Jack in the Box Beats on EPS But GAAP Results Lag

Jack in the Box (Nasdaq: JACK  ) reported earnings on May 15. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended April 14 (Q2), Jack in the Box met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank significantly. Non-GAAP earnings per share increased significantly. GAAP earnings per share shrank significantly.

Gross margins increased, operating margins grew, net margins dropped.

Revenue details
Jack in the Box booked revenue of $355.6 million. The 16 analysts polled by S&P Capital IQ looked for net sales of $359.1 million on the same basis. GAAP reported sales were 30% lower than the prior-year quarter's $506.6 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.33. The 14 earnings estimates compiled by S&P Capital IQ forecast $0.31 per share. Non-GAAP EPS of $0.33 for Q2 were 22% higher than the prior-year quarter's $0.27 per share. GAAP EPS of $0.30 for Q2 were 38% lower than the prior-year quarter's $0.48 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 23.2%, 690 basis points better than the prior-year quarter. Operating margin was 8.3%, 290 basis points better than the prior-year quarter. Net margin was 3.7%, 60 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $369.2 million. On the bottom line, the average EPS estimate is $0.42.

Next year's average estimate for revenue is $1.55 billion. The average EPS estimate is $1.61.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 325 members out of 364 rating the stock outperform, and 39 members rating it underperform. Among 127 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 122 give Jack in the Box a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Jack in the Box is outperform, with an average price target of $36.38.

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Add Jack in the Box to My Watchlist.

Why Electro Scientific Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Electro Scientific (NASDAQ: ESIO  ) popped briefly today, up by 11% at the high, after the company reported earnings.

So what: Revenue in the fiscal fourth quarter totaled $39.6 million, which translated into a non-GAAP net loss of $1 million, or $0.03 per share. Both figures came out better than expected, as consensus estimates were calling for $38.1 million in revenue and an adjusted loss of $0.07 per share.

Now what: CEO Nick Konidaris said the company continues to progress along its restructuring and focus on laser microfabrication, which should make Electro Scientific leaner and more focused. The company has received its first orders for a new DiamondBlaze series of glass cutting systems, and total orders during the quarter were $44.1 million. Revenue in the coming quarter is expected to be in the "mid to high" $40 million range. Noble Financial has upgraded shares from "hold" to "buy" with a $15 price target.

Interested in more info on Electro Scientific? Add it to your watchlist by clicking here.

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An Early Look at Reynolds American's Earnings

On Tuesday, Reynolds American (NYSE: RAI  ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Cigarette demand has been in a long-term decline for decades, and as a major domestic tobacco producer, Reynolds American hasn't benefited from that trend. Can the company find a way to keep generating the impressive cash flows that have financed its lucrative dividends for so long? Let's take an early look at what's been happening with Reynolds American over the past quarter and what we're likely to see in its quarterly report.

Stats on Reynolds American

Analyst EPS Estimate	$0.69
Change From Year-Ago EPS	9.5%
Revenue Estimate	$1.92 billion
Change From Year-Ago Revenue	(0.5%)
Earnings Beats in Past 4 Quarters	2

Source: Yahoo! Finance.

Can Reynolds American light up its report this quarter?
Recently, analysts have gotten somewhat more optimistic in their predictions of Reynolds American's earnings. They've raised their estimates for the just-finished quarter by a penny per share, but they've boosted their full-year 2013 projections by a much larger $0.08 per share. The stock has responded somewhat favorably to that news, rising 8% since mid-January.

Reynolds American has been under attack from regulators, health agencies, and other government bodies for a long time, but tobacco opponents have redoubled their efforts. After Reynolds and peer Lorillard (NYSE: LO  ) fought back against an FDA attempt to force them to modify their cigarette packaging to include warnings with graphic images, the Centers for Disease Control have launched ad campaigns highlighting the health risks of smoking. New York City Mayor Michael Bloomberg made a proposal last month to force stores to get rid of tobacco displays, as a follow-up with the 10th anniversary of his then-controversial smoking ban.

