Calls of Note Part 3

- Citigroup is previewing Focus Media's (NASDAQ:FMCN) quarter saying they believe that the Street has been expecting weak 1Q07 guidance for nearly 3 weeks, but with consensus numbers still too high, the guidance will likely be "weak." This could create volatility in after-hours trading that investors could take advantage of. The other issue that could drive the stock near-term is a possible acquisition.

They expect Focus to beat their US$67.6m revenue and US$0.62 non-GAAP EPS estimates when it reports today after the US close. Street is at US$68.4m and US$0.57 (GAAP); Guidance is revenue of US$67-69m and non-GAAP EPADS of US$0.62-0.64.

Guidance likely to be "mixed" ? Citi recently brought their 1Q07 numbers down to revenues of US$57.0m and non-GAAP EPADS of US$0.42 (GAAP EPADS of US$0.36), and expect Focus to guide in-line with their new estimates. The Street, however, is still modeling US$59.0m revenue and US$0.38 GAAP EPADS for 1Q. Offsetting this risk, they expect the company to provide full-year guidance at least in-line with the Street's US$329.4m revenue and US$2.46 GAAP EPADS estimates.

Given that the DotAd acquisition was announced on last year's 4Q call, and the ACL acquisition (Movie Theater) deal was announced on the 2Q call, there is a good possibility the company could announce another deal tonight, possibly in the Internet "ad serving" space.

Notablecalls: Good heads up on FMCN. The co reports 4Q06 results at 8:00pm U.S. Eastern Time on February 26, 2007 (5:00pm U.S. Pacific Time on February 26, 2007 and 9:00am Beijing/Hong Kong Time on February 27, 2007).