CBI Q1 Earning

CBI reported Q1 eps of $.60, five cents off of the streets estimates and revenue came in at $1.2 billion compared to street estimate of $1.27 billion. Net earnings grew 18% year over year led by growth at its project engineering and construction business. The quarter was hurt by lower than expected Steel Plate revenue and Lumus Technology income plus higher SG&A. Margins were higher than expected due to new awards in the quarter across all of their business sectors. While 85% of their work is still outside the U.S., 75% of their work from the first quarter was from North America. And with strong international position in key end-markets, there's exciting development of new energy driven infrastructure driven by shale gas and non conventional oil production presents a great oppertunity for CB&I to sustain growth well into the future. CEO Phillip Asherman said, "And so for 2012 we remain confident and the guidance we provided during our investor day in November and anticipate another solid year ahead for Chicago Birdge and Iron Company." CBI gained 1.1% despite missing earnings due to a positive outlook for the rest of the year.

-John Astarita

HAL's 2012 1Q Can Be Summarized By Growth

On April 18, 2012, Haliburton (HAL) reported revenues of $6.9 billion in the first quarter (1Q) of 2012, compared to $5.3 billion in the 1Q of 2011 that represented an increase of 30.2%. Total operating profit was $1.0 billion, compared to $814 million in the 1Q of 2011. Excluding the $300 million ($191 million after-tax) charge related to the Macondo well incident, income from continuing operations in the 1Q of 2012 was $826 million, or $0.89 per diluted share. The $300 million Macondo charge is an amount that was estimated by HAL as the company anticipates this as being the future cost of the incident (this can be adjusted as new developments occur). Income from continuing operations in the 1Q of 2011 was $558 million, or $0.61 per diluted share, excluding an after-tax charge of $46 million relating to asset reservation in Libya caused by political sanctions.

Overall, all regions and most product service lines realized double-digit revenue and operating income growth from the 1Q of 2011.

·         Completion and Production: Revenue in the 1Q of 2012 was $4.3 billion, a 35% increase from the 1Q of 2011. HAL reported that increased demand for pressure-pumping services in the United States and the addition of the Multi-Chem product line accounted for the majority. More specifically, cementing servicing led the way in the U.S and Latin America and all regions realized tremendous growth across this service line.

·         Drilling and Evaluation: Revenue in the 1Q of 2012 was $2.6 billion, a 22% increase from the 1Q of 2011. This was primarily driven by higher drilling activity and strong demand for wireline and perforating services.

HAL experienced steady growth in unconventional oil-directed activity in the U.S. which increased by 12% and nearly countered the 17% decline in natural-gas directed rig count. The U.S continues to show strength in the oil and liquids-rich basins, while experiencing further decline in natural gas prices and related natural –gas directly activity. HAL experienced cost inflation on certain scarce materials and pricing pressure due to excess service equipment capacity in certain basins that negatively affected margins. The company expects “the transient impact of some additional natural gas rig dislocation, further cost inflation, continued pricing pressure, and the impact of spring break up in Canada to negatively impact North America’s margins by 200-250 basis points in the second quarter.

Revenue from Latin America and the Eastern Hemisphere increased by 27% and 14%, respectively. In Latin America, deep water drilling continues to lead the way, while focusing on cost structure in the Eastern hemisphere has kept HAL relatively competitive.  The company expects global demand for energy to remain robust for the remainder of fiscal year 2012.

