Yum! Brands (YUM) is expected to report Q3 earnings after market close Tuesday, October 7, with a conference call scheduled for Wednesday at 9:15 a.m. ET.

Guidance

Analysts are looking for a profit of 54c on revenue of $2.78B. The consensus range is 52c to 58c for EPS, and revenue of $2.67B to $2.85B, according to First Call. In July, Yum! forecast FY08 EPS $1.89 to $1.95 vs. First Call consensus of $1.90 and said it will "meet or exceed" FY08 profit targets despite commodity inflation.

The United States Treasury introduced the $700-billion bailout to try and save the economy from disaster. According to Paradigm Capital analyst J. Marvin Wolff, an odd side effect of that bailout could prove to be a big win for solar-grade silicon maker Timminco Ltd. (TIMNF.PK).

One piece of legislation that was attached to the bill extends investment tax credits in the solar industry to 2013. Mr. Wolff noted that this "bodes very well" for the solar industry just as it is building steam in the U.S., which should support strong pricing for solar-grade silicon.

On Monday morning I sold my remaining 180 shares of Copart (CPRT) at $33.7488. My cost basis was approximately $33.72, so this was essentially a sale at 'break-even'. Copart has 'come back' somewhat since my sale, another case of my own bad timing, and is currently trading at $34.80, down $(2.84) or (7.55)% on the day.

With my own sale of shares, and the overall weak tone of the market, I cannot in good faith rate this stock a 'hold' even though there is nothing wrong that I am aware of, rather the stock is sinking along with the rest of the market. Thus:

According to Birinyi Associates' most recent bottoms up analysis on the S&P 500, a consensus of analysts covering those stocks expect the market to rally over 31% within the next year.  (This is calculated as if every stock were to reach its respective price target within the specified time - usually 1 year or 6 months.)  Anyone who has been watching stocks over the last 6 months probably knows, not thinks... knows, that Google (GOOG) for example will not rally to 620 within the next year.

Analysts are historically bullish on their stocks.  US Steel (X), for example, is trading at an estimated P/E of 2.7.  With the stock down 53% year-to-date, the people trading it obviously do not agree with the analysts.  Earnings season begins tomorrow.  We would not be surprised to see a string of estimate revisions and downgrades as these companies come closer to reporting.  With that in mind, market bottoms are sometimes associated with extreme negative sentiment.

The AP has a tendency to turn any earnings misstep into a headline. Such was the case with Thursday’s news that “AngioDynamics 1Q profit slips on lower laser sales”. The Business Review said, “AngioDynamics reports 7.1% drop in 1Q net income.”

While true, by most measures, AngioDynamics' (ANGO) first quarter was a resounding success.

Last week in China, it was time for the National Day Holiday, and most of China took the week off, a celebration that put considerable constraint on news flow. Nevertheless, there were a few deals announced (and one that fell apart), and several companies released their financial results from the previous quarter as the current one came to a close. At ChinaBio Today, we interviewed Dr. Sofie Qiao, who delineated for us the business plan of the US-China biopharma she formed, LEAD Therapeutics. Among the deals that made news, China Biologic Products (CBPO.OB) said it had agreed to terms that will give it control of a competitor in the plasma-based pharmaceutical sector (see story). China Biologic will pay $28.5 million for a 90% stake in Chongqing Dalin Biologic Technologies Co. Dalin owns a 54% equity interest in Qianfeng Biological Products Co., Ltd., which has a 9.5% market share of China’s highly fragmented plasma-based biopharma space. China Biologic is responsible for 6.1% of the country’s plasma-based products. A 15.6% share would make the combined company the largest non-state owned business in the sector. The plasma business remains very fragmented: the six largest China companies in the sector (including Qianfeng) have a total market share of only about 50%. China Biologic projects synergies between the two entities, though it did not estimate a dollar value for them.

On Thursday, I wrote about my sale of Greif (GEF) on an 8% loss.  As I reminded my readers, my portfolio management strategy demands that I unload shares that hit pre-specified losses.  After an initial purchase, stocks that dip 8% are sold.  This limits my losses and enables me to preserve my gains. 

Also, I commented once again about the other part of my portfolio management strategy, that while not actually trying to 'time' the market, is designed to respond to market influences by shifting either into or out of cash and equities depending on the performance of my own holdings in my portfolio.

