eBay Flourishes In The First Quarter
April 18, 2013
In spite of a weak European situation, eBay posts stellar first-quarter results.
Yahoo: The Turnaround
April 17, 2013
Internet search and content provider Yahoo (click ticker for report: ) reported first-quarter results that were mediocre. Revenue ex-TAC (excluding traffic acquisition costs) was flat year-over-year, falling short of consensus estimates. Earnings per share easily exceeded consensus expectations, rising 52% year-over-year to $0.35. Yahoo provided non-GAAP earnings per share of $0.38 that excluded stock-based compensation expense. Unfortunately for shareholders, the EPS increase was mostly the result of a 10% reduction in share count, a reversal of one-time charges, and a significantly lower tax rate. Non-GAAP operating income fell $7 million year-over-year to $224 million. Operating cash flow also declined to the magnitude of 26%, while free cash flow also declined 20%. In our view, the quarter was not nearly as strong
Intel Struggles With The PC Market Slumping
April 17, 2013
Best Ideas and Dividend Growth Newsletter holding Intel (click ticker for report: ) reported lackluster results Tuesday afternoon. For the first quarter, the firm posted a revenue decline of 3% year-over-year, which was slightly worse than consensus expectations. Earnings were a penny shy of consensus estimates, falling 17% year-over-year to $0.40 per share. Gross margins fell 800 basis points year-over-year to 56%, but the firm maintained its full-year outlook for gross margins of 60%. Ultimately, the market knew not to expect a blowout quarter, as PC sales languish. For the quarter, PC client revenue declined 6% year-over-year to $7.99 billion, but the segment’s operating income decline was steeper, falling 28% year-over-year to $2.5 billion as the firm took large inventory
Coca-Cola Grows Earnings And Restructures
April 16, 2013
Warren Buffet favorite Coca-Cola (click ticker for report: ) reported solid first-quarter earnings Tuesday morning. Reported revenues fell 1% year-over-year to $11 billion, falling a touch short of consensus estimates. Comparable earnings per share grew 5% year-over-year to $0.46 per share, a penny above consensus expectations. Total product volumes increased 4% compared to the year prior. In spite of reporting decent results, Coca-Cola announced a restructuring in the United States that stole the show. The firm will allow five of its largest bottlers to expand their territories, effectively undoing the bottler rollup of year’s past. CEO Muhtar Kent expanded on the announcement on the company’s conference call, stating: “In the coming months, we will be collaborating with five of our
The April Edition of Our Best Ideas Newsletter!
April 16, 2013
Outperformance Grows As The Market Swoons By The Valuentum Team “I try my best/To be just like I am/But everybody wants you/To be just like them. Bob Dylan, “Maggie’s Farm” The words above come from Bob Dylan’s classic song, “Maggie’s Farm,” but they seem to apply perfectly to the current situation with Apple. The market wants to see Apple push “phablets.” Everyone wants Apple to pay a more aggressive dividend. People are even calling for the job of CEO Tim Cook because he hasn’t “listened” to customers. To continue reading, please click . INSIDE THIS ISSUE 1 Outperformance Grows As The Market Swoons 1 Aloca Sets a Positive Tone for Earnings Season (ticker:AA) 3 Shares of Baidu Are Just Too
Procter & Gamble Raises Its Dividend
April 15, 2013
Dividend Growth Newsletter portfolio holding Procter & Gamble (click ticker for report: ) boosted its dividend 7% sequentially to $0.6015 per share on a quarterly basis. We believe the firm’s dividend growth will continue.
Ergen Chooses Sprint Over DirecTV
April 15, 2013
Monday morning, satellite TV provider Dish Network (click ticker for report: ) made a bold offer to merge with the United States’ third largest cellular carrier, Sprint (click ticker for report: ). The deal represents a valuation premium to SoftBank’s offer $20.1 billion offer for 70% of shares, and we believe Sprint’s board must consider the superior offer, which equates to $4.76 per share in cash and $2.24 per share in Dish stock, valuing Sprint at $25.5 billion. CEO Charlie Ergen is no stranger to bold moves, and many believe he’s had his eye on Sprint for a some time. Although we thought a DirecTV (click ticker for report: ) merger was more likely to occur, the Sprint deal makes
JP Morgan and Wells Fargo Post Solid First Quarters
April 15, 2013
Although not surprising, two of the United States’ largest banks, JP Morgan (click ticker for report: ) and Wells Fargo (click ticker for report: ) kicked off the first quarter with terrific earnings. JP Morgan exceeded earnings expectations, generating a record $1.59 per share in earnings on revenue of $25.8 billion. Wells Fargo’s results weren’t too shabby either, boasting record earnings per share of $0.93 on revenue of $21.3 billion. JP Morgan Much of JP Morgan’s quarter was driven by strong performance from the mortgage business, which earned a return on equity of 14% (image source: JPM Q1 2013 presentation). Originations grew 37% year-over-year and 3% sequentially to $52.7 billion. Net interest margins on mortgages continue to compress, and CFO
Firms Raising Their Dividends In The Week Ending April 12
April 13, 2013
The week ending April 12 was a light week in terms of dividend raises, but we did see some significant increases. Firms Raising Their Dividends This Week: Bank of New York Mellon (BK): now $0.15 per share quarterly dividend, was $0.13. First Merchants Corp (FRME): now $0.05 per share quarterly dividend, was $0.03. IDEX Corporation (IEX): now $0.23 per share quarterly dividend, was $0.20. Lakeland Financial (LKFN): now $0.19 per share quarterly dividend, was $0.17 Qualcomm (QCOM): now $0.35 per share quarterly dividend, was $0.25. Select Income REIT (SIR): now $0.44 per share quarterly dividend, was $0.42. Stage Stores (SSI) now $0.125 per share quarterly dividend, was $0.10. Weyerhaeuser Company (WY): now $0.20 per share quarterly dividend, was $0.17.
Why First Solar’s Analyst Day Did Not Sway Our View
April 11, 2013
For more than 18 months, Valuentum has been bearish on the future of the solar industry, with First Solar (click ticker for report: ) being a name we’ve carefully avoided. Shares went parabolic Tuesday afternoon, jumping over 40% at one point. CEO Jim Hughes also delivered some positive commentary about First Solar’s cost-per-watt pathway (below 40 cents in the near-future) and “off-grid” electricity sales potential. During its analyst day, the firm also provided much more bullish financial guidance than the Street had forecasted. First Solar anticipates full-year revenue of $3.8 billion to $4 billion to drive earnings per share of $4.00-$4.50. Operating cash flow is expected to be $800 million to $1 billion, but that matters little, in our view,
