Fair Isaac Corp.

FAIR ISAAC CORPORATION $22.22 (New York symbol FICO; SI Rating: Average) (415-472-2211; www.fairisaac.com; Shares outstanding: 48.9 million; Market cap: $1.1 billion) sells products and services that help businesses around the world make better decisions on customer creditworthiness. Its main business is its FICO software, which lets creditors use a customer’s information to calculate a credit score. The lender can then use that score to decide if they should give the customer a mortgage, a credit card or any other type of loan. Fair Isaac’s major clients include banks, credit-card issuers, insurers, retailers, telecom providers and government agencies. In the three months ended June 30, 2009, Fair Isaac’s revenue fell 14.9%, to $156 million from $183.3 million. Tight credit markets have hurt the financial institutions that are its main customers. Fair Isaac offset some of the revenue drop with cost-cutting measures, including layoffs....

HEWLETT-PACKARD CO., $44.78, New York symbol HPQ, reported revenue of $27.5 billion in its third quarter, which ended July 31, 2009. That’s down 2.1% from $28 billion a year earlier. The revenue drop came despite Hewlett’s $13.9-billion purchase of Electronic Data Systems (EDS) in August 2008. Thanks to EDS, revenue at Hewlett’s computer-services business jumped 93% in the latest quarter, to $8.5 billion, or 31% of total revenue. However, this was more than offset by lower sales of computers, printers and software. Hewlett continues to cut its costs in response to the slow sales. As a result, earnings rose 1.0%, to $2.21 billion from $2.19 billion. Earnings per share rose 5.8%, to $0.91 from $0.86, on fewer outstanding shares. These figures exclude the cost of integrating EDS. On this basis, the latest earnings beat the consensus estimate of $0.90 a share....

FAIR ISAAC CORP., $24.13, symbol FICO on New York, has changed its ticker symbol on the New York exchange from FIC to FICO. The new symbol is part of the company’s plan to change its corporate identity. Its main business remains its FICO software, which lets lenders of all types calculate a customer’s credit score. Fair Isaac Corporation is still the company’s legal name. The stock has rebounded sharply from last March’s low of $9.76. Aggressive cost cuts are letting Fair Isaac increase its profits in the face of falling sales. It has also recently upgraded its FICO scoring system. This should help it gain from rising demand for credit scores as the economy recovers....

FAIR ISAAC CORPORATION $22.51 (New York symbol FICO; SI Rating: Average) (415-472-2211; www.fico.com; Shares outstanding: 48.9 million; Market cap: $1.1 billion) has changed its ticker symbol on the New York exchange from FIC to FICO. The new symbol is part of the company’s plan to change its corporate identity. The company’s main business remains its FICO software, which lets lenders of all types calculate a customer’s credit score. Fair Isaac Corporation is still the company’s legal name. The stock has rebounded sharply from last March’s low of $9.76, as aggressive cost cuts are letting Fair Isaac expand profits in the face of declining sales. Recent upgrades to its FICO scoring system should also help the company gain from increasing demand for credit scores as the economy recovers....

FAIR ISAAC CORP. $18 (New York symbol FIC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 48.9 million; Market cap: $880.2 million; Price-to-sales ratio: 1.4; WSSF Rating: Average) sells products and services that help businesses evaluate customer creditworthiness. Its earnings shrank with the end of the subprime boom in 2007. But thanks to cost cuts, its earnings are now rising again, despite a drop in sales. In its third quarter, which ended June 30, 2009, Fair Isaac’s earnings per share fell 2.6%, to $0.37 from $0.38 a year earlier. But the latest earnings include an $0.08-a-share charge related to the sale of two businesses that help telecom companies detect and prevent fraudulent use of their networks. If you exclude all unusual items, per-share earnings actually rose 9.8%, to $0.45 from $0.41, even though sales fell 14.9%, to $156 million from $183.3 million. Fair Isaac continues to devote nearly 12% of its revenue to research. This helped it launch FICO08, the latest version of its widely used FICO credit-scoring system. Over 400 lenders are now using or testing FICO08, which Fair Isaac feels is twice as accurate as previous versions....

