Thursday, February 28, 2013

World Wrestling Entertainment Beats Up on Analysts Yet Again

World Wrestling Entertainment (NYSE: WWE  ) reported earnings on Feb. 28. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), World Wrestling Entertainment met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded slightly. Non-GAAP earnings per share didn't change. GAAP earnings per share grew.

Margins grew across the board.

Revenue details
World Wrestling Entertainment notched revenue of $115.1 million. The five analysts polled by S&P Capital IQ anticipated revenue of $114.5 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.02. The three earnings estimates compiled by S&P Capital IQ forecast $0.01 per share. Non-GAAP EPS of $0.02 were the same as the prior-year quarter. GAAP EPS were $0.01 for Q4 compared to -$0.12 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 39.9%, 760 basis points better than the prior-year quarter. Operating margin was 2.3%, 300 basis points better than the prior-year quarter. Net margin was 0.5%, 810 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $128.0 million. On the bottom line, the average EPS estimate is $0.13.

Next year's average estimate for revenue is $520.0 million. The average EPS estimate is $0.46.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 434 members out of 542 rating the stock outperform, and 108 members rating it underperform. Among 111 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 85 give World Wrestling Entertainment a green thumbs-up, and 26 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on World Wrestling Entertainment is hold, with an average price target of $12.33.

Can your portfolio provide you with enough income to last through retirement? You'll need more than World Wrestling Entertainment. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.

  • Add World Wrestling Entertainment to My Watchlist.

Tyco International Beats on Both Top and Bottom Lines

Tyco International (NYSE: TYC  ) reported earnings on Jan. 29. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 28 (Q1), Tyco International beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly and GAAP earnings per share dropped significantly.

Margins dropped across the board.

Revenue details
Tyco International chalked up revenue of $2.60 billion. The 10 analysts polled by S&P Capital IQ expected to see a top line of $2.57 billion on the same basis. GAAP reported sales were 38% lower than the prior-year quarter's $4.21 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.40. The 14 earnings estimates compiled by S&P Capital IQ predicted $0.39 per share. GAAP EPS of $0.35 for Q1 were 51% lower than the prior-year quarter's $0.71 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 35.8%, 370 basis points worse than the prior-year quarter. Operating margin was 9.6%, 340 basis points worse than the prior-year quarter. Net margin was 6.3%, 160 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.60 billion. On the bottom line, the average EPS estimate is $0.42.

Next year's average estimate for revenue is $10.69 billion. The average EPS estimate is $1.83.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 485 members out of 530 rating the stock outperform, and 45 members rating it underperform. Among 141 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 136 give Tyco International a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Tyco International is outperform, with an average price target of $30.83.

Can your portfolio provide you with enough income to last through retirement? You'll need more than Tyco International. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.

  • Add Tyco International to My Watchlist.

SINA Beats on Both Top and Bottom Lines

SINA (Nasdaq: SINA  ) reported earnings on Feb. 19. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), SINA beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share dropped significantly. GAAP earnings per share dropped significantly.

Gross margins grew, operating margins dropped, net margins dropped.

Revenue details
SINA reported revenue of $139.1 million. The 15 analysts polled by S&P Capital IQ looked for a top line of $136.4 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.13. The 11 earnings estimates compiled by S&P Capital IQ predicted $0.05 per share. Non-GAAP EPS of $0.13 for Q4 were 38% lower than the prior-year quarter's $0.21 per share. GAAP EPS of $0.03 for Q4 were 77% lower than the prior-year quarter's $0.13 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 57.0%, 250 basis points better than the prior-year quarter. Operating margin was 4.0%, 50 basis points worse than the prior-year quarter. Net margin was 1.7%, 530 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $120.4 million. On the bottom line, the average EPS estimate is -$0.01.

Next year's average estimate for revenue is $610.7 million. The average EPS estimate is $0.82.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,119 members out of 1,235 rating the stock outperform, and 116 members rating it underperform. Among 301 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 271 give SINA a green thumbs-up, and 30 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on SINA is outperform, with an average price target of $65.49.

Internet software and services are being consumed in radically different ways, on new and increasingly mobile devices. Is SINA on the right side of the revolution? Check out the changing landscape and meet the company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.

  • Add SINA to My Watchlist.

SM: Rolling Over Retirement Accounts

Chances are you'll have to roll over a retirement account at least once in your lifetime. Most likely, it will be when you leave your current employer and take your 401(k) with you. Or, you may be eligible to roll over your current IRA into a Roth. Here's what you need to know in order to get each rollover right.

Avoiding the 20% Withholding Trap

Leaving your current job? Then you've got a great opportunity to roll over your 401(k) into an IRA. This will give you many more investment options than either leaving the money in your old 401(k) or rolling it over into your new employer's plan. (Each of those options is available at the discretion of the employer.)

If you ask, your company plan will be only too happy to send you a check for the full vested balance of your account. If the company makes the check out to you, however, it is required to withhold 20% for taxes. That leaves you between a rock and a hard place. You'll have to come up with the missing 20%, or pay income taxes (plus a 10% penalty on the withdrawal if you are under age 55). You won't get the withheld money back until you file your taxes the following year (assuming your salary withholding and any other tax payments for the year exactly equal your tax bill).

To avoid the 20% withholding tax, you must arrange for a "direct" rollover (also known as a "trustee to trustee" rollover). Put simply, this means the distribution check from the retirement plan at your old company must be made out in the name of the trustee or custodian of the IRA account that you want to receive the rolled-over funds. Ask the bank or brokerage house that will function as the IRA trustee or custodian for specific written instructions on how the check should be made out. It will be something like: "Huge Securities Corporation, for the benefit of John Q. Public."

The next step is to notify your former employer's retirement plan administrator that you are making a direct rollover. You will probably be told to fill out a form, which will include a place for you to give instructions on how the distribution check should be styled. When you get the check, simply deposit it in the rollover IRA within 60 days.

To meet the 60-day rule, start counting on the day after you receive the check and include the day you deposit the money into your IRA. For example, if you get the check on Sept. 1, you must get the money into your IRA on or before Oct. 31. There's no extension for weekends or holidays.

When an IRA Doesn't Pay

Let's say your company retirement plan account holds some appreciated employer stock, and you leave your job. You may be better off withdrawing the shares and holding them in a taxable account instead of rolling them over into your IRA. (You can still roll over everything else.) Assuming the shares are received as part of a lump-sum distribution (usually this means a complete liquidation of all your company retirement accounts in the same calendar year), you'll be taxed only on the amount the plan paid for the stock. But if the stock has been appreciating, this could be a small fraction of current market value (although this could still be a significant number).

The tax is at ordinary income rates, but here's the benefit: The net unrealized appreciation when the shares are distributed to you (the difference between the market value and the plan's cost for the shares) will qualify for the maximum long-term capital gains rate (which is lower than income taxes if you are in one of the higher brackets). Even better, that capital gains tax is deferred until you sell the shares. Any additional appreciation also qualifies for the capital gains rate if you hold the shares more than 12 months before selling.

Last but not least, if you die while still owning the shares, your heirs will get a basis step-up for all appreciation after the shares come out of your retirement account up to the date of death. This means that appreciation never gets taxed. In contrast, if you roll the shares over into an IRA, you or your heirs will eventually pay tax at ordinary income tax rates on all these gains when withdrawals are made from the account. And there's no break for your heirs if the stock is still in your IRA when you pass away.

What Comes Out Must Go Back In

If you take cash from a qualified retirement plan account, you must roll over cash into your IRA, rather than some other asset of equal value. Ditto if you are simply rolling funds from one IRA to another. You cannot, for example, do what the poor guy in the court case did and use cash withdrawn from a retirement plan or IRA to buy stock and then attempt to roll over the shares. If you try this type of maneuver, the door is shut on any rollover and you'll be taxed on the withdrawal. If you are not 59 1/2, you will generally owe the 10% "premature withdrawal" penalty tax as well. What should you do? Roll over the cash into your IRA and then buy the stock. (The taxpayer in the court case couldn't wait because he had to meet a stock subscription deadline.)

Now, if you withdraw stock from a qualified plan or IRA account, it's OK to roll those shares over into another IRA. In fact, it's mandatory. You can't sell the shares and then roll over an equal amount of cash, nor can you roll over different shares of equal value. So the rule for tax-free rollovers is: cash to cash, stock to stock, and ashes to ashes.

Rollovers to Split IRAs in a Divorce

In connection with a divorce, you may transfer some or all of your IRA funds to your ex-spouse. This happens all the time as part of splitting up a divorcing couple's assets, and it's a tax-free deal if and only if you follow these two steps:

First, the split of your IRA assets must be required pursuant to your divorce settlement.

Second, the split must be accomplished by rolling funds over from your IRA into an IRA set up for the other party. The other party then treats the rollover IRA as his or her own. When funds are withdrawn, it will be your ex-mate who owes the resulting taxes. Fair enough because that's what you both expect.

