Mattel Posts Strong Fourth Quarter; Raises Dividend
February 4, 2013
Toymaker Mattel (click ticker for report: ) reported solid fourth quarter results Friday morning that were slightly worse than consensus estimates. Revenue grew 5% year-over-year to $2.3 billion, producing adjusted earnings per share of $1.13, also 5% higher than the year ago period. These results outpaced those of competitor Hasbro (click ticker for report: ), which missed the mark when it preannounced weak fourth quarter results in late January. Both domestic and international markets drove strength at Mattel, as North American sales jumped 5% year-over-year on a reported-basis (4% excluding currency) and International sales increased 8% year-over-year on a reported basis (10% excluding currency). Asia was incredibly strong, with sales jumping 27% year-over-year, and we think the future looks bright
Refining Profits Help Fuel Supermajors
February 4, 2013
Two of the world’s largest oil companies, Exxon Mobil (click ticker for report: ) and Dividend Growth portfolio holding Chevron (click ticker for report: ) announced solid fourth quarter results Friday. Exxon’s fourth quarter earnings rose 12% year-over-year to $2.20 per share, easily exceeding consensus expectations, even though production declined 5.2% year-over-year. Production at Chevron was stronger, increasing 1.1% year-over-year, while earnings were fantastic, surging 43% year-over-year to $3.70 per share (well above consensus estimates). After Phillips 66 (click ticker for report: ), Valero (click ticker for report: ), and the rest of the refining cohort reported stellar results, we were not at all surprised to see downstream earnings surge at both supermajors. Chevron swung from a loss of $61
MasterCard Posts Terrific Fourth Quarter Results
February 3, 2013
Late last week, payment processor MasterCard (click ticker for report: ) announced terrific fourth quarter results. Revenue jumped 10% year-over-year to $1.9 billion, in line with expectations. Earnings, however, exceeded consensus estimates, growing 21% year-over-year to $4.86 per share. Much like Best Ideas Newsletter holding Visa (click ticker for report: ), MasterCard continues to ride secular tailwinds as the world moves to a cashless society. Though the US is MasterCard’s largest market, its credit card market share substantially lags that of Visa. Still, the company has tremendous global exposure. With credit and debit payments nearing maturity in the US, other markets (shown below) are driving the growth at MasterCard (Image Source: MasterCard Earnings Presentation). Although the company’s exposure to Europe may be
Problems Persist at Under Armour But Cash Flow Improves
February 3, 2013
Athletic apparel giant Under Armour (click ticker for report: ) recently reported strong fourth quarter results. Revenue jumped nearly 26% year-over-year to $506 million, exceeding consensus expectations. Earnings were in line with consensus estimates, growing 52% year-over-year to $0.47 per share. For more than a year, we’ve been cautious about the way the apparel firm has been managing its cash flow. After a warm fourth quarter in 2011, the company was saddled with large amounts of product that strained liquidity through most of the year. However, 2012, and more specifically, the past two quarters, represented a push in the right direction. Under Armour’s inventory declined year-over-year during the third quarter, and we once again saw inventory decline 2% year-over-year during
What a Month! Valuentum’s February Edition of Its Dividend Growth Newsletter!
February 2, 2013
What a Month for Dividend Growth Investors! by Brian Nelson, CFA Not only did the Dow Jones Industrial Average (DJIA) top 14,000 for the first time since October 2007, but performance of constituents in the portfolio of our Dividend Growth Newsletter (see page 5) was even better! ConocoPhillips’ spin-off Phillips 66 (PSX) hit an all-time high and has now nearly doubled since it joined our portfolio. Johnson & Johnson (JNJ) and Procter & Gamble (PG) notched all-time highs, while Altria (MO), Kinder Morgan (KMP), and Emerson Electric (EMR) also had an excellent month! We’ve been more than satisfied with our performance so far this year and since inception. Our Dividend Growth portfolio has now advanced over 16% for an annualized
Best Ideas Portfolio Holding Google Hits All-time High!
February 1, 2013
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Delays from Asia Pressure Earnings at Potash
February 1, 2013
Agricultural nutrient provider Potash (click ticker for report: ) announced relatively weak fourth quarter results Thursday morning. Revenue tumbled 12% year-over-year to $1.6 billion, falling below consensus estimates. Earnings also missed the mark, dropping 38% year-over-year to $0.48 per share. Company-wide gross margins sank 1,200 basis points year-over-year to 35.7% Potash, generally the company’s namesake nutrient, was weak everywhere outside of North America. Total potash volumes declined 17% year-over-year to 1.3 million tonnes, even though North American volumes were 39% above the comparable period of 2011. Going into 2013, management thinks demand for potash will remain strong in North America, mentioning on the conference call: “In North America, dry conditions persist in certain areas, but many of our customers say;
US Housing Recovery Has Yet to Hit Whirlpool
February 1, 2013
Appliance maker Whirlpool (click ticker for report: ) reported strong fourth quarter earnings Thursday morning. Improving operating margins helped drive earnings growth of well over 600% to $2.29 per share on an adjusted basis, easily exceeding expectations. Revenue fell 2% on a reported basis, to $4.8 billion, but was up 2% in constant currency. Perhaps the most impressive part of Whirlpool’s results (shown below) was that the firm significantly expanded operating margins (profitability), despite the weakness in its largest market, North America. Sales fell 3% year-over-year to $2.5 billion. However, ongoing business operating margins more than doubled to 9.3%, and the firm saw a total profitability increase of 121% (please see image below). The firm has lowered its cost structure to the
Qualcomm’s First Quarter was Fantastic
February 1, 2013
Chipmaker Qualcomm (click ticker for report: ) posted a fantastic first quarter, continuing its momentum from fiscal year 2012 into 2013. Revenue surged 28% year-over-year to $6 billion, easily exceeding the consensus estimate. Non-GAAP earnings were also better than the consensus anticipated, growing 30% year-over-year to $1.26 per share (Image Source: QCOM Earnings Presentation). If there’s any beneficiary of the smartphone revolution, it is most certainly Qualcomm. Aside from perhaps the phone carriers themselves, Qualcomm is the most OEM agnostic way to play massive smartphone growth. As the above chart shows, average selling prices continue to grow, and shipments look to exceed 1 billion units in Qualcomm’s 2013 fiscal year (shown above). While there’s no doubt Qualcomm benefited from spectacular
ConocoPhillips Posts Decent Fourth Quarter Results
January 31, 2013
Oil giant ConocoPhillips (click ticker for report: ) reported decent fourth quarter results Wednesday night. Earnings, adjusted for certain items and to reflect the divestiture of Phillips 66 (click ticker for report: ), declined 8% year-over-year to $1.43 per share, which was a penny better than the Street expected. Production was up modestly compared to the same period a year ago, growing 1.8% to 1,607 MBOE (MBOE = one thousand barrels of oil equivalents), with production hitting record numbers in the Eagle Ford and Bakken shales. The firm also had solid growth in reserve replacements, which totaled 156% for the year at 8.6 million BOE. The majority of reserves came from oil sands in Canada, as well as increased provable
