So the big news on Thursday was CBS' (NYSE: CBS) hefty $1.8 billion purchase of CNET (NASDAQ: CNET). Douglas McIntyre already explained why this was such a "weird deal" in an excellent article that you can read here. I'd like to expand on that thinking a bit by asking if it should have been Viacom (NYSE: VIA), as opposed to CBS, in the buying seat.

Remember "old Viacom"? Old Viacom was composed of CBS and "new Viacom", the latter being the Viacom of today. I know, confusing, but that's how things are when a big media conglomerate splits in two. Anyway, there was a general mandate given to both companies, one that basically stated the logic of CBS being an entity that focuses on cash flows and dividend increases while new Viacom would focus on acquisitions to promote capital appreciation of the company's stock. Sure enough, the yield on CBS tells the tale perfectly.

So, I have to ask, what gives? I mean, a check of CBS' latest 10K shows that the broadcaster generated $2.2 billion in operational cash flow in 2007. I think paying $1.8 billion for anything, let alone a questionable asset vis a vis CBS' core media competencies, might be too much given CBS' mission to return a lot of value to shareholders over the long-term in the form of dividends.

And, since Viacom is the acquirer, maybe CNET should have been its target. I'm not necessarily saying Viacom should have fooled around with CNET either, but I just see more synergies between CNET and Viacom than I do between CBS and CNET. One quick example would be Viacom's intense efforts to invest in video games, both casual and not-so-casual. Viacom owns the Rock Band brand, and has done well with it. CNET owns GameSpot and MP3.com, and from where I sit, I simply would see more of a fit with Viacom. CBS should just worry about growing ratings at its major broadcasting asset.

But, the die is cast it seems; as deal expert Tom Taulli pointed out, "old media" has a lot of money to spend on new media, so transactions like this should be expected. If I were a shareholder of CNET, I'd cash out and call it a day, and maybe even try to figure out what the next Internet-related buyout will be (for an opinion on that, check out this piece by Peter Cohan). If you're a shareholder of CBS, keep a watch on management and make sure they don't do too many expensive acquisitions such as this. Make sure they focus on the cash flow and the dividend.

Disclosure: I don't own shares in any company mentioned here; positions can change at any time.

Read | Read | Read | Read | Permalink | Email this | Linking Blogs | Comments

IMAX (NASDAQ: IMAX) really missed Wall Street's expectations. In its latest earnings release, issued on Monday, the company said that its net loss per share doubled to $0.25 for the first quarter compared to the 2007 quarter when the net loss was $0.12 per share. Revenues were $23.5 million, a 12% decline.

While that performance is bad enough in itself, it was also below expectations with the bottom line missing by $0.11. Yikes! Revenues were likewise a disappointment. Even with all the snazzy content from studios such as Time Warner (NYSE: TWX), Viacom (NYSE: VIA), Disney (NYSE: DIS) and DreamWorks Animation (NYSE: DWA), IMAX is having a tough time getting its stock out of the single digits. Management is hoping that a stronger slate for the rest of the year will have a positive impact.

Maybe it will, maybe it won't. IMAX is a stock I have no interest in buying. The company sports a negative book value at the moment, and the stock's past performance has been pretty terrible. I have to concede, however, that on a shorter-term period, the stock has been strong -- in fact, it is not too far from a 52-week high.

As one can imagine, many are speculating that IMAX has a great future ahead of it as the company transitions to digital platforms (this article at USATODAY.com provides an excellent summary of the bull argument, as well as issues IMAX has had with financing). Also, I'm sure many are speculating about a potential sale of the company at some point.

Hey, I'm not going to necessarily rain on the long-term thesis for IMAX, but I have to be honest and say that I'd have to see a breakout from here and some better numbers next quarter to even think about starting a position.

Disclosure: I own shares in Disney; positions can change at any time.

