Target’s Second Quarter Results Better Than Feared
August 21, 2024
Image: Target’s shares have been quite volatile since the beginning of 2023. By Brian Nelson, CFA Target (TGT) reported better than expected second quarter results with revenue and non-GAAP earnings per share coming in higher than the consensus forecasts. Sales grew 2.7% thanks to comparable store sales growth of 2%, which came in at the high end of the company’s expectations and above the consensus estimate of 1.1%. The quarter for Target marked a return to top-line growth and positive comparable store sales expansion and showcased meaningful margin expansion. Traffic at Target advanced 3% in the period as all six of its core merchandising categories delivered growth, with Apparel comparable sales growing 3%+ in the quarter. Digital comparable store sales
Mastercard’s Results Point to Continued Healthy Consumer Spending
August 20, 2024
Image: Mastercard’s stock has done quite well since the beginning of 2022. By Brian Nelson, CFA Mastercard (MA) recently reported better than expected second quarter results with the firm’s revenue and non-GAAP earnings per share coming in higher than the consensus forecasts. Second quarter net revenue came in at $7 billion, up 11% year-over-year (13% on a currency-neutral basis) thanks to growth in its payment network and value-added services and solutions. Operating income came in at $4 billion, up from $3.7 billion in the same period a year ago. Its adjusted operating margin was an impressive 59.4% in the quarter. On a currency-neutral basis, non-GAAP net income advanced 24%, while adjusted diluted earnings per share increased 27%, bolstered in part
Ford Raises Adjusted Free Cash Flow Guidance, Warranty Costs Weigh on Shares
August 20, 2024
Image: Ford’s second quarter results weren’t great, but the company’s guidance calls for increased adjusted free cash flow in 2024. By Brian Nelson, CFA Ford Motor (F) reported disappointing second quarter results recently where both automotive revenue and non-GAAP earnings per share came in below expectations. Ford’s second-quarter revenue grew 6% year-over-year thanks to a “persistently fresh lineup of vehicles (including) momentum from the all-new F-150 pickup and record volumes of Transit commercial vans.” However, company net income came in at $1.8 billion, down from $1.9 billion in the same period of 2023, while company adjusted earnings before interest and taxes [EBIT] was $2.8 billion in the quarter, down from $3.8 billion due to an increase in warranty reserves. Its
Lowe’s Lowers Full Year 2024 Outlook on Weak DIY Sales
August 20, 2024
Image: Lowe’s shares have traded sideways since the beginning of 2022. By Brian Nelson, CFA On August 20, Lowe’s (LOW) reported mixed second quarter results with revenue coming in below expectations and the firm’s non-GAAP earnings per share exceeding the consensus forecast. Total sales during the quarter fell 5.5%, while comparable sales for the quarter fell 5.1% “driven by continued pressure in DIY (do-it-yourself) bigger ticket discretionary spending and unfavorable weather adversely impacting sales in seasonal and other outdoor categories.” Adjusted diluted earnings per share fell to $4.10 per share in the second quarter from $4.56 per share in the second quarter of 2023. During the second quarter, Lowe’s bought back roughly 4.4 million shares of stock for $1 billion,
Gilead Raises Non-GAAP Diluted Earnings Outlook for 2024
August 19, 2024
Image Source: Gilead By Brian Nelson, CFA Gilead Sciences (GILD) reported better than expected second quarter results on August 8. Total second quarter revenue increased 5% thanks to higher sales across its HIV, Liver Disease and Oncology portfolio, while non-GAAP diluted earnings per share came in at $2.01 in the second quarter of 2024, compared to $1.34 in the same quarter of 2023. Total product sales increased 6%, excluding its COVID-19-related treatment Veklury. Management had the following to say about the quarter: Gilead has had another strong quarter with 6% year-over-year growth in our base business. This was driven by sales of our therapies for HIV, Oncology and Liver Disease, including 8% growth for Biktarvy. One of the key highlights
