Wed07302014

News

‘Brown is the new green,’ says local water district

‘Brown is the new green,’ says local water district


Lina Broydo/Special to the Town Crier
Are downtown Los Altos flower pots getting too much water? The Santa Clara Valley Water District plans to hire “water cops” to discourage overwatering.

The Santa Clara Valley Water District is spendi...

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Schools

Foothill camps prepare local students for STEM careers

Foothill camps prepare local students for STEM careers


Photos Ellie Van Houtte/Town Crier
Middle school students make robotic hands using 3-D printers during a STEM Summer Camp at Foothill College.

From designing roller coasters to developing biodegradable plastics, high school students received an i...

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Community

Local entrepreneur opens home to Afghan and Rwandan women

Local entrepreneur opens home to Afghan and Rwandan women


Ellie Van Houtte/Town Crier
Businesswomen Joan Mazimhaka of Rwanda, third from left, and Fakhria Ibrahimi of Afghanistan, in orange, traveled to the U.S. with a 26-woman delegation through the Peace Through Business program.

Employees scoop ice ...

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Comment

Moving on: The Rockey Road

Just over a month ago, we decided to put our house on the market. My husband and I had been tossing around the idea of moving back to the area where we grew up, which is only approximately 40 minutes from here. Of course, Los Altos is a great place t...

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Special Sections

Looking for life without lows, local diabetic tests artificial pancreas

Looking for life without lows, local diabetic tests artificial pancreas


Photo by Ellie Van Houtte/Town Crier
Dr. Trang Ly, left, reviews blood sugar readings on a smartphone with Los Altos resident Tia Geri, right, and fellow participant Noa Simon during a closed-loop artificial pancreas study for Type 1 diabetics.
...

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Business

Halo heads to Los Altos: Blow-dry bar founder opens new First Street location Monday

Halo heads to Los Altos: Blow-dry bar founder opens new First Street location Monday


ElLie Van Houtte/ Town Crier
Armed with blow dryers, Halo founder Rosemary Camposano, left, and store manager Nikki Thomas prepare for the blow-dry bar’s grand opening on First Street Monday.

A blow-dry bar is set to open downtown Monday, and i...

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Books

"Frozen in Time" chronicles harrowing WWII rescue attempts


Many readers can’t resist a true-life adventure story, especially those that shine a spotlight on people who exhibit supreme courage in the face of adversity and end up surviving – or not – against the odds.

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People

CARSTEN HUGHES

Long time Los Altos resident, Dr. Alfred Hughes, died May 1st after a long illness. Dr. Hughes was born in 1927 in Maspeth, NY. He served in the US Army from 1945-6, attended Brooklyn Polytechnic University, then graduated from Reed College in Portla...

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Travel

Travel Tidbit: Ritz-Carlton, Lake Tahoe offers spa getaway

Travel Tidbit: Ritz-Carlton, Lake Tahoe offers spa getaway


Courtesy of Ritz-Carlton
The Ritz-Carlton in Lake Tahoe offers fall getaway packages that include spa treatments and yoga classes.

Fall in North Lake Tahoe boasts crisp mornings and opportunities to spend quality time in the mountains. Specially ...

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Stepping Out

'Wizard' winds down at Bus Barn

'Wizard' winds down at Bus Barn


Town Crier file photo
Local actors rehearse a scene from “The Wizard of Oz.”

Los Altos Youth Theatre and Los Altos Stage Company’s collaborative production of “The Wizard of Oz” is slated to close Sunday at Bus Barn Theater, 97 Hillview Ave.

T...

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Spiritual Life

Stanford University appoints new dean for religious life

Stanford University appoints new dean for religious life


Shaw

Stanford University named the Very Rev. Dr. Jane Shaw, dean of Grace Cathedral in San Francisco, its new dean for religious life.

Provost John Etchemendy announced Shaw’s appointment July 21, adding that she also will join the faculty in...

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Magazine

Festival features fun for everyone

Festival features fun for everyone


TOWN CRIER FILE PHOTO
The Los Altos Arts & Wine Festival boasts more than 375 craft and arts booths.

This weekend’s 35th annual Los Altos Arts & Wine Festival promises to be jam-packed with fun activities for just about everyone. The eve...

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Stocks tumble on weak earnings

The stock market correction finally arrived Friday when the Dow Industrials closed down 318 points. That is important because it has been more than two years since the last stock market correction. Investors fleeing from stocks are wondering whether this will be the end of the correction.

The stock market fall comes over weak corporate earnings of blue chip stocks like IBM Corp., Starbucks Corp, and McDonald’s Corp. At some point, companies will have to produce revenue growth to translate into real earnings before the market reaction turns positive.

Earnings-reporting season is in full swing and the near-term action deserves a closer look. Fourth-quarter results hold importance because they often come with guidance for the year ahead. The December reporting quarter is crucial because it tells you what the future holds for a company.

Last week’s drop also stems from worries about China’s manufacturing growth and China’s economic growth. Between China and earnings season, analysts have been looking for that long overdue correction and this is kindling the fire.

Expectations for the March quarter are modest, pointing to just 4 percent year-to-year growth. The market’s reaction to quarterly results is a great gauge for guidance.

Traditional Town Crier “50” titans such as Hewlett-Packard Co. (HPQ; $28.88), IBM Corp. (IBM; $178.87), Microsoft Corp. (MSFT; $36.27) and Oracle Corp. (ORCL; $36.68) have struggled with earnings in the latest quarter and should be drawing attention.

Some companies have grown so big that their acquisitions barely move the needle, while others face threats from nimble startups that offer cloud-based software. These new cloud-based software companies undercut the bulky, lucrative contracts that once assured the giants steady income and growth.

Without improved signs of profit growth, your favorite stock may have trouble making headway, so keep a close eye on the market and the next hundred companies that report earnings for the December quarter.

One Town Crier “50” stock is reasonably priced but reported a loss for the December quarter:

• IBM is a large and diversified tech company whose stock is widely held by institutions and everyday investors. You could spend hours breaking down the business of IBM, but it is still a company that generates more than $100 billion in annual revenue through the many services it offers. However, earnings determine stock prices.

After the market closed Jan. 21, the company reported its quarterly revenue, recording its steepest drop in more than four years. The results immediately lowered the Dow Jones industrial average because of the vast holdings throughout the market.

Fourth-quarter results for the firm revealed earnings of $6.13 per share on $27.8 billion in sales, short of the $28.25 billion analysts had expected. Cloud and software services continued to help IBM’s hardware business, but systems and technology revenue plunged 26 percent over a year to $4.3 billion.

IBM’s fourth-quarter revenue dropped 5.5 percent below expectations, and the hardware group’s revenue fell 27 percent. The stock price has tumbled, with some analysts dropping their target price to $175.

Reports circulated that IBM was trying to divest its x86 server segment, with both Dell and Lenovo reported to express interest. Last week Chinese PC maker Lenovo Group agreed to buy IBM’s low-end server business for $2.3 billion. The sale will allow IBM to focus on more profitable software and services.

Essentially, IBM is unable to grow, and it is using its buyback program to drive earnings growth. With the business in decline, there are times when the buyback is not enough. Free cash flow was down 16.7 percent year-over-year to $15 billion.

An analyst at J.P. Morgan Chase recommended that investors take profits from the stock, because there are limited catalysts that could boost investor sentiment.

Clyde Noel is a Los Altos Hills resident and longtime investor in stocks. A strong supporter of IBM, he has shares in his retirement program.

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