Here are highlights from Friday's Analyst Blog:

EBAY Growth Decent But Declining

eBay, Inc.'s (Nasdaq: EBAY) second quarter EPS were $0.02 above our estimate. Those results were overshadowed by weak growth in the company's gross merchandise volume, which increased just 8.3% year-over-year, and disappointing guidance for the second half of 2008. Macro headwinds, competitive pressures, and a slowing in its core business continue to weigh on the company's stock price.

The company's powerful business model, which requires no inventory and little capital investment, continues to produce solid growth, hefty profit margins, and substantial free cash flow. These positive attributes helped the company deliver solid results in the second quarter of 2008. The company's continued growth has enabled eBay to invest in or acquire businesses outside its core U.S. auction business.

CSX Corp. Upgraded from Sell

We are raising our rating on CSX Corp. (NYSE: CSX) to Hold from Sell, due to expectations of improved earnings. CSX reported second quarter EPS of $0.89 before non-recurring items, up 26% year over year. This matched consensus, but was below our $0.91 estimate due to a higher number of shares outstanding. Despite this, we are maintaining our 2008 EPS estimate at $3.55, near the top of CSX guidance of $3.40-3.60, while increasing our 2009 estimate to $4.20 from $4.00 due to higher revenue growth than previously expected.

Improved efficiency, strong yields, and share buybacks should offset weakening volumes from a slowing economy and higher fuel costs. Dissidents nominated by activist hedge fund shareholders Transcontinental Realty Investors Inc. (NYSE: TCI) and 3G Capital won four of the five board seats sought. CSX recently increased the dividend 22%.

Altera Improves, Stays a Buy

Altera Corporation (Nasdaq: ALTR) reported revenues of $360 million in Q2:FY2008, exceeding our estimate of $347 million, mainly due to growth in sales of new products. EPS of $0.32 beat our estimate of $0.26 and street consensus of $0.27.

Gross margin improved to 67.1% from 65.1% generated in the previous quarter, mainly due to a reduction in material and logistics costs as well as sales strength from the Communication and Industrial end markets, which usually carry higher margins. Going forward, third quarter is a seasonally slow quarter for the company and management expects total revenue to remain flat or decline by 3% on a sequential basis. We have adjusted our FY2008 estimates and maintain our Buy rating.

Logitech Demand Keeps It a Buy

Logitech International S.A. (Nasdaq: LOGI) reported revenues for the fourth quarter of 2008, which were better than expected although earnings were below our estimates due to write-down of value of remaining CDOs. The company delivered good quarter in terms of revenues despite weaknesses in its Cordless Keyboard and Gaming segments.

There was strong demand for Harmony remotes and pointing devices combined with good traction in original equipment manufacturer. Gross margins remained at a high level for the company reflecting ongoing product cost reductions and supply chain efficiencies. We now estimate that the company will continue to grow revenues and GAAP EPS by 15.0% and 10.1% respectively in 2009 over 2008 figures.

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Altera's programmable solutions enable system and semiconductor companies to rapidly and cost-effectively innovate, differentiate and win in their markets. Find out more at www.altera.com.

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