Get The Hell Out Part V

FedEx's CEO said nearly exactly the same thing last August.

Assuming he may be wrong again, whether that means he lacks either credibility or an accurate vision, well, I guess that's a matter for interpretation.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aw2wg2Dq3QIM&refer=home

FedEx to Extend Pay, Job Cuts as Profit Falls 75%

By Mary Schlangenstein and Mary Jane Credeur

March 19 (Bloomberg) -- FedEx Corp., the second-largest U.S. package-shipping company, said quarterly profit slid 75 percent, more than analysts expected, and sales fell for the first time in at least a decade in the worsening economy.



Pay cuts will be extended to some non-U.S. workers and an unspecified number of jobs will be cut as it seeks to remove $1 billion from operating costs by next year, Memphis, Tennessee- based FedEx said in a statement today. The changes will result in a $100 million fourth-quarter charge.

A 3 percent decline in U.S. air shipments was the 13th in a row as businesses and consumers curbed spending amid the worst unemployment rate in 25 years. International air shipments tumbled 13 percent. The company, considered a bellwether for the U.S. economy, delivers everything from mortgage and banking documents to clothing and electronics.

“The fact they missed the estimate that had been already coming down sends a message that maybe we had been living on a bit of false optimism recently,” Dan Ortwerth, an Edward Jones & Co. analyst in St. Louis, said in an interview. “Near term -- staying bad. Anybody who thought differently was probably fooling themselves a bit.”

Net income for the fiscal third-quarter dropped to $97 million, or 31 cents a share, from $393 million, or $1.26, a year earlier, the company said. Revenue fell 14 percent to $8.14 billion for the period ended Feb. 28. Per-share earnings trailed the 46-cent average of 16 analyst estimates compiled by Bloomberg.

Lower Expectations

FedEx said it expects earnings of 45 cents to 70 cents a share in the fiscal fourth quarter. The company was estimated to earn 70 cents, the average of 16 analyst estimates compiled by Bloomberg.

“It’s a very, very difficult market to forecast right now because of this unprecedented decrease in international business,” said David Campbell, a Thompson Davis & Co. analyst in Richmond, Virginia.

To trim costs, FedEx in December cut Smith’s salary by 20 percent and reduced pay by 5 percent to 10 percent for other salaried workers. The company also suspended retirement account contributions for at least a year and froze hiring.

FedEx today said it would extend the pay reductions to an unspecified number of non-U.S. workers and would reduce capacity in both its FedEx Express and FedEx Freight units.

“The downturn in our industry and the severity and expected duration of the recession require that we take additional actions,” Chief Executive Officer Fred Smith said in the statement.

FedEx fell 25 cents, or 0.6 percent, to $42.80 at 9:04 a.m., before the start of regular New York Stock Exchange composite trading.

To contact the reporters on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net; Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net
Last Updated: March 19, 2009 09:09 EDT

 

Another article showing that earnings could be much worse than anticipated. Delaying of 10ks.....

http://www.bloomberg.com/apps/news?pid=20601109&sid=adTEdZtY_5e4&refer=home

By Courtney Dentch

March 17 (Bloomberg) -- Casino owner MGM Mirage said it needed more time to complete its annual report to assess its finances. Newsprint maker AbitibiBowater Inc. attributed its delay to an impairment charge, and General Motors Corp. was slowed by debt refinancing.

More companies are citing fluctuating asset values and mounting debt as reasons for late 10-K filings with the U.S. Securities and Exchange Commission. About 83 companies have postponed 2008 reports this year, based on filings compiled by Bloomberg as of yesterday’s market close.

Others will probably follow later this month as the deadline for smaller companies looms, said Mark Grothe, a research analyst with investment advisory firm Glass, Lewis & Co. in New York. Falling real estate and portfolio values, the financial crisis and tighter credit restrictions are complicating the annual review, making it harder for auditors to ensure that writedowns are valued properly, he said.

“Prices have declined everywhere and it requires adjustment to the values the companies have held on the books,” Grothe said in a telephone interview. “Today, those assumptions don’t seem as possible as they did a year ago.”

Of the companies that have delayed their 2008 annual reports, 33 cited debt refinancing, impairments or bankruptcies. That compares with 81 late filers a year earlier, nine of which gave impairments and bankruptcies as reasons.

Fair Value

Companies are trying to determine impairments under a fair- value rule that requires them to revalue assets every quarter to reflect a market price regardless of whether they plan to sell.

The U.S. real estate market lost $2.4 trillion in value last year, according to First American CoreLogic, a provider of mortgage and economic data in Santa Ana, California. The Standard & Poor’s 500 Index fell 38 percent, while the Dow Jones Industrial Average lost 34 percent.

“Fair-value accounting and having to recertify goodwill impairments all become harder to do in a market that isn’t giving good, predictable information,” said David Martin, a former SEC lawyer and partner at Washington-based Covington & Burling LLP. “Value in the open market is much harder to discern.”

Montreal-based AbitibiBowater said its fourth-quarter loss of as much as $238 million will include a $296 million charge related to asset and goodwill impairments and a mill closing. The company cited the writedown in delaying its annual report.