-Kelechi Nwokocha

AEO 1Q12 Earnings

     American Eagle Outfitters released earnings for 1Q12 this morning, Wednesday, May 23rd.  They reported net sales of $709mil compared to $603mil in 1Q11, which represents an 18% increase year-over-year. Sales were driven by a 17% increase in comparable store sales due to strong in-store traffic, a 20% increase in repeat customers, and an improved conversation rate.  Revenue missed street expectations of $720mil, but an adjusted EPS of 22 cents beat the mean estimate of 20 cents per share. This marks a 40% increase in EPS year-over-year.  Gross margin fell 0.1% to 37.9% mostly due to the higher cost of cotton and other products.  Strong top line growth was able to take pressure off the increased cotton costs which is a good sign for the company going forward.  AEO opened 7 new stores in 1Q12, and also closed 7 locations during the same period.
     EPS estimate for the second quarter is between 13-15 cents which is right in line with EPS from 2Q11.  For the year, adjusted EPS is expected to be $1.16 to $1.22 which assumes comp store sales growth in the low to mid single-digit range. Guidance is adjusted for the 10 cent per share 77kids operating loss due to the closing of that business. Management believes cotton costs will continue to weigh on bottom line growth until the 2nd half of 2012.

-Pete

Marvell Earnings Announcement

Marvell released earnings Thursday, they reported non-GAAP EPS of 23 cents per share on revenues of $796.4 million. Street analysts were expecting EPS of 20 cents per share on revenues of $768.3 million. Marvell has also initiated a quarterly dividend of 6 cents per share, and they also are expanding their share buyback program by $500 million. Mobile and wireless end market revenue grew 14% from the year ago quarter but fell 1% from last quarter, this segment made up 29% of their total revenues. They saw an increase in their storage end market revenues of 20% from their last quarter release, resulting in a recovery from the flooding in Thailand. Gross and Operating margins dropped 4.3% and 6.7%, respectively. They still carry no long term debt and have a cash and cash equivalent balance of about $2.2 billion.

Marvell released guidance for next quarter with revenues in a range of $840-890 million, representing a sequential 6-12% increase. They also expect their mobile and wireless segment to grow between 5-10% during the next quarter, due in large part to an increase in TD smartphone revenue. Non-GAAP EPS estimates for next quarter are 28 cents per share. With the Chinese mobile market continuing to grow and China Mobile continuing their investments in the TD-SCDMA and TD-LTE networks, Marvell stands to benefit from this with a strong product line in both networks. Currently higher material costs and European exposure continue to hinder the stock lower despite a good earnings release and positive outlook.

- Ryan Ranado

DVA Acquires HealthCare Partners 05/21/12 - (Ryan Kennedy)

On May 21st, DaVita announced the acquisition of HealthCare Partners for $3.66 billion in cash and $758 million in stock, for a total of $4.42 billion. The acquisition of HealthCare Partners represents the entrance into a new market for DaVita, a dialysis service company. HealthCare Partners is the largest medical group and physician network in the United States, and focuses on lower medical costs and positive patients outcomes. The firm provides medical services to approximately 667,000 patients through a network of 700 physicians. HealthCare Partners operates under a capitated model, in which insurers pay a fixed amount, which encourages low-cost positive outcomes, as opposed to maximizing the volume of services and prescriptions. DaVita CEO, Kent Thiry, commented that the capitated model is "where the puck is headed for American health care." In this sense, the deal can be viewed as a way to ease the transition into a capitated dialysis market. The $4.42 billion deal values HealthCare Partners at 8.4x EBITDA, and will be funded by cash on hand and the issuance of high yield debt.

Alexion Pharmaceutical (ALXN) joins the S&P 500

Shares of Alexion Pharmaceuticals (ALXN) will replace those of Motorola Mobility Holdings (MMI) within the S&P 500 index on Friday, April 25th . MMI's departure from the index is a result of its recent takeover by Goolge. Shares of ALXN jumped 4.3%, closing at $92.54 on abnormally high trading volume.Throughout the day 5.6 million shares were traded compared to the daily average of 1.2 million shares. The stock price ranged from $91.80-$94.36, after previously closing at $91.80 the day before.