But any other transaction that has the effect of transferring your IRA funds to your spouse or ex-spouse -- before or after a divorce -- will cause you to owe income taxes. This is because you are deemed to have taken a taxable IRA withdrawal and then turned around and handed the money over to the other party of your own free will. If you are under 59 1/2 at the time, you'll get socked with the 10% premature withdrawal penalty as well.

This tax fiasco can happen before your divorce is final if, for example, you voluntarily try to help your soon-to-be-ex with his or her cash flow problems by doling out some of your IRA money with the idea it will be rolled over into the other person's IRA. This seems very reasonable, because you already know he or she is going to wind up with at least that much of your IRA money anyway. And it only makes sense that a tax-free rollover is permitted in this --ituation. Right?

Unfortunately, being so cooperative will cost you. Your spouse can't roll the money over because the tax laws don't allow this except when an IRA split is required under a divorce agreement. But don't expect to hear any complaints, because you'll get stuck with the tax bill for the IRA withdrawal while the other side winds up with tax-free cash (at your expense).

You can get into the same trouble after a divorce by using your IRA funds to meet divorce-related financial commitments to your ex. In either situation, the other party gets a tax-free cash windfall, while all you get is a bill from the IRS.

The moral: Make sure your divorce documents specify that any and all transfers of your IRA funds to your spouse or ex-spouse are pursuant to the divorce settlement and intended to be tax-free under Section 408(d)(6) of the Internal Revenue Code. Also make sure the transfer is accomplished via a "direct" or "trustee-to-trustee" rollover from your IRA to an IRA set up for the other party. If you follow this advice, the transfer doesn't cost you any taxes. The other party will owe Uncle Sam when money is subsequently withdrawn from the rollover IRA. Fair is fair.

IRA to IRA Rollovers (Including the Roth)

If you are simply transferring funds from one IRA to another, as in a rollover to a Roth IRA, there is no 20% withholding to worry about. So a withdrawal check can be made out in your name with no adverse tax consequences as long as the other IRA has not received any other rollovers within 365 days. (Again, "direct" rollovers into that account don't count for purposes of the 365-day waiting period rule.)

However, you must still get the money into the other IRA within 60 days, or you will be taxed on the withdrawal.

Some Numbers at Alico that Make Your Stock Look Good

There's no foolproof way to know the future for Alico (Nasdaq: ALCO  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result.

A cloudy crystal ball
In this series, we use accounts receivable and days sales outstanding to judge a company's current health and future prospects. It's an important step in separating the pretenders from the market's best stocks. Alone, AR -- the amount of money owed the company -- and DSO -- the number of days' worth of sales owed to the company -- don't tell you much. However, by considering the trends in AR and DSO, you can sometimes get a window onto the future.

Sometimes, problems with AR or DSO simply indicate a change in the business (like an acquisition), or lax collections. However, AR that grows more quickly than revenue, or ballooning DSO, can, at times, suggest a desperate company that's trying to boost sales by giving its customers overly generous payment terms. Alternately, it can indicate that the company sprinted to book a load of sales at the end of the quarter, like used-car dealers on the 29th of the month. (Sometimes, companies do both.)

Why might an upstanding firm like Alico do this? For the same reason any other company might: to make the numbers. Investors don't like revenue shortfalls, and employees don't like reporting them to their superiors.

Is Alico sending any potential warning signs? Take a look at the chart below, which plots revenue growth against AR growth, and DSO:

Source: S&P Capital IQ. Data is current as of last fully reported fiscal quarter. FQ = fiscal quarter.

The standard way to calculate DSO uses average accounts receivable. I prefer to look at end-of-quarter receivables, but I've plotted both above.

Watching the trends
When that red line (AR growth) crosses above the green line (revenue growth), I know I need to consult the filings. Similarly, a spike in the blue bars indicates a trend worth worrying about. Alico's latest average DSO stands at 23.4 days, and the end-of-quarter figure is 33.5 days. Differences in business models can generate variations in DSO, and business needs can require occasional fluctuations, but all things being equal, I like to see this figure stay steady. So, let's get back to our original question: Based on DSO and sales, does Alico look like it might miss its numbers in the next quarter or two?

I don't think so. AR and DSO look healthy. For the last fully reported fiscal quarter, Alico's year-over-year revenue shrank 18.0%, and its AR dropped 26.0%. That looks OK. End-of-quarter DSO decreased 9.7% from the prior-year quarter. It was down 22.2% versus the prior quarter. Still, I'm no fortuneteller, and these are just numbers. Investors putting their money on the line always need to dig into the filings for the root causes and draw their own conclusions.

Looking for alternatives to Alico? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

  • Add Alico to My Watchlist.

5 Smart Money Moves for Young Adults

Financial advice is only useful if it's relevant to your own particular situation. The right move for someone twice your age may be totally wrong for you, while your best financial move may be completely inappropriate for someone else.

To reach as wide an audience as possible, we've spent the week looking at people in different age groups and coming up with tips for them to follow to improve their financial situation. After having given tips for retirees, near-retirees, and middle-aged investors earlier in the week, today's focus moves to young adults and their particular financial needs and challenges.

Just starting out
In stark contrast to those who are close to retirement, young adults have a huge number of short-term and long-term financial needs with minimal resources to put toward them. The biggest challenge that most people face as they start out in their careers is finding the best uses for your money. Especially if you've lived a frugal lifestyle throughout your college years, the temptation to splurge with your newfound paycheck can be almost irresistible. But with time on your side, anything you manage to save can have a much bigger impact on your future lifestyle than if you wait until later to address your long-term goals.

Finding the right balance is tough, but following these five ideas is a good place to start.

Idea 1: Get familiar with finances.
Millions of young adults come out of school with no knowledge of personal finance at all. If you're one of them, don't be embarrassed -- but don't accept your ignorance. Take steps to find out everything you need to know about money.

The Motley Fool's 13 Steps to Investing Foolishly are a good place to find out how to get started with the ins and outs of investing. For more basic advice on debt, savings, real estate, and taxes, the Fool has free resources to help you learn what you need to know. Either way, getting familiar with all the money issues that you'll face throughout your life will pay huge dividends for decades to come.

Idea 2: Address bad debt first.
It's an unfortunate fact of life that most young people now start adulthood with debt. For certain types of student loans, home mortgages, and other low-interest debt, paying down balances over time is both practical and prudent.

But credit card debt is another matter. Even after taking substantial losses during the financial crisis, big card-issuing banks JPMorgan Chase (NYSE: JPM  ) , Citigroup (NYSE: C  ) , and Bank of America (NYSE: BAC  ) have all rebounded sharply due largely to falling credit card delinquency rates and high interest rates. There's no investment you can make that will dependably produce returns of 15% to 20% -- even shares of those banks' stock! -- but paying down high-rate credit cards gives you exactly that payoff. Take advantage of it.

Idea 3: Start small and build on saving.
When you're young, building a habit of saving is more important than the amount that you save. A good way to start is to save a tiny amount of your paycheck -- as little as 1% -- and put it into a 401(k) account at work or an IRA. Then, when you're fortunate enough to get a raise, boost your savings by half your extra pay. That way, you'll enjoy the fruits of your career success but also ramp up your long-term saving. It may seem insignificant, but later in life, you'll be amazed how much those little savings add up to.

Idea 4: Focus on your credit score.
It's hard to underestimate the impact that a good credit score has. Nowadays, credit scores aren't just about credit; insurance companies look at your credit report to determine the rates they charge you, and bad credit can even deter prospective employers from hiring you.

The easiest way to establish a solid credit history is to use credit responsibly. Whether it's paying off your student loans on time or getting a credit card and paying off the balance every month, things you do now to build your credit can save you thousands of dollars in the future.

Idea 5: Recognize your most valuable asset.
When you're young, the present value of your future earning power is the most valuable asset you own. Take advantage of training and development opportunities to increase your value both to your current employer as well as in potential future jobs down the road. The effort may not always pay off immediately, but you'll be surprised how often it comes in helpful down the road.

What's next
Tomorrow, we'll look at how you're never too young to learn about money. We'll close our series with money advice for kids and teens.

Once you get your credit card debt paid down, looking to invest in the banks that collected so much interest from you has a certain appeal. But banks have done quite well lately, with Bank of America's stock having doubled in 2012. Find out whether B of A is still worth buying by reading The Motley Fool's premium research report on B of A, in which top banking analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials Bureau Chief, give you the inside scoop on the bank's operations. Click here now to claim your copy, and as a bonus you'll receive a full year of FREE updates and expert guidance as key news breaks.

Nook Sales Plunge, But Barnes & Noble Stock Up 7.5%

Agence France-Presse/Getty ImagesStrong foundations

Barnes & Noble‘s (BKS) latest earnings weren’t good, with an 18 cents a share loss and a 10% fall in overall revenue spurred by a 26% drop in revenue at its Nook business. But while the stock fell immediately after the results, it’s currently up about 7.5%.

Part of that may be because there’s one part of the business that’s seemingly holding up: Retail stores. While retail sales fell 10%, the unit’s Ebitda rose 7.3%, notes WSJ DealJournal’s David Benoit. As David remarks, no wonder Chairman Leonard Riggio wants to buy the retail business and exclude the Nook part.

