U.S. airline Mesa Air Group

Struggling U.S. airline Mesa Air Group (MESA.O) on Tuesday said US Airways Group (LCC.N) plans to reduce the number of aircraft it pays Mesa to fly regionally.
The carrier said the flight cuts, which are planned for January, July and next January, could continue, putting new strain on the company.

Mesa said that US Airways said it would eliminate three CRJ-200 flights by next year.
"We anticipate US Airways will continue to further reduce the number of covered aircraft in accordance with the agreement," the company said in a regulatory filing.
Mesa said that as of September 30, it operated 38 CRJ-900, 11 CRJ-200, and 6 Dash-8 aircraft for US Airways under a code-share agreement.

Mesa, which provides regional service for US Airways, Delta Air Lines (DAL.N) and other carriers has been looking to shore up its finances for months as it tries to ride out volatile fuel prices and a drop in travel demand.

Mesa said on Monday it received a letter from Nasdaq warning the company its stock is subject to delisting because Mesa was not in compliance with some listing requirements.
Mesa shares were down 10 percent at 26 cents in afternoon trade on the Nasdaq.

drive-in hamburger company Sonic

In similar fashion to retailers, fast food operators have resorted to price slashing in an effort to stem slowing consumer traffic. Old style, drive-in hamburger company Sonic (Nasdaq:SONC) recently rolled out a value menu that offers junior burgers, small fries and ice cream cones. Sonic's discount menu coincides with its earnings, which likely will remain stalled for the foreseeable future. At current share prices, Sonic is arguably a value from an investment standpoint.

Digesting the QuarterSonic rang in the first quarter of its fiscal year with a resounding thud as sales fell 3% to $184.1 million, which consisted of overall negative same-store sales growth of 3.6% on a 1.7% decline in foot traffic and a 1.9% decline in average check size.

The drop in comparable sales was more severe at partner, or company-owned locations, which saw a decline of 6.6%, while franchised locations registered a decline of 2.9%. During the earnings conference call, an analyst suggested that the difference was due to more aggressive pricing that didn't pan out at partner locations. Meanwhile, management referred to the overall need to bring customers back to Sonic. Currently, consumers have opted to buy groceries from the likes of Kroger (NYSE:KR) and SUPERVALU (NYSE:SVU) to save money by eating at home. (Get a taste for how to analyze this sector at Sinking Your Teeth into Restaurant Stocks.)

The introduction of the value menu is designed to improve traffic trends. But the success or failure of this strategy has yet to be determined, as Sonic only rolled out the new menu options on December 29, 2008. The company hopes that increased foot traffic as a result of the value menu will stave off the significant decline in profitability, as first quarter earnings fell by nearly half - to $0.12 per share on lower sales. Higher advertising spending related to the roll out of the value menu and hefty interest expense on an ill-timed decision to take on debt and buy back shares in an attempt to fend off a hostile takeover at the height of the private equity boom in 2006 also contributed to Sonic's decline in profits.

Battening Down the BurgerUntil macro conditions improve, Sonic has a few levers it can pull. Lowering prices on certain menu items should help on the fringes and the company has plans to opportunistically increase them in other categories. In addition, Sonic is also looking to sell company-owned stores in order to shift the mix of partnered stores to between 12% and 14% of total stores, down from 17-18%, currently. Such measures will leave room for Sonic to pay down debt. And fundamentally, Sonic is "primarily a franchiser" of its restaurants, which leads to a high margin fee and royalty revenue.

Bottom LineLast year, Sonic reported 97 cents in full-year earnings per share, and the average analyst projection for the coming year is a similar 96 cents. That puts the forward P/E at just under 12, which falls well below fast food rivals such as McDonald's (NYSE:MCD), Burger King (NYSE:BKC) and Wendy's/Arby's Group (NYSE:WEN). This multiple appears quite reasonable, provided that consumers start spending again, because it would allow the company to reignite its store expansion plans and return to bottom line growth. (EPS helps investors analyze earnings in relation to changes in new-share capital.

Yahoo Shares

Yahoo stock closed down 91 cents, or 6.9 percent, to $12.22. The stock has ranged between $8.94 and $30.25 over the past year.

American Technology Research analyst Rob Sanderson wrote in a note to investors that he expects a significant slowdown in online shopping.

Sanderson also wrote that he expects "the online advertising market to take a much greater than seasonal decline" in the first three months of 2009. The post-holiday first quarter is traditionally slower for online ad spending.

However, Sanderson noted that the possibility of a sale to Microsoft Corp. or another sort of deal could keep Yahoo's stock from falling too far.