As if that weren't bad enough, President Obama hit Reynolds American again earlier this month, with a proposed increase of $0.94 per pack on federal cigarette taxes attached as part of his budget proposal. The measure would raise $78 billion over the next decade, but it would inflate the prices that smokers have to pay and thereby put further pressure on sales for Reynolds and its peers.

But investors shouldn't ignore the fact that some tobacco companies may fare better than others. Lorillard expects decent sales growth of 5% to 6% both this year and next, while even the larger Altria (NYSE: MO  ) should manage modest revenue gains. By contrast, Reynolds is seen posting declining revenue throughout 2013 before bouncing back in 2014, suggesting that the company has work to do to preserve its competitive position.

As the first of the major domestic cigarette companies to report, Reynolds American will give you a baseline on which to judge the entire industry. Look closely at sales and profit figures not just as a gauge of Reynolds American's individual success but also as a gauge of the health of tobacco in the U.S. more broadly. In addition, as alternatives to traditional cigarettes become more popular, watch sales of its Vuse electronic cigarette as well as its smokeless tobacco division for signs of potential growth.

Altria has been the best-performing stock of the past 50 years, but as the number of smokers in the U.S. continues to steadily decline, is Altria still a buy today? To find out whether everyone's love-to-hate dividend stock is a savvy investment choice or a hazard to your portfolio, simply click here now for access to The Motley Fool's new premium research report on the company.

Click here to add Reynolds American to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Model S Owner Speaks Up: My Tesla Saved My Life

Model S fire in Tennessee. Source: Tesla Motors official blog.

After another Model S fire this week -- and three in less than six weeks -- many investors were waiting for Tesla Motors (NASDAQ: TSLA  ) to speak up. This time, however, it wasn't Tesla that spoke up to defend the safety of the company's Model S -- it was the owner of the third Model S that caught fire.

Speaking up
Following the first Model S fire -- which started after the car struck a metal object on the road -- Tesla was quick to respond to the negative headlines. In a company blog post, Elon Musk wrote a personal letter on the safety of the Model S and shared an email from the owner of the burned vehicle in which the owner showed enthusiasm for the Model S -- despite the fire.

Musk had quite a bit to say in his letter. 

Had a conventional gasoline car encountered the same object on the highway, the result could have been far worse. A typical gasoline car only has a thin metal sheet protecting the underbody, leaving it vulnerable to destruction of the fuel supply lines or fuel tank, which causes a pool of gasoline to form and often burn the entire car to the ground.

... the combustion energy of our battery pack is only about 10% of the energy contained in a gasoline tank and is divided into 16 modules with firewalls in between. As a consequence, the effective combustion potential is only about 1% that of the fuel in a comparable gasoline sedan.

For consumers concerned about fire risk, there should be absolutely zero doubt that it is safer to power a car with a battery than a large tank of highly flammable liquid.

Following the second fire, Tesla didn't post a story on the company's blog. It did, however, have a statement prepared for probing publishers. The statement again emphasized that the fire was a result of an accident, and not spontaneous. As cited by Business Insider, it read:

This was a significant accident where the car was traveling at such a high speed that it smashed through a concrete wall and then hit a large tree, yet the driver walked away from the car with no permanent injury. He is appreciative of the safety and performance of the car and has asked if we can expedite delivery of his next Model S.

After a third fire, however, Tesla responded with more than a statement. This time the owner of the third vehicle took it upon himself to passionately defend the Model S on the company's blog.

The story
After Juris Shibayama drove over a "rusty three-pronged trailer hitch that was sticking up with the ball up in the air," going 70 miles per hour, Tesla's Model S began communicating to the driver:

30-45 seconds after the driver felt the "thud" that seemed to lift the car up in the air, the Model S displayed a warning on the dashboard: "Car needs service. Car may not restart." Continuing to drive, and hoping to get home, there was a new message about one minute later: "Please pull over safely. Car is shutting down."

After pulling over, Shibayama said he was able to retrieve all of his belongings from the car and walk about 100 yards away from the vehicle, where he waited about two minutes before he began to see flames coming from the front of the car.