But as this Reuters brief notes, the company said today that 95% of its stores are profitable and it doesn’t plan for any closings. Back to David:

Gross margin at that unit rose to 33.2% from 30.9%, as Barnes and Noble cut costs in retail. And even the retail sales were hurt by the Nook. Same-store sales in the unit fell 7.3%, but a metric without the Nook dropped only 2.2%.

The board reiterated Thursday that it has formed a special committee to evaluate his proposal and said it�wouldn�t�comment further until there is news. Riggio may want to move fast.

In the latest quarter, the retail unit’s Ebitda was $212 million, while the entire company’s enterprise value is $1.45 billion, even including today’s rise. It could well be that the expectation of an imminent sale coupled with realizing the retail unit is doing rather well is what’s boosting the stock’s price — suggesting as it does that Riggio will have to pay a fairly hearty sum for the business.

Geeking Out with the Guts of the Next Great Phone Cameras

BARCELONA

It's a question for every maker of a slab hoping to have the next great smartphone: How do you make it different, possibly unique?

Cameras are one thing that consumers immediately respond to in a phone, so it's a natural place to focus, if you will. I met here at the Mobile World Congress with DigitalOptics, the camera component subsidiary of Tessera Technologies (TSRA), which markets a number of devices and patented IP for electronics, including the guts of cameras.

DigitalOptics has image processing intelligence that is designed into the image processor chip included in many of the prominent handsets on the market. The fifteen-year-old outfit has sold a quarter of a billion units so far, where units is basically licenses of its technology.

Today, DigitalOptics has its patented technology included in imaging chips in not just mainstream handsets but also those from up-and-comers that want desperately to rise above the pack.

Phones such as those from OPPO, the upstart China brand, for example, may feature something called the “beauty effect,” which adjusts skin texture and tones in real time as you're taking a portrait to, say, make your subject look better. Think of it as real-time PhotoShopping. That feature has made some OPPO devices very popular with women in China, says the unit's VP of product marketing, Eric Siegler.

And DigitalOptics technology is in numerous phones to achieve the face-detection feature that lets the camera home in on a person in a shot.

The next step may be an IPO for DigitalOptics, perhaps in a couple of years, Tessera has said. But for the moment, DigitalOptics is focused on moving beyond licensing intellectual property to instead selling a new kind of hardware that manipulates camera lenses in small spaces.

The company's “MEMS Cam” is an “actuator” that is responsible for physically moving a camera lens back and forth to achieve focus. Unlike today's actuators, which are made from multiple moving parts assembled in a coil fashion, dependent upon magnetic forces, Siegler explains, MEMS Cam is fashioned like a semiconductor, from a wafer of silicon, as a single part that can tense and stress to achieve movement, a so-called microelectromechanical system, or MEMS, hence the name. It serves as an armature that grips the lens and can flex to move the lens back and forth.

There are numerous advantages to MEMS in general, and in MEMS Cam in particular, including far lower power requirements, and less bulk. That allows for camera assemblies that save battery life and save precious space inside a handset. And they can be very, very fast. DigitalOptics says its focus time of a couple hundred milliseconds is fractions of the time a conventional actuator takes in today's cameras to shift the lens.

The MEMS Cam, bottom, in its package, and bundled with an image processing chip, top.

While phones such as Apple's (AAPL) iPhone and Samsung Electronics's (005930KS) Galaxy S III, and even a less-ambitious phone such as Google's (GOOG) Nexus 4, can all take very good pictures, the advantages of MEMS Cam promise some novel features. One is multiple focus, where a single shot is taken as a series of shots in rapid succession with different foci. The MEMS Cam can switch so fast that it might, say, take six exposures in half a second, with focus on foreground in one, mid-point in another, background in a third, and points in between in each of the other exposures. The camera can stitch them together as a single image file called an “MPO.” That means that a user can take a shot and then decide afterward which object should be in focus, seeing as there are several focused exposures captured for a given moment in time.

DigitalOptics expects the MEMS Cam to show up in handsets toward the latter half of this year.

Many intriguing possibilities arise, though they are not necessarily imminent. For example, every phone camera user would love to have real optical zoom. With a MEMS actuator that can move left and right, not just back and forth, one could swap out lenses of different focal lengths to achieve a kind of zoom, says Siegler. In addition, the MEMS Cam is not just a solid-state motor, it is also a sensor, in that it detects gravitational pull. What that means is that when you point a phone upward to take a picture of the sky, or down to snap a flower, the device can sense the change in the tug of the earth. It can then adjust how much force is required to move the armature depending. That can result in more efficient use of the phone's power and faster switching times for the lens, as less effort is required in some cases to overcome gravity.

All in all, it looks like a fascinating future for one of the features with which consumers seem most enamored in their smartphones.

 

5 Smart Money Moves for Young Adults

Financial advice is only useful if it's relevant to your own particular situation. The right move for someone twice your age may be totally wrong for you, while your best financial move may be completely inappropriate for someone else.

To reach as wide an audience as possible, we've spent the week looking at people in different age groups and coming up with tips for them to follow to improve their financial situation. After having given tips for retirees, near-retirees, and middle-aged investors earlier in the week, today's focus moves to young adults and their particular financial needs and challenges.

Just starting out
In stark contrast to those who are close to retirement, young adults have a huge number of short-term and long-term financial needs with minimal resources to put toward them. The biggest challenge that most people face as they start out in their careers is finding the best uses for your money. Especially if you've lived a frugal lifestyle throughout your college years, the temptation to splurge with your newfound paycheck can be almost irresistible. But with time on your side, anything you manage to save can have a much bigger impact on your future lifestyle than if you wait until later to address your long-term goals.

Finding the right balance is tough, but following these five ideas is a good place to start.

Idea 1: Get familiar with finances.
Millions of young adults come out of school with no knowledge of personal finance at all. If you're one of them, don't be embarrassed -- but don't accept your ignorance. Take steps to find out everything you need to know about money.

The Motley Fool's 13 Steps to Investing Foolishly are a good place to find out how to get started with the ins and outs of investing. For more basic advice on debt, savings, real estate, and taxes, the Fool has free resources to help you learn what you need to know. Either way, getting familiar with all the money issues that you'll face throughout your life will pay huge dividends for decades to come.

Idea 2: Address bad debt first.
It's an unfortunate fact of life that most young people now start adulthood with debt. For certain types of student loans, home mortgages, and other low-interest debt, paying down balances over time is both practical and prudent.

But credit card debt is another matter. Even after taking substantial losses during the financial crisis, big card-issuing banks JPMorgan Chase (NYSE: JPM  ) , Citigroup (NYSE: C  ) , and Bank of America (NYSE: BAC  ) have all rebounded sharply due largely to falling credit card delinquency rates and high interest rates. There's no investment you can make that will dependably produce returns of 15% to 20% -- even shares of those banks' stock! -- but paying down high-rate credit cards gives you exactly that payoff. Take advantage of it.

Idea 3: Start small and build on saving.
When you're young, building a habit of saving is more important than the amount that you save. A good way to start is to save a tiny amount of your paycheck -- as little as 1% -- and put it into a 401(k) account at work or an IRA. Then, when you're fortunate enough to get a raise, boost your savings by half your extra pay. That way, you'll enjoy the fruits of your career success but also ramp up your long-term saving. It may seem insignificant, but later in life, you'll be amazed how much those little savings add up to.

Idea 4: Focus on your credit score.
It's hard to underestimate the impact that a good credit score has. Nowadays, credit scores aren't just about credit; insurance companies look at your credit report to determine the rates they charge you, and bad credit can even deter prospective employers from hiring you.

The easiest way to establish a solid credit history is to use credit responsibly. Whether it's paying off your student loans on time or getting a credit card and paying off the balance every month, things you do now to build your credit can save you thousands of dollars in the future.

Idea 5: Recognize your most valuable asset.
When you're young, the present value of your future earning power is the most valuable asset you own. Take advantage of training and development opportunities to increase your value both to your current employer as well as in potential future jobs down the road. The effort may not always pay off immediately, but you'll be surprised how often it comes in helpful down the road.

What's next
Tomorrow, we'll look at how you're never too young to learn about money. We'll close our series with money advice for kids and teens.

Once you get your credit card debt paid down, looking to invest in the banks that collected so much interest from you has a certain appeal. But banks have done quite well lately, with Bank of America's stock having doubled in 2012. Find out whether B of A is still worth buying by reading The Motley Fool's premium research report on B of A, in which top banking analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials Bureau Chief, give you the inside scoop on the bank's operations. Click here now to claim your copy, and as a bonus you'll receive a full year of FREE updates and expert guidance as key news breaks.

Dynamic Materials Beats on Both Top and Bottom Lines

Dynamic Materials (Nasdaq: BOOM  ) reported earnings on Feb. 27. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Dynamic Materials beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped. GAAP earnings per share dropped significantly.

Gross margins expanded, operating margins dropped, net margins dropped.

