Adobe Issues Cautious Fiscal 2025 Guidance
December 12, 2024
Image Source: Adobe By Brian Nelson, CFA Adobe (ADBE) reported better than expected fiscal fourth quarter 2024 results on December 11 that showed outperformance with respect to revenue and non-GAAP earnings per share. Revenue increased 11% in the quarter, while diluted earnings per share came in at $3.79 on a GAAP basis and $4.81 on a non-GAAP basis, exceeding the consensus forecast by $0.14. The company put up record fiscal fourth quarter operating cash flow of $2.92 billion, while it exited the quarter with remaining performance obligations of $19.96 billion. Free cash flow was $2.87 billion for the three months ended November 29. Management was upbeat in the press release: Adobe delivered record FY24 revenue, demonstrating strong demand and the
Toll Brothers Ends Strongest Year Ever
December 11, 2024
By Brian Nelson, CFA On December 9, luxury homebuilder Toll Brothers (TOL) reported better-than-expected fourth-quarter fiscal 2024 results with revenue and non-GAAP earnings per share coming in higher than the consensus forecasts. Home sales revenues increased 10% in the quarter, while delivered homes were 3,431, up 25%. Net signed contract value was up 32% compared to the same quarter a year ago, with contracted homes of 2,658, up 30%. Backlog value, however, fell 7% on a year-over-year basis, with homes in backlog of 5,996, down 9%. Toll Brothers’ adjusted home sales growth margin, which excludes interest and inventory write-downs, came in at 27.9% in the quarter, below the adjusted home sales gross margin of 29.1% in the fiscal fourth quarter
Oracle’s Remaining Performance Obligations (RPO) Growth Speaks to Accelerated Expansion
December 10, 2024
Image Source: Oracle By Brian Nelson, CFA On December 9, Oracle (ORCL) reported lower than expected second quarter fiscal 2025 results with revenue and non-GAAP earnings per share coming in lower than the consensus forecasts. Total revenue was up 9% year-over-year in both USD and constant currency, while GAAP earnings per share increased 24% and non-GAAP earnings per share advanced 10%, to $1.47. Cloud services and license support revenues increased 12% year-over-year in both USD and constant currency, while cloud license and on-premise license revenue nudged up 1% in USD and 3% in constant currency. Management’s commentary was upbeat in the press release: Record level AI demand drove Oracle Cloud Infrastructure revenue up 52% in Q2, a much higher growth
Dollar General Hit By Hurricane-Related Expenses
December 8, 2024
Image Source: Valuentum By Brian Nelson, CFA On December 5, Dollar General (DG) reported mixed third quarter results with revenue exceeding the consensus forecast, but GAAP earnings per share coming up short relative to expectations. Net sales increased 5% in the quarter thanks to positive sales contributions of new stores and same-store sales expansion of 1.3%, which reflected increases of 1.1% in average transaction amount and 0.3% in customer traffic. In the quarter, operating profit fell more than 25% and diluted earnings per share fell nearly 30%, however, as the company suffered from hurricane-related expenses. Management had the following to say about the quarter: We are pleased with our team’s execution in the third quarter, particularly in light of multiple
Lululemon’s International Business Powers Results, Tweaks 2024 Guidance
December 8, 2024
Image Source: Lululemon By Brian Nelson, CFA On December 5, Lululemon (LULU) reported better than expected results for its third quarter of fiscal 2024, with both revenue and GAAP earnings per share exceeding the consensus forecasts. Net revenue increased 9% (8% on a constant dollar basis) in the quarter thanks primarily to strength in its International net revenue, which advanced 33% (30% on a constant dollar basis). Americas net revenue increased 2% in the quarter. Comparable sales advanced 4% (3% on a constant dollar basis) for the quarter led by International comparable sales growth of 25% (or 22% on a constant dollar basis). Americas comparable sales decreased 2%. Lululemon’s gross profit increased 12% in the quarter as its gross margin
Foot Locker Talks of a More Promotional Environment, Softening Consumer Spending
December 5, 2024
Image Source: Foot Locker By Brian Nelson, CFA Foot Locker (FL) reported lower-than-expected third quarter results on December 4, with revenue and non-GAAP earnings per share coming in below the consensus forecasts. The company also lowered its 2024 sales and non-GAAP earnings per share outlook. Total revenue fell 1.4% year-over-year (down 2.2% on a constant currency basis) in the quarter, with comparable store sales up 2.4%. Foot Locker and Kids Food Locker experienced comparable store sales growth of 2.8%, while Champs Sports and WSS experienced comparable store sales growth of 2.8% and 1.8%, respectively. Foot Locker experienced gross margin expansion of 230 basis points year-over-year in the quarter, but the company’s non-GAAP earnings per share of $0.33 was lower than expectations.