He vigorously defended the car's performance in the situation:

I am thankful to God that I was totally uninjured in any way from this impact. Had I not been in a Tesla, that object could have punched through the floor and caused me serious harm. From the time of impact of the object until the time the car caught fire was about five minutes. During this time, the car warned me that it was damaged and instructed me to pull over. I never felt as though I was in any imminent danger. While driving after I hit the object until I pulled over, the car performed perfectly, and it was a totally controlled situation. There was never a point at which I was anywhere even close to any flames.

The firemen arrived promptly and applied water to the flames. They were about to pry open the doors, so I pressed my key button and the handles presented and everything worked even though the front of the car was on fire. No flames ever reached the cabin, and nothing inside was damaged. I was even able to get my papers and pens out of the glove compartment.

This experience does not in any way make me think that the Tesla Model S is an unsafe car. I would buy another one in a heartbeat.

Shibayama wasn't the only owner to show enthusiasm for the car after the accident -- all three owners did.

Should investors be concerned?
For now, the statistics are still in Tesla's favor. Vehicle fires occur more frequently in traditional vehicles -- 152,000 vehicles fires per year and about 17 per hour. Comparatively, fires in Teslas happen about once in every 50 million miles driven, compared with about one in every 20 million miles driven for conventional gasoline cars.

Model S. Source: Tesla Motors Facebook page.

If these fires were spontaneous or happened in low-impact collisions, there might be reason for alarm. But all three of these were the result of high-speed accidents. Sure, investors should keep an eye on the development. But for now, there's no indication that the safest car ever tested by the National Highway Traffic Safety Administration has any defect.

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Would you move abroad for a job?

NEW YORK (CNNMoney) Moving to a new city for work is a pretty big deal. Moving to another country for a job is something else entirely.

Yet a new survey found 64% of people worldwide say they would be game to cross borders for their careers.

The Boston Consulting Group and The Network, an online recruiting firm, culled through more than 200,000 responses to their online survey, which sought to gauge who is willing to work abroad and why.

Respondents from less developed economies - such as Pakistan, Jamaica, Honduras and Ghana - were much more willing to uproot themselves than workers in more stable economies. But France and the Netherlands broke that mold: More than 90% of the French and Dutch respondents said they'd be willing to go abroad.

By contrast, less than half of the American, British and German respondents felt the same way. That's also true of the survey takers from Denmark, which is regularly found to be among the best for working parents and quality of life.

Location, of course, makes a difference when choosing a new place to live. Among those who said they were willing to work abroad, non-U.S. citizens said they would most like to work in the United States, while Americans looking to ex-patriate said the United Kingdom would be their top destination.

Survey takers also chose their favorite cities for jobs. Among all respondents, the top 10 cities were London, New York, Paris, Sydney, Madrid, Berlin, Barcelona, Toronto, Singapore and Rome.

Even though the global workforce has become more mobile than ever, not every type of worker is eager to pack her bags.

The BCG survey found that 70% of engineers, particularly! those in information technology and telecommunications, were willing to go abroad. Far less willing were those who worked in the fields of health and social work, with only about half saying they'd take a job in another country.

Related links:

Unlimited vacation days and other perks you don't get

Cure burnout, lose 25 lbs.: The perks of taking a sabbatical

Workaholism: Regain balance before you burn out

Liquidmetal Technologies & NanoTech Entertainment Reach Escape Velocity (LQMT, NTEK)

Looking for a couple of near-term trades that have a decent shot at rallying even if the broad market feels like it might pull back? Then take a look at Liquidmetal Technologies Inc. (OTCBB:LQMT) and NanoTech Entertainment, Inc. (OTCMKTS:NTEK). Although both LQMT and NTEK will be dismissed by some traders simply because they're OTC-listed stocks, for those traders willing to look past the exchange and appreciate the opportunity, the risk-versus-reward ratio is actually quite compelling.

