Computer Sciences (CSC) Earnings Preview: Margins Hold Key To Q3 Earnings

IT services provider Computer Sciences Corp. (CSC) will announce its fourth quarter earnings results on February 8 before the market opens. The focus will also be on the impact from the Federal budget uncertainty besides the performance of North American Public Sector. But the company seems to be banking on its managed services sector and business solutions and services divisions.

However, the margins are holding key to its results. In the last four quarters, both gross margin as well as operating margin is witnessing downtrend indicating weakness.

Street analysts are expecting the Falls Church, Virginia-based Computer Sciences to deliver earnings of 58 cents a share on revenues of $3.98 billion. This represents earnings downside of 62 percent on revenues fall of 0.6 percent.

Last year, the company earned $1.54 a share on revenues of $4.01 billion.

Significantly, analysts have reduced their earnings target to 58 cents a share from 65 cents a share 60 days back and $1.19 a share 90 days ago.

Q2 Results

Computer Sciences reported a net loss of $2.88 billion or $18.56 loss a share versus net income of $184 million or $1.18 a share in the year-ago quarter. On an adjusted basis, net income was $146 million or 94 cents a share for the second quarter.

Revenues rose 1 percent to $3.97 billion from $3.94 billion in the previous year quarters. Analysts' had earnings target of 68 cents a share on revenues of $4.03 billion.

Significantly, the company reduced its fiscal 2012 adjusted earnings outlook to $4.05 - $4.10 a share from $4.70 - $4.80 a share. CSC also cut its higher end of its revenue forecast to $16.5 - $16.7 billion from $16.5 - $17 billion projected earlier.

During the last four quarters, the company's earnings failed to meet analysts' estimations in only one quarter and topped expectations in other three quarters. CSC earned 85 cents a share, $1.18 a share, $1.09 a share and $1.54 a share respectively in the last four quarters.

The company generated revenues of $3.966 billion, $4.033 billion, $4.202 billion and $3.995 billion respectively during the past four quarters.

Gross margin during the same period was 11.5 percent, 16.56 percent, 19.42 percent and 19.37 percent respectively. The company suffered operating loss in the second quarter due to unusual items. But in the preceding three quarters, it was 2.5 percent, 6.71 percent and 5.76 percent respectively.

Analyst Take

One analyst has Strong Buy rating, while another analyst has Buy rating for CSC shares. But ten analysts are recommending Hold, whereas two are rating the stock as Underperform. One analyst recommends the stock as Sell.

iStock Punch

Weakness from federal budget may continue to affect its top line. The company's margins are poorly placed. It is in fact margins that hold key to its earnings number. This is not a right time to enter the counter given its performance.

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Bank Investigations Could Drag On, Says KBW

President Obama announced a new mortgage fraud unit in Tuesday night’s State of the Union address, meaning banks could be taking heat on their actions during the mortgage crisis for the foreseeable futures. That’s a negative for the industry, wrote Keefe, Bruyette & Woods analyst Brian Gardner, who thought the speech was decidedly anti-bank.

The announcement appears to be a way for Obama to placate the attorneys general who have not yet signed onto a deal worth approximately $25 billion between the states and the big banks over foreclosure practices. Some AGs have declined to sign onto the deal because of concerns that it lets the banks off too easily. Nonetheless, the deal appears close to completion. The settlement would include Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C) and Ally Financial.

Arguably, any movement toward a deal and fewer lawsuits could be a good thing for banks. But Gardner also sees trouble brewing. Obama plans to appoint New York Attorney General Eric Schneiderman, one of the fiercest bank critics, to head the fraud unit, according to news reports.

“The announcement of this new group at the Justice Department suggests to us that the headline risk to banks coming from government investigations is unlikely to diminish in the near term, even after the mortgage settlement is announced. The tone of the SOTU was decidedly anti-bank, in our view. We think investors should expect that the industry will continue to be used as a foil through the election campaign.”

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Don¡¯t Worry About Europe, Here¡¯s One Stock That Has It All

Hello traders everywhere!? Adam Hewison here, co-founder of MarketClub with your mid-day market update for Wednesday, the 7th of December.

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PERSONAL MARKETCLUB COACHING
Free consultation, Free call.
Give us a call at 877�C219�C1482!
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Don't worry about Europe, here's one stock that has it all.

For the past several months, the market has been fixated on what is going on in Europe.? While that's an incredibly important element in the global picture, there are still many markets that are offering great opportunities both here in the states and overseas.

