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Whisper Report
4/19/99
Super Tuesday
Brokerages
As we mentioned last week, the brokerage firms and online brokerage firms should report the
biggest earnings surprises this earnings season. However, though the analysts have been very
optimistic about the performance of the brokerage firms, these same analysts have been fairly quiet
about E*Trade (EGRP). Still, the overall expectation is for E*Trade to report a loss of $0.12 on
Tuesday, which is four cents better then the consensus estimate and one cent better than the highest
officially reported estimate. The lowest estimate is for a loss of $0.23 per share. Last quarter,
E*Trade met the whisper number and beat estimates by six cents on a pre-split basis, but this was
the first positive surprise in over a year. Therefore, the four cent expected surprise is a significant
expectation.
Computer and Software
Analysts are fairly optimistic about Microsoft's (MSFT) earnings as well, especially after the
previous quarter's blockbuster surprise. However, the analysts are concerned about the upcoming
quarters because of the Year 2000. The analysts will be looking for signs of a slowdown and will be
watching revenues more than earnings. The analysts basically expect revenues to be around $4.3
billion. For earnings, the consensus estimate is $0.32 and our whisper number is $0.35. The top
estimate is $0.37 and the low is $0.28; however, there are even a few that believe earnings will be
closer to $0.40. You may listen to Microsoft's conference call at
webevents.broadcast.com or (800) 568-6364 with the passcode of
1017 beginning at 5:30 PM EST.
Analysts are mixed about EMC's (EMC) results for the quarter, but overall are fairly bullish.
EMC's estimates have been lowered during the quarter, with the current consensus being $0.39.
Our whisper number is $0.40, with some whispering $0.41. However, there have also been
whispers of $0.39 for the quarter. Long-term, the analysts feel EMC will outperform, and the stock
is currently $50 below most target prices. Salomon Smith Barney was the latest to set a target price
of $150 for the company, when they reiterated a "Buy" rating on Monday. You may listen to
EMC's conference call at (703) 925-2435 with the passcode 1418725.
You shouldn't expect too much of a surprise from PeopleSoft (PSFT) on Tuesday. On March 31st
the company warned that revenues would be basically flat to a possible 10% increase over the
previous year's. (Press Release) The analysts immediately cut their estimates from $0.12 to $0.02.
On top of that, PeopleSoft hasn't beaten earnings estimates since last summer, and the analysts
really don't expect it now - even after the lowered estimates. The top estimate is $0.07, the low
estimate is for a loss of $0.03, and the whisper number equals the consensus estimate of $0.02.
Beginning at 6:00 PM EST on Tuesday, you may listen to the conference call at
nasdaq-amex.com
There is almost a unanimous expectation for Texas Instruments (TXN) (and many other technology
stocks). Analysts from PaineWebber, Soundview, Fahnestock & Co, Everen Securities, Salomon
Smith Barney, and others all basically say that earnings will meet or slightly beat estimates, but
revenues may be light.
Tobacco
If you want to watch a stock that will likely miss the estimates, we suggest Phillip Morris (MO).
The analysts have continually lowered their expectations of Phillip Morris recently. We currently
have a whisper number that is inline with the consensus estimate of $0.81, however the trend has
been going down. The whispers from just the past few days have been for Phillip Morris to report
numbers closer to $0.79 per share. CS First Boston, Morgan Stanley Dean Witter, Brown
Brothers, and others have all spoken negatively recently, including Joseph Abbott from I/B/E/S
International on Monday.
Internet
The major Internet company reporting earnings on Tuesday is RealNetworks (RNWK). There is
little doubt among the six analysts following RealNetworks that they will at least meet the consensus
estimate of a $0.02 loss, but most believe the Company will surprise. Our whisper number is a loss
of $0.01, but there have been recent suggestions that the company will break even (or possibly have
a possible gain). Still, the "consensus" whisper is for a $0.01 loss. The conference call can be heard
at (800) 633-8284 with the passcode of 12104856. It will also likely be on the Internet at
real.com.
You may view each day's earnings surprises at stockselector.com
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