LIFE F1Q12 Earnings 4/27/12 - (Jorge Perez)

Life Technologies reported earnings on Tuesday after market hours and beat analysts’ expectations with earnings per share coming in at $0.72, up from $0.50 last Q1. Revenues increased 5% year over year to $939 million. Operating margin came in at 30.2% in the first quarter, approximately 2% higher than the same period of the prior year. This was primarily due to the company’s continued focus on operational efficiencies. They recently realigned their segments into three categories, providing historical data going back to 2010, to better reflect their business model: Research Consumables, Genetic Analysis, and Applied Sciences. Revenues increased 4%, 7%, and 4%, respectively within these segments. Genetic Analysis sales were driven by robust growth of Ion Torrent and CE products, partially offset by lower sales of SOLiD products. The change in reported earnings has no effect on results of operations, financial condition, or cash flows. Regional revenue growth rates year over year were as follows: the Americas were flat, Europe grew 2%, Asia Pacific grew 8%, and Japan grew 7%. On a negative note, their ending cash and short-term investments was down to $267 million, from $887 million in 2011, due to one-time cash payments.

The company repurchased $185 million worth in shares in the first quarter with plans to purchase another $200 million in the upcoming quarters. Their return on investment capital was 9%, while they plan to reach their goal of 10% ROIC by the end of 2012. Total debt was about $2.4 billion. In the first quarter LIFE made 2 tuck-in acquisitions with no expected material impact on earnings: Matix Microsciences and LSI. Both acquisitions will better their position in the animal health and food safety businesses. They also experienced about a 6% increase in online sales and activated more distribution centers across the world. During the quarter they continued to deliver on their innovation pipeline, launching Ion AmpliSeq Custom Panels and TaqMan Mutation Detection Assays. Looking ahead, they are still on track to release their most innovative product yet, Ion Proton, on schedule in mid and late 2012. They expect next quarter’s revenue to be flat with a tax rate of 28.6%, similar to Q1’s tax rate. Life Technologies reiterated its outlook for 2012, still expecting organic revenue growth of 2-4%, resulting in adjusted EPS of $3.90-$4.05.

-Jorge Perez

Barclays (BCS) to Sell Entire Minority Holding in BlackRock (BLK)

When BlackRock acquired Barclays Global Investors in 2009 some of the payment was made in BlackRock common stock. Barclays remained a minority stakeholder in BlackRock as an investment over the past three years. With tightening capital requirements in accordance with new Basel laws coming into affect, Barclays needed to find extra capital.  Barclays holds a $6.1 Billion investment in BlackRock and plans to sell it entirely.

To counter the possible negative impact this might have on BlackRock’s share price, BlackRock’s management has arranged to purchase back $1 Billion of this stake.

Barclays stake in BlackRock was a known risk and one that should be monitored closely in the upcoming months. A growing trend in the financial sector is the different ways firms are dealing with Basel capital ratio requirements. We expect this trend to continue through the end of 2012.

Timing does not seem to be a factor. Barclays needed the capital, therefore needed to sell their BlackRock investment regardless of BlackRock’s current market price.

S&P reaffirmed BlackRock’s credit rating as A+ with a stable outlook. S&P noted BlackRock’s operations remain strong and cash flows constant, following the Barclays announcement. 

DVA F1Q12 Earnings 05/02/12 - (Ryan Kennedy)

DaVita Inc. reported positive results for the first quarter of the fiscal year. DVA posted EPS of $1.46 compared to street estimates of $1.45 per share, representing a 48% increase year-over-year. DaVita had revenues of $1.9 billion compared to $1.6 billion, or an increase of 19%. The gains were predominantly driven by increases in the amount of treatments per day, with approximately 68,000 treatments per day, or a 14% increase over the same quarter a year ago. Treatments per day grew by 6% organically, as the firm acquired 28 new treatment centers and opened up an additional 13 centers in the United States. Going forward, management raised guidance for the rest of 2012, and guided operating income from $1.20-1.30 billion to $1.23-1.31 billion. Since the release, the stock has fallen 8% based on broader market movements and Medicare changes which may negatively affect the reimbursement the firm receives.