Revenue details
Dynamic Materials logged revenue of $52.5 million. The three analysts polled by S&P Capital IQ looked for revenue of $51.7 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.21. The five earnings estimates compiled by S&P Capital IQ anticipated $0.20 per share. GAAP EPS of $0.21 for Q4 were 19% lower than the prior-year quarter's $0.26 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 30.5%, 320 basis points better than the prior-year quarter. Operating margin was 8.5%, 100 basis points worse than the prior-year quarter. Net margin was 5.4%, 120 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $50.7 million. On the bottom line, the average EPS estimate is $0.24.

Next year's average estimate for revenue is $220.0 million. The average EPS estimate is $1.09.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Dynamic Materials is outperform, with an average price target of $20.20.

Looking for alternatives to Dynamic Materials? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

  • Add Dynamic Materials to My Watchlist.

When the Communists Took Over

On this day in economic and financial history...

President Richard Nixon became the first president to visit China on Feb. 21, 1972. This was doubly notable in light of the administration's official refusal to recognize the Communist government that had taken power in 1949.

Politicians on both sides of the aisle voiced their support for the diplomatic effort. Senate Majority Leader Mike Mansfield, a Democrat from Montana, told the Associated Press that the meetings were off to a good start toward improved relations. Senate Minority Leader Hugh Scott, a Republican from Pennsylvania, added, "Whatever we can do in furthering understanding and communications, the better." Even Hubert Humphrey, one of the contenders in a Democratic presidential primary eventually won by George McGovern, voiced positive sentiment -- for Chinese Premier Zhou Enlai, who "made a speech that was quite constructive," in Humphrey's words. As for Nixon, Humphrey sniffed that "[Nixon's] automobile went along the streets, but there were no people gathered on the sidewalk [to greet him]."

This historic visit opened the way for freer trade between China and the United States, and for much of the 1970's, the U.S. balance of trade was positive. In real terms, the U.S. exported $3 billion more to China than it imported. This was a tiny sliver of America's trade pie, but it quickly grew through the 1980s and turned in favor of the Chinese. A nearly $3 billion trade surplus in 1980 became a $6 billion deficit by 1989. By 1999 this became a nearly $70 billion trade deficit. By 2009, the U.S. trade deficit with China was well more than $200 billion, and China accounted for 14% of all U.S. trade volume, up from mere fractions of a percent in the 1970s.

Nixon's bargain has benefited U.S. businesses, but it seems clear that it has benefited China far more. That's been reflected in the 20-year performance of each country's major market index: The Shanghai Stock Exchange Composite grew nearly 2,800% in the first 20 years after its creation at the end of 1990, compared to a paltry 300% gain for the Dow Jones Industrial Average (DJINDICES: ^DJI  ) over the same time frame. If you compared each from its modern low to its absolute peak, it looks even starker: The SSEC peaked at a 6,000% gain in late 2007, while the Dow only managed a 1,700% gain from 1982 to 2007. How much wilder would the SSEC's growth have been if China had begun modernizing earlier?

Triumph of the proletariat
Nixon might not have visited Communist China in 1972 -- and Communist China might not have existed at all -- if not for the publication of The Communist Manifesto on Feb. 21, 1848. The socialist rebuttal to Adam Smith's 1776 masterwork The Wealth of Nations, Karl Marx and Friedrich Engels' tome set forth the precepts of class struggle and communal ownership that would become hallmarks of the major Communist governments that arose during the 20th century. No matter your opinion of it as a political philosophy, communism has had an enormous influence on the modern world. Roughly 1.7 billion people alive today have lived under, or are still living under, a Communist regime.

All aboard!
The first operational railroad locomotive made its maiden journey in south Wales on Feb. 21, 1804. Built by Richard Trevithick, the locomotive attracted enough interest in England to inspire a robust culture of experimentation and development. This entrepreneurial tinkering advanced railroad technology far enough and fast enough for commercial railways to rise within a decade. By the end of the 1820s, the United States was also developing locomotives, and in 1835 a railway opened in Belgium, bringing locomotives to Continental Europe. The Industrial Revolution was underway.

By 1850, England had 6,600 miles of track laid for its growing railroad industry. Within another decade the U.S. had raced forward and built 30,000 miles of track. The first transcontinental railroad was built in 1869, by which time railroads had become a fixture in both the New York and London stock markets. Despite speculative booms and busts, railroads continued to drive the world forward. A million miles of track were laid around the world by the 115th anniversary of Trevithick's first locomotive run.

Say "cheese"
Edwin Land first demonstrated his revolutionary instant camera on Feb. 21, 1947. Land, the founder of Polaroid, had just begun a new era in photography -- and a new era in corporate showmanship. The first Land Camera would go on sale during the 1948 holiday season, and despite its high price -- at $89.75 then, it was worth the equivalent of $850 today -- it was an immediate success, generating more than $5 million in sales in its first year on the market.

Land went on to become an expert at "scientific demonstration," which in the words of The New York Times' Christopher Bonanos, made him an inspirational figure for Apple's (NASDAQ: AAPL  ) Steve Jobs:

Both built multibillion-dollar corporations on inventions that were guarded by relentless patent enforcement. (That also kept the competition at bay, and the profit margins up.) Both were autodidacts, college dropouts (Land from Harvard, Jobs from Reed) who more than made up for their lapsed educations by cultivating extremely refined taste. At Polaroid, Land used to hire Smith College's smartest art-history majors and send them off for a few science classes, in order to create chemists who could keep up when his conversation turned from Maxwell's equations to Renoir's brush strokes.

Most of all, Land believed in the power of the scientific demonstration. Starting in the 60s, he began to turn Polaroid's shareholders' meetings into dramatic showcases for whatever line the company was about to introduce. In a perfectly art-directed setting, sometimes with live music between segments, he would take the stage, slides projected behind him, the new product in hand, and instead of deploying snake-oil salesmanship would draw you into Land's World. By the end of the afternoon, you probably wanted to stay there.

In a unique twist of fate, it was Apple's iPhone that both greatly extended the reach of instant photography and greatly accelerated the demise of instant film -- and has undoubtedly slowed the buying interest in digital cameras, as well. In the five years following the iPhone's release, sales of digital cameras increased by a total of 14%. Smartphones, on the other hand, have grown by leaps and bounds, reaching sales of nearly 500 million units worldwide five years after the iPhone's release.

There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons both to buy and to sell Apple, as well as what opportunities remain for the company (and your portfolio) going forward. To get instant access to his latest thoughts on Apple, simply click here now.

3 Shares Set to Beat the FTSE 100 Today

LONDON -- The FTSE 100 (FTSEINDICES: ^FTSE  ) started hesitantly, but as of 7:55 a.m. EST it's up 0.38% to 6,404 points, having earlier broken the 6,400 level to set a new 52-week high of 6,412 -- its highest level since 2008. Positive results from some FTSE 100 companies, together with improving economic sentiment, appear to lie behind the rise.

So which shares are on the up? Here are three constituents of the indexes rising today.

BT (LSE: BT-A  ) (NYSE: BT  )
Shares in BT Group perked up 1.5% to 281 pence on the news that the telecom giant has been successful in its bidding for 4G spectrum. For the sum of 186 million pounds, BT has secured the rights to 2x15 MHz of FDD and 20 MHz of TDD 2.6 GHz spectrum, with the license good for at least 20 years. According to chief executive Ian Livingstone, the bandwidth will be used to complement BT's existing strategy, rather than to build a new national network.

The auctions, which saw rival Vodafone also succeed in its bid, raised a total of 2.34 billion pounds -- a far cry from the 22 billion pounds raised by 3G auctions in 2000.

Rexam (LSE: REX  )
Final results from Rexam boosted the share price by 5% to 500 pence this morning. Sales at the consumer packaging company rose by 2% to 4.3 billion pounds, with underlying pre-tax profit up 1% to 418 million pounds and earnings per share up 5% to 35.5 pence. A total dividend of 15.2 pence was announced, up 6% and representing a yield of 3%.

The period saw the disposal of the firm's personal-care division, with 395 million pounds being returned to shareholders.

Spectris (LSE: SXS  )
Spectris shares have picked up 1.2% to 2,455 pence, taking the price up more than 40% over the past year to a new 52-week high after the instrumentation and controls developer released full-year results.

At constant exchange rates, sales for the year to December 2012 were up 13% to 1.23 billion pounds, with adjusted pre-tax profit up the same percentage to 217 million pounds and adjusted earnings per share up 11% to 137.5 pence. The company lifted its dividend by 16% to 39 pence per share for a yield of 1.6%.

As we exit a recession and depressed share prices are rising, the odds can be tipped in favor of growth investors. But finding the best growth shares is not easy. If you want some help with the task, I recommend you get yourself a copy of our brand-new report "The Motley Fool's Top Growth Share For 2013," which is the result of some serious brain-work by the Fool's top analysts. It's completely free of charge, but it will be available for a limited period only. So click here to get your copy today.

Indications: U.S. stock futures edge up as record beckons

NEW YORK (MarketWatch) � U.S. stock futures tilted slightly higher Thursday, with the Dow Jones Industrial Average set to open the session 89 points from its all-time closing high set on Oct. 9, 2007.