Permalink | Email this | Linking Blogs | Comments

There's a great article over at The New York Times. It's about all the changes happening at the broadcast networks concerning the traditional upfront model -- the practice of presenting to advertisers around the month of May a new portfolio of programming to be commenced in the fall season and the subsequent booking of ad dollars for said programming. That's how the process has worked -- CBS (NYSE: CBS), General Electric's (NYSE: GE) NBC, Disney's (NYSE: DIS) ABC, News Corp.'s (NYSE: NWS) Fox, and Time Warner's (NYSE: TWX) and Viacom's (NYSE: VIA) CW show their wares now so that they can sell commercial inventory well ahead of the season premieres.

Well, according to the article, you can thank -- or blame -- the writer's strike for the dismantling of this quaint mechanism. I chose to thank the strike, because I think change is good in this case. You see, the broadcasters want to move to a 52-week season -- i.e., they want to debut new shows on a year-round basis instead of all at once, thus neutralizing the need for big upfront promotions. Actually, I should point out that there were probably other factors that helped this decision along -- most of them centering around costs and expenses. The expensive pilot-development process just isn't where it's at anymore. In fact, I wrote about this new paradigm back in April when NBC's co-chairman Ben Silverman was embracing it -- he's actually going for a 65-week season!

So, here's hoping the networks have the discipline to vanquish the traditional upfront selling market and instead conserve this new thesis going forward. Year-round programming will shake things up, which is exactly what is needed.

Disclosure: I own shares in Disney and General Electric; positions can change at any time.

Read | Permalink | Email this | Linking Blogs | Comments

I honestly thought Time Warner's (NYSE: TWX) Speed Racer would take the top spot over the Mother's Day weekend at the domestic box-office marketplace. Thankfully, I was wrong, since I own shares in Marvel Entertainment (NYSE: MVL).

Instead, Marvel's blockbuster Iron Man, which is distributed by Viacom (NYSE: VIA), grabbed the honors. According to estimates at Boxofficemojo.com, Iron Man grossed more than $50 million while Speed Racer drove away with about $20 million, good for second place. Yes, these are estimates, but I'll tell you what, my friends any changes to them later on won't alter the tale of Marvel beating the bigger studio. News Corp.'s (NYSE: NWS) new film, What Happens in Vegas, took in a similar amount to Racer and is currently pegged in third place. While first place is a lock, it's possible that second and third positions will be changed. Sony's (NYSE: SNE) Made of Honor and General Electric's (NYSE: GE) NBC Universal comedy Baby Mama were fourth and fifth, respectively.

This was Iron Man's second weekend, and I couldn't be more pleased by its performance. Hopefully, the picture is on its way to grossing at least $250 million domestically; subsequent weekends will get tougher for Marvel as more summer flicks open and gobble up screens and mindshare. For now, though, the company is a superhero. I just hope that the new Hulk, which will be opening soon, is a lot better than the one put out a few years back. For coverage on Marvel's latest earnings report, check out Sheldon Liber's recent piece.

Disclosure: I own shares in General Electric and Marvel; positions can change at any time.

Permalink | Email this | Linking Blogs | Comments

News Corp. (NYSE: NWS), a media conglomerate that competes with Time Warner (NYSE: TWX), Disney (NYSE: DIS), Viacom (NYSE: VIA), CBS (NYSE: CBS) and Sony (NYSE: SNE), reported third-quarter earnings Wednesday, and they were pretty interesting, to say the least.

I mean, revenues increased 16% to about $8.8 billion, but earnings per share went up like crazy, coming in at $0.91 per diluted share versus $0.27 per diluted share a year ago -- that's more than three times as much as the comparable period's results! As you can imagine, there's a little catch. The stellar appreciation is due to a gain in a transaction with Liberty Media. According to a piece at CNBC, News Corp. earned $0.30 per share after adjustments, which was a penny shy of Wall Street's expectations.

So, News Corp. kind of had a so-so quarter. I think the top-line growth was pretty good even if bottom-line performance wasn't as nice as that special gain made it seem on the surface. Plus, News Corp. is working with some cool assets. Cable programming continues to score thanks to the strength of Fox News Channel, an important platform for the conglomerate which contains valuable brand name pundits such as Bill O'Reilly and Sean Hannity. News Corp. leverages the channel to drive growth in its other cable properties; in fact, Fox Business Channel is trying to make a name for itself and it definitely benefits from synergy with Fox News.

