Blackberrys, Seach Engines, Oil -- Oh My!

Research in Motion

Q1 Rev:  $4.28 Bil

Q1 EPS:  $1.30

Q1 INCOME STATEMENT
Three Months Ended May 29, 2010
Revenue	$4,276,408
Cost of Sales	$2,387,169
Gross Margin	$1,889,239
	44.18%
Operating Expenses:
R&D	$276,094
SG&A	$516,797
Amortization	$88,596
Total	$881,487
Income from Operations	$1,007,752
Investment Income	$7,322
Income before Taxes	$1,015,075
Provision for Income Taxes	$294,372
Net Income	$720,703
EPS
Basic	$1.30

Analysts are expecting Q1 revenue and earnings per share to come in at $4.35 Bil and $1.34, respectively. The June 24 announcement is shaping up to be a bad day for RIMM shareholders.  Some may consider my estimates “close” to consensus, but don’t forget the old cliché “miss by an inch, miss by a mile.” 

Trading Recommendation:  Buy Puts

Visit http://tsmithson.blogspot.com/search/label/Research%20in%20Motion to read more about RIMM.

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Google

Q2 Rev:  $5.23 Bil

Q2 EPS:  $6.82

Income Statement
Three Months Ended June 30, 2010
Revenue	$7,060,054
Costs:
TAC	$1,827,402
Cost of Revenue	$785,035
Gross Margin	$4,447,617
Operating Expenses:
R&D	$862,072
S&M	$642,131
G&A	$462,810
Total	$1,967,012
Income from Operations	$2,480,605
Investment Income	$55,909
Income before Taxes	$2,536,514
Provision for Income Taxes	$556,563
Net Income	$1,979,951
Non-GAAP Adjustments	$2,207,201
Diluted EPS	$6.82

Expectations are for revenue of $5.02 Bil and EPS of $6.58.  My estimates are modestly higher than consensus with a 3.65% EPS surprise.  Given the stock’s lackluster performance over the past couple of months, this earnings announcement could serve as a catalyst for an overdue rally.

Trading Recommendation:  Buy Calls

Visit http://tsmithson.blogspot.com/search/label/Google for past articles relating to Google.    

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Exxon Mobil

Q2 Rev:  $89.86 Bil

Q2 EPS:  $1.29

Income Statement
Three months ended June 30, 2010
Total Revenue	$89,863
Costs & Other Deductions	$78,429
Income before Taxes	$11,434
Income Taxes	$5,144
NI w/ NC Interests	$6,290
NI Attributed to NC Interests	$172
Net Income	$6,118
EPS	$1.29

Analysts are missing the mark, once again, with Exxon Mobil.  Their performance last quarter was abysmal.  Currently I am forecasting second quarter revenue of $89.87 Bil.  Consensus is $98.92 Bil—a $9 Bil difference!  One would assume that after missing by over $6 Bil last quarter, some major revisions would be made.  Apparently that isn’t the case. 

Trading Recommendation:  Buy Puts

Visit http://tsmithson.blogspot.com/search/label/Exxon%20Mobil to see my past performance with XOM.


I encourage each visitor to click the “Follow” button in the upper-right portion of the screen.  By doing so, you are able to catch all of my new posts as soon as they’re released!  Also, don’t forget to sign up as an email subscriber!  Earnings season will be starting up again very soon--don't miss out!

RIMM/GOOG/XOM 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.

What Lies Ahead...

When I started this blog, I never expected to receive such an outpouring of support from so many unknown readers and followers. After nearly two months of projections and dissemination, statistics clearly show that more than 70% of the time, the estimates posted here have been closer to actual earnings than analysts' consensus.

So what's next? Well, throughout the month of June, I will be reassessing RIMM, GOOG, XOM, EBAY, KFT, and HPQ in order to make any necessary revisions for the upcoming quarter. Afterward, I will be posting new analysis and earnings estimates for many more U.S. companies. These may include such widely-traded stocks as MSFT, MCD, BA, INTC, AA, AMZN, CSCO, CAT, IBM, UTX, T, and WMT.

If you are not already a follower or an email subscriber, I encourage you to become one so you are alerted the moment a new post is published!


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.

HPQ Shocks the Street

Second-Quarter Earnings Release

Actual Q2 Rev:  $30.85 Bil

Actual Q2 EPS:  $1.09

Hewlett-Packard Company (“HPQ”) reported earnings that far surpassed Wall Street expectations today.  Street consensus had Q2 revenue at $29.82 Bil, with a range of $29.51 to $30.22, and EPS at $1.05.  Actual revenue of $30.85 Bil exceeded even the highest estimates of all 31 analysts covering the stock.  However, the forecasts that I published early last week called for Q2 revenue of $30.78 Bil and EPS of $1.09.  These results, as summarized in the table below, were extremely close to the reported figures.  My revenue and earnings errors were 0.23% and 0.37%, while analysts’ errors were 3.34% and 4.05%, respectively.   

	Actual	Tyler Smithson	% Error	The Street	% Error
Q2 REV	30,849	$30,777	0.23%	$29,820	3.34%
Q2 EPS	$1.09	$1.09	0.37%	$1.05	4.05%

     

Actual Q2 Earnings
Income Statement
Three months ended April 30, 2010
Net Revenue	30,849
Costs & Expenses:
Cost of Sales	$23,601
R&D	$722
SG&A	$3,064
Amortization	$347
In-process R&D Charges	$0
Restructuring	$180
Acquisition-Related Charges	$77
Total	$27,991
Earnings from Operations	$2,858
Interest and Other, Net	-$91
Earnings before Taxes	$2,767
Provision for Taxes	$567
Net Earnings	$2,200
Non-GAAP Adj.	$604
Non-GAAP Adj. for Taxes	-$171
Non-GAAP Net Earnings	$2,633
Diluted EPS	$1.09

Once again, I find it very surprising that high-paid Wall Street analysts can be so inaccurate at predicting earnings.  Since the creation of this blog, I have been more accurate 71% of the time!  With the information that I freely and regularly provide, readers are better able to make informed trades. 

I encourage each visitor to click the “Follow” button in the upper-right portion of the screen.  By doing so, you are able to catch all of my new posts as soon as they’re released!  Also, don’t forget to sign up as an email subscriber!

HPQ 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.