Record Book Earnings

During the second quarter, John Deere was able to hit quarterly highs for both income and sales, and was the tenth straight quarter where thy reporter higher earnings quarter over quarter. Quarterly income cracked $1 Billion for the first time in company history, with revenues growing to over $10 Billon, giving the global giant year over year growth of over 12%. The company reported EPS of $2.61, which beat the market expectations of $2.54, a positive surprise of 2.76%. A big reason for this growth has been the growth in global farming, which according to CEO Sam Allen has shown impressive “strength and endurance.” The company has also successfully launched their major new product line, the engine-emission technology.


-Matt Buechele

Intuit (INTU) Reports Q3 2012 Earnings

Intuit gained $2.51 per share, beating estimates of $2.48 by $0.03 on the quarter. Revenues grew by 5% year over year with revenues of $1.945 Billion. Barely missing revenue estimates of $1.960 Billion. Strong revenue was driven by performance in the Consumer Tax Segment with 3% growth during this quarter compared to Q3 of the year prior. Total Small Business Segment revenue grew by 11%, contributing to this segment was growth in Payment Solutions & Employee Management Solutions. Intuit was able to beat EPS estimates by expanding margins during the quarter, despite a slight miss on the top line.

Intuit management reaffirmed full year 2012 revenue guidance of $4.185-$4.285 Billion. Management guided for a less than expected quarter loss for Q4 2012. Typically, Q3 is Inuit’s strongest and most critical quarter of the year. This is due to tax season and the revenue provided by Intuit’s TurboTax product. National tax filings were up 2% this year, which was greater than expected. Yet, TurboTax was not able to match this upward trend. Management expected more out of their team on the quarter and will evaluate ways to boost revenue next year.

During the quarter Intuit made two strategic acquisitions with hopes of increasing revenue in the Payment Solutions segment. The long-term goal is for companies to integrate credit card payments processing with QuickBooks. This offers Inuit’s customers’ payments processing solutions with the software they already have in place. In future quarters this could be a sizable area of expansion due to the attractiveness of this idea to many small businesses.

Intuit remains exposed to 95% U.S., which offers investors a degree of safety from European economic exposure.

Early in May the board of directors approved a $0.15 dividend to be paid on July 18^th during the quarter ahead.
-George Hoffmann

Target Corporation (TGT) Q1 Earnings

Wednesday, May 16:
Pre-market, Target Corporation (TGT) reported Q1 net earnings of $697 million, or $1.04 per diluted share, representing a 5.0% increase over the prior-year period and a $0.03 surprise against a $1.01 consensus estimate. Adjusted EPS, which omits expenses related to investment in the Canadian segment during the quarter, totaled $1.11, representing a 11.5% increase year-over-year.
A comparable-store sales increase of 5.3% was driven by warmer-than-normal weather coupled with a positive response by consumers to TGT's spring product assortment. Also during Q1, operating margin expanded by 50 bps (7.3%) and SG&A expense as a percentage of sales decreased by 50 bps (19.9%).
In regard to our thesis, TGT continued to develop its position within Canadian markets during Q1, as expenses related to IT and distribution infrastructure development contributed approximately $(0.08) to quarterly EPS. In Q2, Zellers will vacate several locations slated to serve as the first set of Canadian Target stores. Management expects to have 125 to 135 of these stores opened by 2014.
For Q2, management expects GAAP EPS of $0.94 - $1.04 and adjusted EPS of $1.04 - $1.14. Guidance for FY2012 was raised by $0.05, to $4.10 - $4.30 for unadjusted EPS and $4.60 - 4.80 for adjusted EPS.
The market reacted favorably to TGT's Q1 results, as shares were +3.3% following the earnings announcement.