Overall, the cable programming segment delivered a 17% increase in operating income while Fox News saw its operating profit go up by 11%. The television segment increased its profits by over 50%, and the Fox network just about doubled its bottom-line base. Other parts of News Corp. didn't do as well, such as filmed entertainment -- this segment's profit took a dive to the tune of 36%. However, don't blame one of my favorite shows, Family Guy -- DVD sales of this hot property was a positive driver.

Those are the highlights that stuck out at me. As for the stock, I don't see a compelling reason to buy at the moment. News Corp. should do well over time, but it wasn't like these were blowout numbers or anything. I'll wait and see how the company is doing when it reports its fiscal-year stats.

Disclosure: I own shares in Disney; positions can change at any time.

Permalink | Email this | Linking Blogs | Comments

News Corp (NYSE: NWS) did better than Wall Street expected. With one-time items backed out, the numbers were not quite as good, but were still impressive.

Hidden in among the numbers and news about the success of Fox and the company's cable operations were comments by chief Rupert Murdoch that the economic climate is going to start to bite advertising. "There's no doubt the consumer economy is stressed. You're seeing it affected in advertising, more short-term planning and booking," said the News Corp chairman and chief executive is quoted by Reuters as saying.

The observation should give pause to investors in News Corp and shareholders in other global media companies and advertising agencies. Murdoch's operation are structured very much like Viacom (NYSE: VIA), Disney (NYSE: DIS), and Time Warner (NYSE: TWX).

There had been some hope that advertising expenditures would not fall as the economy slowed. First quarter results from several media shops were decent. But the unlucky consumer, hit by rising fuel and food prices cannot spend on forever. Murdoch knows that and just wanted to pass it along.

Douglas A. McIntyre is an editor at 247wallst.com and editor of the Ten Stocks Under $10 newsletter.

Read | Permalink | Email this | Linking Blogs | Comments

Playboy's (NYSE: PLA) shares are hovering near a 52-week low as I write this. The catalyst, you ask? The sexy company reported some dismal earnings this week. Net sales decreased 8%. The net loss came in at $0.09 per diluted share versus positive net income of $0.04 per diluted share in the previous year's quarter.

Even if you look at some of the adjustments, the Playboy story just isn't a seductive one. And according to a Reuters article, expectations were for a profit of $0.06 per share after adjustments. The net income of each Playboy operating division headed in a downward direction. And publishing, well -- that's been the saddest segment of all for a while now.

I have a question for Christie Hefner: Are you serious about turning your father's company around? Seriously. I've been giving Playboy the benefit of the doubt now for quite some time, and I'm not sure I can do that anymore. I want to, believe me; I'm a guy who has always been in love with the Playboy lifestyle. And, remember, the invitation is always open if you need me to come over to the Mansion to help you generate some new marketing strategies.

I actually do have one suggestion you might be interested in -- ever think of branching out and investing in the mainstream movie business like World Wrestling Entertainment (NYSE: WWE) does? That may sound crazy, and I'm not sure the company is ready to go up against studios such as Time Warner (NYSE: TWX) and Viacom (NYSE: VIA), but maybe Playboy needs to shake things up a bit, create youth-targeted films featuring cameos from its Playmate stable to promote the magazine. It's a thought, anyway.

Christie Hefner has done a poor job of keeping his father's brand alive. Yes, I know licensing has done well over the years, but I'm sick of these losses. I'm sure a lot of shareholders out there are growing impatient. As for the stock, I'll say this: it could be a trade if it stays above the 52-week low for a bit. As for fundamentals, I'm not sure Playboy makes the cut.

Disclosure: I don't own shares in any company mentioned here; positions can change at any time.

Permalink | Email this | Linking Blogs | Comments

World Wrestling Entertainment (NYSE: WWE) stepped into the Wall Street ring on Tuesday -- and lost. The company's stock dropped about 8% at closing on the Q1 earnings release (it did recover a bit during the after-hours session). I'd probably call this profit-taking, although there was one thing about the earnings report that I didn't like: free cash flow.