Energy Transfer Raises 2024 Adjusted EBITDA Guidance, Units Yield 7.8%
August 19, 2024
Image Source: Energy Transfer By Brian Nelson, CFA Energy Transfer (ET) reported strong second quarter results on August 7. Net income attributable to partners totaled $1.31 billion in the quarter, up from $911 million in the same quarter a year ago. Net income per common unit on a diluted basis expanded to $0.35 from $0.25 in last year’s quarter. Adjusted EBITDA in its June quarter was $3.76 billion compared to $3.12 billion for the same three months of last year. Distributable cash flow [DCF] to partners came in at $2.039 billion in the quarter compared to $1.554 billion in last year’s period. Total distributions to be paid to partners was $1.1 billion in the quarter, translating into excellent distribution coverage
Deere’s Fiscal Third Quarter Results Reveal Challenging Conditions in the Global Agricultural and Construction Sectors
August 16, 2024
Image Source: Deere & Company By Brian Nelson, CFA Deere & Company (DE) reported better than expected fiscal third quarter results on August 15 with revenue and GAAP earnings per share coming ahead of the consensus forecasts. Worldwide net sales and revenues fell 17% on a year-over-year basis, accelerating from the 11% fall through the first nine months of the year, but this was better than feared. Net income of $6.29 per share in the quarter fell from $10.20 per share in the quarter ended July 30, 2023. Net income dropped 42% on a year-over-year basis. Management’s commentary was cautious in the press release: John Deere’s third-quarter results showcase our disciplined execution in the face of challenging conditions in the
Walmart Raises Its Fiscal 2025 Outlook
August 15, 2024
Image Source: Walmart By Brian Nelson, CFA On August 15, Walmart (WMT) reported better than expected second quarter results with both revenue and non-GAAP earnings per share coming in higher than the consensus forecast. Consolidated revenue advanced 4.8% in the quarter led by Walmart U.S. comp sales up 4.2% and Sam’s Club comp sales up 5.2%, both measures excluding fuel. The company’s consolidated gross margin expanded 43 basis points thanks to strength in Walmart U.S. and Walmart International. Walmart’s adjusted operating income increased 7.2% in the quarter “due to higher gross margins and growth in membership income.” Global ecommerce and global advertising advanced 21% and 26%, respectively, in the period. Adjusted earnings per share increased 9.8%, to $0.67 per share,
Cisco’s Fiscal Fourth Quarter Results Exceed Expectations
August 15, 2024
Image Source: Cisco By Brian Nelson, CFA On August 14, Cisco Systems (CSCO) reported better than expected fiscal fourth quarter results with both revenue and non-GAAP earnings per share coming in higher than the consensus forecasts. Revenue fell 10% on a year-over-year basis, while non-GAAP earnings per share dropped 24% from the same period last year. Fiscal fourth quarter non-GAAP gross margin was 67.9%, and the company now has total annualized recurring revenue of $29.6 billion, up 22% year-over-year inclusive of its acquisition of Splunk. The company’s product order growth was 14% in the quarter. Management’s commentary in the press release was positive: We delivered a strong close to fiscal 2024. In our fourth quarter, we saw steady customer demand
Home Depot’s Results Show Weaker Spending on Home Improvement Projects
August 14, 2024
Image: Home Depot’s shares have been choppy the past few years. By Brian Nelson, CFA On August 13, Home Depot (HD) reported better-than-expected second quarter results with both its top line and non-GAAP earnings per share coming in higher than the consensus forecast. Comparable sales for the second quarter of fiscal 2024 fell 3.3%, while U.S. comparable sales slid 3.6%, however. Adjusted operating income for the second quarter was roughly flat with the year-ago period, while adjusted operating margin contracted approximately 20 basis points, to 15.3%. Adjusted net earnings nudged slightly lower in the second quarter, to $4.67 from $4.68 in the same period last year. Management’s commentary in the press release was cautious: The underlying long-term fundamentals supporting home
