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business newsAlcoa Earnings Send Stock Surging
By
Justin Sharon
Oct 08, 2010 4:20 pm
The aluminum giant is easily the Dow's biggest gainer today, up about 6% after reporting revenue rose 2% to $5.3 billion in its most recent quarterly announcement.
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A week that began with a slide in shares of American Express (AMEX) is ending with one company redeeming the reputation of plastic almost singlehandedly. Hard as it is to envisage anyone at Goldman having to pry open day-old leftovers out of airtight containers in order to eat, the firm did in fact take up its rating on Tupperware Brands (TUP) early Friday. Stock in the firm that makes those iconic burping seals is partying on, up more than 5% as I write after the bank gave it a Buy-from-Neutral boost. Although the typical length of a US Tupperware party, at 90 minutes, lasts exactly the same amount of time as an average sleep cycle, this isn't your grandmother’s snoozy Don Draper-era outfit, not when Kim Kardashian’s football-playing ex was among the recent participants at an event it hosted under the name of “Aphrodisiac Luncheon.” According to a PBS program I once watched on the brand (yes, I clearly must get out more often) a Tupperware party takes place somewhere in one of more than 100 countries around the world every 2.5 seconds. An independent sales force that's some 2.5 million strong brought in annual sales of $2.1 billion last year and overseas represents an especially attractive avenue of growth. Surprisingly for a firm that screams mid-century America, 86% of the company’s annual revenue is derived from abroad. While the direct sales model can’t always be seamlessly replicated -- Russia has proved particularly problematic -- in Indonesia for instance sales almost doubled in 2009 as the corporation continues to branch out its product offerings beyond basic containers. Also check out Something for Mr. Mom to Do ’til the Woman of the House Gets Home.
California can’t catch a break. On the day it at last approved a budget, a company headquartered in the increasingly anti-business Golden State -- indeed based in the dreadfully misnamed City of Commerce -- promptly tanks 10%. Investors are certainly not betting their bottom dollar on 99 Cents Only Stores (NDN) this afternoon; indeed, the deep discounter is currently the Big Board’s worst percentage performer by some distance. A second-quarter sales miss is responsible for the penny dropping at an outfit that, even in our deflationary era, should now be known as 99.99 Cents Only. It issued a negative earnings pre-announcement (is there any other kind?) in reporting revenue of $333.6 million, considerably short of consensus analyst expectations calling for $344 million. CEO Eric Schiffer also pointed to “unusually aggressive price promotions” as a source of the retailer’s specific troubles in Texas. Although a troubled economy should be a boon for such bargain-basement operations -- it’s no coincidence it was founded in 1982, the last time unemployment was this high -- pricing pressure in upcoming quarters will likely keep a lid on the shares. Please see The Dollar Stores That Deserve Your Bucks.
Expedia (EXPE), which once assembled some amusing outtakes of assorted linguistic errors, is today seeing its own stock ever so slightly lost is translation after getting downgraded by Goldman this morning. Analyst James Mitchell reduced his rating to Neutral from Buy basically due to valuation after a 50% increase in only three months, and he sees better current value elsewhere in the sector. Still, Mitchell actually moved his price objective up a dollar to $30 for the world’s largest online travel outfit, which was spun off by Microsoft (MSFT) at the turn of the millennium and whose brand roster also includes hotels.com, Hotwire.com, and TripAdvisor. Expedia remains a formidable operator in its industry but shares have likely hit an air pocket for the time being, especially as rival Priceline.com (PCLN) has been posting substantially faster growth overseas of late. TripAdvisor Exposes Nasty Truth About Airline Fees and Cheap Thrills For Travelers provide related content.
No positions in stocks mentioned.
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