One of the easiest ways to find winning markets and winning trades is to use MarketClub's SmartScan tool that is available to all MarketClub members.? We have demonstrated this tool time and time again, and it continues to find excellent trades in stocks, futures, precious metals and Forex.

Today, in addition to the regular markets we cover, we will be looking at a couple of interesting stocks that I think could fit into your portfolio in 2012.

Now, let's go to the charts and the video and see how we can create and protect your wealth for the balance of the year.
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S&P 500 INDEX
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BIG PICTURE: Trading Range

Support today at $1243.? The Trade Triangles are showing a Chart Analysis Score of +70, indicating we are presently in a trading range for the S&P 500.? Our weekly Trade Triangle turned positive on Monday, signaling that intermediate term traders should now be out of this market.? Long-term term traders should either be in cash or continue to hold short positions in this index with appropriate money management stops.

Monthly Trade Triangles for Long-Term Trends = Bearish
Weekly Trade Triangles for Intermediate Term Trends = Bullish
Daily Trade Triangles for Short-Term Trends = Bullish

Combined Streng! th of Tr end Score = +70
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HOW TO USE THE MARKETCLUB SCORING SYSTEM:
Score: 50 �C 65 Trading Range
Score: 70 �C 80 Emerging Trend
Score: 85 �C 100 Strong Trend
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See today's S&P 500 Video Here.
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Suggested S&P 500 Trading Instruments:
Non Leveraged ETF's: (Long SPY) (Short SH)
2 x Leveraged ETF's: (Long SSO)(Short SDS)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.
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PERSONAL ONE-ON-ONE MARKETCLUB COACHING
Free call �C 877�C219�C1482 �C Free consultation.
Watch my personal one-on-one coaching right here.

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SILVER (SPOT)
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BIG PICTURE: Strong Trend Bearish

With a Chart Analysis Score of -70, silver is in a waffling between a trading range and a bearish trend.? Generally speaking, the major trend for silver continues to be negative based on our monthly and weekly Trade Triangles.? Our intermediate weekly Trade Triangle turned negative on 11/17 and our daily Trade Triangle moved into the negative column yesterday, putting all our Trade Triangles into negative mode.? Long-term and intermediate term traders and short term traders should be in short positions in silver with appropriate money management stops.

Monthly Trade Triangles for Long-Term Trends = Bearish
Weekly Trade Triangles for Intermediate Term Trend = Bearish
Daily Trade Triangles for Short-Term Trends = Bearish

Combined Strength of Trend Score = -70
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HOW TO USE THE MARKETCLUB SCORING SYSTEM:
Score: 50 �C 65 Trading Range
Score: 70 �C 80! Emergin g Trend
Score: 85 �C 100 Strong Trend
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See today's Silver Video Here.
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Suggested SILVER Trading Instruments:
Non Leveraged ETF's: (Long SLV) (Short the ETF SLV)
Leveraged ETF's: (Long AGQ) (Short ZSL)
Futures: Contracts are available to trade this market.

Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.
��������-

PERSONAL MARKETCLUB COACHING
Free consultation, Free call.
Give us a call at 877�C219�C1482!

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GOLD (SPOT)
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BIG PICTURE: Trading Range

With a Chart Analysis Score of +60, gold is back in a trading range.? However with our monthly Trade Triangle in a positive position, we have a longer term bullish bias.? We remain positive on this market longer term and expect we will see it move much higher in 2012 as inflation kicks in around the world.? Long-term traders should remain positive for this precious metal.? Intermediate term traders should be out of this market at the moment and on the sidelines waiting for a buy signal with the weekly Trade Triangle.

Monthly trade triangles for Long-term trends = Bullish
weekly trade triangles for intermediate term trends = Bearish
daily trade triangles for short-term trends = Bearish

Combined Strength of Trend Score = +60
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HOW TO USE THE MARKETCLUB SCORING SYSTEM:
Score: 50 �C 65 Trading Range
Score: 70 �C 80 Emerging Trend
Score: 85 �C 100 Strong Trend
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See today's Gold Video Here.
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Suggested GOLD Trading Instruments:
Non Leveraged ETF's: (Long GLD) (Short the ETF GLD)
Leveraged ETF's:(Long UGL) (Sh! ort GLL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.

