Qualcomm’s Fall Is Baffling
April 25, 2013
Chipmaker Qualcomm (click ticker for report: ) announced wonderful second-quarter results Wednesday afternoon. Revenue jumped 24% year-over-year to $6.1 billion, exceeding consensus expectations. Non-GAAP earnings per share rose 16% year-over-year to $1.17 per share, which was also above consensus estimates. Free cash flow for the quarter jumped 10% year-over-year to $1.99 billion, equal to a whopping 33% of revenue! On the expense side, the firm did a fairly good job of keeping costs contained. Research and development costs increased 100 basis points (28% year-over-year on an absolute basis) to 20% of revenue. Management cited development of CDMA-based 3G tech and 4G LTE technology as the main drivers, though stock-based compensation was also 24% higher year-over-year at $156 million. Because the firm is
Valuentum’s Dividend Coverage Universe
April 25, 2013
Please use the ‘Symbol’ search box to download stock and dividend reports of companies you are interested in. The ‘Symbol’ search box can be found in our website header. Image shown from above. Use the active search box in the website header above. Learn more about your membership >> —– Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free. Some of the companies written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
Procter & Gamble’s Third Quarter Stalls
April 25, 2013
After picking up momentum in the second quarter and raising its dividend in recent weeks, consumer products giant Procter & Gamble (click ticker for report: ) announced mediocre results. Revenue grew only 2% year-over-year to $20.6 billion, falling below consensus estimates. Earnings were slightly stronger than consensus expectations, with core earnings per share increasing 5% year-over-year to $0.99. The firm also announced it will increase its share buyback program to $6 billion—near the high end of the previously announced range. Core gross margins expanded 20 basis points year-over-year to 50% as initiatives in manufacturing and productivity yielded positive results. We’d like to see the firm push this number a bit higher, but it seems its price increases have been offset
Modest European Improvement Could Propel Ford Higher
April 25, 2013
American automaker Ford (click ticker for report: ) reported fantastic first quarter results Wednesday morning. Revenue jumped 10% year-over-year to $35.8 billion, which was significantly better than consensus estimates. Earnings were modestly higher, growing 5% year-over-year to $0.41 per share, which was also much better than consensus expectations. The firm also generated $700 million in automotive operating cash flow, making it the twelfth consecutive quarter of positive cash flow performance—a drastic departure from where the company was five years ago. Image source: Q1 2013 Ford Investor Presentation The standout performer during the first quarter was once again North America. Automotive operating profit jumped 14% year-over-year to $2.4 billion driven by a 20% increase in revenue to $22.3 billion. Operating margins
Apple: Capital Allocation Can’t Shake Bearish Sentiment
April 24, 2013
Best Ideas Newsletter holding Apple (click ticker for report: ) posted solid results Tuesday afternoon. Apple exceeded consensus earnings expectations earning $10.09 per share versus an expectation of $10.07. Revenue grew 11% year-over-year to $43.6 billion, exceeding consensus estimates by over $1 billion. Free cash flow totaled $31.6 billion during the first 6 months of the fiscal year, an increase of 10% compared to the same period a year ago. Importantly, the company also announced expanded intentions to repurchase shares and boosted its dividend 15%. The firm’s buyback was raised to $60 billion (from $10 billion), and it will also use $1 billion annually to offset restricted stock grant dilution. Apple sneakily increased its share count 5% over the past
Valuentum Invited to Present at the World MoneyShow in Las Vegas! Register Free!
April 24, 2013
Las Vegas | May 13 – 16, 2013 • Caesars Palace The Valuentum Team has been invited by the MoneyShow to present its take on the ‘12 Most Important Steps to Understand the Stock Market‘ on Tuesday May 14, 2013, from 5:45pm-6:45pm at Caesers Palace. 12 Steps to Understand the Stock MarketTuesday, May 14, 2013 | 5:45 pm – 6:45 pm Join Director of Research Development RJ Towner and President of Equity Research Brian Nelson to learn more about how Valuentum has redefined the investment process and why combining a variety of investment perspectives is the key to successful stock selection. REGISTER FREE! We look forward to seeing you in Las Vegas! Call 800/970-4355. Mention priority code 031145www.LasVegasMoneyShow.com About the MoneyShow The MoneyShow team produces
Caterpillar’s 2013 Doesn’t Look Great
April 23, 2013
Global equipment manufacturer Caterpillar (click ticker for report: ) posted weak first-quarter results on the back of a decline in global mining capital expenditures. Revenue dropped 17% year-over-year to $13.2 billion, which was slightly below consensus expectations. Earnings tumbled 45% year-over-year to $1.31 per share, which was also worse than consensus estimates. The decline during the first quarter wasn’t much of a surprise as the outlook for mining capital expenditures fell precipitously as commodity prices tumbled. In fact, Cat’s revised outlook implies a 50% year-over-year decline in sales of the firm’s traditional mining equipment and a 15% decline in sales of the equipment sold by recently-acquired Bucyrus. Sales fell 23% in the resource segment for the quarter, and with most of the global mining
Strong Headline Results From Apple
April 23, 2013
Best Ideas Newsletter holding Apple (click ticker for report: ) posted solid results Tuesday afternoon. Apple exceeded consensus earnings expectations earning $10.09 per share versus an expectation of $10.07. Revenue grew 11% year-over-year to $43.6 billion, exceeding consensus estimates by over $1 billion. Free cash flow totaled $31.6 billion during the first 6 months of the fiscal year, an increase of 10% compared to the same period a year ago. Importantly, the company also announced expanded intentions to repurchase shares and boosted its dividend 15%. The firm’s buyback was raised to $60 billion (from $10 billion), and it will also use $1 billion annually to offset restricted stock grant dilution. We’ll provide full analysis after the conference call.
Netflix’s Subscriber Growth Remains Fantastic
April 23, 2013
Content distributor Netflix (click ticker for report: ) kicked off 2013 with strong growth in revenue, subscribers, and earnings per share. Revenue jumped 18% year-over-year to $1 billion, roughly in-line with consensus estimates. On the other hand, earnings per share generously exceeded estimates, moving from break-even to $0.31 per share. Further, the company added 3.05 million new streaming subscribers while losing only 3% of domestic DVD subscribers. Both domestic streaming and international streaming posted strong improvements in profitability and revenue. Domestic streaming revenue increased 26% year-over-year, with lower content costs driving a 630 basis point increase in operating margins to 20.6%. This resulted in an 82% increase in operating profit. In his candid letter to investors, CEO Reed Hastings cited strong
GE Posts Another Record Backlog, But Organic Growth Falters
April 23, 2013
Industrial conglomerate General Electric (click ticker for report: ) reported solid first-quarter results marked by a record backlog of $216 billion. Revenue was flat year-over-year at $35 billion, which modestly exceeded consensus expectations. Earnings, excluding the positive impact of the sale of NBCUniversal, grew 17% year-over-year to $0.35 per share, slightly better than consensus estimates. In spite of decent backlog growth, weakness in its Power and Water division and lackluster results in Oil & Gas weighed on performance. The Power and Water segment was particularly challenged, as revenue dropped 26% year-over-year to $4.8 billion driven by a 42% decline in equipment revenue. The firm focused on cost-cutting efforts in order to preserve margins, but segment profitability still fell 39% to