Let me say first, though, that revenues increased more than 50% to $162.6 million, and that earnings per share rose almost 29% to 27 cents (according to Briefing.com, this matched expectations). This is excellent growth, and it shows the resilience of wrestling as an entertainment brand; sure, many on Wall Street may not take the company seriously, but they're wrong. I enjoyed, by the way, that WWE increased the buy-rates for its Royal Rumble and No Way Out pay-per-view events. Pay-per-view is a very vital part of WWE's operations, in my opinion. And let's not forget a big driver for the quarter -- Wrestlemania XXIV -- which brought in more than million buys.

Unfortunately, free cash tumbled off the mat, decreasing 77%. And, no, the amount generated did not cover the generous dividend that WWE pays. I would really like to see free cash flow do well every quarter since WWE has been a steady dividend-increaser over its time as a public company. Management must focus on the cash-flow statement and make it a priority.

Besides cash flow, my other favorite thing to look at with WWE is how its film operations are faring. Longtime shareholders know that its Hollywood ambitions have gotten off to a shaky start, but during the quarter, WWE films contributed profits equal to $1.9 million on recognized revenues of $11.3 million. I think WWE should continue making movies and build up as deep a library as possible. There are probably a lot of shareholders who think that WWE should drop this scheme, but I would disagree with such a notion. You can just tell that the McMahon's want to become as big a competitor as possible to larger media companies like Disney (NYSE: DIS), Time Warner (NYSE: TWX), News Corp. (NYSE: NWS), and Viacom (NYSE: VIA). Like it or not, WWE needs a movie division.

So, I liked the earnings, but I'm wishing for a better free-cash-flow picture next time around. Over the long haul, I'm hoping WWE lives up to my expectations, as I think it will grow over time and become a larger media company.

Disclosure: I own shares in Disney; positions can change at any time.

Read | Permalink | Email this | Linking Blogs | Comments

I really want to turn bullish on Midway Games Inc. (NYSE: MWY), but there's no way I can do that right now. The company's stock is below $3 a share, and it's there for a reason. But, let's first look at a couple positives from the software publisher's latest earnings release. Net revenues shot up 170% to $29.9 million in Q1; that beat expectations, according to Briefing.com. And the net loss per share also beat expectations by a penny -- it came in at $0.29 per diluted share on an adjusted analysis.

But, that net loss is worse than the previous year's net loss of $0.20 per diluted share, also adjusted. Like I say, someday I want to report that Midway has turned the corner and is a buy. I simply can't do that, even though I recently bought the publisher's catalog title Rampage: Total Destruction for the Nintendo Gamecube and am having a great time with it -- guess it goes to show that you can't always judge a company's stock by the fact that you enjoy its products. One thing that Midway needs to do is perhaps seek some synergy from Viacom, Inc. (NYSE: VIA)'s MTV and Nickelodeon channels. Sumner Redstone is, after all, the controlling shareholder of Midway. Granted, THQ Inc. (NASDAQ: THQI) deals with the Nickelodeon characters at the moment, but in the future, Redstone needs to figure out a way to use his media assets to promote Midway and perhaps funnel some licensing deals to the publisher. MTV is certainly doing well with its own video-game ambitions via Rock Band, which is sold by Electronic Arts Inc. (NASDAQ: ERTS).

One thing I must point out is that, since my last article about Midway, the stock is up. This was mentioned to me by a reader. So, in objective trading terms, if you went against my opinion, you would have made money, no question. However, I have to stick to my guns and say that I personally wouldn't play the volatility in Midway's shares. Yes, you could luck out with it, maybe Redstone will come along one day and buy out the remaining shares at a big premium (doubtful, at least the big-premium part). I wouldn't want to speculate on such an outcome; I am still content with my Activision, Inc. (NASDAQ: ATVI) shares as a way to play video-game investing.

Disclosure: I own shares in Activision; positions can change at any time.

Read | Permalink | Email this | Linking Blogs | Comments

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

My son is an Elmo addict. He has Elmo clothes, Elmo books, and Elmo toys. He insists on listening to an Elmo CD whenever he rides in my car and watches the furry Muppet almost every day on "Sesame Street." Oh yeah, he calls his binky Elmo.

And you know what? This doesn't bother me.

