Thursday, October 28, 2010
The Industrial Packaging segment saw a record increase in earnings due to realization of price increases and improved input costs. Its profits grew 17% year over year and 7% sequentially amounting to $2.6 billion. The Printing Papers segment saw a 5% revenue growth year over year and 7% revenue growth sequentially. This can be attributed to favorable pulp and paper pricing, reduced fixed costs, fewer mill outages, bad debt recovery, and increased volumes to the U.S. and Europe. Consumer Packaging posted revenues of $870 million, up 10% year over year and 3% sequentially. Higher volumes, realization of price increases, and fewer maintenance outages drove the improvement. The Forest Products segment sold off a majority of their land portfolio and recorded revenues of $205 million, which was an improvement from the $5 million both sequentially and year over year. Their last segment, xpedx, which is their distribution segment, shows a year over year increase of 5% to revenues and an 8% sequential increase in revenues. Although revenue increased, they showed a drop in operating profit of 15%, due to increased overhead and lower margins.
The company reported an increase in free cash flow of more than $750 million dollars and ended the quarter with more than $1.4 billion dollars in cash on hand. They also reduced their long-term debt by $200 million and put $1.4 billion dollars into their pension plan. Some investors were concerned with the debt of the company and the status of their pension plan and I believe they are showing steps towards taking care of these issues. John Faraci, CEO, stated in their fourth-quarter outlook that they expect to continue to see strong earnings and free cash flow, but at seasonally lower levels than the third quarter. I believe the company has a strong outlook for the long-term, but don’t see much higher return in the near future.
International revenue climbed 3 % to $775 million, particularly in Kay, Asia Pacific and Latin America. The introduction of the Scrub-N-Go, the floor cleaner for QSR restaurants, was a huge factor for earnings in Kay. The Company wishes to continue this growth in Kay and to continue to be aggressive gaining accounts and achieve better sales. For fourth quarter predictions, analysts believe the company will show earnings of $ .59-$ .61 per share.
Wednesday, October 27, 2010
No revenue was recognized for Ensco 8502, as a result of a pending contract. This rig was placed in service on August 13th, and has been recognized as an operating expense. Resolving this dispute is a key objective for ESV in Q4. Another factor is going to be Ensco’s ultimate contracting for the 7500 rig. Management claims that they have had an increase in requests regarding the rig, but still have not made their final decision. Q4 revenues are expected to be between $345- $400 million, with the wide range resulting from the uncertainties in the deepwater segment. Ensco is poised well in comparison to its competitors in regards to new regulations expected within the industry. The government of Singapore honored Ensco with a Safety Award for their construction of Ensco 8503.
Ford being the only car maker to avoid a US government bailout, is has been diligently working to improve it's balance sheet by paying off debts and eliminating liabilities. Ford's total debt will be paid down to $22.8 billion, compared to $33.6 billion a year ago. The reduction of company debt will save F an estimated $800 million in annual interest payments. Company officials predict debt net of cash, currently standing at $2.6 billion, will be eliminated by the end of the year, which is one year earlier than the company predicted 3 months ago. The good press surrounding the company has been reflected in it's stock price which hit $14 on Monday.
Tuesday, October 26, 2010
Cash flow from operating activities for the third quarter was $215 million. Third quarter capital expenditures were $28 million and resulting free cash flow was $187 million. The company ended the quarter with $537 million in cash and short-term investments, including $19 million held as restricted cash. Regional organic growth rates for the quarter compared to the same quarter of the prior year were as follows: the Americas increased 8 percent, Europe 5 percent, and Asia Pacific 7 percent. Japan declined 1 percent. Revenue from orders transacted through Life Technologies’ eCommerce channels grew 26% percent during the quarter. Over 50% of all transactions are processed using eCommerce platforms.
LIFE beat expected EPS by 9 cents $0.87 over $0.78 Non-GAAP forecasted. Management has risen their guidance for FY 2010 to $3.48-$3.52 from $3.35-$3.50. With LIFE beating estimates again this quarter, it extends their record of beating estimates I believe now for as far back as Q1 2009. Afterhours the stock has been up 2%. Historically LIFE has seen significant slowdown in business during 3Q yet these were not far off of Q2. With management increasing their outlook I believe we should be seeing upside in the stock as the market prices management’s new guidance in. Furthermore, LIFE has been producing mid-high single digit organic growth since 2007 and this quarter’s organic growth was 6% providing evidence that management is capable of continuing this growth which will result in an increase of equity value. I will update the model with this quarter’s results and post my new price target.