"We continue to believe this is the ultimate outcome and will reward Yahoo shareholders, but have no visibility on timing," Sanderson wrote.

The analyst downgraded shares of Sunnyvale, Calif.-based Yahoo to "Neutral" from "Buy" and cut his price target to $14.50 from $18.

Goldcorp

I can think of no more essential question to pose to investors during these tumultuous times. I could, of course, state it more eloquently: "Pardon me, would you happen to have any Goldcorp (NYSE: GG)?"

A flurry of downgrades and target-price reductions rained down upon Goldcorp after the company released lowered guidance late last week, projecting a pit stop for production growth during 2009. Until those analysts begin including their gold price forecasts alongside their outlook for miners, however, I find it best to tune them out entirely. It is indeed unfortunate that declining production from mines like Goldcorp's El Sauzal will offset many of the gains from the newer ones this year, but I continue to urge Fools to focus upon the larger picture.

The newly issued forecast for 50% production growth through 2013 is only about 5% below what analysts had targeted, and the starting point of 2.3 million ounces of gold produced in 2008 is nothing to sneeze at. Goldcorp continues to post impressive cost metrics, with anticipated 2008 costs of about $300 per ounce of gold and about $365 for 2009. I have heaped praise upon intermediate miners like Yamana Gold (NYSE: AUY) and my top pick Agnico-Eagle Mines (NYSE: AEM) on the basis of their low cost structure, but Goldcorp achieves similar margins on a much grander scale.

After divesting its sizeable stake in spin-off Silver Wheaton (NYSE: SLW) a year ago, Goldcorp's debt-free balance sheet is a thing of beauty. Nonetheless, the company is deferring some longer-range development projects to focus resources upon the three core properties under development: Penasquito, Red Lake, and Pueblo Viejo. Penasquito is truly a world-class deposit, and will be the primary driver of Goldcorp's production growth for years to come. At Red Lake, where Goldcorp founder Rob McEwen has struck another bonanza through junior explorer Rubicon Minerals (AMEX: RBY), Goldcorp will obtain more than one quarter of 2009 production despite deferring some improvement projects. Of the $1.4 billion Goldcorp plans to spend in 2009, $430 million will go to Pueblo Viejo, a joint venture with larger rival Barrick Gold (NYSE: ABX).

Bring on the downgrades, analysts! In the long run, I believe they can only help Fools by creating more attractive entry points. After shares promptly doubled from their October low, we frankly needed a little consolidation.

Watch Out

Oil fell below $40 a barrel as investors worried that a weak economy will hurt demand. That weighed on energy stocks. Financial stocks also declined as investors looked to Citigroup and Morgan Stanley, which could announce as early as Monday a deal to combine their brokerages. The potential tie-up underscores the troubles with tattered balance sheets that many banks are still trying to address.

Investors are also digesting comments from General Motors that the company has presented a worst-case scenario to Congress in which it would need more money than the $13.4 billion allocated by the Treasury Department.

israel defence force

Obama Smoking

Yahoo!

Yahoo! is getting closer to picking a new chief executive to replace Jerry Yang and investors are abuzz about who might be on top. While two names are riding the rumor circuit, Yahoo! might need something that neither of the named candidates has: youth.

On Friday speculation began circulating about possible CEO picks after a report said the Internet company narrowed its search to Carol Bartz, the current chairwoman of Autodesk (nasdaq: ADSK ), Susan Decker, Yahoo! (nasdaq: YHOO )’s president, and one other candidate.

Yahoo! is expected to make a decision before its earnings report on Jan. 27.
Yahoo’s shares rose 0.5% to $13.13, at the close on Friday.

Global Equities Research analyst Trip Chowdhry said that the ideal candidate is neither Bratz nor Decker, but a 25 to 30 year-old Steve-Jobs-like-wunderkind who is brash and product savvy. The problem with Yahoo! he said is products, technology, and motivation, and the new leader will have to be able to deal with all three. “If Bartz becomes CEO, investors should run the other way,” said Chowdhry. “Autodesk is a prehistoric company when it comes to technology. We want someone who can cut through the generation gap and who can take the company to the next level.”

Chowdhry doesn’t see an outside candidate taking the reins of Yahoo! and said that any internal promotion would probably come from the engineering ranks. “If someone is super bright Yahoo! is not going to be their first choice, it’s not going to be their second choice and it’s not going to be their third choice,” said Chowdhry. “I haven’t seen any person externally who can change the fortunes of Yahoo!”

Chowdhry isn’t happy with Decker as a pick either. “She oversaw three failed CEO’s and under her leadership the stock has gone down more than 80.0%,” he said.