Sesame Street, which has been on the air for about 40 years, is still a quality show. It teaches kids the alphabet, how to count and other important lessons in an entertaining manner. The show has some aspects of Saturday Night Live to it with clever bits like having Oscar the Grouch host something called the "Grouch News Network," which featured CNN's Anderson Cooper.

I realize that his Elmo fascination won't last. My son recently discovered Mickey Mouse on one of Walt Disney Co.'s (NYSE: DIS) cable channels. Eventually, Mickey will give way to Dora the Explorer and SpongeBob SquarePants on Viacom Inc.'s (NYSE: VIA) Nickelodeon.

Kids today are marketed in ways that would have been unthinkable when I was a kid. Sesame Street, which is no slouch in the merchandising department either, seems to stand for something more than just marketing merchandise to our youngest consumers. The for-profit media companies worry about shareholders and bottom lines as they should. But when it comes to kids, there need to be a higher standards.

To the mind of this parent, Elmo trumps Mickey and Dora and the rest of the them. Elmo, though, is lover not a fighter. He would say that there is room enough for everybody in a child's imagination and you know what, he's right.

Vote in our poll for Disney or Nickelodeon as your preferred brand, and let us know in the comments why you love it.

Permalink | Email this | Linking Blogs | Comments

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Alcatel-Lucent (NYSE: ALU) reported its fifth straight quarterly loss and lowered its outlook.
• Anadigics Inc. (NASDAQ: ANAD) beat Q1 expectations and raised its Q2 guidance.
• AuthenTec Inc. (NASDAQ: AUTH) Q1 revenues jumped 67% on new product offerings.
• CBS Corp. (NYSE: CBS) posted better-than-expected Q1 results and raised its dividend.
• Cognex Corp. (NASDAQ: CGNX) beat Q1 expectations and lifted its outlook.
• Comcast Corp. (NASDAQ: CMCSA) posted soild Q1 results on high-speed internet/digital phone strength.
• DreamWorks Animation Inc. (NYSE: DWA) earnings and revenues soared in the first quarter.
• Eastman Kodak Co. (NYSE: EK) narrowed its Q1 loss but missed earnings estimates.
• IAC/InterActivCorp (NASDAQ: IACI) Q1 profits fell but met analsts' expectations.
• LSI Corp. (NYSE: LSI) beat Q1 expectations and raised its guidance for the next quarter.
• NetSuite Inc. (NASDAQ: N) narrowed its loss on a surge in Q1 revenue.
• Omniture Inc. (NASDAQ: OMTR) Q1 revenue jumped 136% on acquisitions.
• RadioShack Corp. (NYSE: RSH) just beat low Q1 expectations on lower demand and narrower margins.
• SAP AG (NYSE: SAP) earnings for the first quarter fell short of analysts' expectations.

• Sohu.com Inc. (NASDAQ: SOHU) Q1 profits rose 156%, easily beating analysts' estimates.
• Sun Microsystems Inc. (NASDAQ: JAVA) reported a Q3 loss and announced layoffs.
• Teledyne Technologies Inc. (NYSE: TDY) posted its 25th consecutive quarterly earnings growth.
• Verizon Communications Inc. (NYSE: VZ) posted solid Q1 profits in line with expectations.
• Viacom Inc. (NYSE: VIA) posted solid Q1 profits despite weakness in movie business.
• Virtual Radiologic Corp. (NASDAQ: VRAD) solid Q1 results failed to impress investors.

Also, Jim Cramer lauds Procter & Gamble Co. (NYSE: PG) for its success in these tough times and Colgate-Palmolive Co. (NYSE: CL) for bouncing back after taking a hit. And Time Warner Inc. (NYSE: TWX) investors may have been looking for more than they got in the quarterly report.

Upcoming results to watch for include Anadarko Petroleum (NYSE: APC), Cisco Systems (NASDAQ: CSCO), Fannie Mae (NYSE: FNM), Molson Coors (NYSE: TAP), Walt Disney Company (NYSE: DIS), and American International Group (NYSE: AIG).

Visit AOL Money & Finance for more earnings coverage.

