Sunday, August 15, 2010

Verizon Communication (VZ) Q2

Verizon Communications posted second quarter earnings of $0.58 a share beating analyst expectations by 4.32%. Second quarter highlights for the communications company included 9.8 billion dollars in cashflow from operations up nearly 30%, and 5.5 billion dollars in free cash flow up nearly 77% from 2Q FY2009.

Wireless service has proven to continue to strengthen throughout the quarter. The increase in data subscribers continues to be a driving force behind Verizon's gross profit. Through personal observation, it appears as if Verizon Wireless is restructuring their business plan to make it nearly impossible to not have a data plan which will allow for increased profitability.

Verizon remains to be strong position in our portfolio. The market value of the position has been relatively flat, but we continue to benefit from Verizon's $0.47 dividend. Unless a dire need to free capital arises, I am confident that this position will remain profitable for UASBIG and should remain in the portfolio.


Gilead Misses 2Q Estimates

Gilead Sciences failed to meet the Street’s 2Q estimates, despite experiencing a 25% growth in profit for the quarter. The company also lowered their sales guidance for the year going forward due to continued distress in the Euro markets.

Net income for the quarter was $709.1 million, up from $569.1 million a year ago. Revenue increased 17% to $1.93 billion, missing the Street consensus of $1.96 billion. Gilead cut their 2010 net sales projection to a range between $7.3 and $7.4 billion, from a range of $7.4 billion to $7.5 billion. The company insists that business fundamentals are as strong as ever, but the current economic situation continues to be a constraint on revenue. Company management also restated their desire to pursue acquisitions or partnerships that can solidify their product pipeline with the wave of patent expirations to come in the near future.

-Dave Siegel