NVIDIA's Q1FY2013 Results

For the quarter,NVIDIA  reported revenue of $924.9 million, down 3% sequentially and off 4% from a year ago, but ahead of the Street consensus at $916.2 million. GAAP profits of 10 cents a share matched Street estimates. Non-GAAP profits in the quarter were 16 cents a share.

 NVIDIA reported strong demand for its newly launched chips for desktop computers and contract wins for its Tegra smartphone chips but said revenue and profit is still being limited by supply constraints and macro economic issues.

 For FY Q2, the company sees revenue of $990 million to $1.05 billion, ahead of the Street at $976.2 million. The company sees GAAP gross margin of 51.2%, with non-GAAP gross margin of 51.5%; in the first quarter GAAP gross margin was 50.1%, and non-GAAP gross margin was 50.4%.

-Vlad

Steve Madden (SHOO) Q1 earnings report

Steven Madden reported earnings Thursday morning, reporting quarterly earnings that met analysts’ expectations, causing stock price to fall 1.45% by market’s close Thursday evening.  Sales reached $266 million, a 60.5% jump from last year, beating estimates of $250 million.  Net income increased 22.5% to $21.9 million.  First quarter EPS rose 19%, continuing 15 straight quarters of double digit EPS growth.  This was the fifth consecutive quarter of double digit sales growth for the company.   Sales growth was a result of expansion within the core Steve Madden   brand, expanding into to new categories, geographies, and channels.  Same stores sales increased 11.9%, proving overall development of the brands products and diversified categories. The wholesale business gross margin narrowed to 32.3% from 37.9% from the acquisition of shoemaker Topline.  Gross margins within the retail segment increased by 2% from 58.1% to 60.1%.   

Guidance was increased bringing EPS for 2012 to 2.62-2.72 from 2.60-2.70, with net sales expected to increase by 26%.  E-Commerce is continually growing for Steve Madden, up $24 million from the previous quarter.  The largest segment a growth came from Women’s wholesale footwear, which Steve Madden’s attests to its constant effort to be on trend, and the success of its “test and react” sales model.  Sales of Steve Madden handbags doubled from Q1 2011, and will be in Nordstrom stores this fall.  Steve Madden as a company is pleased with the consumer interest of their outlet store chain, recently adding a 7^th, as well as the consumer reaction to its newly opened flagship store in Manhattan.  The company expects future double digit sales growth through the development of the Steve Madden shoe and accessory line, as well as through all other Steve Madden owned brands, Betsey Johnson, Elizabeth and James, Madden Men, and Big Buddha.

Ford (F) 1Q 2012 Earnings

            On Friday, Ford reported a fall in quarterly profit that beat street expectations.  Since then, the stock price has slid about $1 on macroeconomic concerns: Europe debt worries & disappointing domestic GDP numbers. 

            In the first fiscal quarter of 2012, ford earned $1.4 billion.  This is a large drop from a year earlier--the first quarter of 2011 yielded $2.55 billion in earnings.  Ford incurred higher taxes in the most recent quarter, which dragged down profits with the help of losses in Europe and Asia.  CFO Bob Shanks said that Ford has lowered its guidance on European demand for the next five years and will lose about $500-600 million for this fiscal year.  Guidance for the Asia Pacific area was also lowered.  But, there is some form of a silver lining.  Increased productivity and product launches should still help profitability in the rest of the year.

            Ford showed strength in its domestic market, with an increase in $289 million in pre-tax profit year-over-year.  This is the highest quarterly profit in this division since 2000.  Its operating margins in this area increased 1.2% since 1Q2011 because they have been focusing on a smaller product line.  But, there is a caveat in this improvement.  Ford has lost market share in the U.S., dropping from 16% to 15.2%.

            On April 20^th, 2012, Ford announced a $5 billion investment in China.  New dealerships and factories should be completed by 2015. In the conference call, management reaffirmed that although there are some concerns about China’s future growth, middle class consumers’ demand in China is not fully saturated. 

