Lack of New Container Supply Helps TAL International Maintain Growth
October 30, 2013
Intermodal freight lessor TAL International () posted modest third quarter results, as the market for global shipping remains weak. Revenue increased 6.4% year-over-year to $143.9 million, short of consensus expectations, while adjusted net income per share fell short of consensus estimates at $1.03 (up 8.4% year-over-year). Adjusted EBITDA grew only 1.3% year-over-year to $142.8 million. Still, TAL increased its quarterly dividend to $0.70 per share, an increase of 2.9%. Utilization: Strong But Declining Image Source: Company Filings, Valuentum In spite of what TAL identified as a relatively weak market, utilization rates were above 97% compared to the industry average of the low-to mid-90% range. However, management noted that current utilization rates are hovering at 96.9%, which means that rates are
Evaluating AT&T’s 3Q Performance
October 30, 2013
A Few Words from CFO John Stephens Telecom giant AT&T (T) announced strong third quarter results October 23. Revenue increased 2.2% year-over-year to $32.2 billion, just below consensus expectations. Earnings per share, excluding one-time items, increased 6.5% year-over-year to $0.66, a penny above consensus estimates. However, due to an increase in capital expenditures, free cash flow has fallen more than $3 billion year-to-date to $11.1 billion, equal to 11.6% of revenue. Smartphone Takeover Image Source: T 3Q13 Slides As has become the norm, wireless revenue drove AT&T’s top-line growth, expanding 5.1% year-over-year to $17.1 billion. The strong performance was driven by an increase in wireless data revenue of 17.6%, as a higher percentage of consumers opt for higher ARPU plans. During the third quarter,
Apple’s Products and Free Cash Flow Are Amazing
October 29, 2013
Best Ideas Newsletter and Dividend Growth Newsletter portfolio holding Apple (AAPL) posted decent fiscal fourth quarter results Monday, finishing off a tremendously profitable 2013 fiscal year. Revenue increased 4% year-over-year during the fourth quarter to $37.5 billion, easily exceeding consensus estimates. For the full-year, the iPad maker’s revenue grew 14% to $170.9 billion—more revenue than Chipotle, Netflix, Tesla, and Facebook combined. Earnings per share easily exceeded consensus estimates but fell 4.7% year-over-year to $8.26. For the full-year, earnings per share declined 10% to $39.75. However, Apple generated $45.5 billion in free cash flow for fiscal 2013, up about $3 billion year-over-year and equal to 27% of revenue. iPhone Refresh a Success Apple sold 33.8 million iPhones during the quarter, an
Pfizer’s and Merck’s 3Q Performance
October 29, 2013
Whereas revenue advanced in Bristol-Myers’ (BMY), Eli Lilly’s (LLY), and AbbVie’s (ABBV) respective calendar third-quarter results, the same cannot be said about the performance of Pfizer (PFE) and Merck (MRK) during the equivalent period. Pfizer’s third-quarter report, released Tuesday, showed that net revenue dropped 2% as strength in its smallest segment, ‘Oncology’, failed to offset weakness at the rest of the firm. Pfizer continues to deal with the impact of product losses of exclusivity (Lipitor) and the expiration of its Spiriva collaboration in certain countries, which overwhelmed growth in its blockbuster Lyrica (up 11%), Celebrex (up 13%), Inlyta (up 186%), and Xalkori (up 92%). Sales of Pristiq advanced 15%. Emerging market expansion tallied 5% in the period. The US basis
American Capital Agency Disappoints Again; Armour Residential Follows
October 29, 2013
We’re still getting praises from our call on the mREIT industry that shocked the investment world and literally put our research firm on the map (click here for that). We outlined how other research firms were so wrong in this piece (link), and interestingly, we’re adding BAML today to the list of investment shops that led their advisor communities astray. Frankly, we’re honored to serve you, and we’re proud to have delivered on the correct research perspective. We’re not here to point out the pitfalls of others, but by pointing out this well-documented example, our goal is to continue to build your trust in us as a firm. Let’s take a look at the ongoing troubles the mREIT industry continues