Permalink | Email this | Linking Blogs | Comments

5/2 - Iron Man, Viacom (NYSE: VIA)'s Paramount Pictures

6/27 - Wall-E, Disney's Pixar

8/8 - Pineapple Express, Sony's Sony Pictures

Permalink | Email this | Linking Blogs | Comments

Viacom (NYSE: VIA) issued its Q1 earnings results on Friday. The conglomerate seems to be doing all right with its strategy of leveraging content to drive growth. Revenues were up 15%, and adjusted diluted earnings per share jumped 29% to $0.44. But it can be seen that there's a dichotomy going on if you look into the performance of the two main operating segments: media networks saw its operating income rock up 15% while filmed entertainment tallied up an operating loss for the quarter. Even though that loss was narrowed by over 40%, I always get disappointed when I see a studio in the red -- it reminds me that the movie business is a risky, oftentimes low-return one.

But, should you be down on Viacom's movie business right now? Maybe not, since Paramount is currently distributing Marvel's (NYSE: MVL) Iron Man -- see Sheldon Liber's recent article about the film. That should hopefully improve things going forward, as might Indiana Jones and the Kingdom of the Crystal Skull. Viacom also will be distributing Kung Fu Panda for DreamWorks Animation (NYSE: DWA). Sumner Redstone is certainly counting on these projects to be huge. And speaking of huge, the company's Rock Band continues to fuel the media networks segment -- it's sold by Electronic Arts (NASDAQ: ERTS), and it is apparently holding its own against Activision's (NASDAQ: ATVI) Guitar Hero. The synergies between MTV and the music system are obviously pushing this one. Maybe the studio should get in on the video-game action by greenlighting a movie based on Rock Band -- maybe Jack Black could star in it!

Overall, I think Viacom is performing as it should, and I hope the movie division can bring in some profits during the coming months (I think it will). As for the stock, I'd ideally like to see it a bit lower before I'd consider buying it.

Disclosure: I own shares of Activision and Marvel; positions can change at any time.

Read | Permalink | Email this | Linking Blogs | Comments

• DJIA 13,051.36 (+41.36; +0.32%)
• S&P500 1,413.96 (+4.62; +0.33%)
• NASDAQ 2,476.14 (-4.57; -0.18%)
• 10YR-TBond 3.845% (+0.096)

Permalink | Email this | Linking Blogs | Comments

Permalink | Email this | Linking Blogs | Comments

Blockbuster (NYSE: BBI) must want to own a piece of everything. First, it made a bid for Circuit City (NYSE: CC) and now it is trying to get a piece of the new pay TV channel being launched by Viacom (NYSE: VIA).

Viacom says it will start a TV network with movies and other video content with contributions from MGM and Lions Gate (NYSE: LGF). The channel will compete with HBO and Showtime.

According to The Wall Street Journal, "As part of a deal being discussed, Blockbuster would get digital rights to the new channel's programming in return for an investment in the partnership."

How that makes sense is a mystery. The Viacom channel can sell DVDs though a number of outlets. Streaming content over the internet does not require help from Blockbuster. How does a company with rental stores and a DVD-by-Internet operation help a pay TV channel which will be distributed by satellite and cable?

Blockbuster has problems of its own. For starters, it just needs to stay in business. Its stock trades at $2.98, near a 52-week low, and down from more than $20 less than five years ago. Putting capital into new ventures or nutty M&A transactions is a waste of shareholder money.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 Letter.

Read | Permalink | Email this | Linking Blogs | Comments

Next week is sure to be filled with fun and volatile market conditions. The highlight will be the Fed decision on key rates, due on Wednesday, April 30, following a two-day meeting. Anytime the Fed has the floor, the markets listen. Tuesday and Wednesday will be filled with speculation up until the time of the announcement of a cut or pause.

There are many possible outcomes for this meeting, as we have seen a substantial change in investor sentiment regarding the potential need for further rate cuts. The buzz on the street is for a cut of 25 basis points and then a wait-and-see attitude from there. I think that is the most likely direction.

