Filed under: Forecasts, Products and services, Consumer experience, Recession

Economic forecasters and analysts are beginning to give in to recession language, with 51% of respondents to a poll conducted by the National Association for Business Economics (NABE) indicating they believe that a stalled economy is where we may be headed. An Associated Press report indicates that 70% of all survey respondents feel the economy shall grow 3% or less in the first half of this year. A whopping 30% of respondents indicated they feel the economy shall actually contract.

Associated Press said, “The majority of forecasters polled — 51 percent — thought the economic growth during the first half of this year would clock in between zero and 1 percent, which would still mark a feeble showing. Sixteen percent pegged growth in the first half at between 1 and 2 percent, while only three percent put it at between 2 and 3 percent.”

The question is whether or not consumers and their discretionary incomes shall tip the economic balance into classically defined recession. While inflation has a greater portion of personal incomes being utilized for the necessities of life, these days it’s generally the optional “extras” that stimulate economic growth numbers. Recreational electronics, home entertainment devices, and items of fad and fashion make up the bulk of growth industries today. To what extent will they bear up and in what measure will they support domestic economy?

Your guess is as good as mine…

Gary Sattler is a freelance blogger and former sole proprietor of a thriving retail establishment.

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Filed under: Products and services, Microsoft (MSFT)

Several years ago, I talked to the CEO of Farecast, an upstart online travel company. However, the company had a very special twist. That’s, it leveraged the big amounts of data in the airline industry to predict the pricing of airfares.

I thought it was a cool idea. And, interestingly enough, so did Microsoft (NASDAQ: MSFT), which recently concurred to buy the company (the price tag was not disclosed).

Then again, Microsoft had some visibility into the operations of Farecast - since both companies are partners (in MSN.com).

So far, there are few details on the transaction (although, it sounds like we will hear more soon). But, it does show the importance of using data to build companies - essentially, next-generation companies. What’s more, with the turmoil in the airline industry, there should be lots of opportunity for on the web operators.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Filed under: Earnings reports, Press releases, Products and services, Lilly (Eli) (LLY)

Shares of Eli Lilly & Co. (NYSE: LLY) are tanking after the drugmaker reported worse-than-expected first quarter earnings.

Net income more than doubled to $1.06 billion, or 97 cents a share, as sales of Cialis and Cymbalta climbed. Revenue rose 14% to $4.81 billion from $4.23 billion. Excluding one-time items profit was 92 cents, below the 96-average estimate of analysts surveyed by Thomson Financial. Revenue was expected at $4.83 billion. Thanks to a lower tax rate, company raised its 2008 forecast to $3.90 to $4.05, from $3.73 to $3.90.

“Following strong performance in 2007, Lilly continued to deliver solid financial results in the first quarter of 2008,” commented John Lechleiter, the company’s new chief executive officer, said in the earnings release. “Double-digit sales growth was once again primarily driven by volume. …We also made appropriate investments in R&D to accelerate the progress of our mid-stage pipeline, resulting in six molecules advancing to the next stage on clinical development this past quarter, while at the same time delivering strong earnings per share growth for the quarter.”

The earnings miss was due to a larger-than-expected charge for halting development of the AIR insulin inhaler. The $145.7 million, or 9 cents a share, was at least $25.7 million more than the Indianapolis-based company estimated when it abandoned the drug last month, according to Bloomberg.

Miller Tabak analyst Les Funleyder told the news service that “In the near term, our earnings picture isn’t that bad for Lilly, but they’ve a Zyprexa problem. It is going off patent soon and Risperdal is going off patent in the second half of this year.”

Shares of Lilly fell $2.29, or 4.4%, to $49.78 in early trading.

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Filed under: Products and services, Consumer experience, Crocs Inc (CROX)

After losing about 40% of its value last week, Crocs (NASDAQ: CROX) has another headache.

The Wall Street Journal reports (subscription required) that “Japan has asked the maker of Crocs to look into changing the design of its footwear after complaints that children wearing the colorful plastic clogs have had their feet injured on escalators.”

The company has faced similar accusations in the United States and Crocs is reportedly working with the Elevator/Escalator Safety Foundation (I can’t believe that even exists) on public education initiatives.

What does all this mean for Crocs? Probably not much beyond the company’s already dismal financial results, even though the posters warning about the dangers of Crocs near escalators in Japan probably won’t do much to spur sales.