Stock-index futures offered little reaction to economic reports that had the U.S. economy growing 0.1% in the final quarter of 2012 and weekly jobless claims falling by 22,000 to 344,000.

After a blockbuster session on Wednesday, driven by stimulus-supportive comments from Federal Reserve Chairman Ben Bernanke and Mario Draghi, head of the European Central Bank, futures on the Dow Jones Industrial Average DJH3 were lately off a point at 14,059.

S&P 500 index futures SPH3 rose nearly 1 point to 1,516.6, and those for the Nasdaq 100 index NDH3 rose 4.75 points to 2,745.25.

Click to Play

Figures from the Commerce Department had the U.S. economy clearing a prior-estimated contraction.Read about the economy�s meager growth.

At the same time, the Labor Department reported a larger-than-expected drop in jobless claims last week.See more on drop in initial applications for benefits.

At 9:45 a.m. Eastern, the February reading for the Chicago purchasing-managers� index will be released.

Wall Street bull

A positive report on housing and a commitment by Bernanke to stimulus lifted Wall Street on Wednesday to its best day in nearly two months. The Dow Jones Industrial Average DJIA ended the day with a gain of 175.24 points, or 1.3%, at 14,075.37. Read: U.S. stocks surge in best day since Jan. 2.

The Dow was just 89 points from its record finish of 14,164.53 on Oct. 9, 2007. The Standard & Poor�s 500 index SPX closed up 1.3% to 1,515.99, less than 50 points from its highest close, reached that same day, of 1,565.15. The Tell: Record stock-market highs should aid the bruised retail psyche.

Analysts said the proximity to these highs could lure in even more investors, and that the market was also coming to realize that the consequences of sequestration were perhaps not as gloomy as originally thought. Automatic spending cuts kick in Friday, barring a last-minute deal by lawmakers. Read: The sequester starts Friday. Then what?

�With less than 24 hours before the sequester activates and a huge run-up yesterday, we think the market may trade sideways, notwithstanding a revised upward Q4 GDP that will show the economy grew by 0.7%. Nonetheless, we believe the indices will close the month holding their gains,� said Peter Cardillo, chief market economist at Rockwell Global Capital, in a note.

On the corporate front, shares of Groupon Inc. GRPN sank in premarket moves after the daily-deals website warned late on Wednesday that quarterly revenue will probably miss Wall Street�s estimates.Read more on Groupon.

Also making a sharp move in premarket trading, shares of retailer J.C. Penney Co. JCP , which reported a wider fourth-quarter loss and sales short of analysts� expectations, tumbled.

Shares of Sears Holdings Corp. SHLD rose after reporting a narrower fiscal-fourth quarter loss and stronger-than-expected adjusted earnings. Read: Sears Holdings Q4 loss narrowed; adjusted net up.

In overseas markets, Europe stocks rose for a second day after Draghi defended the ECB�s loose monetary-policy stance, and concerns over Italy eased. Read: Europe stocks gain on Bernanke comments.

The Japanese government formally nominated Haruhiko Kuroda, a monetary-policy dove, as the new central-bank governor. Read: Japan, China stocks jump; Indiaslides on budget.

In other markets, gold prices GCJ3 � remained under the psychologically important $1,600 an ounce level, while crude-oil futures CLJ3 � slipped as the dollar rose against the yen. Read: Yen weakens against dollar, as Aussie jumps.

European Markets Pause

European equity markets started the week cautiously after a particularly strong session on Friday, during which the Dow Jones Industrial Average was pushed to a high of more than five years.

The DJIA rose 1.1%, to 14,009.79 on Friday, climbing above 14,000 for the first time since Oct. 12, 2007. As a result, most traders expected equities, in particular, to pause for breath on Monday. The euro dipped against the dollar and the British pound in early trading, while stocks, oil and gold prices were mixed within a tight range.

Spanish and Italian government bond yields pushed higher due to political concerns in Spain. Corruption allegations emerged last week against Spain's governing party, bringing the recent improvement in sentiment to a halt in euro-zone debt markets. "The weekend news flow served as a timely reminder of the political risks looming on the European horizon," said Deutsche Bank .

Spanish Prime Minister Mariano Rajoy moved to contain a scandal over alleged cash payments to him and other leaders of his party by promising to disclose his tax returns and financial assets. But this didn't stop protesters from taking to the streets on Saturday in Madrid, Barcelona and other cities in Spain.

Adding to Spain's woes, the number of people out of work there rose 2.7% on the month in January, according to data released on Monday. The currency bloc's No. 4 economy is failing to curb rising jobless claims. Last month, the country's statistics institute said 26% of Spain's working-age population was unemployed at the end of December�the second-highest unemployment rate in the euro zone, after Greece.

In stocks news, Swatch Group AG shares surged following well-received earnings. The world's largest watchmaker by sales reported a 26% increase in full-year net profit for 2012.

Julius Baer Gruppe AG shares dropped after the Swiss private bank reported its full-year results. Assets under management increased 11%, but some analysts said its rising cost base was a concern.

In the U.K., the banking sector trod water ahead of a speech by Treasury chief George Osborne. He is expected to announce draft legislation on "ring-fencing" within the industry and to warn that banks could be broken up if they fail to separate their retail and investment arms.

The U.K. construction purchasing manager's index, euro-zone producer prices and U.S. factory orders are scheduled for release on Monday.

Write to Andrea Tryphonides at andrea.tryphonides@dowjones.com

We Love You, Just Not Enough to Buy You (Yet)

Regeneron Pharmaceuticals (NASDAQ: REGN  ) said Monday that it got a notice from its partner Sanofi (NYSE: SNY  ) saying that the pharma intends to buy additional shares of the biotech.

How much? Sanofi isn't saying, but it can't own more than $4.8 billion at current prices as long as the two companies remain partners because it's bound by a standstill agreement to not acquire more than 30% of outstanding shares of Regeneron.

Aventis, which subsequently merged with Sanofi, took a stake in Regeneron when the original deal was set up in 2003, and Sanofi took a larger stake when it revamped the deal in 2007. As of October 2010 -- the last SEC Form 4 I could find -- Sanofi owned 15.8 million shares valued at $2.66 billion at today's prices.

Investors initially jumped at the idea, apparently speculating that Sanofi would launch a hostile takeover but came to their senses with shares trading just a little above Friday's closing price as trading wrapped up Monday.

Biotech has a history of small drug developers being acquired by their larger partners, often hostilely. Roche bought partner Genentech; GlaxoSmithKline (NYSE: GSK  ) bought its partner Human Genome Sciences. Both were hostile takeovers. Neither came down to investors voting in the pharma's board nominees to vote for the deal. Roche and Glaxo succeeded by offering a high enough price that management had to take the deal. Bristol-Myers Squibb (NYSE: BMY  ) failed for the same reason Roche and Glaxo succeeded when it tried to acquire ImClone Systems. Not offering enough for its partner allowed Eli Lilly (NYSE: LLY  ) to top its bid and acquire the biotech.

Sanofi would be crazy to try and purchase Regeneron for a substantial premium. Sure, the launch of its eye drug Eylea is going well, but it seems priced in at this point. Shares are up more than 550% over the last three years. Sanofi would gain full access to the cancer drug Zaltrap that they developed together, but that would be a financial liability for now because Sanofi gets to collect repayment of the development costs for the drug from Regeneron's share of the profits from Zaltrap.

The companies are working on other drugs together, which makes Regeneron a good takeout target, but not at these prices. I'm not even sure why Sanofi would want to increase its ownership at this point, but I guess this announcement is like a board announcing the authorization of a share buyback. The company isn't obligated to make any purchases right now. Sanofi would be smart to wait for a pullback before acquiring more shares.

About that ImClone purchase
While adding half the U.S. sales of Erbitux has helped Eli Lilly, the pharma is still in a patent pickle. Over the next two years, Eli Lilly will see nearly $0.40 of every $1.00 in sales exposed to generic competition. How does the company plan to respond to this huge patent cliff? Better yet, what does this mean for investors? In a brand new premium report on Eli Lilly, The Motley Fool's top pharmaceuticals analyst delves into everything investors need to know about the stock today. Simply click here now to claim your copy.

Take-Two Interactive Software Beats on the Top Line

Take-Two Interactive Software (Nasdaq: TTWO  ) reported earnings on Feb. 5. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Take-Two Interactive Software beat expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share expanded significantly.

Margins expanded across the board.

Revenue details
Take-Two Interactive Software tallied revenue of $415.8 million. The 16 analysts polled by S&P Capital IQ predicted a top line of $364.0 million on the same basis. GAAP reported sales were 76% higher than the prior-year quarter's $236.3 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.67. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.55 per share. GAAP EPS of $0.66 for Q3 were 313% higher than the prior-year quarter's $0.16 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 48.0%, 150 basis points better than the prior-year quarter. Operating margin was 19.5%, 1,090 basis points better than the prior-year quarter. Net margin was 17.2%, 1,120 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $301.3 million. On the bottom line, the average EPS estimate is $0.33.