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COPPER (MARCH)
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BIG PICTURE: Trading Range

Resistance comes into copper today at the top of the Donchian trading channel at $3.63.? Support comes in at $3.50.? With today's Chart Analysis Score of +55, the market is in a trading range.? As stated before, copper generally reflects economic conditions, and as such is influenced by equity prices.? With equity prices moving higher, it is in return reflected in higher copper prices.? The major trend based on our monthly Trade Triangle continues to be negative.? Long-term traders should continue to hold short positions in copper with appropriate money management stops.? Intermediate term traders should now be on the sidelines.

Monthly Trade Triangles for Long-Term Trends = Bearish
Weekly Trade Triangles for Intermediate Term Trends = Bullish
Daily Trade Triangles for Short-Term Trends = Bearish

Combined Strength of Trend Score = +55
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HOW TO USE THE MARKETCLUB SCORING SYSTEM:
Score: 50 �C 65 Trading Range
Score: 70 �C 80 Emerging Trend
Score: 85 �C 100 Strong Trend
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See today's Copper Video Here.
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Suggested Copper Trading Instruments:
Non Leveraged ETF's: (Long JJC)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin.

Contact your broker for more information.

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CRUDE OIL (JANUARY)
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BIG PICTURE: Emerging Trend

As we said yesterday, this market needs to regroup and consolidate if it is going to move higher.? The $101.75 area basis the January contract appears to be offering stiff resistance for this commodity at the present time.? With two of our Trade Triangles green, giving us a +75 Chart Analysis Score, it would appear as though the under lying elements of this market remain bullish.? Long-term, and intermediate term traders should be long this market with appropriate money management stops.

Monthly Trade Triangles for Long-Term Trends = Bullish
Weekly Trade Triangles for Intermediate Term Trends = Bullish
Daily Trade Triangles for Short-Term Trends = Bearish

Combined Strength of Trend Score = +75
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HOW TO USE THE MARKETCLUB SCORING SYSTEM:
Score: 50 �C 65 Trading Range
Score: 70 �C 80 Emerging Trend
Score: 85 �C 100 Strong Trend
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See today's Crude Oil Video Here.
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Suggested Crude Oil Trading Instruments:
Non Leveraged ETF's: (Long USO) (Short the ETF USO)
Leveraged ETF's: (Long UCO) (Short DTO)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.

��������-

PERSONAL MARKETCLUB COACHING
Free consultation, Free call.
Give us a call at 877�C219�C1482!

��������-
DOLLAR INDEX
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BIG PICTURE: Emerging Trend

For the past six days this market has been moving sideways as it readjusts to its new levels . The importance of the $78.00 area as support should not be overlooked.? The possibility of a major double top in this index is something every trader! should be aware of.? With all of our Trade Triangles in a positive mode we remain bullish on the market.? Long-Term and intermediate term traders should maintain long positions with the appropriate stops in place.

Monthly Trade Triangles for Long-Term Trends = Bullish
Weekly Trade Triangles for Intermediate Term Trends = Bullish
Daily Trade Triangles for Short-Term Trends = Bullish

Combined Strength of Trend Score = +70
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HOW TO USE THE MARKETCLUB SCORING SYSTEM:
Score: 50 �C 65 Trading Range
Score: 70 �C 80 Emerging Trend
Score: 85 �C 100 Strong Trend
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See today's Dollar Index Video Here.
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Suggested DOLLAR INDEX Trading Instruments:
Non Leveraged ETF's: (Long UUP) (Short UDN)
Leveraged ETF's: (Long) (Short)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.

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REUTERS/JEFFERIES CRB COMMODITY INDEX
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BIG PICTURE: Strong Trend Bearish

No change in our comments for this index.? Based on our Trade Triangle technology, this index is in a bearish trend.? We will wait and watch this indicator and our Trade Triangles looking for a sign that the inflation bull is upon us. Resistance is evident at $315, with support coming in between $305 and $310.? With all three of our Trade Triangle indicators red we remain firmly in the bearish camp for this market.? Our long and intermediate term Trade Triangles remain negative for this index. ? Long-term and intermediate term traders should continue to hold short positions in silver with appropriate money management stops.

Monthly Trade Triangles for Long-Term ! Trends = Bearish
Weekly Trade Triangles for Intermediate Term Trends = Bearish
Daily Trade Triangles for Short-Term Trends = Bearish

Combined Strength of Trend Score = -100
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HOW TO USE THE MARKETCLUB SCORING SYSTEM:
Score: 50 �C 65 Trading Range
Score: 70 �C 80 Emerging Trend
Score: 85 �C 100 Strong Trend
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See today's REUTERS/JEFFERIES CRB COMMODITY INDEX Video Here.
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Suggested REUTERS/JEFFERIES CRB COMMODITY INDEX Trading Instruments:
Non Leveraged ETF's: (Long CRBQ) (Short the ETF CRBQ)
Leveraged ETF's: (Long) (Short CMD)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity in some ETFs is very thin. Contact your broker for more information.

