Key Tronic Corp (Nasdaq: KTCC) Announces Second Quarter Results

Palm Beach, FL 2/1/12 (StreetBeat) -- Key Tronic Corporation (Nasdaq: KTCC), a provider of electronic manufacturing services (EMS), today announced its results for the quarter ended December 31, 2011.

For the second quarter of fiscal 2012, Key Tronic reported total revenue of $84.5 million, up 38% from $61.0 million in the same period of fiscal 2011. For the first six months of fiscal 2012, total revenue was $154.2 million, up 24% from $124.4 million in the same period of fiscal 2011.

Net income for the second quarter of fiscal 2012 was $3.2 million or $0.30 per diluted share, up 83% from $1.7 million or $0.17 per diluted share for the same period of fiscal 2011. Net income per diluted share for the second quarter of fiscal 2012 included $0.11 for research and development tax credits. For the first six months of fiscal 2012, net income was $4.4 million or $0.42 per diluted share, up 27% from $3.5 million or $0.33 per diluted share for the same period of fiscal 2011.

For the second quarter of fiscal 2012, gross margin was 8% and operating margin was 3%, compared to 9% and 3%, respectively, in the same period of fiscal 2011. In the third quarter, the Company expects to see its gross margin increase to around 9%.

“We’re very pleased with our strong growth in revenue and earnings for the second quarter of fiscal 2012, driven primarily by the rapid production ramp up for new customer programs,” said Craig Gates, President and Chief Executive Officer, “During the quarter, we achieved the highest quarterly revenue in Key Tronic’s history and significantly increased our operating efficiencies from recent quarters. We also continued to diversify our future revenue base by winning new programs involving irrigation equipment, gaming devices, electric transportation and military equipment.

“Moving into the third quarter, we expect continued strong growth in revenue and earnings. As a result of the increasing recognition of our unique combination of world-class engineering, global logistics and cost-effective production, we’re capturing market share from many of our competitors. As we grow our business, we remain focused on maintaining outstanding customer service, carefully managing our operating expenses and maximizing our return on invested capital.”

Business Outlook

For the third quarter of fiscal 2012, the Company expects to report revenue in the range of $92 million to $97 million, and earnings in the range of $0.30 to $0.35 per diluted share. The expected earnings range assumes an effective tax rate of 30%.

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Corinthian Colleges (Nasdaq: COCO) posts Q2 profit, tops market

Palm Beach, FL 2/1/12 (StreetBeat) -- Corinthian Colleges Inc (Nasdaq: COCO) reported a second-quarter profit that beat market estimates as the new student enrollment declined at a slower pace from last year, and the for-profit education provider forecast a strong third quarter.

Corinthian forecast third-quarter earnings of 15 cents to 17 cents, versus analysts' average estimate of 13 cents. It expects new student enrollment to be flat in the quarter.

Santa Ana, California-based Corinthian's second-quarter new student enrollment fell at a moderate pace of 3 percent.

The company, which runs the Everest, Heald and WyoTech campuses, has been facing a sharp decline in student numbers after it tightened admission standards to comply with new education rules.

Corinthian's October-December net income was $1.8 million, or 2 cents a share, compared with a net loss of $163.7 million, or $1.94 a share, a year ago. On a adjusted basis, the company earned 4 cents a share.

Revenue fell 14 percent to $415.5 million.

Analysts on average had expected earnings of 1 cent a share, on revenue of $415.2 million, according to Thomson Reuters I/B/E/S.

Shares of the company closed at $3.03 on Tuesday on the Nasdaq.

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Amazon’s (Nasdaq: AMZN) Revenues Disappoint

Palm Beach, FL 2/1/12 (StreetBeat) – Amazon.com’s (Nasdaq: AMZN) plans for world domination hit a slight bump on Tuesday. For years, the retailer has been telling Wall Street to ignore how little money it was making and focus instead on the fact that it was bringing in more and more customers and keeping them so happy they never went anywhere else for anything.

In Amazon’s fourth-quarter results, however, investors finally glimpsed off in the distance that growth beginning to flatten. Its revenue rose to $17.43 billion, up 35 percent. Most retailers would die happy with such a jump. But for the e-commerce leader, sales were nearly a billion dollars short of what analysts had been expecting.

Even as investors are panting for Facebook’s public stock offering, established Internet stars are disappointing. Amazon’s poor showing came on the heels of a similar miss from Google. Among the reasons for Amazon’s missed expectations: Video games were lackluster. There were supply issues from flooding in Thailand. And maybe there was a bit of backlash.