Next year's average estimate for revenue is $1.18 billion. The average EPS estimate is $0.16.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,140 members out of 1,230 rating the stock outperform, and 90 members rating it underperform. Among 295 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 277 give Take-Two Interactive Software a green thumbs-up, and 18 give it a red thumbs-down.

Looking for alternatives to Take-Two Interactive Software? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

  • Add Take-Two Interactive Software to My Watchlist.

FirstEnergy Earnings: Can This 5.5% Dividend Deliver?

FirstEnergy (NYSE: FE  ) reported earnings on Monday, and Mr. Market was unimpressed. The utility missed top-line sales expectations but managed to coast by on earnings. With a sizable 5.5% dividend yield and one of the largest customer bases around, there's a bull story behind every bear. Let's take a deeper look at the company, see what it's offering, and decide whether first energy deserves a spot in your portfolio.

Number crunching
Bad news first for FirstEnergy: revenue. The utility reported $3.5 billion in sales for Q4 2012, a miserly 28% below analyst estimates �and 7.6% lower than 2011's fourth quarter. Falling sales have proven to be a common trend for utilities this quarter, but FirstEnergy's flop puts it at the top of the bottom.

On a more positive note, the company squeaked by with $0.80 earnings per share, matching Wall Street expectations. Earnings also came in $0.03 higher than last year's Q4, but 2012's overall results took a $0.91 per-share hit from pension costs and other charges.

For FY 2012, FirstEnergy's sales clocked in at $15.3 billion and earnings logged $1.84 diluted EPS. Compared with 2011, sales fell 5.2%, while EPS dropped by just over 20%.

Can FirstEnergy finish?
Like many utilities, FirstEnergy operates both regulated utilities and unregulated energy generation divisions. Regulated business offers slow and steady growth (if the company keeps on top of regulatory requests and approvals), while generation can be a company's ticket to big returns or cash-sucking expenditures.

FirstEnergy's 10 utilities account for 64% of the company's sales, while 18,000 MW of generation pulled in the remaining 36%. The decent split offers some risk diversification, but FirstEnergy's fuel sources provide some cause for concern. The company currently relies on coal for about 60% of its total generation capacity and expects to spend $985 million on EPA compliance measures over the next several years.

Source: First Energy 2013 Credit Suisse Energy Summit Presentation.�

FirstEnergy's also adding on to its 20,000-plus miles of transmission line. The company plans to spend around $700 million in the next three years, which should provide an additional source of steady revenue.

Capital expenditures cut cash from the balance sheet, but spending now could mean savings down the road. Here's how FirstEnergy stacked up against competitors for 2011:

Company

Capex ($M)

Capex-to-Sales Ratio (%)

FirstEnergy

2,281

22%

Atlantic Power (NYSE: AT  )

115

40%

Duke Energy (NYSE: DUK  )

4,363

30%

Southern (NYSE: SO  )

4,525

26%

Exelon (NYSE: EXC  )

1,329

7%

Source: Yahoo! Finance.

Although Exelon (NYSE: EXC  ) brings up the rear, it's taking its capex seriously. The company recently announced that it will slash its dividend by 40% in 2013 to fund new nuclear and renewable initiatives. Southern's (NYSE: SO  ) spending is helping to shift the utility away from coal, with $16.5 billion slotted for capex in the next two years alone. Duke Energy (NYSE: DUK  ) is undergoing a massive modernization project and will ultimately spend around $12 billion to retire 6,800 MW of costly coal plants and add on cheaper/cleaner energies. With the smallest sales around by a long shot, Atlantic Power's (NYSE: AT  ) supersized capex-to-sales ratio makes sense for a company with growth on its mind.

Dividend dynamite?
FirstEnergy's 5.5% annual dividend yield is nothing to yawn at, and income investors could look to this utility as a long-term cash cow. But all dividends are not created equal, and the staying power of any dividend is even more important than its current payout.

FE Cash Div. Payout Ratio TTM data by YCharts

FirstEnergy has crept its way to the bottom of the pool over the past few years, creating a less-than-rosy outlook for this company's future distributions.

Foolish bottom line
In an inarguable sign of disapproval, Mr. Market has pushed FirstEnergy's stock down around 5% since its earnings announcement. Its latest quarter didn't win it any favors, and the company's long-term value add remains to be seen. The utility is spending decent money to keep itself competitive, but it has quite a bit of catching up to do compared with Exelon's nuclear fleet and Duke's major progress. With an unstable dividend to boot, I'm putting FirstEnergy on the backburner for now.

For a company with much of its modernization spending behind it, Exelon is perfectly positioned to capitalize on having the largest nuclear fleet in North America. Combine this strength with an increased focus on renewable energy, and Exelon's recent merger with Constellation places�Exelon and its best-in-class dividend on a short list of top utilities. To determine whether Exelon is a good long-term fit for your portfolio, you're invited to check out The Motley Fool's premium research report on the company. Simply�click here now�for instant access.

W&T Offshore Beats on Both Top and Bottom Lines

W&T Offshore (NYSE: WTI  ) reported earnings on Feb. 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), W&T Offshore beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share dropped significantly. GAAP earnings per share contracted significantly.

Margins shrank across the board.

Revenue details
W&T Offshore reported revenue of $237.1 million. The seven analysts polled by S&P Capital IQ anticipated a top line of $227.2 million on the same basis. GAAP reported sales were 9.5% lower than the prior-year quarter's $261.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.26. The 11 earnings estimates compiled by S&P Capital IQ predicted $0.23 per share. Non-GAAP EPS of $0.26 for Q4 were 62% lower than the prior-year quarter's $0.69 per share. GAAP EPS of $0.21 for Q4 were 66% lower than the prior-year quarter's $0.61 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 71.6%, 350 basis points worse than the prior-year quarter. Operating margin was 19.7%, much worse than the prior-year quarter. Net margin was 7.0%, much worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $234.4 million. On the bottom line, the average EPS estimate is $0.26.

Next year's average estimate for revenue is $910.0 million. The average EPS estimate is $1.16.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on W&T Offshore is outperform, with an average price target of $22.38.

Can your portfolio provide you with enough income to last through retirement? You'll need more than W&T Offshore. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.

  • Add W&T Offshore to My Watchlist.

Wednesday, February 27, 2013

Can Optimer Optimize Shareholder Returns?

In the following video, Motley Fool health-care analyst David Williamson discusses Optimer's (NASDAQ: OPTR  ) 10% jump on word that the company will look into "strategic alternatives" in the midst of its current difficult times. David speculates that this means the company may be looking to sell, and he discusses who some potential buyers might be.

While you can certainly make huge gains in biotech and pharmaceuticals, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of.�Click here now�to keep reading.

Expert: BP Engaged in "Pattern of Misreporting"

NEW ORLEANS (AP) -- A well design expert testifying for the federal government today accused BP (NYSE: BP  ) of withholding critical information from industry regulators before a blowout triggered a deadly explosion on the Deepwater Horizon drilling rig in 2010.

Alan Huffman is a geophysicist who has worked for Conoco (NYSE: COP  ) and Exxon (NYSE: XOM  ) . He testified Wednesday that BP continued drilling in dangerous deepwater conditions despite clear warnings of trouble and without informing the Minerals Management Service about its plans.

Huffman said his review of internal BP documents and MMS records showed that the London-based oil giant engaged in a "consistent pattern of misreporting" and gave the regulators a "very false impression" of what was happening on the drilling project.

Huffman is the second expert witness at a trial that started Monday and, barring a settlement, could last several months.

link

The Smells of Commercial Success

The Art of Scent 1889-2012

Museum of Arts and Design

Through March 3

New York

Should "scent art"�perfume, that is�be critically considered alongside music and painting? In "Against the Grain," an influential 1884 novel by J.-K. Huysmans, the decadent character Des Esseintes makes a case that it should. "After all, he argued, it was no more abnormal to have an art that consisted of picking out odorous fluids than it was to have other arts based on a selection of sound waves or the impact of variously coloured rays on the retina of the eye."

Like much of what Des Esseintes says in Huysmans's fanciful and wonderful book, his case for perfume is both logical and absurd�an aestheticism taken to an extreme. But he is right to argue that scents should command a more respectful place alongside sights and sounds, with a critical language that includes more than merely "good" and "bad." By appreciating each sense on its own, says Des Esseintes, we better enjoy its harmony with others, "co-ordinating them to compose the whole that constitutes a work of art."

Enlarge Image

Close Brad Farwell

An exhibition on 'scent art' that's less insightful than a walk through the Saks Fifth Avenue fragrance department.

Just like food and wine, perfume has recently enjoyed a renaissance of sorts among latter-day Esseintes-ists. Independent perfumeries create their own blends. Professionals and amateurs write sophisticated perfume blogs. The 2008 book "Perfumes: The A-Z Guide," by Luca Turin and Tania Sanchez, has become something of an Oxford English Dictionary for scent.

Now add to the mix "The Art of Scent: 1889-2012" at New York's Museum of Arts and Design.