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FINRA Expels B/D in Dallas; Case of $480-Mn Ponzi Scheme

The Financial Industry Regulatory Authority said that it expelled Provident Asset Management, a Dallas-based broker-dealer, "for marketing a series of fraudulent private placements offered by its affiliate, Provident Royalties, LLC, in a massive Ponzi scheme," the regulatory organization explained in a press release.

The action is the first produced by a FINRA initiative involving active examinations and investigations of broker-dealers in retail sales of private placement interests, as well as broker-dealers affiliated with private placement issuers.

FINRA is looking at firms' compliance with suitability, supervision and advertising rules, as well as potential instances of fraud.

The initiative came in response to an increase in investor complaints involving private placements and Securities and Exchange Commission actions halting sales of certain private placement offerings.

Provident Asset Management misrepresented to investors that the funds raised through the offerings would be used to purchase interests in the oil and gas business, including exploration activity and the acquisition of real estate, oil and gas leases and mineral rights, FINRA says.

In fact, investors' funds were commingled and used by an affiliated issuer to make dividend and principal payments to other investors. In addition, the firm acted as the agent in an oil and gas private placement offering but failed to establish an escrow account for investors' funds during the contingency period of the offering, according to the regulatory group.

"Provident facilitated the sale of a series of [23] fraudulent private placements that were marketed to unsuspecting customers [from September 2006 to January 2009] as income-producing investments, when it was simply using new investors' money to pay previous investors the promised dividends - a classic Ponzi scheme," said Susan L. Merrill, FINRA executive vice president and chief of enforcement.

"While the private placement market is an important source of capital for many companies, the market is also one in which investors have been subject to unsuitable or abusive sales tactics," explained Merrill.

The offerings were sold to customers through more than 50 retail broker-dealers nationwide, raising over $480 million through about 7,700 individual investments made by thousands of investors. FINRA's broader investigation into broker-dealers that sold the Provident and other troubled private placement offerings is continuing.

The Provident Royalties private placement memoranda promised investors returns of up to 18 percent per year and said the funds raised through each offering would be used to purchase interests in all aspects of the oil and gas business.

In concluding the settlement, Provident Asset Management neither admitted nor denied the charges, but consented to the entry of FINRA's findings.

In other news, FINRA said that Susan Merrill, who has headed enforcement at FINRA and one of its predecessor organizations for more than five years, is stepping down to return to private practice.

Merrill, who became New York Stock Exchange Regulation's enforcement chief in 2004, continued in that role when much of NYSE Regulation merged with NASD in 2007 to form FINRA. Prior to joining NYSE Regulation, she was a partner at the New York law firm of Davis Polk & Wardwell LLP.

Merrill's departure date has yet to be determined and a search for a successor is underway.

The chief of enforcement is responsible for the management of some 300 enforcement staff in 17 offices across the United States.

Netflix Still Has a Long Way to Go

It continues to be a redemptive year for Netflix (Nasdaq: NFLX  ) .

Shares of the video giant have soared nearly 42% in just the first five trading days of 2012.

This isn't just some lazy rally. At least 12 million shares have traded hands in each of the past four trading days. There were just two days in all of December with eight-digit trading volume. The last time that investors traded as many as the 30.6 million shares swapped yesterday was the day the stock tanked after Netflix's disastrous third-quarter report in late October.

I may have been joking when I suggested tapping CEO Reed Hastings as this young year's top CEO, but shareholders who were waiting until last year's tax-loss selling subsided to buy back into the company are certainly doing well right now.

Can the rally continue? Are the recent gains even sustainable?

Obviously a lot has to go right for Netflix to continue wooing back cynical investors.

Last week's encouraging revelation of 2 billion hours of streaming video served during the fourth quarter and this week's overseas debut in the U.K. and Ireland are great, but there are still a lot of things that Netflix needs to do.

There was also speculation by Piper Jaffray's Gene Munster on CNBC suggesting that Netflix would make an ideal takeover target by Yahoo! (Nasdaq: YHOO  ) -- but a stock doesn't pop 42% higher because some analyst is simply thinking out loud.

As great as the past five trading days have been, Netflix would still have to more than triple from here to hit the all-time highs it landed just six months ago. In other words, Netflix still has a long way to go before making all of its investors whole -- and we're not just talking about the distance that the stock needs to travel.