Crocs’ dramatic fall from grace has been an interesting story to watch, and the company just doesn’t seem to be able to catch a break.

The safety concerns are not disclosed as risk factors in Crocs’ latest 10-K, indicating that the company’s management might not see them as a material threat to sales.

The safety concerns are not disclosed as risk factors in Crocs’ latest 10-K, indicating that the company’s management may not see them as a material threat to sales.

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fyc writes “It seems that the educational MMORPG NASA’s proposing will no longer have a budget of $3 million. Instead, any prospective development partner is being asked to create and maintain the MMORPG for free under a ‘non-reimbursable Space Act Agreement’. It won’t be a one-sided agreement, though. From NASA’s RFP: ‘In exchange for a collaborator’s investment to create and manage a NASA-based MMO game for fun and to enhance STEM [science, technology, engineering and mathematics], NASA will consider negotiating brand placement, limited exclusivity and other opportunities.’”

Read more of this story at Slashdot.

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Bored MPA writes “The Times reports that PETA is to announce plans on Monday for a $1 million prize to the “first person to come up with a method to produce commercially viable quantities of in vitro meat at competitive prices by 2012.” PETA founder Ingrid Newkirk addressed the controversial decision by saying, “We don’t mind taking uncomfortable positions if it means that fewer animals suffer.” An unexpected and pragmatic move from an organization that has a strong base of support from pro-organic vegans.” The question I always had about this- if they have the ability to take one sample from one animal and clone it in a vat and feed this world, will the vegans be ok with that?

Read more of this story at Slashdot.

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eldavojohn writes “Painting the current scientific community as just as bad as the Spanish Inquisition, an extended trailer of Ben Stein’s “Expelled” has a lot of people (at least that I know) speaking. It looks like his motion picture plans to encourage people to talk out if they believe intelligent design or creationism to be correct. In the trailer he even warns you that if you’re a scientist you might lose your job by watching ‘Expelled.’ Backlash to the movie has started popping up and this might force the creationism/evolutionist debate to a whole new level across the massive screen and the web.” adholden points out a site called Expelled Exposed, which asserts that ‘Expelled’ “is simply an anti-science propaganda film aimed at creating controversy where none exists, while promoting poor science education that can and will severely handicap American students.”

Read more of this story at Slashdot.

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Filed under: Deals, Bad news, Industry, Citigroup Inc. (C), Merrill Lynch (MER), Housing

After Citigroup (NYSE: C) and Merrill Lynch (NYSE: MER) reported earnings, there was at least some hope that the worst was behind the banking and brokerage industries. But that might not be true. Over the weekend Royal Bank of Scotland (NYSE: RBS) stated it might have to raise $12 billion. Then there’s today’s news from massive Midwestern bank National City Corp. (NYSE: NCC).

NCC will probably announce that it has raised over $6 billion. According to The Wall Street Journal, “the Cleveland-based regional bank was hammering out final terms of the transaction with a group of investors led by Corsair Capital LLC, a New York private-equity group.”

Current NCC stockholders will be beaten to death. The new capital will come in at $5 a share. The stock trades at over $8 now. NCC’s 52-week high is over $38.

The news is another example of how management at banks doomed their shareholders. Financial companies took on huge amounts of subprime-backed paper. The investments looked safe, but, on closer examination, they carried great risks if the housing market began to falter. The underlying assumption was that home prices would move up forever and that mortgages had been granted to consumers at reasonable rates. Both of those assumptions were wrong.

When something looks too good to be true, it usually is.

Douglas A. McIntyre is an editor at 247wallst.com.

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epsas writes “On Cosmonaut’s Day (April 12th 2008) the Russian Federal Space Bureau (Roskosmos) announced that they will cease it’s $40,000,000-a-flight space tourism enterprise. Vitaly Perminov, the head of Roskosmos, elaborated on this statement by citing national criticism of the space tourism project; all the while reiterating Roskosmos’s focus on the International Space Station and the new launch site at Vostochny Cosmodrome: ‘Vitaly Lopota, the president of the Energia space rocket corporation, stated he believes space tourism is a forced measure compensating for insufficient financing of the Russian space program.’ This statement (made the day before) by Vitaly Lopota follows another announcement that ‘Energia is ready to send missions to the Moon and Mars if told to do so by the government.’”

Read more of this story at Slashdot.

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