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Citi(C), Aflac(AFL), SanDisk(SNDK) and DOW

Published on February 3, 2009

Citi(C), Aflac(AFL), SanDisk(SNDK) and DOW

February 3, 2009

There is a lot of earnings data this week and today is also heavy. There doesn’t appear to be a clear direction. As of this writing futures are pointing to modestly higher opening. Here are four heavyweights-

Citigroup (C) issued a quarterly progress report sharing how they are deploying $45 billion in capital it received from the Treasury under the TARP. “Our responsibility is to put these funds to work quickly, prudently and transparently to increase available lending and liquidity,” said CEO Vikram Pandit in a statement included in the report. To that end, Citi said it is putting $36.5 billion to work into following areas- a) $25.7 billion to U.S. residential mortgage activities, b)$2.5 billion of personal and business loans, c) $1.0 billion in student loans, d) $5.8 billion in credit card lending and e)$1.5 billion in corporate loan activity.

Insurance provider Aflac (AFL) missed earnings and revenue expectations in the fourth quarter, but said it does not anticipate a need for raising additional capital and may be that’s what is driving their stock price higher in the pre-market activity.  Recently AFL has been very volatile.

SanDisk (SNDK) reported a steep loss. For the fourth quarter, SanDisk reported a non-GAAP loss of $1.65 per share, excluding nonrecurring items, $1.05 worse than the First Call consensus that expected a loss of $0.60 per share. Revenues plummeted 30.6% year-over-year to $864 million compared to the $766.7 million consensus. SNDK is losing about 20% in the pre-market activity.

Dow Chemicals (DOW) lost $1.55 billion in the fourth quarter, due in large part to restructuring costs including its decision to slash 11 percent of its work force and a 23 percent drop in sales amid a global slump. As of yesterday’s close, DOW is selling for almost half the book value, and at a price level seen in 1980s. It credit default swaps widened by 79 basis points to 619 basis points, or $619,000 a year to protect $10 million of debt.

Tough times indeed, but opportunity time as well, depends on how you view it.

Profitable Trading, OP

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