After scaring away 800,000 net subscribers during the third quarter and warning of near-term losses, Netflix will have to stop the! bleedin g on both fronts before its stock can rest comfortably in the triple digits.

The good news is that folks are no longer making Netflix jokes. No one's calling yesterday's overseas rollout Quidster. Well, I just did, but that's about it. (Call me if you want that one, Jay Leno.)

Even the official blog entry detailing Netflix's entry into the U.K. and Ireland was generally greeted by praise and excitement. Folks from other European countries lobbied for their homelands to receive Netflix next. The initial users -- comparing it to Amazon.com's (Nasdaq: AMZN  ) LOVEFiLM -- rated it superior in terms of content (which is a surprise) and quality (which is not, since LOVEFiLM still only streams in standard definition).

Netflix is winning back the respect of its customers, and that in turn will earn it renewed support of studios. It will be a long road back, but at least the company's finally turning in the right direction.

Motley Fool co-founder David Gardner has been a fan of Netflix as a disruptor for nearly a decade, but there's a new Rule-Breaking mutlibagger that he's getting excited about these days. Learn more in a free report that you can check out now.

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DrStockPick.com Stock Report! 8/21/09, ASTTY, USB, FWLT, BOGN, CASS, RAIL

DrStockPick.com Stock Report!

Friday August 21, 2009

ASAT Holdings Limited (OTC Bulletin Board: ASTTY), a global provider of semiconductor package design, assembly and test services, today announced the appointment of Eric E. Thompson to the position of Chief Restructuring Officer and interim CEO. Mr. Thompson will be based in the Company’s manufacturing facility in Dongguan, China, and will work closely with ASAT’s management team, board of directors and creditors on the financial restructuring of the Company’s obligations under the 9.25% Senior Notes due 2011 and the Purchase Money Loan Facility. T.L. Li, former acting CEO, will continue to be involved in ongoing operations and will remain as a consultant to ASAT.

Elavon, a wholly owned subsidiary of U.S. Bancorp (NYSE: USB) and a leading global payments provider, has acquired the merchant processing portfolio of MB Financial Bank, the Illinois local operating unit of MB Financial Inc. (NASDAQ: MBFI). Elavon will provide its robust payment processing solutions, customer service and support operations to MB Financial Bank’s merchant customers. In addition, new merchant services referrals to Elavon will be marketed through the bank’s more than 70 branches across the greater Chicago metropolitan area.

Foster Wheeler AG (Nasdaq: FWLT) announced today that its subsidiary Foster Wheeler USA Corporation, part of its Global Engineering and Construction Group, has been awarded a detailed design contract by a confidential client for a chemicals project in the United States.

Bogen Communications Inter! national , Inc.,? (Pink Sheets: BOGN) today announced that a verdict has been reached in the lawsuit initiated by a former contractor, Tri-Signal Integration, Inc. (”Tri-Signal”), against the Company’s wholly-owned subsidiary, Bogen Communications, Inc. (”BCI”). The case was originally filed on July 18, 2006, in Los Angeles County Superior Court, case number BC355591, relating to BCI’s termination of their contractor agreement. The suit alleged multiple causes of action for breach of contract and various torts and sought an award of compensatory and punitive damages. On August 12, 2009, the jury in the case delivered its final verdict, submitting to the court its award to Tri-Signal of approximately $12.5 million in compensatory and punitive damages. BCI is currently planning to file motions for a new trial and for judgment notwithstanding the verdict and to file an appeal, and is also considering other alternatives.

Cass Information Systems, Inc. (NASDAQ: CASS), a leading provider of enterprise-wide expense management services, has announced that Stein Mart, Inc. (NASDAQ: SMRT) has expanded its relationship with Cass to now include telecom expense management. Since 1999, Cass has provided Stein Mart with utility expense management services whereby Cass processes Stein Mart’s facility-related invoices (such as electric, gas, and water expenses) and delivers valuable energy expense data via an online business intelligence platform.

FreightCar America, Inc. (NASDAQ: RAIL) announced today that, due to the delayed filing of its quarterly report on Form 10-Q for the quarter ended June 30, 2009, the Company has received, as expected, a notification letter from the Nasdaq Stock Market (”Nasdaq”) stating that the Company is no longer in compliance with Nasdaq Marketplace Rule 5250(c)(1), which requires timely filing of SEC periodic repor! ts. The Nasdaq letter was issued in accordance with standard Nasdaq procedures.

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