First Solar’s Volatile Performance Continues
May 7, 2013
Solar manufacturer First Solar (click ticker for report: ) saw its shares tumble after the firm posted terrible gross margins during its first quarter. Revenue jumped 52% year-over-year, but fell 30% sequentially to $755 million, which was slightly ahead of consensus estimates. Earnings were several cents short of consensus expectations at $0.66, but the measure was still much better than the same period a year ago in which First Solar took a restructuring charge. Cash flow generation was relatively weak as the company posted $19.7 million in free cash flow, down from $253.3 million in the prior quarter. The big issue for First Solar came from the cost side of the equation. CFO Mark Widmar spoke to the issue of
Astronics Surges on Record Results
May 7, 2013
Best Ideas Newsletter holding Astronics (click ticker for report: ) reported a first quarter that displayed the company’s fantastic earnings potential. Revenue jumped 14% year-over-year to $76 million, which exceeded consensus estimates by a few million dollars. Earnings growth was robust as earnings per share rose 40% year-over-year to $0.56, which was significantly above consensus estimates. The firm’s backlog increased $4.5 million sequentially to a record high of $119 million. To top it off, the firm generated $12.5 million in free cash flow. Aerospace continued to be the standout segment. Total aerospace revenue rose 16% year-over-year to $71.7 million. While commercial revenue also grew 16%, business jet revenue jumped 30% year-over-year and FAA/Airport revenue increased 48% year-over-year. Although the FAA
Taking a Close Look at Berkshire
May 7, 2013
After the annual meeting in Omaha, let’s take a look at Berkshire.
Strong Earnings Powers CBS; Tony Stark Boosts Disney
May 6, 2013
Media stocks have been on a fantastic run as of late, and the trend looks to continue after CBS (click ticker for report: ) posted great results and Disney’s (click ticker for report: ) Iron Man 3 put up a blockbuster debut at the box office internationally and domestically. Let’s take a look at recent events. CBS CBS posted strong first quarter results, driven by a 6% year-over-year increase in revenue to $4 billion, which resulted in a 24% jump in operating earnings per share to $0.73. Both figures easily exceeded consensus expectations. Strong headline results consummated in $553 million in free cash flow. Results were solid for CBS across all of its segments, though entertainment led the charge with
Facebook and LinkedIn Early In Monetization; Neither a Bargain
May 6, 2013
During the past week, publicly traded social media giants Facebook (click ticker for report: ) and LinkedIn (click ticker for report: ) both reported strong first quarter results. Facebook’s revenue grew 38% year-over-year to $1.46 billion, exceeding consensus estimates, while earnings per share were flat at $0.12. LinkedIn’s revenue surged 72% year-over-year to $325 million driving earnings per share of $0.45—both figures handily better than consensus expectations. Cash flow at both companies revealed significantly different stories. LinkedIn generated roughly $59 million in free cash flow as the company’s research and development spending was kept in check. Facebook posted negative free cash flow of $12 million as the firm invested heavily in mobile, servers, and data centers. Both firms’ valuations are
Best Ideas Newsletter Holding Google Hitting All-Time Highs
May 3, 2013
Best Ideas Newsletter holding Google (click ticker for report: ) is flirting with all-time highs today. We anticipate further upside from current levels.
China and North America Help Drive GM
May 3, 2013
Global auto giant General Motors (click ticker for report: ) reported much better than expected first quarter results earlier this week. Revenue, though down 2% year-over-year at $36.9 billion, easily exceeded consensus expectations. Earnings per share, adjusted for one-time items, fell 28% year-over-year to $0.67, which was also far stronger than anticipated. Automotive free cash flow wasn’t incredibly strong, turning to a negative $1.3 billion. Not surprisingly, North America was among the standout performers at GM driven by market share gains. Both Cadillac and Buick were fantastic in the United States, with sales growing 38% and 28%, respectively. We think the brands have done spectacular job fighting back against the strong performance of the likes of Audi and BMW with
Dividend Growth Holding Phillips 66’s Earnings Boom
May 3, 2013
Earlier this week, Dividend Growth Newsletter holding Phillips 66 (click ticker for report: ) reported strong first quarter results on the back of fantastic refining margins. Adjusted earnings per share surged 83% year-over-year to $2.19, handily exceeding consensus estimates. The firm generated over $1.4 billion in free cash flow which it returned to shareholders in part via the repurchase of 6.4 million shares for $382 million and $194 million in dividends. Refining profitability drove a high percentage of the earnings growth at Phillips 66, as refining profits doubled to $909 million. The firm realized a profit margin of $13.94 per barrel. Advantaged crude, which the firm purchases at a discount to relative global benchmarks, jumped 800 basis points year-over-year to
Intel’s New Management Team Looks Fit for the Challenge
May 2, 2013
Earlier this morning, Best Ideas and Dividend Growth Newsletters holding Intel (click ticker for report: ) announced that it has ended its search to find a replacement for current President and CEO Paul Otellini. Stepping into the CEO role will be current COO Brian Krzanich, while Renee James will take the helm as President. Krzanich appears to be a typical Intel hire, in our view. Every Intel CEO has come from within after spending several years at the firm. Krzanich joined the company in 1982, and has since held various roles throughout the development and business side of the firm. His expertise lies in manufacturing, which has been a crown jewel of Intel’s competitive advantage over the past several years.
Visa’s Second Quarter Was Fantastic
May 2, 2013
Credit and debit payment network provider Visa (click ticker for report: ) announced fantastic second-quarter results Wednesday afternoon. Revenue for the quarter jumped 15% year-over-year to $3 billion, easily exceeding consensus estimates. Earnings per share, adjusted for a one-time tax benefit during the second quarter of the prior year, increased 20% year-over-year to $1.92. Due to litigation expenses, free cash flow does not look great year-to-date, but management is confident the company can generate $6 billion in free cash flow for the full-year. Considerable focus on the call addressed the company’s new exclusive card branding with JP Morgan’s (click ticker for report: ) credit unit—not surprising given CEO Charlie Scharf’s previous position as Chase’s retail financial services chief. The deal
