Thursday, March 28, 2013

Chicago Bridge and Iron Investor Day

Chicago Bridge and Iron (CBI) hosted Investor Day on Thursday March 28th to discuss the outlook for the company post the acquisition of the Shaw Group that was finalized earlier this quarter. The company offered a revised revenue guidance of $10.7 billion-$11.2 billion, to be compared to the guidance of CBI on a stand-alone basis of $6.3-$6.7 billion that was given earlier this year. CBI forecasts new awards between $13 billion and $16 billion and earnings per share between $4 and $4.35. The stand-alone projection for new awards was $7 billion-$10 billion, while the EPS guidance was $3.35-$3.65. The current backlog of the combined company is $27 billion.

During the opening presentation CEO Philip K Asherman expressed his excitement for the company going forward:
“We are certainly in a position to provide integrated solutions to our customers as never before. And although engineering and construction is a majority of the backlog, around 70% of earnings from all the other groups, which is more predictable and less cyclical.”

The stock traded at $61.97, up about 5%, on this news mid-day Thursday. 

Wednesday, March 6, 2013

American Eagle Outfitters (AEO) reports 4Q12 Earnings

Today, American Eagle Outfitters (AEO) held its fourth quarter earnings conference call, reporting revenues of $1.12B, representing an increase of 9% from $1.03 billion last quarter which were directly in-line with analyst expectations. Revenue growth was driven by a 4% comp increase on top of an 11% increase last year and growing average unit sales (AURs). Comps broken down by business show American Eagle Outfitters comps increased a meager 1% and aerie comps declining 3% and e-Commerce growing 24%, showing consumers increasing shift to online sales. 

Gross profit for the quarter rose 27% to $461MM. Margins grew 600 bps to 41.2% driven by lower cotton costs and other operational leverage opportunities. SG&A expenses increased 21% to $253MM, due to increased marketing spending, among other incentive relative costs. Operating income for the quarter climbed 48% to $177MM with margins expanding 430 bps to 15.9%. The company achieved net income of $111MM. EPS increased 41% to $0.55 compared to $0.39 last year, missing analyst estimates of $0.56 by $0.01.

AEO ended the quarter with $631MM in cash on its balance sheet, and inventory levels of $332MM. Capital expenditure investments for the quarter totaled $94MM with slated out plans to boost spending in 2013 to support future growth initiatives. The company issued rather bleak earnings guidance for the first quarter citing unfavorable weather and macroeconomic factors, with EPS expected to fall within the range of $0.16 - $0.19 based on an expected consolidated comp in the negative mid-single-digit range.

 Robert Hanson, chief executive officer stated, “I’m extremely pleased with our progress in 2012 as the team delivered on our near-term priorities and exceeded our targeted financial metrics. In a competitive and volatile consumer environment, we drove a strong topline on leaner inventories, reduced markdowns and achieved cost leverage. We remain focused on our strategic plan aimed at fortifying our brands and processes and growing our business across North America. Concurrently, we are laying the ground work for transformational global expansion, while continuing to drive strong returns to our shareholders.” The company as of market close today is trading at $20.27, down 10.11% from its opening price and full holdings of the stock position have been sold.

GB Shokunbi