Industrial and Consumer Packaging Drive Results at International Paper
October 29, 2013
On Thursday morning, International Paper (IP) posted record third quarter operating earnings driven by solid margin expansion. Revenue increased 5% year-over-year to $7.4 billion, slightly below consensus expectations. Operating earnings per share of $1.05 per share were in-line with consensus estimates and 30% higher than the year ago period. Year-to-date, free cash flow stands at $1.2 billion, down slightly compared to the same period a year ago, but still equal to 5.6% of total revenue. Robust Industrial Packaging Image Source: IP 3Q13 Slides North American Industrial Packaging was a standout performer for International Paper during the third quarter. As shown in the above chart, the segment’s EBITDA margins easily eclipse peers and increased 510 basis points year-over-year to 24.4%. Although wood
Homebuilders Report Nice 3Q; We’re Not Putting New Money to Work in Them
October 28, 2013
We’ve seen the recent hike in interest rates put a moderate dent in the upward trajectory of performance at Lennar (LEN) and KB Home (KBH) in their respective third quarters. This was also the case in PulteGroup’s (PHM) and M/I Homes’ (MHO) third quarter performance, which we will outline in this piece. However, recent trends in the average 30-year fixed rate, which hit a four-month low last week, may make fourth-quarter performance a bit better for the group than originally anticipated. Still, we’re not putting new money to work in the industry at this time on the basis of valuation. PulteGroup On Thursday, PulteGroup reported decent third-quarter results that showed strong revenue, growth, home selling-price expansion, and solid margin performance.
Microsoft Sets Six-Year Price High; You Knew It Was Going to Happen
October 26, 2013
Microsoft (MSFT) continues to be a no-brainer. The firm has robust free cash flow, a rock-solid balance sheet, and significant revenue and earnings growth potential. As we continued to pound the table on shares for much of the past two years—the company is one of the LARGEST weightings in the portfolio of our Dividend Growth Newsletter—others said Microsoft was “dead money” and would continue to be. The firm’s share price hit a six-year high Friday. Thursday after the close, the software giant exceeded top- and bottom-line expectations in its fiscal first quarter by a significant margin. Revenue jumped 15.8%, while diluted earnings per share leapt nearly 17%. These are staggering growth figures for a firm that is supposed to be
Surveying 3Q Performance from Big Pharma: Bristol-Myers, Eli Lilly, and AbbVie
October 25, 2013
Bristol-Myers On Wednesday, Bristol-Myers (BMY) showcased the strength of its key marketed products in its third-quarter report. The firm experienced a 9% increase in net sales and a 12% jump in non-GAAP diluted earnings per share. Bristol-Myers also confirmed its 2013 non-GAAP earnings per share range of $1.70 to $1.78 per share. Looking at its current marketed portfolio, Abilify, its largest revenue generator, faced a 16% decline, though this was offset by strength in Yervoy, which grew 33%, Orencia, which grew 22%, and Sprycel, which grew 20%. Yervoy doesn’t lose exclusivity in key markets until after 2020 (2023 in the US), Orencia loses exclusivity in Japan, the EU, and the US between years 2017 and 2019, and Sprycel doesn’t lose
Dividend Increases for the Week Ending October 25
October 25, 2013
Below we provide a list of firms that raised their dividends during the week ending October 25. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here (or use our ‘Symbol’ search box in our website header). Firms Raising Their Dividends This Week American Midstream Partners, LP (AMID): now $0.4525 per share declares quarterly distribution, was $0.4325. Associated Banc-Corp (ASBC): now $0.09 per share quarterly dividend, was $0.08. Bar Harbor Bankshares (BHB): now $0.32 per share quarterly dividend, was $0.315. Cape Bancorp (CBNJ): now $0.06 per share quarterly dividend, was $0.05. Cintas Corporation (CTAS): now $0.77 per share annual dividend, was $0.64. Columbia Banking System
