- Pre-Market Indications

Wednesday, July 23, 2008

Opening View: Washington Mutual, E*Trade, and VMware Report Earnings

Costco Wholesale (COST: View sentiment for COSTsentiment, chart, options) is topping this morning's earnings news, despite being one of the few companies not releasing their quarterly results. Specifically, COST warned that fourth-quarter profit would be "well below" analyst expectations. The company blamed the forecast on higher fuel costs, greater-than-anticipated inventory charges, and slightly lower-than-planned merchandise profits. In an attempt to appease shareholders, COST expanded its stock buyback plan by $1 billion and reiterated its 16 cents-per-share quarterly dividend.

Diving into the heart of earnings season, Washington Mutual (WM: View sentiment for WMsentiment, chart, options) reported a second-quarter net loss of $3.33 billion, or $6.58 per share. The nation's largest thrift boosted loan-loss reserves by $3.74 billion to $8.46 billion during the latest quarter. Excluding one-time items, WaMu lost $3.34 per share compared to expectations for a loss of $1.05 per share.

Also in the financial sector, shares of E*Trade Financial (ETFC: View sentiment for ETFCsentiment, chart, options) are primed for a negative open after posting a gain of more than 10% yesterday. After the close last night, ETFC posted a second-quarter net loss of $94.6 million, or 19 cents per share. The loss was wider than expected, with the consensus on Wall Street looking for a loss of 14 cents per share. E*Trade noted that losses in its mortgage portfolio were a bit higher than expected, but that loan delinquency growth continued to moderate.

Elsewhere, Yahoo! (YHOO: View sentiment for YHOOsentiment, chart, options) reported that second-quarter profit and sales fell short of analysts' estimates. Net income for the period fell to $131 million, or 9 cents per share, while net revenue rose 8% to $1.35 billion. Analysts were looking for a profit of 10 cents per share on revenue of $1.38 billion.

Finally, shares of VMware Inc. (VMW: View sentiment for VMWsentiment, chart, options) are poised to open more than 11% lower this morning after the company's second-quarter earnings report. For the period, VMW reported an ex-items profit of $92 million, or 23 cents per share, on revenue of $456 million. The figures largely bested analysts' expectations for earnings of 22 cents per share on $459 million in revenue. However, the company scuttled the report when it placed third-quarter sales estimates between $462 million and $468 million, versus Wall Street's expectations for revenue of almost $497 million.

Opening View: Washington Mutual, E*Trade, and VMware Report Earnings

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