UNITED TECHNOLOGIES CORP., $52.23, New York symbol UTX, makes a variety of products for the aerospace and construction industries. Its main subsidiaries are Pratt & Whitney (jet engines), Hamilton Sundstrand (aircraft electronics), Carrier (heating and air conditioning) and Otis (elevators). The recession continues to weigh on many of United Technologies’ clients. As a result, the company’s revenue fell 17.2% in the three months ended June 30, 2009, to $13.2 billion from $15.9 billion a year earlier. As well, United Technologies gets about 50% of its revenue from overseas operations, so unfavourable foreign-exchange rates accounted for about a third of the drop. Earnings in the quarter fell 23.5%, to $976 million, or $1.05 a share, from $1.3 billion, or $1.32 a share. However, if you exclude severance costs and other one-time items, the company would have earned $1.21 a share in the latest quarter. That beat the $1.04 that analysts were expecting....

INTUITIVE SURGICAL, $222.53, symbol ISRG on Nasdaq, jumped almost 31% this week after it reported improved results in the latest quarter. Intuitive makes the “da Vinci,” a computerized surgical system. Guided by a miniature camera connected to a 3-D monitor, surgeons use the da Vinci to operate by remotely manipulating tiny robotic arms. This is safer and far less invasive than regular surgical techniques, and helps cut a patient’s recovery time and post-operative discomfort. It also reduces scarring and infection risk. The da Vinci system is used in heart surgeries, prostatectomies and hysterectomies, among other procedures. In the three months ended June 30, 2009, Intuitive’s revenue rose 18.9%, to $260.6 million from $219.2 million a year earlier. Earnings climbed 21.9%, to $62.4 million, or $1.65 a share, from $51.2 million, or $1.32 a share. These results beat analysts’ expectations of $1.25 a share in profits on revenue of $230 million....

AUTODESK, INC. $19.14 (Nasdaq symbol ADSK; SI Rating: Average) (515-507-5000; www.autodesk.com; Shares outstanding: 228.2 million; Market cap: $4.4 billion) makes AutoCAD, the world’s top-selling computer-aided design program. About four million architects and engineers in over 100 countries use AutoCAD to design and test new buildings and products. Autodesk gets nearly 90% of its revenue from this business. The rest comes from programs that filmmakers use to create special effects. In its third quarter, which ended January 31, 2009, Autodesk’s revenue fell 18.2%, to $489.8 million from $599 million. Earnings, excluding one-time items, fell 43.3%, to $70.4 million, or $0.31 a share, from $124.2 million, or $0.52 a share. Slower construction activity has hurt demand for Autodesk’s software. In response, the company plans to lower its annual expenses by $150 million. This is in addition to the $130 million in cuts it announced in January. As part of its cost-cutting measures, Autodesk plans to lay off workers and consolidate facilities....

MASTERS ENERGY, $1.92, Toronto symbol MSY on Toronto, has become the target of a second takeover offer. This week, Sun Century Petroleum, a Calgary-based private company, offered $1.95 a share in cash for each Masters share. On March 2, 2009, Masters received a friendly takeover offer from ZARGON ENERGY TRUST ($16.10, symbol ZAR.UN on Toronto). Zargon is offering Masters’ shareholders a cash option and a units-plus-cash option. Under the cash option, Zargon will pay $1.83 for each Masters common share tendered until it reaches its maximum cash payout. Any remainder will be paid in Zargon units. Under the second option, each Masters common share may be exchanged for 0.12 of a Zargon unit. This option will also be pro-rated according to Zargon’s unit and cash maximums....

SONY CORP. ADRs $22 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1 billion; Market cap: $22 billion; Price-to-sales ratio: 0.3; WSSF Rating: Above Average) has struck a new alliance with Internet search engine Google. Sony hopes the new arrangement will spur sales of its Sony Reader electronic book device. Over the past few years, Google has converted several million books into electronic form. Under this new deal, users of the Sony Reader can download titles from Google for free, but only books whose copyrights have expired. Still, that’s over 500,000 titles. This deal should help Sony’s device compete with the popular Kindle book reader from online bookseller Amazon.com. Sony is a buy. FAIR ISAAC CORP. $14 (New York symbol FIC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 48.8 million; Market cap: $683.2 million; Price-to-sales ratio: 0.9; WSSF Rating: Average) is changing its corporate identity to FICO. (FICO is an acronym for Fair Isaac Corp.) Fair Isaac is still the company’s legal name, but it will now be known as FICO. Its ticker symbol is unchanged....