For NTEK, the budding breakout actually has its roots in something that happened in early June. That's when NanoTech Entertainment shares broke above a falling resistance line that had been in place since late-2013. What's only evident on the daily chart (not shows) is how the stock pushed above the 100-day moving average line on Thursday, and put some distance between itself and the 100-day average today. It's the first time in months the stock's been above the 100-day line. The next big hurdle - not that one would need to wait to see it cleared before getting into NTEK - is the 200-day moving average line at $0.1016, Interestingly the reason the surge from late June crumbled so early one was the brush with the 200-day average line then, although the fact that the stock carried the rally so far, so fast, the surge didn't have much of a chance of lasting.

As the name suggests, NanoTech Entertainment makes entertainment technologies, ranging from gaming software to 3D advertising to IPTV hardware to coin-operated casino games, and more. Revenue has been growing rapidly for the past couple of quarters, and incredibly enough, the tine company is profitable.

As for Liquidmetal Technologies, though it too is in the shadow of a breakout (from a long-term pullback) that began in late May, it's only been today that LQMT has really sealed the deal. With today's push, shares are on the rise again, overcoming the slide from the initial breakout thrust. If the bears were going to fling this chart back into a downtrend, they would have done so. Today's bullish bump verifies the bulls are truly in charge here, even of erratically.

Liquidmetal Technologies has developed technologies that allow for ultra-tough coatings for a variety of instruments and devices, including cell phones, medical devices, and more. In fact, some of its materials can be used not just to coat, but to act as a hard material itself. Sales have been nil for over a year now, but there's a light at the end of the tunnel, and LQMT moves well on hope (even if only temporarily).

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Millennial Californian Pioneers World of Startup Fiction

Millennial Thursdays: Twenty-seven year old Eliot Peper has never worked in an office on the typical nine to five schedule,  saying, "I'm pretty sure I am allergic to structure."

And before an upcry about a wishy-washy millennial mindset, one needs to take a look at the author and consultant's life. In the past year and a half, the native Californian published his first book, "Uncommon Stock," traveled the world for nine months, married his fiancée and launched a start-up consultancy business. His take-away?

"The big thing is experiment. I know that many of my mistakes have been due to over planning," says Peper. "The fact is, if you really love something, getting a job doing that is not a prerequisite. I didn't have a publishing offer before I started writing a book."

Eliot Peper: published, married and world-traveled, all before thirty. Photo credit: Eliot Peper.

In 2012, the self-described voracious reader was frustrated that there wasn't any fiction about tech entrepreneurship and decided to write his own book. Set in Boulder, Colorado, "Uncommon Stock" is a startup thriller that explores the highs and lows of founding a tech company, as the main character Mara partners with best friend James. Published in Spring 2014, the book debuted at the top of its Amazon category and is available in both hardcover and as an e-book. For a free download of the first ten chapters, click here.

Peper finished writing the book on his nine-month world trip, penning the last pages while on a beach in the Maldives. He was toying with the idea of self-publishing when he was approached by the newly formed FG Press, a publishing company based in Boulder, Colorado. Created by members of the Foundry Group, FG Press wanted to bring their venture capital mentality to publishing.

"In the past, either you are going to self-publish and spend thousands and thousands of dollars to have a garage full of books that now you have to go out and figure how to sell, or you go to a publisher, they will print a certain amount of books and if they don't sell, the publisher has to give the money back. The bookstores can return books as long as they want," explains Sandy Grason, Chief Marketing Officer of FG Press. "That model doesn't really make a lot of sense."

"I don't see a distinction between self-publishing and traditional publishing," says Peper. "I see a distinction between professionally published books and unprofessionally published books."

"I think that people who are really wrapped up in the traditional publishing mindset, they are diluting themselves. Authors are personal brands. There is no way you can get around that," says Peper. "I've literally never bought a book because it was published by Random House."

However, Peper acknolwedges that self-publishing entails more work, and perhaps is not the best path for all writers.

"Writing is often an artistic endeavor, and your calling may or may not be, 'oh I want to manage a bunch of freelancers,'" explains Peper. Some self-published authors whose careers the millennial admires include James Altucher and Hugh Howey.

