Macy's Hits 15-Year Lows, but Management Still Optimistic
just reported a third-quarter loss of $44 million, or 10 cents per share, after a profit of $33 million, or 8 cents per share, a year earlier.
Sales fell to $5.49 billion from $5.9 billion a year earlier, but that was in-line with analyst estimates. Management did say it's confident about the company's strong cash flow, solid balance sheet and ample borrowing capacity. The company also plans to continue to aggressively manage expenses and inventories.
Another big item was the company reducing its budget for 2009 capital expenditures from approximately $1 billion to a range of $550 million to $600 million. In 2008, the total amounted to $950 million.
As for the outlook, the company sees 2008 EPS to finish in the $1.30-$1.50 per share range. The consensus is at $1.37.
We had removed shares of Macy's from our "Recommended" list on Sept.17, when the stock was trading at $20.17. The company has a dividend yield of 5.53%, based on last night's closing stock price of $9.41. The company is now trading at 15-year lows. That said, we would like to see the shares stabilize here, before we think the stock has bottomed.
Macy's is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.
Qualcomm's New 'Kayak' Device Aims to Bring Web to Emerging Markets
Mobile technology company
unveiled Wednesday a new device named Kayak that aims to allow wireless Internet access to people in developing countries, without using a computer.
The device, which works on mobile-phone chip technology, can be hooked up to TVs or monitors and also includes keyboard and mouse support.
Countries in emerging markets are expected to construct massive wireless networks in the coming years, and Qualcomm's device is intended to capitalize on overseas consumer adoption of Internet access technologies.
Qualcomm said it plans to begin user trials of the new device in the first quarter of 2009 in Southeast Asia.
The Kayak device marks Qualcomm's first major foray back into the mobile device market. The company left the mobile-phone market a few years ago, now deriving the bulk of its revenue from licensing revenues associated with its proprietary CDMA technology, as well as the sale of CDMA chips, which are used in wireless phones.
Could this new device be a "dress rehearsal" for the company to re-enter the mobile phone market? Our initial thoughts point toward "no," since the Kayak is not actually a phone, rather a mobile Internet device, aimed squarely at cheap personal computing. However, as the lines between "phone" and "mobile Internet device" become increasingly skewed, anything is possible. For instance, many existing "mobile Internet devices" now have to ability to act as phones through services such a
-owned Skype, which allows people to place telephone calls over the Internet.
These types of hybrid gadgets may well afford Qualcomm an entry point back into the mobile phone market, although perhaps not in the traditional sense.
Qualcomm, Inc. is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars.
Prologis Cuts Dividend 56%, CEO Resigns
is announcing its CEO Jeffrey Schwartz has resigned and will be replaced by former president and chief operating officer Walter Rakowich.
The company is also announcing a new annual dividend of $1 per share, down 56% from the $2.28 per share it was currently paying.
The company is the largest U.S. owner and developer of warehouse and distribution centers.
We had removed shares of PLD from our "Recommended" list on Aug. 19, when shares were trading at $45.80. The credit markets and overall market conditions are forcing the company to significantly reduce expenses. We are not sure if other dividend cuts will be needed, but the reaction so far in the stock today may be saying we should expect further radical cost-savings. We would not bottom-fish here, but would instead monitor the shares and look elsewhere for better opportunities.
Prologis is not recommended at this time, holding a Dividend.com Rating of 2.4 out of 5 stars.
Head of Merrill's Asian Investment Unit Leaves Firm
According to an internal memo, the top executive of
( MER) Asian investment banking unit has left the U.S.-based brokerage.
The executive, Damian Chunilal, left the firm for undisclosed reasons. His departure was confirmed by Merrill spokesman Rob Stewart, who did not elaborate any further on the reasons behind the departure. No replacement for Mr. Chunilal has been named as of yet.
Chunilal's departure comes amid a wave of layoffs and departures in the Asian units of several U.S.-based investment firms. Merrill Lynch cut at least 75 employees from its Asian offices last month, and
laid off around 100 of its staff in Hong Kong recently.
We expect to see several other top investment brokers leave their once-mighty big-name firms in the coming weeks and months. The hassles of integrating, both culturally and financially, with
Bank of America
, which is in the process of acquiring Merrill Lynch, is once factor that will potentially affect executives' decisions to leave.
Another factor in the migration from large firms will be investment bankers' desire to be more nimble and free from the increased regulations (including executive compensation limits) placed on investment firms that have filed for and been approved as having "bank holding company" status. We will most likely see many top execs bring their Rolodexes into newly-established boutique firms.
How this shift will affect pending mergers and acquisitions remains to be seen. If most of the top talent leaves a firm like Merrill Lynch, then what will be left for Bank of America to buy?
Merrill Lynch is not recommended at this time, holding a Dividend.com Rating of 2.8 out of 5 stars.
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At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.
Tom Reese and Paul Rubillo are senior editors of Dividend.com. Visit Dividend.com for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.