Morning Market Report

The earnings season is just about over. We still have a few more earnings reports to go. On Thursday, we’ll get Dell’s (DELL) earnings report. The company’s quarter ended on October 31, so they’re actually pretty quick to report. Dell recently warned Wall Street that its earnings won’t be as strong as previously thought. Dell was already the subject of a negative article in Barron’s this weekend, plus one in Business Week this morning.
Apple Computer (AAPL) had another downgrade this morning. This is the second downgrade recently due to valuation. I also see that Google (GOOG) is poised to open higher, and it will probably make a run on $400 a share. The stock went public last August at $85.
The Wall Street Journal quoted Michael Panzner, head of sales trading at Rabo Securities USA, as saying, “It’s almost like things haven’t cratered, so let’s be optimistic.” As odd as that sounds, I think he’s got it. Oil looks to fall again today, and we’re headed to a higher open.
U.S. News & World Report has an article on Frontier Airlines (FRNT). If you’re not familiar with the airline, the article does a nice job of explaining what Frontier is about. Here’s a sample:

Frontier and similar airlines have benefited from the overall growth in travel and customers’ increasing frugality. One of Frontier’s assets is geography, says Denver-based Mike Shonstrom, a senior vice president of research with Emerging Growth Equities of King of Prussia, Pa. Denver is the nation’s fifth-busiest airport, and Shonstrom says the city’s location near the country’s midsection means most flights reach 1,000 miles, which creates efficiencies not found in short hops. With ski season boosting winter flights, and vacation jaunts to Mexico and Florida padding spring and fall, the year-round business is solid. “We still hear a lot of people getting on the planes say, ‘What a great airline. We’ve never heard of you before,'” Potter says. Then he adds: “They’re finding us.”
Potter promotes a go-slow business philosophy. He downplays the idea of Frontier’s becoming a major national airline. It has no first class, and that holds true for its single-story corporate headquarters, a few miles down the road from the airport runways. The CEO’s modest office looks out across the parking lot at a Courtyard by Marriott. Potter recalls his first day on the job, as a vice president of marketing, in 1995. A local newspaper story had said Frontier might go out of business. Now sitting in the CEO chair, Potter earned just over $275,000 in salary and an additional $11,000 plus in stock and 401(k) matching funds for the 2005 fiscal year.

Frontier also has its sights set on Canada.
The least-surprising story this morning is that Guidant (GDT) is suing Johnson & Johnson (JNJ) to complete their $25.4 billion merger. Guidant also reported today that its earnings plunged by 60%, which of course will be Exhibit A in J&J’s defense.

Posted by on November 7th, 2005 at 9:48 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.