Nvidia Beats Second Quarter Estimates
August 28, 2024
Image: Nvidia’s shares have been on a tear the past year. By Brian Nelson, CFA On August 28, Nvidia (NVDA) reported better than expected second quarter fiscal 2025 results, but the performance wasn’t strong enough for the market to bid up shares. Revenue of $30.04 billion was nonetheless up a whopping 122% on a year-over-year basis, while quarterly non-GAAP earnings per share came in at $0.68, up 152% from the year-ago period. Its GAAP gross and operating margin was 75.1% and 62.1% in the quarter, respectively. In addition to record quarterly revenue and outsized levels of profitability, Nvidia posted record quarterly Data Center revenue, which advanced 154% in the second quarter from the same period a year ago. Second quarter
The Difference Between Speculation and Investment
August 28, 2024
Brian Nelson, President of Investment Research at Valuentum, discusses the difference between speculation and investment. Brian Nelson, CFA: This is Brian Nelson from Valuentum Securities. I’d like to talk about the concept of speculation. I think it is best taught with a story perhaps, one of my personal experiences. I used to work on the buy side and one of the more interesting stocks that I pitched in my experience was a company called Synaptics (SYNA). This must have been in 2004-2005 — almost 20 years ago now. Synaptics made an interface for a number of electronic devices, and what it held was some of the technological building blocks for a click-wheel technology. About a year or two later following that
Foot Locker Burns Through Cash During First Half of Full Year 2024
August 28, 2024
Image: Foot Locker’s shares have been quite volatile the past couple years. By Brian Nelson, CFA Foot Locker (FL) recently reported second quarter results with revenue and non-GAAP earnings per share coming in ahead of consensus estimates. The company returned to top-line growth in the quarter with total sales advancing 1.9% and comparable sales up 2.6% thanks to global Foot Locker and Kids Foot Locker comp growth of 5.2%. Though its gross margin expanded 50 basis points in the quarter on a year-over-year basis, Foot Locker still put up a non-GAAP net loss of $0.05. Inventory declined 10% from the same period a year ago, however. Management had a lot to say about the quarter in the press release: The
Ralph Lauren’s Dividend Is Quite Healthy
August 27, 2024
Image: Ralph Lauren’s shares have done quite well since the beginning of 2022. By Brian Nelson, CFA Ralph Lauren (RL) reported better than expected fiscal first quarter results recently. Net revenue increased 1% in the quarter on a reported basis and was up 3% in constant currency. Foreign currency was a 170 basis-point headwind in the period. Europe revenue increased 6% (7% in constant currency), while Asia revenue increased 4% (9% in constant currency), with China up high-single-digits on a reported basis (up low-double digits in constant currency). North America revenue fell 4% in the quarter as improved direct-to-consumer performance was offset by planned declines in wholesale. Earnings per share in the quarter increased 15%, to $2.70 on an adjusted
Toll Brothers Expects Demand to Remain Solid Into 2025
August 27, 2024
Image: Toll Brothers stock has done quite well during the past couple years. By Brian Nelson, CFA Luxury homebuilder Toll Brothers (TOL) recently reported fiscal third quarter results with revenue and non-GAAP earnings per share coming in better than expectations. Home sales revenues advanced 2% from the same period a year ago, while pre-tax income came in at $503.6 million, down from $553 million in last year’s quarter. Fiscal third quarter earnings per diluted share was $3.60 compared with $3.73 in the same period a year ago, but it exceeded the consensus forecast of $3.31 per share. Net signed contract value was $2.41 billion in the quarter, up 11% from last year’s period, while contracted homes were also up 11%
Berkshire Hathaway’s Cash Balance Swells, Ownership Stake in Apple Substantially Reduced
August 26, 2024
Image: Berkshire Hathaway reduced its equity stake in Apple by a sizable margin. By Brian Nelson, CFA Berkshire Hathaway (BRK.A) (BRK.B) recently reported second quarter results. The insurance and industrial conglomerate’s total revenue nudged up modestly 1.2% during the second quarter, while net earnings attributable to Berkshire Hathaway shareholders dropped to $30.4 billion from $35.9 billion in the same period a year ago, as investment gains weren’t as large as they were in the same period last year. Berkshire Hathaway ended the quarter with $276.9 billion in cash and short-term investments in U.S. Treasury bills, up from $167.6 billion at the end of last year. For the first six months of the year, cash flow from operations came in at
Chevron Lacks Dividend Coverage with Traditional Free Cash Flow
August 26, 2024
Image: Chevron’s shares have been choppy during the past few years. By Brian Nelson, CFA Chevron (CVX) recently reported second quarter results that showed mixed performance, with revenue beating the consensus forecast, but non-GAAP earnings per share coming up short. During the second quarter of 2024, total revenues advanced 4.7%, while adjusted earnings came in at $4.7 billion ($2.55 per share on a diluted basis) compared to adjusted earnings of $5.8 billion ($3.08 per share on a diluted basis) during the second quarter of last year. The earnings weakness was driven by lower margins on refined product sales, less favorable tax items in the most recent quarter, and negative foreign currency impacts. Management had the following to say about the
Main Street’s Dividend Track Record Is a Sight to See
August 22, 2024
Image: Main Street has never lowered its monthly dividend, and it has paid supplemental dividends to bolster its yield. Image Source: Main Street By Brian Nelson, CFA Internally managed business development company Main Street (MAIN) recently reported second quarter results with net interest income and total investment income coming in better than expectations. Net investment income came in at $87.3 million (or $1.01 per share) in the quarter, while distributable net investment income [DNII] was $92.3 million (or $1.07 per share) in the period. Total investment income was $132.2 million in the quarter, up 4% from the same period a year ago. Return on equity was 16.1% on an annualized basis for the second quarter, while it was 18.5% for
ExxonMobil’s Free Cash Flow Remains Impressive
August 22, 2024
Image: ExxonMobil’s shares have done quite well since the beginning of 2022. By Brian Nelson, CFA ExxonMobil (XOM) recently reported better than expected second quarter results with both revenue and non-GAAP earnings per share coming in higher than the consensus forecast. Total revenue and other income increased 12.2% from the prior-year quarter, while non-GAAP earnings per share came in at $2.14 per share, up $0.08 on a sequential basis. Exxon Mobil returned $9.5 billion to shareholders in the quarter, consisting of $4.3 billion in dividends and $5.2 billion in buybacks. Management was upbeat about the performance: We delivered our second-highest 2Q earnings of the past decade as we continue to improve the fundamental earnings power of the company. We achieved
TJX Companies Boosts Profit Guidance
August 21, 2024
Image: TJX’s stock has been on a tear over the past couple years. By Brian Nelson, CFA TJX Companies (TJX) reported better-than-expected second quarter fiscal 2025 results August 21 that showed a revenue beat and non-GAAP earnings per share outpacing the consensus estimate. Net sales increased 6% thanks to consolidated comparable store sales increasing 4% as a result of increased customer transactions, which was above the consensus forecast for comps to experience 2.8% growth. Its second-quarter pre-tax profit margin of 10.9% was 0.5 percentage points ahead of last year’s mark thanks to lower freight costs and stronger sales. Second-quarter diluted earnings per share of $0.96 was up 13% from the same period a year ago. Its comparable store sales growth,
