Stocks were languid today, perhaps waiting pensively in anticipation of Intel's
In today's Motley Fool Take:
- No Bull at Merrill
- Shameless Plug: Quarterlife Conference
- Gannett Scores a "9.5"
- Discussion Board of the Day: Building/Maintaining a Home
- J&J Weathers Stent Duel
- Quote of Note
- More on Fool.com Today
No Bull at Merrill
Last week marked the date for the rather bewildering -- and potentially bone-crunching -- practice of "the run of the bulls" in Pamplona, Spain, but when it comes to bull running, maybe there's not so much this week. Today, Merrill Lynch
Merrill reported earnings up 10% at $1.1 billion, or $1.06 per share. The rub? That's $0.03 shy of expectations. Revenues came in at $5.3 billion, basically flat from their levels at the same time last year and a far cry from the expected revenues of $5.7 billion. Though Merrill derived strength from global private management and investment managers divisions, it pointed to a tough quarter given slightly gloomy investor sentiment.
Other recent pressures to revenues included "interest rates, the geopolitical environment, oil prices, and inflation," according to the conference call transcript supplied courtesy of CCBN StreetEvents. Merrill said that it remains "confident" in future earnings potential due to the foundation it has set over the last several years.
It's no secret that trading volumes have been sluggish these days. Not only are we dealing with annual summertime trading doldrums, that state's compounded with a case of the jitters on the part of investors. We've seen similar signs of a downward trend from discount brokers like Motley Fool Stock Advisor pick Charles Schwab
Despite what may be a sluggish outlook for the remainder of the summer, Merrill gave assurances about the strengthening economy and its cost-saving initiatives. Merrill shares hit a new 52-week low in today's trading, bringing up the question of whether the summer's weakness represents a bargain for the long haul.
Read more on Wall Street and brokerage firms:
- The House of Morgan Stanley, by Roger Nusbaum
- Wall Street's in Trouble, by Tom Gardner
- Reinventing Schwab, by Nathan Slaughter
Alyce Lomax does not own shares of any of the companies mentioned.
Shameless Plug: Quarterlife Conference
Are you a quarterlifer in need of financial advice? If so, join Fool co-founder Tom Gardner and senior writer Dayana Yochim for a lively workshop on paying down post-college debt, avoiding financial pitfalls, and investing for the future.
The workshop is part of the Quarterlife Conference, which will meet Aug. 20-22 at the Marriott's Georgetown University Conference Center in Washington, D.C. For details, visit the event website.
Gannett Scores a "9.5"
Most of Gannett's financial measures flirted with double-digit growth. Net income grew 9.3% to $354.4 million ($1.30 share) on a 9.9% rise in revenues to $1.87 billion. Operating cash flow growth clocked in a shade less than 10%, as did revenues in the newspaper segment, which aside from the USA Today include more than 100 daily and 500 non-daily publications. However, broadcasting revenue growth from the firm's 22 TV stations did manage to break double-digits by rising 10.3%, bucking the trend as well as my theme.
Newspaper circulation ticked up a modest 1.1%, but the real story was in advertising. After restrained ad spending finally showed signs of life last quarter, Gannett delivered what President and CEO Douglas McCorkindale called "industry-leading ad revenue growth." On a pro-forma basis, local, national, and classified advertising grew 5.9%, 10.4%, and 12.2%, respectively.
While Gannett is best known for the print medium, it has also developed quite a portfolio of online properties. The firm operates 110 domestic websites, including USAToday.com, which saw traffic surge 54% last month and is now the fastest-growing top-tier news site on the Web, according to Nielsen.
Gannett and other media companies will not sit idly by as more and more jobseekers focus their search online (though traditional classified employment listings have strengthened). CareerBuilder.com, a collaborative venture between Gannett, Tribune
Gannett owes much of its recent success to a buoyant economy, which has created 1.5 million jobs since last August. With that underlying backdrop, Gannett's core operations should continue to prosper. Factor in a growing digital business and a proposed $1 billion stock buyback in the works, and the stock's forward P/E of 16 doesn't seem quite as pricey.
Fool contributor Nathan Slaughter is proud of himself for resisting the urge to include any newspaper puns in this story. He owns none of the companies mentioned.
Discussion Board of the Day: Building/Maintaining a Home
As interest rates inch higher, demand for housing and goods will start to dry up. Is the threat of higher rates holding you back from upgrading your home? Share your home-improvement dreams and maintenance woes with other Fools in the Building/Maintaining a Home discussion board.
J&J Weathers Stent Duel
For the second quarter, J&J's earnings -- excluding the impact of one-time charges on last year's quarter -- grew 17.1% to $0.82 per share, or $2.5 billion. Meanwhile, sales climbed 11.1% to $11.5 billion, with a positive currency impact of 2.6%.
Leading the way, the medical device and diagnostics business grew sales 11.8% to $4.1 billion, with international sales increasing 17% to $2 billion. The company cited strong growth from LifeScan's blood glucose monitoring products and Vistakon's disposable contact lenses, among others.
Also, the Cordis unit's Cypher drug-coated stent provided a positive boost in year-over-year comparisons, despite a rough hit compared with the first quarter. As we have noted, Boston Scientifc's Taxus stent has dominated the domestic stent market since its introduction on March 8. J&J had temporarily owned the market; it claimed only 30% of the U.S. market during the second quarter.
In other areas, J&J's pharmaceutical sales experienced worldwide growth of 11.1% to $5.4 billion, led by strong performances from Remicade for rheumatoid arthritis and Crohn's disease, the antiepileptic drug Topamax, and Duragesic, a transdermal patch for chronic pain. However, sales of anemia treatments Procrit and Eprex were hurt by competition.
The worldwide consumer segment also posted a healthy 10% growth in sales to $2 billion, driven by strong sales of McNeil Nutritional's Splenda sweetener, as well as skin-care products from the likes of Neutrogena and RoC.
On March 15, Mathew Emmert -- the Fool behind the Motley Fool Income Investor -- made his case for Johnson & Johnson's stock. It's a worthwhile read, and the company's business performance in the second quarter hasn't disappointed (and neither has the stock, for that matter, appreciating about 10% since then).
But as Alyce Lomax pointed out this time last quarter, the competition in J&J's stent business is an increasing point of interest.
For more, check out the following articles:
- Boston Scientific's Stent Gold Mine, by W.D. Crotty
- Stent Wars Going Strong, by Seth Jayson
- J&J, Guidant Join Forces, by Alyce Lomax
Fool contributor Jeff Hwang owns none of the companies mentioned above.
Quote of Note
"Where we have strong emotions, we're liable to fool ourselves." -- Carl Sagan
More on Fool.com Today
In Hot Fund Tips, Shannon Zimmerman offers a trio of pointers to keep you on the right track with your funds.... Roger Friedman says saved change can add up to big bucks in the long haul in Give Me Money!... In Dueling Cheapskates, Dayana Yochim insists that the smartest tightwads hunt down deals on the big-ticket items.
In other news:
- Cintas Wears It Well
- Wanted: Wall Street Analysts
- Finding the Best Brokerage
- A Page-Turner at the Times
For a list of all our stories from today, see our Today's Headlines page.