Ticker Shock: United Tech, BorgWarner, Alcatel-Lucent Get Downsized
Friday's top stories and stocks with potential to move.
So, I finally managed to get all my Christmas lights working. What a scene: My wife was giving me instructions though the window as I made adjustments to the lights looping around the bushes in the front yard - in the rain.
What a fool I am sometimes. I've still got nothing on Clark Griswold, of course, but I like to think that I make a respectable display.
Getting down to business: Asian markets got battered as we slept. The Hang Seng and the Nikkei were both down more than 5%. And Europe was showing me some red, as well. And we're trading lower here in the US.
Here's what's on my radar screen on this fine Friday morning:
United Technologies (UTX)
The Connecticut-based conglomerate is expecting to earn $4.90 a share in 2008, and $4.65 to $5.15 a share in 2009. The economy is obviously an issue.
Long story short, I think some may view this as disappointing; the estimates I'm seeing are for $4.93 a share in 2008 and $5.03 a share in 2009.
I don't think the guidance United offered up was all that bad, all things considered. My interest is admittedly piqued, given that it trades at only about 9.6 times that current year expectation.
However, I do have 2 concerns: First, is that 2009 guidance doable? Second, are investors going to be paying a great deal of attention to this company in this environment, given all the other stocks out there that can be picked up on the cheap?
Additionally, this company can be a bit difficult to understand. It has its hands in multiple businesses ranging from elevators to aircraft engines to security solutions.
General Motors (GM) / Ford (F)
I don't think it was too much of a surprise that the auto bailout failed in the Senate. By midday yesterday, it seemed that everyone and their sister were talking about how tough a sell it would be in that chamber - particularly given "GOP demands that the United Auto Workers union agree to steep wage cuts by 2009 to bring their pay into line with Japanese carmakers."
However, in spite of the breakdown, I still think some sort of a bailout will eventually get done. There are just too many votes at stake that neither party wants to lose. And with the holidays just around the corner, I think there will be a lot of pressure to get something done.
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