‘Multiple Priorities’

“We’ve had multiple priorities,” Seth Kursman, an AbitibiBowater spokesman, said yesterday in a telephone interview. “The upcoming debt maturities and the sale of assets and other activities that have been going on here have had to take top billing versus the release of the information.”

Carrizo Oil & Gas Inc. also cited an impairment in postponing its report, according to a regulatory filing.

GM and Carrizo have since filed their 10-K reports while MGM and AbitibiBowater haven’t, according to Bloomberg data through yesterday. GM and MGM Mirage said they had no comment beyond the filings.

Carrizo had a writedown of more than $138 million and that flowed through the company’s bookkeeping and caused the delay, said Richard Hunter, vice president of investor relations.

“As soon as we got all of that taken care of and accounted for, we were able to file,” Hunter said.

Falling Revenue

MGM Mirage, the casino operator controlled by billionaire investor Kirk Kerkorian, borrowed the remaining $842 million under its senior credit facility last month. The company said one reason for its delayed 10-K was the need to assess the consequences of that decision.

MGM Mirage has been hurt by falling gambling revenue and lacks funds to finish building its Las Vegas CityCenter casino, hotel and residential development. MGM is scheduled to report earnings later today.

This week’s deadline for companies with $75 million to $700 million in outstanding stock will probably accelerate the wave of delays, Grothe said. Companies with a market capitalization of more than $700 million had to file their 10-K annual reports by March 2, 60 days from the end of the calendar year. The smallest companies must file by the end of the month.

“Small companies often don’t have the systems in place like the larger companies,” Grothe said. “They don’t have the accounting staff to handle it.”

Late filings can trigger penalties from lenders, and companies often will seek waivers to avoid breaching debt covenants, said Eli Bartov, an accounting professor at New York University’s Leonard N. Stern School of Business.

Fees, Interest Payments

If companies aren’t able to negotiate waivers, fees and additional interest payments can range from $10,000 to $1 million, depending on the size of the loan and the company, Grothe said.

Stocks also can be removed from exchanges, and companies may have to rewrite prospectus documents tied to share issues if they delay regulatory filings.

The SEC may take legal action, including a civil law suit, against companies who are delinquent in bringing the filings into compliance. In 2008, the regulatory agency brought 111 late filers before administrative judges, accounting for 16 percent of its total legal actions. It filed no civil suits last year.

Delays may signal financial trouble, including the need to restate earnings, particularly if it’s the first time a company has postponed, Grothe said. Restatements are traditionally the biggest reason for tardy reports, although accounting changes under the Sarbanes-Oxley Act have limited the need for corrections, he said.

“Late filings are the first red flag that there’s something wrong at the company,” he said.

To contact the reporter on this story: Courtney Dentch in New York at cdentch1@bloomberg.net.

 

You need to backup your call with a valuation analysis for the S&P and why you think the market will eventually agree and go there. What so special about the 500 level?If people really think the sp is worth 900, the by multiple expansion that will became true

 

I'd like to add some bells and whistles like cramer has.....maybe we can get you one that says..sir sir sir sir sir sir sir...

 

one thing I've learned throughout me years on this planet:

NO ONE DELAYS GOOD NEWS....

 

Indeed.


To Bernanke and Geithner, OPM is for nothin' and chicks are free.

I wonder what the ultimate default rate will be on these steaming piles of shit they're buying with our money.

http://www.bloomberg.com/apps/news?pid=20601068&sid=aNBEEAbUZ7Fo&refer=home

"Current TALF

As it’s currently set up, the TALF may lend as much as $1 trillion to investors from hedge funds and pension funds to insurance companies to buy recently created securities backed by loans for car purchases, college education and real estate. Applications for its first loans are due today.

Broadening the TALF to include older, illiquid and lower- rated securities could allow the participants in the public- private investment funds to potentially repackage assets and sell them on to a wider group.

The Fed’s policy-making committee, which met yesterday in Washington, said in its statement that the range of eligible collateral for the TALF “is likely to be expanded to include other financial assets.” The Federal Open Market Committee also pledged $1.15 trillion of extra measures to lower borrowing costs, including purchases of long-term Treasuries."

 

LOL

I attribute it to old school upbringing Sir

When I was a kid I received more than a few thumping’s on the head for being disrespectful – I guess some lessons remain with you for life.

But damn – anyone other than cramer please!!!!!

Take Care

 

Get The Hell Out Part V

I wonder in the musical whose part Meat Loaf is going to play?

Also BuyLo, how is your atomic bunker building going? Not to mention a screenshot of your large short position would be nice, otherwise all this fearmongering is getting redundant...

 

Pekelo, what exactly is wrong with liquidity preservation?

Tell us all if you believe the man who loses nothing or relatively little is not wise for the accomplishment in this brutal environment.

 

No one wanted to be a bag holder over this weekend.

I can hardly blame them.

Oh, the FDIC ramped up banking losses due to higher 'impairment' charges.