"What happened to movies and music ten years ago is what is happening to book publishing now," says Peper. "It is not really clear that the industry has learned much from those other two implosions."

One way that Peper does think the industry is innovating? Serialized publishing, wherein episodes of a book are released on a weekly basis, and oftentimes will be available for free during a certain block of time. If readers miss the deadline, they then pay for the content. He points to the example of Michelle Miller, another start-up fiction author who used this model with her recent book, "The Underwriting."

"Serial storytelling is awesome," says Peper. "We've seen it since the 19th century, the whole reason serial storytelling fell off is because of printer economics."

As e-readers change the publishing model again, serialized content is back in vogue. If you are interested in serializing your work, make sure that it can stand on its own merit. Peper advises to avoid cliffhangers, as they can seem gimmicky. Also, don't be tempted to give away content totally for free.

Lululemon: Headed for the Negative Space?

Yesterday, we took a look at the dismal first-quarter results at Lululemon Athletica (LULU). As the shares went into freefall in the wake of the quarter results and damp outlook, we wondered what analysts had to say…and while we waited, we wondered: would the bullish analysts continue to love the luxury yoga and athletic wear maker as they once had?

Bloomberg News

One answer came our way fairly quickly in the form of a report by Brian Tunick of JPMorgan. In an update earlier today, he spared no expense as he downgraded the company to Neutral from Overweight and slashed the price target to $42 from $56. Tunick explains why:

While we've tried to take a somewhat longer-term and global view despite near-term negative sales and EPS revisions, we see the risk-to-reward as skewing negative as the brand: 1) contemplates negative and decelerating store comps against a rising, potentially multi-year investment cycle, and still-superior margins; 2) navigates a CEO and, now, impending CFO transition; and 3) sets out on an accelerating international expansion program (20 stores in Europe and Asia each by year-end 2017) despite a domestic business that continues to battle traffic and assortment issues.

Tunick's change of heart (and thesis) comes from the company's PR blunders and the subsequent decline in customer demand:

When we initiated on Lululemon last fall, it was based on the assumption that core demand for lulu product remained intact in spite of growing competition and execution/public relations missteps in 2013. We thought a positive reception to a new CEO and the "easy" Luon compares in the first half would have been a nice bridge to a looming International roll-out. The deceleration in comparable store sales again in second quarter suggests waning demand on core product and ongoing execution issues at a time during which most of retail has seen a general pick-up.

Despite the downgrade, shares of Lululemon gained 1% to $37.61 today.

Fidelity’s Durbin: RIAs Thriving; Top Clients See Robo-Advisors as Positive Trend

Less than a year after a major reorganization of Fidelity Institutional's clearing business, Mike Durbin, president of Fidelity Institutional Wealth Services, reports that the RIA custodian is doing quite well, thank you, with total client assets under custody of more than $750 billion as of year-end 2013. In that year, 109 net new RIA firms, with an average of $127 million in assets under management, chose to custody with Fidelity IWS.

In an interview Thursday, Durbin noted that the data from new firms doesn’t include RIAs or registered reps who joined an existing RIA firm. “It’s a good business,” he said, helped by “the prevailing tailwind in this broadly defined independent space,” but also by “great new net asset flow from existing” Fidelity IWS RIA firms, along with new firms that are “being created and/or joining us.”

Admitting that “it helps to have an S&P at 1,900,” the trends pushing the independent space continue, he argues, notably “bigger and better RIAs getting bigger and better.” While not that long ago it was “rare to have a $1 billion RIA, now there are more and more” achieving that benchmark in AUM through organic growth and expansion either geographically or through mergers and acquisitions, producing a “growing cadre of pan-regional” RIA firms.

That overall growth in the industry, and Fidelity’s investment over the past few years in “reinventing” its technology platform and service offerings, “allows us to be more strategic with our clients,” Durbin said, helping in particular firms around the $500 million mark to leap over that hurdle where too often “the principal wears too many hats.” Instead, the fastest-growing firms, which Fidelity calls “high performers,” are being run as businesses, with a “clear segregation of duties and clear processes,” creating “real firms with real management teams that can provide leverage” to that overworked principal.