In December, Amazon.com created an uproar by encouraging customers to use a price-checking app on Main Street and in the malls, and then return to Amazon for a better deal. Booksellers, who have long felt themselves in the retailer’s cross hairs, were particularly offended. A tentative “buy local” movement sprang up.

In its earnings release, Amazon also warned that it could lose money in the current quarter, offering a range between $100 million in operating income and a $200 million loss. Shares of Amazon, which rose $2.29 to $194.44 on Tuesday, immediately slumped in after-hours trading by $18.

“With the valuation Amazon is carrying, you got to perform,” said Colin Gillis, senior technology analyst for BGC Financial. “You’ve got to be like Apple — smash through the numbers people are afraid even to whisper. Instead, they’re only making slightly over a penny on every dollar in revenue. That’s pathetic in any industry.”

Other analysts were more optimistic. “The long-term story is very much intact,” said Scott Devitt of Morgan Stanley, although he noted that investors might not be buying the stock for the next six months or so. The biggest question on the mind of analysts going into this earnings report was, How well did the Kindle Fire do? But they knew what the answer was, which was that Amazon was not going to tell them.

“We were very pleased with the great growth we had,” said Tom Szkutak, Amazon’s chief financial officer, in a conference call. The only data Amazon would share about Kindles is that their sales were up 177 percent from the fourth quarter of 2010.

“That seems like a healthy business,” Mr. Devitt said.

If sales were weaker than expected, profits were higher than forecast. Net income decreased 58 percent to $177 million in the fourth quarter, or 38 cents a share, compared with $416 million, or 91 cents a share, in the year-earlier period. Analysts expected sales of $18.3 billion and earnings per share of 17 cents, according to FactSet Research. The company said earlier that it might lose money during the quarter, traditionally the best part of the year for any retailer.

Amazon has been in the enviable position of growing much faster than the industry itself. But all that meteoric growth, stoked by selling goods as cheaply as possible and then shipping them either for a pittance or free, does not leave much room for profit. Its margins declined for four quarters before rebounding in the fourth quarter.

Yet even as margins have suffered, the stock has been strong. Ever since its founding in 1994, Amazon has built for the future. “We’d rather have a very large customer base and low margins than a smaller customer base and higher margins,” Amazon’s chief executive, Jeff Bezos, explained in a recent interview with Wired magazine.

For a company often thought of as virtual, with its e-books and vibrant cloud computing service, Amazon is increasingly rooted in the real world. Delivering sneakers and diapers and Kindles to the masses requires a lot of warehouses and a lot of warehouse workers. Nomura Securities estimated this week that Amazon would add the rough equivalent of 450 Costco stores from 2011 to 2016. Costco, by comparison, has 592 stores worldwide. “E-commerce is a long secular growth story,” Brian Nowak, a Nomura analyst, said in the report. “We’re still at only 5 percent penetration. So there’s a lot of runway left.”

The Fire was unveiled with the sort of splash not seen since Apple introduced the iPad two years ago. But where the acclaim for the iPad only grew once users had it in hand, the Kindle Fire has been subject to some grumbling by some early customers, which has in turn produced crankiness from the device’s fans.

Despite the dispute, which shows signs of resembling a high-tech Hatfield and McCoys-style feud, the $199 Fire and the $499 iPad are not necessarily competitors. Analysts have been estimating that Amazon sold as many as six million Fires plus millions more traditional Kindles.

Apple said last week that it sold more than 15 million iPads during its fourth quarter, drawing customers who might otherwise have bought Macs or Windows-based PCs. The introduction of the Fire, said Apple’s chief executive, Timothy D. Cook, did not have “an obvious effect” on the iPad.

About 27 percent of the Fire reviews on Amazon’s own site have mixed to negative feelings about the device, down from a third immediately after its debut.

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AOL's (NYSE: AOL) Budding Ad Revenue Bumps Stock

Orlando, FL 2/1/12 (StreetBeat) – AOL’s (NYSE: AOL) success in boosting its display ad revenue for the third straight quarter sent its stock up 4.5% in pre-market trading.

AOL still saw profits drop precipitously. Fourth-quarter net income fell 66% to $22 million or 23 cents per share. Revenue declined 3% to $576.8 million.

Some goods news though: Wall Street expected greater revenue losses with EPS closer to 20 cents. And this was the lowest rate of total revenue decline in five years, AOL said.