Exxon Mobil’s Permian Assets Performing Well, Structural Cost Reductions on Track
December 4, 2024
Image Source: Exxon Mobil By Brian Nelson, CFA Exxon Mobil (XOM) recently reported better than expected third quarter results, though performance faced some headwinds from lower industry refining margins and reduced natural gas prices. Total revenues and other income fell 0.8% in the quarter on a year-over-year basis, while earnings excluding identified items (non-GAAP) fell to $8.6 billion from $9.2 billion in the year-ago period. Diluted earnings per common share came in at $1.92 versus $2.25 in the same period a year ago. Management had the following to say about the quarter: We delivered one of our strongest third quarters in a decade. Our industry-leading results continue to demonstrate how our enterprise-wide transformation is improving the structural earnings power of
Salesforce Posts Mixed Results, Agentforce Capitalizing on AI Demand
December 4, 2024
Image Source: Salesforce By Brian Nelson, CFA Salesforce, Inc. (CRM) reported mixed third quarter results on December 3 with revenue coming in ahead of the consensus forecast, but non-GAAP earnings per share coming in light versus what Wall Street had been looking for. Third quarter revenue grew 8% on a year-over-year basis with Subscription and Support revenue up 9%. Its third quarter GAAP operating margin was 20%, up 280 basis points year-over-year, while its non-GAAP operating margin came in at 33.1%, up 190 basis points year-over-year. In the quarter, non-GAAP diluted net income per share was $2.41, up 14% year-over-year. Management had the following to say about the quarter: We delivered another quarter of exceptional financial performance across revenue, margin,
Union Pacific’s Free Cash Flow Generation Remains Robust
December 2, 2024
Image Source: Union Pacific By Brian Nelson, CFA Union Pacific (UNP) recently reported third quarter results that missed expectations on both the top and bottom lines, but the company remains one of our favorite railroads. Its operating revenue grew 3% in the quarter, to $6.1 billion, thanks to increased volume and core pricing gains that were only partially offset by business mix and lower fuel surcharge revenue. Freight revenue, excluding fuel surcharges, advanced 5% in the period, while revenue carloads grew 6% in the quarter. Union Pacific’s operating ratio improved 310 basis points in the quarter, to 60.3%, thanks in part to lower fuel prices. In the quarter, operating income increased 11%, while net income increased 9% and earnings per
Verizon Covering Dividends with Free Cash Flow
December 2, 2024
Image Source: Verizon By Brian Nelson, CFA Verizon (VZ) recently reported mixed third quarter results, with revenue missing the consensus forecast and non-GAAP earnings per share edging out the market’s expectations by a penny per share. On a consolidated basis, total third-quarter operating revenue was essentially flat compared to the same period a year ago, while the company’s net income of $3.4 billion was weighed down by severance charges. Consolidated adjusted EBITDA for the third quarter came in at $12.5 billion, up from $12.2 billion in last year’s quarter. Adjusted earnings per share, excluding special items, was $1.19 in the quarter, down from $1.22 in the year-ago period. Management had the following to say about the quarter: This has been