While Durbin says “we have a very strong base proposition for all our clients” around brokerage and custody, operations and service, the notion of keeping an eye on the bigger, fastest-growing firms "allows us to provide our more human-capital-intensive programs” to those high performers, such as practice management consulting or succession planning or even M&A financing through its partnership with Live Oak Bank. “We want to earn a seat at their conference room table with them,” he says of the fastest-growing firms.

There’s another angle to what Fidelity IWS does for its clients, Durbin says, and that’s where so-called robo-advisors come in. “Our role is to understand the landscape and educate our clients” about trends and technology, which is reflected in a number of initiatives at the firm. They include the launch of the physical and virtual Office of the Future (see article by Danielle Andrus on ThinkAdvisor). Fidelity also held a summit — Emerging Affluent/Digital Advisor Day — in which certain Fidelity clients gathered with “digital advisor,” or robo-advisor, technology pioneers “to explore how our clients can work with them or even create their own offering” along with options to leverage technology to attract and efficiently serve certain underserved client segments. In that vein, during its recent Executive Forum conference, to which Fidelity’s top broker-dealer (National Financial) and IWS (RIA) clients are invited, a poll of attendees focused on web-based digital advisors. It found that 74% saw the rise of robo-advisors as a “positive industry trend that is here to stay,” though 54% said that “digital advisors cannot replace the human element of advice.” However, only 13% of the executives surveyed said they felt “very informed” about robo-advisor models.

Durbin was quick to point out that clients at the Executive Summit tend to be more sophisticated, making it unsurprising that they “see the trend around the digital advisor” but also that they expect Fidelity to help educate and guide them around “new technologies that should be leveraged by us as their service providers." However, the attributes of robo-advisors — a user-friendly interface, unbundling of services, aggregating client data — suggests how advisor technology should evolve to help attract “these Gen X and Gen Y cohorts.”

So Fidelity’s role, Durbin concluded, was to help its clients “learn a lot more” and to help them “pivot to embrace these technologies,” and to determine “which ones can be a solution for them and which we should mimic.”

Durbin points outh that “if these technologies are embraced the right way, a broader segment of the U.S. population will be able to get advice,” and that we may well be “at the early stages of a virtuous cycle in getting people to be prepared for retirement and financial independence.”

Despite S&P 500's New High, Stocks Face Challenges

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Stocks ended the first quarter with a big rally; the Standard & Poor's 500 Index actually closed -- barely -- at a new high. The fact is, however, that the market overall was a muddle -- and likely to stay that way. And second quarters are often dicey.

On the Surface

The S&P 500 finished up nearly 15 points to 1,872.34 on Monday, breaking its old record of 1,872.25, set on March 18. It's up 1.3% for the year. The Nasdaq Composite rose 43 points, or 1%, to 4,199 and is sporting a small gain for the year, 0.5%. The Dow Jones industrials, up 135 points (0.8%) to 16,458, are still down slightly on the year -- about 0.7%.

The one-day gains for the Index, the Dow, and the Nasdaq Composite were their best in two weeks. The S&P 500 and the Dow ended March with their second monthly gains in a row, up 0.7% and 0.8%, respectively. But the Nasdaq fell 2.5% for the month and for the second time in three months.

The market overall gained support from energy and utility stocks. About 288 S&P 500 stocks were higher, led by First Solar (NYSE: FSLR) and steel-maker Allegheny Technologies Inc. (NYSE: ATI), up 22% and 18.6%, respectively.

So much for the surface numbers. This is one of those markets where you must dig through the numbers to get a clear understanding of what happened. March and the quarter didn't treat all stocks alike.

Digging Into The Numbers

Given the strong March of S&P 500 and the Dow, how to explain the Nasdaq's March fall? The short answer is that a lot of momentum stocks ran out of gas and fell, often heavily.