Baxter International (BAX) Q1 Earnings Call

         Baxter International reported earnings for the 3 months ended, March 31^st, 2012, with better than anticipated results. First quarter revenue of $3.4 billion beat growth expectations by 2%. Overall, year-over-year revenue increased roughly 4% from $3.3 billion. Also, EPS increased by $0.06 to $1.04 from previously $0.98 in 2011, representing a 6% increase. Both revenue and EPS exceeded BAX’s previous guidance for the year, primarily due to their Bioscience division, which increased recombinant sales by 10%. The increase in this product line was a result of high demand for several hemophilia treatments and the revenue generated from the Synovis Life Technologies Inc. acquisition. Medical Products also grew to $1.9 billion, a 3% increase, driven by strong growth in anesthesia products and certain inject able and nutritional therapies. Unfortunately, the FDA delayed approval of HyQ, an investigational product or immune disorders. The new sent BAX shares down as much as 7%. However, CEO Bob Parkinson conveyed considered BAX’s extensive pipeline, he believes that the “reaction in the market is a total disconnect.” Nevertheless, BAX continued to expand its portfolio and pipeline through investments in R&D and pursuit of business development opportunities. For example, under the Hart-Scott-Rodino Antitrust Improvements Act, Baxter received clearance for its collaboration with Momenta to develop and commercialize follow-on biosimilars. In addition, the FDA approved TISSEL for an expanded indication for general homeostasis in surgery. Among other advancements, BAX has entered 2012 with strong momentum and is confident in their ability to continue their success. That being said, management forecasted even brighter projections for FY2012, including increased sales growth of 4-5% and earnings of $4.49-$4.57 per share.

- Shawn Laljit

Apple (AAPL) 2Q 2012 Earnings

            Last Tuesday, Apple’s stock recovered the previous week’s losses after ‘blowout’ second quarter earnings during late-day trading.  The stock gapped up 7%, driven by EPS of $12.30 (almost doubling year-over-year) versus the average estimate of $10.02.  Revenue came in at $39.19 billion (year-over-year growth of 59%) compared to Zack’s Consensus of $36.58 billion.  Gross margin increased 600 basis points to 47.4%.  iPhone sales increased 88% year-over-year to 35.1 million units, fueled by international demand for the iPhone 4S, notably in China.  International sales made up 64% of total revenue in the most recent quarter.  iPod sales fell 15%, as these sales were partially replaced by the hot-selling iPhone & iPad.  Although, CFO Peter Oppenheimer said that the iPod still holds about 70% of the market share of MP3 players.

            iPad sales were up 151% to 11.8 million units.  Although some of these sales cannibalized Mac sales, management insists that this is not a ‘zero-sum game’.  Education & enterprise are two promising markets for future growth.   For example, 94% of Fortune 500 companies have used/tested the iPad in their operations.   Sales to domestic K-12 grades outnumbered Macs by two to one this quarter, after iBooks 2 was introduced in January.  CEO Tim Cook said that the main reason for cutting the iPad 2 price to $399 was to ‘unlock some (price-sensitive) educational demand’.  The iPad occupies about 60% of the tablet market, followed by tablets supporting the Android operating system (32%). 

            China was a clear catalyst for international growth during this quarter.  The iPhone 4S debuted in China in mid-January, as the #3 wireless carrier (China Telecom) was brought into the mix.  This should continue to grow, when China Mobile (#1 carrier) eventually comes into play.  Analysts anticipate Apple to launch a new iPhone (5) this fall, followed by a TV (iPanel) in the winter.  The new iPhone is expected to support 4G service.  Management reiterated (pending board approval) a dividend of $2.65 to be paid out at the end of the next quarter.

            Revenue guidance was lowered for the next fiscal quarter (ending in June).  Production was more efficient than anticipated, so revenue that was anticipated for the next quarter (ending in June) may have been realized in the most recent quarter.  Also, management expects that a strengthening dollar will hurt revenue levels in the next fiscal quarter.