There has been a great deal of concern that all the recent rate cuts have not provided the benefit to consumers the economy needs. Clearly, there is a fatty clog within our financial circulatory system. Traditionally, the Fed likes to see how its actions trickle into the economy before it continues too far down one path, which would argue for a pause now. Plus, the Fed does not want to run out of ammunition by cutting rates too far too fast. But there is no question that we are dealing with a more aggressive Fed than we have seen in decades, so I think we will see another small rate cut.

After the Fed announcement, earnings will again take center stage. Watch out for surprises as investors have been bidding up stocks with a vengeance. Misses have been taken in stride as investors don't seem worried about large bank failures anymore. The truth is, the Fed has created a monster with its bailout policy and I'm worried stocks are getting overpriced here.

It is going to be a busy week for earnings as the season is in full swing. Here is a day-by-day look at the week ahead at some of the opportunities investors may want to consider.

Monday April 28

Tyson Foods (NYSE: TSN) will be reporting. While this is not an exceptionally exciting report, it is one that will help to provide insight of just how bad the food crisis is and how the corn shortage is effecting profits. Last week we saw a considerable take-down for Chipotle Mexican Grill Inc. (NYSE: CMG) after it explained its outlook. First Call is expecting only $.01 EPS on $6.69 billion revenue as compared to EPS of $.19 for the same quarter last year.

Fair Issac Corp. (NYSE: FIC) has been in the hot seat as it is the company that created the FICO score. You know, the beloved company that provides lenders your credit rating/score. There has been quite a fallout over the ability of this company to properly gauge credit risk. The chart shows a recovery pattern filling toward the January gap-down. This is similar to what we have seen for many others that have rocketed on earnings lately.

If FIC manages to hit earnings, shares could get a nice pop. Shares are down 40% or so since November, and this report will show us how many lenders are looking to other companies to provide the data. Competitors taking over some of FIC's business may include the likes of Equifax Inc. (NYSE: EFX) and Experian Group Ltd. (LSE: EXPN). First Call is expecting $.43 per share on revenue of $204 million.

With that in mind, the credit card business is booming! Why you ask? People who are having trouble getting money these days are spending in a reckless manner with plastic. The winners here are Visa Inc. (NYSE: V) and Mastercard Inc. (NYSE: MA). Remember, neither of these companies has exposure to default as they are only processors of the transactions. There has been some talk about the negative effects that will be felt due to the Delta-Northwest merger as they will probably look to consolidate the card offering. What that really means to Visa is anyone's guess at this point.

On deck today are both Visa and Mastercard. The estimates are looking for an EPS of $1.99, up from a year ago of $1.57. Revenues are expected to come in at $1.06 billion. Visa is reporting its first earnings since it went public in March. There is a great deal of positive buzz on this name. Watch out as expectations are for a good number which could just as easily sink the stock if investors are disappointed. First Call estimates $.46 for the period.

Tuesday April 29

Food costs are out of control. Pizza inflation is the new buzzword and Archer Daniels Midland (NYSE: ADM) may continue to benefit from this new paradigm. It is expected to show a 50% increase in EPS to $.70 this quarter and revenues will rise to $12.45 billion. That is a lot of food product.

The theme continues on with Panera Bread (NASDAQ: PNRA) reporting. As mentioned above, food costs are eating away at restaurant profits and there could be a big disappointment brewing for this name. Remember, the extraordinary wheat prices will hit right in their gut as margin (and margarine) compression will hurt their costs.

Wednesday April 30

All eyes will be on the Fed decision this day. Greg Ip, from The Wall Street Journal, regularly writes about the Fed outlook as well as many of the factors that go into the Fed's decision. On this subject I invited him to be a guest this week on The Disciplined Investor Podcast. This episode will be available Monday.

In other earnings, investors are looking towards the darling, now scorned, Garmin (NASDAQ: GRMN) for direction on its future earnings path. Estimates for an increase of $.11 over same quarter last year will need to be met for investors to once again look kindly on this name. Shares have been beaten down with ferocity since January and stand at about 1/3 their value since the November 2007 high.

Thursday, May 1

Automatic Data Processing (NYSE: ADP) will report and give us a good look at the employment situation from a corporate standpoint. The ADP report will provide a look back, but there may be some tidbits within the conference call that may give us a look ahead. Estimates are for $.75 per share and $2.4 billion of revenue.