Netflix Inc. (NASDAQ: NFLX) fell $6.84, or 1.9%, to $352.03. For the month, the shares stumbled 21%; they dropped 4.4% for the quarter. Amazon.com Inc. (NASDAQ: AMZN) closed down 0.5% to 336.52. It fell 6.1% for the month and 15.6% for the quarter. Google Inc. (NASDAQ: GOOG) fell 8.3% for the month and 0.6% for the quarter. It at least ended the month as the world's thirst most valuable company. Staples (Nasdaq: SPLS) has no similar silver lining for its lackluster performance.

See also: Emerging Market ETFs Show Signs of Life

Biotechnology stocks suffered a particularly nasty beating in part because they were among the hottest of momentum plays in 2013 and the first two months of this year.

The NYSE ARCA Biotechnology Index fell 8.1%. Two exchange-traded funds fell more: The iShares Nasdaq Biotechnology Index ETF (IBB) fell 10.6%. The SPDR S&P Biotech ETF (XBI) dropped 12.9%. That was after rising 16.6% and 25.8%, respectively, in the first two months of the year. Alexion Pharmaceuticals (NASDAQ: ALXN) fell 18 from its intraday high of $185.43 on Feb. 27. Gilead Sciences Inc. (NASDAQ: GILD) was an S&P 500 laggard.

There were exceptions to the Nasdaq damage. The most visible winner may have been Microsoft Corp. (Nasdaq: MSFT), up 7% for the month and 9.6% for the quarter. Investors are optimistic with Satya Nadella replacing Steve Ballmer as CEO. Microsoft was the second-best Dow performer in March after AT&T Corp. (NYSE: T) and second-best for the quarter after Pfizer Inc. (NYSE: PFE).

Second Quarter Omens

What's ahead depends on the economy's performance and, probably to a larger-than-expected degree on geopolitical concerns.

According to the Stock Traders Almanac, April is the best month for Dow stocks and second-best for S&P 500 stocks. It's the third-best month for Nasdaq stocks. But April tends to tail off when tax season is done and investors have made annual Individual Retirement Account contributions for 2013. Then, comes May, one of the weakest months of the year and traditionally the start of the year's worst six months.

The geopolitical risk comes largely from the Russia, Ukraine and what happens to the Crimean region of Ukraine. Retail gasoline prices moved up 7.1% in the quarter, according to AAA's Daily Fuel Gauge Report as crude oil moved up 3.2%. And there will be continued worries about the health of China.Those concerns alone pushed a number of global investors to move money into the U.S. dollar. Gold fell nearly 2.9% for the month to $1,283.80 an ounce but is still up 6.8% for the year.

Should you worry about the Federal Reserve and interest rates? Probably not. Janet Yellen, the central bank's new chairman, has been signaling interest rates will remain low for the balance of 2014 and into 2015. The 10-year Treasury yield was 2.723% on Monday, up slightly from Friday.

A correction is possible. Stocks often fall 7% to 10% during the course of any year. A big ugly correction, like the crash in 2008, is probably not likely without a real catalyst such as a major and abrupt deterioration of the economy.

Posted-In: News Economics Federal Reserve Pre-Market Outlook After-Hours Center Markets ETFs Best of Benzinga

© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Why One Analyst Says Facebook Stock Is Hot Despite Site's Dwindling Cool Factor

As parents and grandparents have joined the ranks of Facebook's most active users, the site's bread and butter — the teenage and Millennial sets — have increasingly turned their attention to sites like Snapchat, Vine and Twitter. After all, when dorky Uncle Larry starts "liking" all your pictures, what used to feel cool can suddenly feel passe. But according to one analyst from SunTrust, Facebook's dwindling cool factor is hardly anything for investors to worry about.

In a research note released Monday morning, SunTrust analyst Robert Peck took a bullish stance on the company, reiterating Facebook's "buy" rating and raising its 2014 price target from $55 per share to $65 per share. Peck also revised Facebook's fourth quarter earnings estimate, adjusting its expected revenue to $2.37 billion, up from $2.29 billion. Facebook said Monday that it will release its fourth quarter earnings after the market closes on January 29.

