noted, all research reports provide information of a general nature and do not address the circumstances of any particular investor.

· It is important to do your own due diligence on any position you enter.

Cappuccinos!

Starbucks Corporation

Q3 Rev Est.:  $2.62 Bil

Q3 EPS Est.:  $0.30

On average, analysts are expecting $2.55 Bil in third-quarter revenue for Starbucks (“SBUX”) with earnings of $0.29 per share.  Both of these figures are below my estimates of $2.62 Bil in revenue and $0.30 in earnings.  Shares of the premium coffee maker have risen more than 80% over the past twelve months and 12.5% year-to-date.  Going into the late-July announcement, I am cautiously optimistic.  SBUX has a history of high earnings surprises.  If the stock is below $25 the day of the release, I recommend buying calls. 

Income Statement
For the three months ended June 27, 2010
Total Net Revenues	$2,618.83
Cost of Sales	$1,099.91
Store Operating Ex.	$856.36
Other Operating Ex.	$65.46
Depreciation	$133.92
G&A	$141.42
Restructuring	$8.16
Total Operating Ex.	$2,305.21
Income from Equity Investees	$35.80
Operating Income	$349.42
Interest Income	$11.78
Interest Ex.	-$8.27
EBT	$352.93
Taxes	$122.42
NC Interests	$0.81
Net Income	$229.70
Adj:  Restructuring	$5.14
Net Income for EPS	$234.84
Diluted EPS	$0.30

Trading Recommendation:  Buy Calls (read above)

For more on what a “Trading Recommendation” means, please click HERE.

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SBUX Ownership

Author:   NO

Author’s Family:  NO

Disclaimer:
· Opinions, estimates and projections contained in this report are of the author as of the date published and are subject to change without notice.
· This report is not, nor should it be construed as, an offer to sell or solicitation of an offer to buy any securities.
· Unless otherwise noted, all research reports provide information of a general nature and do not address the circumstances of any particular investor.

· It is important to do your own due diligence on any position you enter.

I'm Loving It

McDonald’s Corporation

Q2 Rev Est.:  $5.95 Bil

Q2 EPS Est.:  $1.12

On average, analysts are expecting second-quarter revenue for McDonald’s Corporation (“MCD”) to come in at $5.90 Bil with earnings of $1.12 per share.  While my revenue estimate slightly tops analysts’ consensus, our EPS figures are equal.  YUM Brand’s earnings announcement on Tuesday should be a good indicator for the overall strength of the fast-food industry.  It is important to note that while the DJI has been slightly negative year-to-date, shares of MCD have improved more than 10%.  If either my top-line or bottom-line estimates turn out to be too optimistic, shares of the restaurant giant would most likely fall sharply.  Given that my estimates are virtually even with consensus, I will not be giving a Trading Recommendation on the stock. 

Income Statement
For the three months ended June 30, 2010
Total Revenues	$5,953
Operating Costs:
Restaurant Ex	$3,293
Occupancy Ex	$353
SG&A	$560
Impairment	$33
Other	-$97
Total Oper. Costs	$4,143
Operating Income	$1,810
Interest Ex	$117
Nonoperating Ex	$0
EBT	$1,693
Taxes	$508
Net Income	$1,185
Adj:  Impairment	$33
Adjusted Net Income	$1,218
Diluted EPS	$1.12

Trading Recommendation: NONE

For more on what a “Trading Recommendation” means, please click HERE.

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MCD Ownership

Author:   NO

Author’s Family:  NO

Disclaimer:
· Opinions, estimates and projections contained in this report are of the author as of the date published and are subject to change without notice.
· This report is not, nor should it be construed as, an offer to sell or solicitation of an offer to buy any securities.
· Unless otherwise noted, all research reports provide information of a general nature and do not address the circumstances of any particular investor.

· It is important to do your own due diligence on any position you enter.