AOL has tried to supplement its faltering subscription service with acquisitions of TechCrunch and The Huffington Post. By selling ads through these new media portals and on its homepage, AOL’s advertising revenue climbed 10% to $363.8 million. AOL’s new hyper-local news network, Patch, reported its traffic, advertisers, and ad impressions grew 100% year over year.

“AOL took a large step forward in Q4, and I am very pleased with how we ended the year,” CEO Tim Armstrong said.

For the year, AOL saw profits return after a terrible 2010. Net income reached $13.1 million or 12 cents per share—up from a loss of $782.5 million a year ago. Revenue dropped 9% to $2.2 billion. Ad revenue was up though, reaching $1.3 billion from $1.2 billion a year ago.

Both domestic and international demand fueled the growth of its display ad revenue, which totaled $148.2 million. Search advertising revenue fell to $88.4 million, and AOL subscribers continue to jump ship with subscription revenue falling to $194.6 million.

While AOL tries to revamp its business model to focus on display ads, it faces stiff competition from Facebook, Google, Microsoft, and Yahoo!. Building to what may be the largest U.S. Web IPO ever, Facebook is now the leader in display ads, and now accounts for 28% of all U.S. display ad, according to a new report from comScore.

AOL was trading at $17 before the opening bell. Google, Microsoft, and Yahoo were little changed.

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Deep Down (OTCBB: DPDW) Announces Multiple Awards

Orlando, FL 2/1/12 (StreetBeat) – Deep Down, Inc. (OTCBB: DPDW), an oilfield services company specializing in complex deepwater and ultra-deepwater oil production distribution system support services, today announced it has been awarded multiple contracts for subsea hardware and deployment equipment orders worth in excess of $2.6 million. Two orders were placed by a major controls OEM and the third order placed by an international installation contractor.

Deep Down, Inc. will be manufacturing Umbilical Termination Assemblies (UTA), Flying Leads, Umbilical Termination Heads (UTH), Rapid Deployment Cartridges, Moray® and Flying Lead Deployment Frames; the majority of the work is scheduled to be completed in the first quarter 2012, with the remainder completed in the beginning of the second quarter 2012. The products and equipment will be used on three international projects in the Far East and Mediterranean and one project in the Gulf of Mexico.

The patent-pending Moray® Termination System contains a light-weight and compact termination head and very flexible steel tube bundle allowing for easy make up of the heads by the ROV on the ocean floor.

Ron Smith, Chief Executive Officer stated, "These awards continue to build upon Deep Down's expansion into the international oil and gas market. Deep Down continues to gain recognition outside of the Gulf of Mexico as a solution provider. By working with our customers, we are able to provide them with innovative cost effective solutions for their offshore projects."

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AmeriLithium (OTCBB: AMEL) Announces Positive CSAMT Survey Results on Lithium Brine Project

Tallahassee, FL 2/1/12 (StreetBeat) – AmeriLithium Corp. (OTCBB: AMEL) is pleased to announce geophysical exploration has been completed on the Company's Jackson Wash lithium project in Esmeralda County, Nevada, and that positive results from the 2nd stage controlled source audio magneto-telluric (CSAMT) survey have been received. AmeriLithium has a 100% interest in the project, which comprises 65 placer mining claims totaling ~2,450 acres (3.83 square miles) and covering the center of an identified gravity low to the east of Nevada's lithium-producing Clayton Valley. The project lies to the immediate east of the Montezuma Range; to the immediate west of the range lies the Clayton Valley playa.

In regard to AmeriLithium's four Nevada-based properties – Paymaster, Clayton Deep, Full Monty, and Jackson Wash – the Company has now received all reports associated with both the gravity and CSAMT surveys for each of the properties, thereby concluding the final phase of a two-phase geophysical exploration program. The purpose of the geophysical exploration program has been to identify geologic conditions favorable for lithium-bearing brine accumulation beneath the four Nevada claim blocks and to identify targets on each property for exploration drilling during the next phase of exploration. Planning and permitting for a targeted drilling program has begun. In particular, the new drill program will include further development of the first stage drilling that was completed on the Company's Paymaster property on April 11, 2011, which included the successful drilling of the initial 3 holes of that property's 8-hole drill program.

In regard to the completion of the Jackson Wash property CSAMT survey, findings from a previous gravity survey were used to place the CSAMT survey lines over the deepest central portion of the Jackson Wash basin. The stratigraphic and structural detail shown in the data for both survey lines is excellent and indicates the presence of highly conductive layers and geologic structures that are strong indicators of brines below the surface within the Jackson Wash claim block.