Peck said his bullish outlook is driven by five factors, including the monetization of Instagram, a better ad quality and the integration of mobile ads. As for claims that teens aren't using the site? Peck sees less of a Myspace comparison than Google Google and Amazon analogies.

"[M]uch like how Google and Amazon aren't necessarily considered "cool" anymore, teens and older people still use those platforms due to their utility," he said, noting that because users share "life events" on Facebook there is an air of permanence and a true community platform. "Will teens begin to use it more as community matters more once they separate from friends physically? As long as Facebook continues to innovate and invest in new functionality, we see no reason why they wouldn't."

A recent Pew study found that 63% of adults visit Facebook on a daily basis, and 40% of that group visits the site multiple times a day. Peck said that this type of activity level lends further credence to the idea that Facebook is a utility and not just a hot trend. Furthermore, he said, the number of users visiting Instagram on a monthly basis (150 million as of Facebook's third quarter earnings report) could translate into significant amounts of money.

"Assuming Facebook shows 2 ads per visit, we calculated ~63 billion total impressions the company could sell in 2014. At an effective [cost per impression] of $2.50, we calculate over $150 million of incremental revenue in 2014, growing to almost $700 million in 2017," Peck wrote.

Indeed, results from an early trial of Instagram ads were positive: Ben & Jerry's reached 9.8 million 18 to 34 year-olds in 8 days, while an Instagram Levi's ad reached 7.4 million 18 to 34 year-olds over the course of 9 days. Control groups for both ads revealed double-digit increases in brand recall.

For its near-term, fourth-quarter revenue prediction, Peck said that the $2.4 billion revenue estimate is split between payment revenues of $242 million (which would mark a 5% year-over-year decline) and ad revenues of $2.13 billion, a 60% year-over-year increase. While the accuracy of Peck's prediction will come to light when Facebook reports its fourth quarter results on the 29th, Peck's recent track record is pretty good: he was the first to set a public price target for Twitter, setting a bullish $50 per share target when the company itself said shares were worth a little over $20 a pop. Today, Twitter is trading for $64.72 per share, a 53.7% gain since its November 7, 2013 stock market debut.

Following the release of Peck's report, shares of Facebook were up 2.3% in Monday morning trading. The stock finished 2013 with 95.2% growth.

Friday 13th Mega Millions Lottery Hits $425 Million

Isn’t Friday the 13th supposed to be considered an unlucky day? Perhaps a massive lottery drawing on the night of Friday the 13th will change that. The Mega Millions jackpot is now up to $425 million. If one person wins this or a group of people wins this, they are not likely to ever view Friday the 13th as a superstitious day of bad luck ever again.

The U.S. Mega Millions lottery jackpot was just $400 million earlier in the week and was $344 million prior to that. This is the second largest jackpot ever for the Mega Millions lotto. Friday’s drawing has followed 20 such drawings without a winner. The winner will have the choice of receiving the full jackpot in 30 annual payments (close to $14.1 million per year, on average), or can choose the all-cash option valued at roughly $228 million before taxes.

What lotto winners need to understand is that, along with empire-building money, this also brings the need for great responsibility. 24/7 Wall St. wants to alert its readers about what they should (and should not do) in twelve steps if they happen to be lucky enough to win a vast fortune such as this.

There are some serious pitfalls for many lotto winners, and it seems ironic to think that coming into a vast amount of wealth in this manner can create problems if not handled properly. Can you imagine winning a vast fortune of this magnitude and then ending up bankrupt in a few short years? Believe it or not, this has happened to many lotto winners who have lost millions.

Mega Millions holds the record for the largest jackpot ever, at $656 million. That jackpot on March 30, 2012, was split by three winning tickets in Illinois, Kansas and Maryland.

Again, it is imperative that lottery winners take action and be mindful of pitfalls. Our own 12-step program for lotto winners is intended as a first-step guide on how to protect you and your newly won empire. It includes some of the obvious issues, but it goes into evaluating what to do for tax purposes and financial and personal security, what not go splurge on, and many other things.