Monday, October 25, 2010
VZ reported cash flows from operations of $25.2 billion and free cash flow of $13.4 billion up 25.3%. The company added an additional 997,000 customers this quarter amounting to totals of 93.2 million customers and 101.1 million connections. VZ also saw 226,000 additional FIOS internet subscribers and 204,000 FIOS TV subscribers demonstrated growth in the company’s wireline segment.
Verizon will be releasing the Apple iPad WiFi starting October 28th and will be launching the Droid X and Droid 2 in the future. Verizon has demonstrated that product and contract development is of priority and has exemplified hard evidence of the company’s ability to compete with other wireless device and service providers. With strong capital gains in the third quarter, expected additional upside in the 4th, and a dividend yield a little over 6%, UASBIG Tech/Telecomm analysts are confident in Verizon’s position in the portfolio.
Sunday, October 24, 2010
Q3 earnings for Novartis have increased, beating both analyst expectations and management’s forecast. Novartis reported $2.3 billion in net income this quarter, or 99 cents per share. Income rose to $2.3 billion from 2.1 billion in Q3 2009, representing an increase of 10 percent. Core earnings per share rose by 16 percent to $1.36 per share, beating analyst expectations of $1.29 per share.
New drugs Afinitor and Gilenya, along with the acquisition of Alcon, helped boost sales 13 percent. Novartis acquired part of Alcon, an eye-care product company, in 2008, and strong Q3 results may help them in their plan to buy out the rest of the company. Novartis is currently offering 2.8 shares per share of Alcon, and any boost in share price will make the offer more attractive.
Thursday, October 21, 2010
Total sales of Gilead's antiviral drugs, which includes HIV and other viral diseases, rose 12% this past quarter to $1.65 billion. Meanwhile, Atripla and Truvada both beat expectations as well. The headlining drugs recorded 3Q sales of $748 million and $669 million, respectively
WDC announced quarter one FY2011 revenue of $2.4 Billion, hard-drive shipments of 50.7 million and net income of $197 Million compared to quarter one FY2010 revenue of $2.2 Billion, 44.1 million shipping hard-drives, and net income of $288 Million.
President and CEO John Coyne stated that even with competitive pricing in the industry, WDC was capable of remaining profitable, grew revenues and shipments, and generated $390 Million in cash from operations.
UASBIG Tech/Telecomm analysts are interested in WDC ability to continue competing with its main competitor Seagate. With recent news regarding Seagate’s possible privatization, WDC is left in a unique place within the industry. WDC also faces significant competition from other memory product producers, producing non magnetic memory products that offer high sustainability and performance.
expectations of $4.08. This quarter is yet another record
for AAPL and we expect that with holiday season
approaching this will only go up next quarter. Net income
was up 70% year over year with revenue growing 67%.
Apple sold 14.1 million iPhones from July through september beating
analyst estimates of 12 million. CFO Peter Oppenheimer stated "had the
company been able to make more iPhones, that number would have been even
higher". With strong catalysts looking forward such as the new line of
iPods, the iPad and possible Iphone contracts with other service providers.
For the quarter Bank of America strengthened its tier one capital ratios, increased asset management fees from the Merrill Lynch acquisition, and the investment bank remains number two in global investment banking fees. On the other hand, due to financial reform, Bank of America expects to see declines in the Global Card Services segment and in fees collected for overdrafts.
Bank of America’s share price was hit hard even after the positive earnings surprise because of developing news that the company may have to repurchase bad loans that were not serviced properly by Countrywide. The Federal Reserve Bank of New York and Pimco are two the major players who are putting pressure on Bank of America to repurchase the loans. The amounts to be repurchased in unknown right now, but investors fear it could be billions.
Friday, October 15, 2010
Western Digital Corporation rallied 8.14% today on news that its main rival Seagate Technology has received an offer to go private. Reports claim that this would be the largest LBO of the year if the deal were to go through. There have been no official releases from Western Digital on who made the offer, however Western Digital has confirmed that they have hired Morgan Stanley and Perella Weinberg Partners for financial and legal advice.
This news break has comes at an interesting time for UASBIG, as our Tech/Telecomm analysts have demonstrated hesitation on WDC’s ability to compete with Seagate. This coming weekend will leave time for UASBIG to further evaluate the situation before market open on Monday.