Visa’s Free Cash Flow Margins Are Incredible
January 31, 2025
Image Source: Visa By Brian Nelson, CFA On January 30, Visa (V) reported strong fiscal first quarter results with revenue and non-GAAP earnings per share coming in ahead of the consensus forecasts. Net revenue increased 10% (up 11% on a constant-dollar basis), while non-GAAP net income increased 11% and non-GAAP earnings per share jumped 14% on a year-over-year basis. During the fiscal first quarter, payments volume increased 9%, total cross-border volume increased 16%, while processed transactions advanced 11%. Management spoke positively in the press release: Visa’s strong first-quarter results reflected healthy spending during the holiday season and improving trends in payments volume, cross-border volume, and processed transactions growth. We delivered 10% net revenue growth, 8% GAAP EPS growth and 14%
Microsoft Issues Fiscal Second Quarter Results
January 30, 2025
Image Source: Microsoft By Brian Nelson, CFA On January 29, Microsoft (MSFT) reported better than expected fiscal second quarter results with revenue and GAAP earnings per share coming in ahead of the consensus forecast. Revenue increased 12% on a year-over-year basis, and Microsoft leveraged that top-line growth into a 17% increase in operating income (up 16% in constant currency). Net income increased 10%, while diluted earnings per share of $3.23 also advanced 10%. Management was upbeat in the press release: We are innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead. Already, our AI business has surpassed an annual revenue run rate of $13 billion, up 175% year-over-year. This
Lockheed Martin’s Earnings Impacted by Classified Program Losses
January 29, 2025
Image Source: Lockheed Martin By Brian Nelson, CFA On January 28, Lockheed Martin (LMT) reported lower than expected fourth quarter results with revenue and GAAP earnings per share missing the consensus forecasts. Quarterly revenue dropped 1.3%, while net earnings for the fourth quarter came in at $527 million, or $2.22 per share, a level that includes $1.7 billion of charges for classified programs in its Aeronautics and Missiles and Fire Control (MFC) business segments. Net earnings were $1.9 billion, or $7.58 per share in the fourth quarter of 2023. Cash flow from operations was $1.0 billion in the fourth quarter of 2024, after a pension contribution of $990 million, compared to $2.4 billion in the fourth quarter of 2023. Free
NextEra Energy Reaffirms Earnings Outlook for Next Couple Years
January 25, 2025
Image Source: NextEra Energy By Brian Nelson, CFA On January 24, NextEra Energy (NEE) reported mixed fourth quarter results with revenue missing the consensus forecast, but non-GAAP earnings per share coming in line. For the fourth quarter, net income attributable to NextEra Energy came in at $1.203 billion, or $0.58 per share, compared to $1.21 billion, or $0.59 per share, for the fourth quarter of 2023. On an adjusted basis, NextEra reported fourth-quarter earnings of $1.095 billion, or $0.53 per share, compared to $1.067 billion, or $0.52 per share, in the same period last year. Management had a lot to say about the quarter: NextEra Energy had an excellent year of execution in 2024, growing full-year adjusted earnings per share
Johnson & Johnson Issues Fourth Quarter Results
January 24, 2025
Image Source: J&J By Brian Nelson, CFA On January 22, Johnson & Johnson (JNJ) reported better than expected fourth quarter results with both revenue and non-GAAP earnings per share exceeding the consensus forecasts. Fourth quarter sales growth came in at 5.3%, with operational growth of 6.7% and adjusted operational growth of 5.7%. Fourth quarter earnings per share came in at $1.41, while adjusted earnings per share came in at $2.04, both measures impacted by IPR&D charges related to the V-Wave acquisition. Adjusted diluted earnings per share was down 10.9% from the prior year period. Management had the following to say about the quarter: 2024 was a transformative year for Johnson & Johnson, marked by strong growth, an accelerating pipeline and industry-leading
Procter & Gamble on Track to Deliver on Fiscal Year Guidance
January 23, 2025
Image Source: Procter & Gamble By Brian Nelson, CFA Procter & Gamble (PG) reported better than expected second quarter results for fiscal 2025 on January 22, with revenue and non-GAAP earnings per share coming in ahead of the consensus forecasts. Net sales increased 2% in the quarter, while organic sales, which excludes M&A and foreign exchange impacts, advanced 3%. Organic sales growth was led by its “Baby, Feminine, and Family Care” unit, where organic sales increased 4%. Organic sales growth in its “Beauty” and “Grooming” segments was 2%, while organic sales in its “Health Care” and “Fabric & Home Care” divisions increased 3%. Core earnings per share were $1.88, an increase of 2% compared to the year-ago period. Management had
Kinder Morgan Is Now Covering Cash Dividends Paid with Free Cash Flow
January 23, 2025
Image: Kinder Morgan’s shares have been on a tear after the midstream energy giant reports healthier free cash flow that covers cash dividends paid. By Brian Nelson, CFA On January 22, Kinder Morgan (KMI) reported fourth quarter results that missed the consensus forecast for both the top and bottom lines. Adjusted EBITDA in the quarter of $2.1 billion was 7% higher on a year-over-year basis, while net income attributable to Kinder Morgan came in at $667 million, up from $594 million in the year-ago period. Adjusted earnings per share was $0.32 in the quarter, up 14% compared to the fourth quarter of 2023. The company approved a cash dividend of $0.2875 per share for the fourth quarter, which is a
Netflix Records Biggest Quarter of Net Adds in Its History
January 22, 2025
Image Source: Netflix By Brian Nelson, CFA On January 21, Netflix (NFLX) reported better than expected fourth quarter results with revenue and GAAP earnings per share coming in ahead of the consensus forecasts. In the quarter, revenue advanced 16% on a year-over-year basis (19% on a foreign exchange neutral basis), while the firm leveraged that top-line growth into a 52% increase in operating income. Its operating margin expanded 5 percentage points to 22% in the quarter. Diluted earnings per share came in at $4.27 versus $2.11 in last year’s period. Netflix added 19 million global streaming paid memberships in the quarter, the biggest quarter of net adds in its history, and finished 2024 with 302 million memberships. Netflix continues to
UnitedHealth Group’s 2025 Outlook Remains Robust
January 17, 2025
Image: UnitedHealth Group’s shares have been choppy the past couple years. By Brian Nelson, CFA UnitedHealth Group (UNH) reported mixed fourth quarter results on January 16 with revenue coming in a bit light of consensus and non-GAAP earnings per share beating what the Street was looking for. UnitedHealth Group’s 2024 revenues grew 8% year-over-year to $400.3 billion, while full year 2024 earnings from operations came in at $32.3 billion. Adjusted earnings from operations of $34.4 billion exclude cyberattack direct response costs and South American impacts. The company’s full year medical care ratio was 85.5% compared to 83.2% in 2023. The higher medical care ratio was due to revenue effects of CMS’s Medicare funding restrictions, member mix, and the timing of
