Fri07252014

News

Downtown green park pops up again in August

Downtown green park pops up again in August


Ellie Van Houtte/Town Crier
The Third Street Green debuts Aug. 3 on the 300 block of State Street in downtown Los Altos.

Another temporary park is poised to pop up in downtown Los Altos this summer.

According to Brooke Ray Smith, community devel...

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Schools

MVLA rolls out laptop integration this fall

MVLA rolls out laptop integration this fall


Town Crier File Photo
Starting in the fall, daily use of laptops in the classroom will be standard operating procedure for students at Los Altos and Mountain View high schools as the Mountain View Los Altos Union High School District launches a pil...

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Community

Generations blend behind the scenes at 'Wizard of Oz'

Generations blend behind the scenes at 'Wizard of Oz'


Altos Youth Theatre and Los Altos Stage Company rehearse a scene from “The Wizard of Oz.” ELIZA RIDGEWAY/ TOWN CRIER

A massive troupe of young people and grownups gathered in Los Altos this summer to stage the latest iteration of a childhood sta...

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Sports

Football in July

Football in July


Town Crier file photo
Mountain View High’s Anthony Avery is among the nine local players slated to play in tonight’s Silicon Valley Youth Classic.

Tonight’s 40th annual Silicon Valley Youth Classic – also known as the Charlie...

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Comment

Pools should be included: Editorial

Los Altos residents should be receiving calls this week from city representatives conducting a survey to determine priorities for a revamped Hillview Community Center.

Notice that we did not say “civic center” – chastened by a lack of public support...

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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

Palo Alto law firm coming to 400 Main

Palo Alto law firm coming to 400 Main


Ellie Van Houtte/ Town Crier
Longtime Palo Alto law firm Thoits, Love, Hershberger & McClean plans to open an office at 400 Main St. in Los Altos after construction is complete in November.

A longtime Palo Alto law firm plans to expand int...

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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

RICHARD PATRICK BRENNAN

RICHARD PATRICK BRENNAN

Resident of Palo Alto

Richard Patrick Brennan, journalist, editor, author, adventurer, died at his Palo Alto home on July 4, 2014 at age 92. He led a full life, professionally and personally. He was born and raised in San Francisco, joined the Arm...

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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

PYT stages 'Shrek'

PYT stages 'Shrek'


Lyn Healy/Spotlight Moments Photography
Dana Cullinane plays Fiona in Peninsula Youth Theatre’s “Shrek The Musical.”

Peninsula Youth Theatre presents “Shrek The Musical” Saturday through Aug. 3 at the Mountain View Center for the Performing Arts...

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Spiritual Life

Foothills Congregational: 100 years and counting

Foothills Congregational: 100 years and counting


Courtesy of Carolyn Barnes
The newly built Los Altos church in 1914 featured a bell tower and an arched front window. Both continue as elements of the building as it stands today.

Foothills Congregational Church – the oldest church building in L...

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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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