Zonge International completed the CSAMT survey in December 2010 over the central portion of the Jackson Wash property. A detailed interpretive report on the methodology and results of the CSAMT survey has been received from J.L. Wright Geophysics. Wright compiled and interpreted the data collected by Zonge with the objective of defining structures and stratigraphy in the basin that resemble the deposit model for lithium brine deposits in nearby Clayton Valley. As an aid to the development of a lithium brine test drilling program, Wright has identified and described geologic conditions similar to the Clayton Valley deposit model.

Sedimentary units are evident in the interpreted data along both survey lines. Distinct low-resistivity layers stand out on both survey profiles as separate from high-resistivity beds above and below. Of significance is the presence of a low-resistivity layer approximately 250 to 400 meters thick lying between 500 and 750 meters below the surface. In addition, a 200-meter thick high-conductance layer is present at a shallower depth (350 meters) in the center of the basin. These are similar geologic conditions to those in which lithium has accumulated in Clayton Valley and from which Chemetall-Foote has been producing lithium. According to Chemetall reports, the presence of highly conductive (low resistivity) sedimentary units in proximity to basin-bounding and inter-basin faults is an important indicator of the presence of brines in Clayton Valley.

While the presence of low resistivity in sedimentary layers within the Jackson Wash Basin and their proximity to inter-basin faults is highly suggestive of brine aquifers, it does not guarantee the presence of economic lithium-bearing brine concentrations. Rather, the only true test for economic concentrations of lithium is drilling, groundwater sampling, and laboratory analysis, which comprise the next step in the Company's exploration process.

Four drillhole locations have been identified based on the CSAMT results. Drilling depths are anticipated to be between 275 and 845 meters. Drillholes will be designed to penetrate into the low-resistivity units and collect water samples for analysis. An additional target will be the base of the conductive layer in order to confirm the stratigraphy in the basin.

Matthew Worrall, AmeriLithium's CEO, commented: "With the results from the Jackson Wash CSAMT survey in hand, we now have all of the required data to put together what we believe will be an effective drill program for all four of our Nevada properties. Over the coming weeks we'll be utilizing the data from those recent reports and the data received from the previous drilling to advance our exploration for commercial lithium-bearing brine concentrations in Nevada."

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3 Things To Know Before Trading

Tallahassee, FL 2/1/12 (StreetBeat) -- Stocks were mixed in Asian trade. Shanghai was among the worst with a decline of one percent, Australia fell about 0.9% and the Hang Seng was down a quarter percent, but the Nikkei added a slight fraction. European indexes are broadly higher, with the Dax up two and a half percent and the Footsie better by one and a half percent. US stock futures are up at least three quarters of a percent as I write.

*The January reading China’s manufacturing sector Purchasing Managers Index was up two tenths on the month to 50.5, better than the fractional decline that was expected.

*The preliminary reading of Germany’s EU harmonized CPI was -0.5% on the month and +2.3% year on year; both results were one tenth under the forecasts.

*The final January reading of Germany’s manufacturing sector PMI was revised up one tenth to 51.0.

*The January reading of Switzerland’s manufacturing sector PMI was much weaker than expected, it fell two points to 47.3, but had been forecast to increase to 51.2.

*The January reading of the UK’s manufacturing sector PMI was well above the estimate, at 52.1; this was expected to improve only fractionally to 50.0.

*They are still talking in Greece…

*US mortgage applications were down 2.9% in the week ended January 27, according to the Mortgage Bankers Association; both key components fell slightly on the week.

*ADP is scheduled to release at 7:15am CST their estimate for the net change in January for private sector non-farm payrolls, it is expected to be +182k. The January reading of the ISM Manufacturing Index is due out at 9:00am CST, it is forecast to be 54.5, up from a revised lower December result of 53.1; the Prices Paid component is expected to be up 2.5 points to 50.0. The December reading of Construction Spending is also due out at 9:00am, it is expected to be up 0.5% on the month.

*The Treasury is scheduled to announce at 8:00am CST the details for next week’s refunding auctions of 3 Year and 10 Year Notes and 30 Year Bonds.

*The weekly report on energy inventories is due out at 9:30am CST. Stocks of Crude Oil are forecast to increase 2.6 million barrels, Gasoline inventories are expected to rise 500k and the estimate for Distillates is -1.375 million.

*The automakers are set to release their January vehicle sales results today; total vehicle sales are anticipated to be an annualized rate of 13.50 million units.

*The Fed is scheduled to buy Treasuries today that are due to mature between 8/15/22 and 2/15/31; the results of the operation will be announced just after 10:00am CST.

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