Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Sunday, July 09, 2006

Media Digest 6/9/2006


Reuters reports that auto parts and tire company Contintentl AG believes that a tied-up of GM, Renault and Nissan would have mixed results. A member of the company's board said that an alliance of the three car makers might raise Continetal's units sales but would also put pressure on prices.

Reuters reports that bankrupt US air carriers Delta and Northwest are trying to get Congress to pass legislation that would allow them a longer period to fund their pension plans which have deficits that are in the billions of dollars.

Reuters reports that Starbuck's will try to increase its sales of non-coffee items during the holiday season. The products would include ornaments and gifts.

Reuters also reports that Wall Street is still skeptical about putting money into generic drug stocks due to rising price competition. Teva, one of the largest companies in the generic business, has seen its stock drop 25% this year. Generic drug companies Barr and Watson have had price drops of over 20% on concerns that companies like Merck will cut prices on their products like Zocor to keep comptition from taking market share.

Reuters writes that Europan Union sanctions on Microsoft for anticompetitive practices are getting the cooperation of the large software company in a way that non-monetary measures in the US have not. Microsoft faces a huge fine in European that could be $2.6 million a day backdated to December 15, 2005.

The Wall Street Journal reports that the film Pirates of the Caribbean is paying off forDisney. The movie's first weekend set a record bringing in $132 million.

The WSJ also reports that the stock in webMethods dropped 32% on Friday to $6.52 on word that it revised its guidance downward. Lesco, which provides turf care products fell 36% to $9.97 on news that its expects a loss for 2006. Shares in NMS Communications fell 33% to $2.45 on news that its quarterly loss was more than expected.

WSJ also reports that shares in Altria, the tobacco and food company have hit a 52-week high, which is close to the break-up value of the company. Whether the stock can go higher will depend on the financial performance of its operating units. Altria has an enterprise value of $181 billion including debt according to UBS. Although the tobacco business has been doing well and the company has much of its litigation over cigarette-related deaths behind it, the Kraft food unit has been doing poorly.

The New York Times reports that Texas Instruments may be in a position to take over leadership in the chip industry from Intel. The company has partnered with other firms that need new and innovative chips for products that, in some cases, have been extremely successful. This includes getting Nokia to use it chips for its new cellphones and convincing Samsung to use TI chips for its high definition TV products. Texas Instruments is betting that the PC era is ending and that it will be a primary provider of chips for the hand-held devices that will take the place of computers.

Douglas A. McIntyre

Powered by Blogger