Claiming to be the "first major museum exhibition to recognize scent as a major medium of artistic creation," the show strips perfume of its extensive packaging and advertising and presents it as an "olfactory art" in a purpose-built white-cube gallery. Curated by Chandler Burr and designed by the architectural firm Diller, Scofidio + Renfro, the spare exhibition consists of 12 smelling stations seamlessly cast into the gallery walls, a side room with a table of perfume oils, and mouthlike formations sculpted into another wall that spit out scented cards.

The perfumes on exhibition begin chronologically with Jicky, an 1889 blend by the perfumer Aim� Guerlain�considered the first modern perfume for its use of synthetic aromatics and still in production�and concludes with Daniela Andrier's Untitled (2010, designed for Maison Martin Margiela). Along the way we encounter Ernest Beaux's magisterial Chanel No. 5 (1921), Pierre Wargnye's odious Drakkar Noir (1982, for Guy Laroche), Olivier Cresp's diaphanous Angel (1992, for Thierry Mugler) and Jean-Claude Ellena's Osmanthe Yunnan (2006, for Herm�s), a scent that starts with an infusion of tea and finishes with a rinse of dental fluoride.

An exhibition of scent is a fresh idea. Too bad "The Art of Scent" is so fishy. With elaborate stagecraft, it is more interested in making the case for commercial perfume as high art, with the rights and privileges accorded therein, than in revealing the artistry of perfume design. For all the hoopla, the show conveys even less than what you would learn walking through the ground floor of Saks Fifth Avenue�which, unfortunately, might be the point.

The urinal-shaped smelling receptacles abstract perfume to absurdity. Paired with illuminated labels that fade to white the moment you want to read them, this is more a show of prestidigitation than olfaction. For a museum of design, MAD seems oddly contemptuous of the design elements that went into these commercial products. "The Art of Scent" gives only passing reference to perfume chemistry and history. It includes an all-too-narrow survey of well-known brands and ignores the independents. It disregards the packaging and advertising that is integral to what these products become. Until the day we have wall-mounted smelling stations in our homes, perfumes are high-end consumables with elaborate marketing campaigns and exotic packaging�a thriving multibillion-dollar industry�and there shouldn't be anything wrong in acknowledging that.

And therein lies the fallacy of this exhibition. Here, everyone is an "artist." Perfumers are "scent artists." Perfumes are "aesthetically influential works of olfactory art." Miuccia Prada, who in 2004 commissioned the perfumers Carlos Bena�m, Max Gavarry and Cl�ment Gavarry to create Prada Amber, is not a fashion executive but a "patron of the arts."

"The Art of Scent" purports to strip away the commercial side of perfume. Instead, it merely adds another layer of packaging, covering over the existing labels and selling the elixirs as high art. At times these gimmicks are all too apparent. The room with the smelling table includes a museum staffer whose hawking of the fragrances is little different from a department-store floor-walker's. The "catalog" of the exhibition is a "limited edition box set" of fragrances that costs $285, with a text that is more sales pitch than scholarship.

Perhaps we shouldn't be surprised that "The Art of Scent is made possible by The Est�e Lauder Companies �a Founding Major Donor�and other Major Donors, including Chanel, Inc., Givaudan, Herm�s Parfums, International Flavors & Fragrances Inc, L'Or�al and P&G Prestige. Additional support for The Art of Scent is provided by Funders Arcade Marketing USA and Guerlain, as well as Diptyque and Women in Flavor and Fragrance Commerce Inc." There is nothing wrong with corporate sponsorship, but here the sponsorship seems to have gone to supporting a nonprofit front for Madison Avenue. With "The Art of Scent," the Museum of Arts and Design has left a good idea smelling rank. Des Esseintes would be the first to turn up his nose at that.

Mr. Panero is managing editor of the New Criterion.

Why Onyx Pharmaceuticals Shares Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Onyx Pharmaceuticals (NASDAQ: ONXX  ) , a cancer-focused biopharmaceutical company, shot higher by as much as 10% after the company reported better-than-expected fourth-quarter results.

So what: For the quarter, Onyx reported revenue of $127.9 million and a loss of $0.36 per share. Revenue was down 46% year-over-year; however, the year-ago period included revenue from the sale of its royalty rights to Nexavar in Japan for $160 million. Wall Street had been projecting that Onyx would lose $0.76 per share. Newly approved second-line multiple myeloma treatment Kyprolis saw sales grow to $45.3 million for the quarter, or 242% higher than the sequential third quarter.

Now what: Things are going really well for Onyx Pharmaceuticals. Royalties from its liver and kidney cancer drug, Nexavar, grew 2.6% for the full year, excluding Japan, and Kyprolis is off to what I consider a fantastic start. There's a little concern for Kyprolis now that Celgene's (NASDAQ: CELG  ) Pomalyst is also approved as a second-line treatment for multiple myeloma, but I'm more of the opinion that with so few options existing beyond the initial multiple myeloma treatments, that the market will expand to more than accommodate sales growth for both drugs.

Craving more input? Start by adding Onyx Pharmaceuticals to your free and personalized watchlist so you can keep up on the latest news with the company.

Can Celgene continue to soar?
Every in-the-know biotech investor has an eye on Celgene. Shares have skyrocketed this year as the company outlined a plan to almost triple its profits in only a few years. But should you buy the story Celgene is selling? Make sure you understand the key opportunities and risks facing this company by picking up The Motley Fool's brand new premium report on Celgene. To claim your copy today -- along with a free year of updates -- simply click here now.

Why Investors Should Favor Political-Spending Disclosures

When 2010's Citizens United ruling expanded the scope of corporate political spending protected by the U.S. Constitution, the Supreme Court partially justified its argument by stating that investors could hold corporations accountable for their political-spending choices.

Unfortunately, investors just don't have the ability to do that, because corporations are not required to disclose their political spending to shareholders. But a proposed Securities and Exchange Commission rule change could help fix this problem.

The SEC is considering a rule called "Disclosure Regarding the Use of Corporate Resources for Political Activities" that would require public companies to disclose their political spending to shareholders. Such a rule would be good for investors for at least three reasons:

  • It would put investors in a better position to determine whether their capital is spent on legitimate business interests or to promote the personal politics of directors and execs.
  • It would provide investors with information they could use to evaluate whether political expenditures made in good faith are actually in the best interests of the business.
  • It would supply information that would help socially conscious investors make decisions that are values-based as well as profit-based.

Managing conflicts of interest
Unless corporations are required to disclose political spending to investors, there is tremendous potential for conflicts of interest. It creates the opportunity for business leaders to funnel shareholder capital into political initiatives that advance their personal political agendas, which may not be aligned with the best interests of the business.

It's not hard to find areas where business leaders might be tempted to use company dollars to support political agendas that may not benefit shareholders. For example, many corporate directors and executives oppose legislation that enhances shareholder rights, and they may be tempted to use shareholder dollars to fund political spending that opposes such legislation.

"Say on pay" legislation was passed in 2010. But in a 2009 survey of 31 CEOs of large companies, USA Today found that 77% opposed the legislation. While some company leaders offered business-related arguments against giving shareholders a nonbinding vote on executive pay, their personal interest in protecting their own salaries should give investors cause for concern.

For example, Kayak Software (NASDAQ: KYAK  ) CEO Steve Hafner openly spoke out against the regulation, saying, "I wonder if the congressmen backing this legislation would propose similar laws governing their own compensation" -- an objection that says nothing about whether this regulation is good for investors.

It's possible that these leaders would never use shareholder money to fight legislation like this. But mandatory disclosures of political spending would put shareholders in a better position to verify that business leaders are truly representing their interests.

Evaluating management decisions
Even if the interests of directors and executives were always aligned with those of shareholders, there can be reasonable disagreement about how corporate funds should be spent. Greater transparency regarding political spending would help investors to determine whether company-funded initiatives are in the best interest of the business and to gauge the risks associated with certain political contributions.

Target (NYSE: TGT  ) shareholders may have welcomed the opportunity to gauge the risk associated with that company's donations to MN Forward, which supported notoriously anti-gay-rights politician Tom Emmer before the information became public and led to boycotts and public outrage.

Even experts frequently disagree about the impact new regulations might have on a company's bottom line. While some have argued that health care reforms such as Obamacare would be bad for health insurers, others have argued that it would boost their profits by putting more people on the rolls. Increased transparency in political spending would help investors understand the strategies of the companies they own or are interested in and use that information to guide their investment decisions.

Empowering socially conscious investors
Some investors are motivated not solely by the potential for profit, but by ethics as well. They may not wish to invest in companies that spend corporate money to oppose stricter environmental legislation or that favor laws some see as corrosive to society.

For example, several activist groups criticized businesses with financial ties to the American Legislative Exchange Council due to its involvement in pushing "stand your ground" laws, which allow people to use force when they have a reasonable belief there is an unlawful threat and impose no obligation to retreat when possible. ALEC also came under fire for its involvement in pushing voter ID laws, which some argue suppress minority voters.