Another Successful Trading Recommendation

Quick Update on Family Dollar:

Yesterday, Family Dollar Stores ("FDO") reported earnings that disappointed the Street. For my readers and followers, this was not a surprise. Early Tuesday, July 6th, I wrote the following:

FDO shares have risen nearly 40% since the start of the year. If estimates do come in below analysts’ consensus as I anticipate, shares should fall quite precipitously.

I also gave a Trading Recommendation on the stock--Buy Puts. The day after the earnings announcement (Wednesday), shares closed with an 8.22% drop. On Tuesday just before the close, I actually followed my own advice and bought August puts, which I sold the next day for an 80%+ gain.

So far this earnings season I have given my readers correct Trading Recommendations on both Research in Motion ("RIMM") and FDO. RIMM fell 10.84% the day after its announcement and FDO dropped 8.22%. Monday, July 12th, marks the official beginning of the season. Estimates and recommendations have already been posted for companies like AT&T, UPS, CSX, Seagate Technology, United Healthgroup, IBM, Intel, Google, Exxon Mobil, and Hewlett-Packard.

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Disclaimer:
· At the time of publication, I do not have any open positions.
· Opinions, estimates and projections contained in this report are of the author as of the date published and are subject to change without notice.
· This report is not, nor should it be construed as, an offer to sell or solicitation of an offer to buy any securities.
· Unless otherwise noted, all research reports provide information of a general nature and do not address the circumstances of any particular investor.
· It is important to do your own due diligence on any position you enter.

Dollar Stores & Health Care

Family Dollar Stores, Inc

Q3 Rev Est.:  $1.97 Bil

Q3 EPS Est.:  $0.73

On average, analysts are expecting second-quarter revenue for Family Dollar Stores (“FDO”) to come in at $2.00 Bil with earnings of $0.76 per share.  Both of these figures are higher than my estimates of $1.97 Bil in revenue and $0.73 in earnings.  FDO shares have risen nearly 40% since the start of the year.  If estimates do come in below analysts’ consensus as I anticipate, shares should fall quite precipitously.

Income Statement
For the three months ended May 29, 2010
Net Sales	$1,971,506
Costs & Expenses:
Cost of Sales	$1,270,301
SG&A	$542,164
Costs & Ex Total	$1,812,465
Operating Profit	$159,041
Interest Income	$227
Interest Expense	$3,395
EBT	$155,873
Taxes	$56,315
Net Income	$99,559
Diluted EPS	$0.73

Trading Recommendation:  Buy Puts

For more on what a “Trading Recommendation” means, please click HERE.

Unitedhealth Group, Inc

Q2 Rev Est.:  $23.26 Bil

Q2 EPS Est.:  $0.87

On average, analysts are expecting $22.94 Bil in fourth-quarter revenue for Unitedhealth Group (“UNH”) with earnings of $0.74 per share.  These figures are below both my revenue and EPS estimates of $23.26 Bil and $0.87, respectively.  Currently, UNH shares have dropped about 7% since the beginning of the year.  If the stock continues to remain weak through the first half of July, shares could see a nice jump upward immediately following the earnings announcement on July 20.  

Income Statement
For the three months ended June 30, 2010
Total Revenue	$23,263
Operating Expenses:
Medical Costs	$17,324
Operating Costs	$3,469
Cost of Products Sold	$474
Depreciation	$261
Total Oper. Ex.	$21,527
Earnings from Operations	$1,735
Interest Ex.	-$142
EBT	$1,593
Taxes	-$590
Net Earnings	$1,004
Diluted EPS	$0.87

Trading Recommendation:  Buy Calls

For more on what a “Trading Recommendation” means, please click HERE.

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FDO/UNH Ownership

Author:   NO

Author’s Family:  NO

Disclaimer:
· Opinions, estimates and projections contained in this report are of the author as of the date published and are subject to change without notice.
· This report is not, nor should it be construed as, an offer to sell or solicitation of an offer to buy any securities.
· Unless otherwise noted, all research reports provide information of a general nature and do not address the circumstances of any particular investor.

· It is important to do your own due diligence on any position you enter.