Exxon Mobile Corp. (NYSE: XOM) also reports today. The last few earnings releases have been whoppers. There is no reason to think that the total revenue number won't be gigantic. The street is looking for $124.43 billion for the period. Did someone say windfall tax?

Friday May 2

A lighter earnings day by far. Con Ed, Nortel, Viacom, take your pick. Nothing too exciting. Stay at home in your PJs.

----------
Disclosure: Horowitz & Company clients may hold positions of some of the stocks mentioned as of the publish date.

Andrew Horowitz is a money manager and author of the bestseller The Disciplined Investor: Essential Strategies for Success. See The Disciplined Investor Blog.

Permalink | Email this | Linking Blogs | Comments

Toymaker JAKKS Pacific (NASDAQ: JAKK) lost the expectations game earlier this week, my friend. Wall Street was looking for more in terms of earnings per share than the company was apparently able to deliver. Was JAKKS playing around too much these last three months? Who knows -- this business can certainly be fickle, after all.

For the first quarter, JAKKS saw its revenues increase over 5% to nearly $131 million. Earnings per diluted share came in at $0.03 if you take into account litigation expenses, restructuring charges, etc. On an adjusted basis, JAKKS earned $0.13 per share, compared to a year-ago adjusted earnings of $0.14 per share. According to Briefing.com, this was $0.06 less than what the Street wanted.

JAKKS, which competes with Hasbro (NYSE: HAS) and Mattel (NYSE: MAT), didn't have a great quarter, it's true. But I've always found this company and stock to be an interesting one, as it seems to do well over time with its various licensed products, such as merchandise based on some Disney (NYSE: DIS) brands, including Hannah Montana, and toys based on Viacom's (NYSE: VIA) Nickelodeon channel.

Whenever the stock is on a pullback, it always catches my attention (although, I should point out, I have never owned it). In addition, the balance sheet appears to be in good shape: there's a nice amount of cash and cash equivalents at $238 million, long-term debt has remained stable, and the accounts receivable line is down.

JAKKS is still forecasting $2.91 per diluted share for the current fiscal year. Given the share price as of this writing, the P/E ratio on the stock remains compelling.

Disclosure: I own shares of Disney; positions can change at any time.

Permalink | Email this | Linking Blogs | Comments

Viacom's (NYSE: VIA) Paramount studio, MGM, and Lionsgate (NYSE: LGF) want their own pay TV channel. That means Viacom will cut ties with Showtime, owned by CBS (NYSE: CBS). MGM and Lionsgate will also break with the CBS property. The deal is more interesting since Sumner Redstone is chairman of both CBS and Viacom.

According to The New York Times, "The deal raises the question of how Showtime will fill the feature film portion of its programming slate. Showtime pays more than $100 million a year to the studios to show their movies."

The new channel could end up ruining Showtime, hurting the CBS financials, and setting up new competition for HBO, but it is a sign of the times. Studios are seeing more and more premium video going to the internet. Some of that content is pirated. It is a cinch the new channel will be a better economic deal for the studios involved. They need the money.

The $100 million budget film used to be unusual. Now it seems to be the norm. Studios which cannot bring in more revenue though new distribution deals may see their P&L's falter, so they are aggressively changing their revenue models, even if it means cutting the throats of old friends.

Douglas A. McIntyre is an editor at 247wallst.com.

Read | Permalink | Email this | Linking Blogs | Comments

According to an AP article citing data from comScore Inc., people are still in love with the internet. In fact, they love to watch videos on the internet. Furthermore, views of videos online experienced an ecstatic rate of growth in February -- they shot up 66% compared to the year-ago period. Incredible, right? And if you're a media company, you love the data, right?

Well, if you're Google (NASDAQ: GOOG), you love it. If you're a Disney (NYSE: DIS) or a General Electric (NYSE: GE), you would be of two minds about it. For you see, while people are watching videos, oftentimes they are doing it on a platform like Google's YouTube -- they aren't necessarily watching them at ABC.com. The data show that YouTube increased its video views by 15% in February 2008 ver