These controversial initiatives put political pressure on companies such as Coca-Cola (NYSE: KO  ) and PepsiCo (NYSE: PEP  ) to cut ties with the organization last year. After Coke ended its partnership with ALEC, Coke spokesperson Diana Garza Ciarlante pointed out the company's long-standing policy to take a stand only on issues that directly affect the company and its industry, stating that Coke's affiliation with ALEC was largely related to its efforts in opposing discriminatory food and beverage taxes. Pepsi's vice president of public policy and government affairs, Paul Boykas, offered a similar explanation of his company's affiliation with ALEC after canceling its membership.

These statements may help explain some of the political-spending choices made by Coke and Pepsi. However, ethically driven investors may still want to know about these political expenditures before a scandal arises so they can determine whether they're comfortable with the use of their investment dollars.

The Foolish bottom line
The SEC plans to issue a Notice of Proposed Rulemaking on the proposed disclosure rule by April. While the future of the rule is uncertain, if it passes, shareholders won't have to rely on the scattered and incomplete information provided by activists and journalists. Instead, they'll be able to make decisions based on a more complete set of information about how corporations conduct themselves as they seek to grow profits.

link

Did Lydall Squander Its Latest Sales Increase?

Margins matter. The more Lydall (NYSE: LDL  ) keeps of each buck it earns in revenue, the more money it has to invest in growth, fund new strategic plans, or (gasp!) distribute to shareholders. Healthy margins often separate pretenders from the best stocks in the market. That's why we check up on margins at least once a quarter in this series. I'm looking for the absolute numbers, so I can compare them to current and potential competitors, and any trend that may tell me how strong Lydall's competitive position could be.

Here's the current margin snapshot for Lydall over the trailing 12 months: Gross margin is 20.5%, while operating margin is 5.4% and net margin is 4.4%.

Unfortunately, a look at the most recent numbers doesn't tell us much about where Lydall has been, or where it's going. A company with rising gross and operating margins often fuels its growth by increasing demand for its products. If it sells more units while keeping costs in check, its profitability increases. Conversely, a company with gross margins that inch downward over time is often losing out to competition, and possibly engaging in a race to the bottom on prices. If it can't make up for this problem by cutting costs -- and most companies can't -- then both the business and its shares face a decidedly bleak outlook.

Of course, over the short term, the kind of economic shocks we recently experienced can drastically affect a company's profitability. That's why I like to look at five fiscal years' worth of margins, along with the results for the trailing 12 months, the last fiscal year, and last fiscal quarter (LFQ). You can't always reach a hard conclusion about your company's health, but you can better understand what to expect, and what to watch.

Here's the margin picture for Lydall over the past few years.

Source: S&P Capital IQ. Dollar amounts in millions. FY = fiscal year. TTM = trailing 12 months.

Because of seasonality in some businesses, the numbers for the last period on the right -- the TTM figures -- aren't always comparable to the FY results preceding them. To compare quarterly margins to their prior-year levels, consult this chart.

Source: S&P Capital IQ. Dollar amounts in millions. FQ = fiscal quarter.

Here's how the stats break down:

  • Over the past five years, gross margin peaked at 21.0% and averaged 18.5%. Operating margin peaked at 5.4% and averaged 1.7%. Net margin peaked at 4.4% and averaged 0.2%.
  • TTM gross margin is 20.5%, 200 basis points better than the five-year average. TTM operating margin is 5.4%, 370 basis points better than the five-year average. TTM net margin is 4.4%, 420 basis points better than the five-year average.

With TTM operating and net margins at a 5-year high, Lydall looks like it's doing great.

Looking for alternatives to Lydall? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

  • Add Lydall to My Watchlist.

Will These Numbers from Best Buy Be Good Enough for You?

Best Buy (NYSE: BBY  ) is expected to report Q4 earnings on Feb. 28. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Best Buy's revenues will decrease -2.6% and EPS will compress -38.1%.

The average estimate for revenue is $16.29 billion. On the bottom line, the average EPS estimate is $1.53.

Revenue details
Last quarter, Best Buy booked revenue of $10.75 billion. GAAP reported sales were 3.5% lower than the prior-year quarter's $11.15 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at $0.03. GAAP EPS were -$0.03 for Q3 versus $0.42 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 24.0%, 160 basis points worse than the prior-year quarter. Operating margin was 0.4%, 300 basis points worse than the prior-year quarter. Net margin was -0.1%, 150 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $49.23 billion. The average EPS estimate is $2.48.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 2,659 members out of 3,448 rating the stock outperform, and 789 members rating it underperform. Among 884 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 679 give Best Buy a green thumbs-up, and 205 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Best Buy is hold, with an average price target of $17.80.

Can your portfolio provide you with enough income to last through retirement? You'll need more than Best Buy. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.

  • Add Best Buy to My Watchlist.

Bernanke Buoys Sentiment in Asia

Asian stocks were mostly higher on Wednesday as comments by Federal Reserve Chairman Ben Bernanke helped improve risk sentiment, though Tokyo shares continued to be weighed by a strong yen.

More in Markets
  • Bernanke Defends Easy-Money Policies
  • Toshiba Names CEO
  • India Budget a Likely Tightrope Walk
  • Russian Banks Look to Yuan Bond Market

Speaking at his semiannual report to Congress, Mr. Bernanke said that the central bank's bond buying program was helping the economy by keeping long-term interest rates lower. The speech was interpreted as Mr. Bernanke remaining in favor of continuing the central bank's stimulus measures.

"Mr. Bernanke confirmed the Fed's commitment to continue quantitative easing until unemployment falls, and U.S. economic data are clearly improving," said Martin Lakos, division director in Macquarie's Private Wealth division in Australia.

The news helped most markets in Asia rebound after they took a beating on Tuesday as inconclusive results from Italy's election revived concerns over the European debt crisis.

Australia's S&P/ASX 200 was up 0.6% and South Korea's Kospi Composite rose 0.3%.

In Hong Kong, the Hang Seng Index added 0.5%, while the Shanghai Composite in mainland China gained 0.3%.

Some high profile Asian companies were higher after releasing their latest earnings reports.

In Malaysia, AirAsia Bhd soared 11% after announcing that its net profit more than doubled in the fourth quarter. The stellar earnings of Southeast Asia's largest discount carrier by fleet size were helped by higher passenger fares, increased passenger volume as well as lower taxes.

In Hong Kong, AIA Group rose 3% after the Asian insurance heavyweight beat estimates by reporting a 27% rise in new business value in the 12 months that ended Nov. 30, with strong growth in Hong Kong, Thailand, Singapore and Malaysia.

Bucking the regional trend was Japan, where stocks continued to fall as the yen remained strong. The Nikkei Stock Average was down 0.6%.

The U.S. dollar gave up its early gains against the yen, and softened a touch as the morning progressed. The greenback was recently at �91.85 compared with �91.97 late Tuesday in New York and much weaker than the �94.77 intraday high it reached on Monday.

Enlarge Image

Close Reuters

Federal Reserve Board Chairman Ben Bernanke said Tuesday the benefits of the Fed's bond-buying program still outweigh the potential risks.

It has been an extremely volatile week in Japan, where the Nikkei leapt 2.4% on Monday after reports that the government was planning to name Asian Development Bank president Haruhiko Kuroda as a nominee for the next Bank of Japan governor, before sliding 2.3% on Tuesday after uncertainty over Italy's elections strengthened the yen.

Among companies in focus in Tokyo, Nissan Motor fell 1.2% after the president of its joint venture in China said that its wholesale sales in China may fall 20% on-year for January and February.

Canon fell 2.3% on profit-taking. The company held its 2013 strategy briefing, which revealed that it is targeting annual sales growth of between 7% and 8% on a local-currency basis.

Write to Daniel Inman at daniel.inman@wsj.com

Wall Street Cuts Jobs But Raises Bonus Pool

Bloomberg NewsMore cuts, but more cash

Two Wall Street Journal articles today nicely sum up the situation of life at a big bank these days — layoffs are more likely, but bonuses are growing.

First off, JPMorgan Chase (JPM) says it will cut $1 billion in expenses and shed a net of 4,000 jobs. Add them to the list of banks, including Citigroup�(C) and Morgan Stanley (MS), that have said they will cut staff this year; Bank of America (BAC) announced 16,000 layoffs late last year.

But despite the redundancies,�the cash pile is still there�– and getting bigger — for those who are left standing:

Wall Street cash bonuses for 2012 are expected to climb 8% from a year earlier, boosted in part by the payment this year of compensation deferred from prior years, according to a report from New York State Comptroller Thomas DiNapoli.

New York securities firms will pay employees $20 billion in cash bonuses, up from $18.5 billion for 2011…

The average cash bonus rose 9% to roughly $121,900. The figure increased more than the total cash bonus pool because it was shared among fewer workers than the prior year, the report said.

Employment totaled 169,700 jobs as of December 2012, 1,000 fewer jobs than in December 2011, as the securities industry shrank again in response to fearful markets and muted client activity.

As Brett Philbin writes, the bonuses last year were 42% lower than the 2006 amount, while there are also considerably fewer workers compared to pre-crisis levels:

The report estimated that Wall Street lost 28,300 job from November 2007 to January 2010, but has added only 8,500 so far during the recovery from the global financial crisis.