The financial markets are scary, and amidst this turbulence, earnings season is under way. Micron (MU) reported a larger-than-expected fourth quarter loss on Wednesday. The company was affected by the oversupply situation in the DRAM and NAND markets. Semiconductor prices continued to plunge and NAND ASP declines outpaced cost reductions; as a result Micron had to write-down its inventory for $205 million. 

Q4 net loss was $344 million or $0.45 per share, down from $158 million, or $0.21 per share last year. Revenue was up slightly y-o-y and down 3% q-o-q to $1.45 billion versus analyst estimates of $1.54 billion. Excluding the $205 million inventory write-down charge and a $70 million benefit for price adjustments for NAND flash memory bought in prior periods, net loss would have been $209 million, or $0.27 per diluted share, versus analyst estimates of $0.24 per share.

While much of the market is staying on the sidelines with cash in hand, Warren Buffett has made some major investments in names like Constellation Energy Group Inc. (CEG), Goldman Sachs Group Inc. (GS) and now General Electric Co. (GE).

His Berkshire Hathaway Inc. (BRK.A) announced plans to purchase $3-billion in perpetual preferred GE stock and warrants to buy 134.8 million common shares at any time in the next five years. The price tag was set at $22.25 a share, below GE's market price and nearly half of where it was trading a year ago. GE is also offering at least $12-billion in common shares to the public.

Citigroup Global Markets has initiated coverage on Power Corp. of Canada [TSX: POW] and its member companies, telling clients that market volatility, pressured fundamentals and reasonable valuations adds up to a stand pat recommendation for each stock.

Citigroup said:

Mosaic (MOS) and the other fertilizer stocks got whacked.

click to enlarge

Global Payments (GPN) is expected to report Q1 earnings after market close Thursday, October 2, with a conference call scheduled for 5:00 p.m. ET.

Guidance

The consensus estimate is 60c for EPS and $395.73M for revenue, according to First Call.

Lawson Software (LWSN) is expected to report Q1 earnings Thursday after market close, with a conference call scheduled for 4:30 pm ET.

Guidance

The consensus estimate is 5c for EPS and $191.01M for revenue, according to First Call.

I said in late 2007 (when many were arguing there would be no recession and in fact everything was fine since the Federal Reserve had our back) that 2008 would be the worst year in two decades for auto sales. Ford's (F) numbers are out and they are staggering (down 34%). Yet another group of companies who promised "second half recovery" back in the spring.

Many Americans were buying autos with their house ATM. Again, a year ago at this time, along with Paulson's " subprime is contained" sing song, we were treated to "what is the fuss about the general economy? housing is only 4.5% of GDP" sing a long on CNBC. Now you are going to see the lagged effect of the "fuss" a few of us were making.

Well, the market is not at all happy with Mosaic's (MOS) results. When you take a step back and look at the big picture everything still looks fine, but the stock market is not about the big picture - only "beating estimates" and/or "raising guidance"; if you don't, you are toast. Mosaic is now toast based on how people will treat it.

The stock is now lower than it was a year ago, despite these metrics:

Zila, Inc. (ZILA)

Q4 2008 Earnings Call

Leading Brands, Inc. (LBIX)

F2Q08 Earnings Call

American International Group (AIG)

Business Update Call

Family Dollar Stores, Inc. (FDO)

Q4 2008 Earnings Call

Corel Corporation (CREL)

F3Q08 Earnings Call

Wells Fargo & Company (WFC)

Wells Fargo Acquisition of Wachovia (WB) Conference Call

Resources Connection, Inc. (RECN)

DemandTec, Inc. (DMAN)

F2Q09 Earnings Call

Global Payments, Inc. (GPN)

F1Q09 Earnings Call

AngioDynamics, Inc. (ANGO)

F1Q09 Earnings Call

Lawson Software, Inc. (LWSN)

F1Q09 Earnings Call

MSCI Inc. (MXB)

F3Q08 Earnings Call

Orleans Homebuilders, Inc. (OHB)

F4Q08 Earnings Call

Crosstex Energy, L.P. (XTEX)

Business Update Call

Mosaic Co. (MOS)

F1Q09 Earnings Call