Waste Management to Acquire Stericycle
June 3, 2024
Image: Waste Management’s shares have done quite well the past 12-18 months. By Brian Nelson, CFA On June 3, Waste Management (WM) confirmed a prior report from the Wall Street Journal that it would acquire medical waste services company Stericycle (SRCL). The news comes a week or so after Stericycle said it was exploring a sale of the company. Waste Management will acquire Stericycle for $62 per share in cash, or for an enterprise value of ~$7.2 billion after considering Stericycle’s net debt. The agreed-upon price represents a ~24% premium to the company’s 60-day volume weighted average price as of May 23, 2024, or the last trading day before the report that made public Stericycle was up for sale. There
Costco’s Comparable Store Sales Deliver
June 2, 2024
Image Source: Costco By Brian Nelson, CFA On May 30, Costco (COST) reported solid third quarter results for its fiscal 2024 period ended May 12. Net sales for the quarter increased 9.1% thanks to total company adjusted comparable sales performance of 6.5% and e-commerce growth of 20.7%. Net income for the quarter came in at $1.68 billion, or $3.78 per share, which beat the consensus forecast. Management talked more about the performance on the conference call: Our average transaction or ticket was up 0.5% worldwide and up 0.7% in the U.S. Foreign currencies relative to the U.S. dollar negatively impacted sales by approximately 20 basis points, while gasoline price inflation positively impacted sales by approximately 30 basis points. Moving down
In the News: CRM, FL, DG, BBY
May 30, 2024
Image Source: Mike Mozart By Brian Nelson, CFA Salesforce Issues Weaker-Than-Expected Outlook On May 29, Salesforce (CRM) reported mixed first quarter results with revenue missing the consensus estimate, and it issued lackluster guidance that sent shares tumbling following the report. In the quarter, revenue advanced 11% in constant currency and its first-quarter non-GAAP operating margin came in at 32.1%. Its current remaining performance obligation was $26.4 billion, up 10% in constant currency. Operating cash flow and free cash flow were up nicely in the quarter, to the tune of 39% year-over-year and 43% year-over-year, respectively. However, the rosy cash-flow performance was overshadowed by the company’s second quarter sales outlook that came in lower than the consensus forecast. Even though Salesforce
Dick’s Sporting Goods Puts Up Strong First Quarter, Raises Guidance
May 29, 2024
Image: Dick’s Sporting Goods’ guidance pleased investors. Image Source: Dick’s Sporting Goods. By Brian Nelson, CFA On May 29, Dick’s Sporting Goods (DKS) reported excellent first quarter results that beat expectations on both the top and bottom lines. Net sales in the quarter advanced 6.2% on a year-over-year basis, while the company put up 5.2% in comparable store sales expansion (well above consensus expectations). Dick’s Sporting Goods delivered strong profitability in the quarter with a double-digit EBT (income before taxes) margin of 11.3%, as well as reported earnings per share of $3.30 on 4% EBT growth (above the Street forecast). The executive team was upbeat with their commentary in the press release: Our strong first quarter results continue to prove
NextEra Energy Expects 10% Annual Dividend Growth Through 2026
May 24, 2024
Image Source: NextEra Energy By Brian Nelson, CFA Back on April 23, NextEra Energy (NEE) reported mixed first quarter results with non-GAAP earnings per share beating expectations, but revenue coming in light versus the consensus forecast at the time. Net income attributable to NextEra Energy on an adjusted basis came in at $0.91 per share, which was up modestly from $0.84 per share in the year-ago period. Management had a lot to say about the quarter and outlook: NextEra Energy delivered strong first-quarter results, growing adjusted earnings per share by approximately 8.3% year-over-year. Both FPL and NextEra Energy Resources delivered solid financial and operating performances to start off the year. FPL placed into service 1,640 megawatts of new, cost-effective solar,
Accenture Facing Revenue Growth Pressures But Stock Is Worth a Look
May 23, 2024
Image: Accenture is facing revenue growth pressure, but the company’s financials remain resilient. By Brian Nelson, CFA Back on March 21, Accenture (ACN) reported mixed second quarter fiscal 2024 results, with revenue missing top-line expectations and non-GAAP earnings per share beating the consensus forecast. “Accenture is a leading global professional services company that helps the world’s leading businesses, governments and other organizations build their digital core, optimize their operations, accelerate revenue growth and enhance citizen services—creating tangible value at speed and scale (Form 10-K).” During the second quarter, Accenture’s revenues were roughly flat in U.S. dollars and local currency compared to the same period a year ago. Adjusted operating income came in at $2.16 billion, which was down from the
Nvidia Remains a Free Cash Flow Generating Powerhouse
May 23, 2024
Image: Nvidia’s first-quarter fiscal 2025 results delivered, and the company remains a Wall Street darling of a stock. By Brian Nelson, CFA All eyes were on Nvidia’s (NVDA) first quarter fiscal 2025 results after the close May 22. The company put up record quarterly revenue of $26 billion in the quarter, which beat the consensus forecast, up 262% from the same period a year-ago. The company’s Data Center revenue came in at $22.6 billion, which also came in better than expectations, up 427% from last year’s quarter. The results were good enough to propel Nvidia’s shares higher following the quarterly report. Founder and CEO Jensen Huang had the following to say about the company’s bright prospects: The next industrial revolution
TJX Reports Strong First Quarter Results; Raises Fiscal 2025 Guidance
May 22, 2024
By Brian Nelson, CFA On May 22, TJX Companies (TJX) reported strong first quarter results and increased its outlook for fiscal 2025. Net sales for the quarter ended May 4, 2024, advanced ~6% from the same period a year ago thanks in part to consolidated same store sales that increased ~3% due to strength in customer transactions. Diluted earnings per share came in at $0.93 versus $0.76 in the same period of fiscal 2024. The off-price apparel and home fashions retailer continues to deliver for consumers and investors alike. We like the company. Management spoke positively about the quarter and the current momentum it continues to experience: I am very pleased with our first quarter performance. Overall comp store sales
Target’s First Quarter Results Weren’t as Good as Walmart’s
May 22, 2024
By Brian Nelson, CFA On May 22, Target (TGT) reported mixed first quarter results that showed in-line revenue performance but a modest miss on the bottom line relative to the consensus forecast. Target’s results were not as good as Walmart’s (WMT) as Target’s first-quarter comparable sales fell 3.7%, while Walmart’s total U.S. comps showed a nice advance during its first quarter. Target’s adjusted earnings per share in the quarter of $2.03 showed a modest decline from the $2.05 mark it achieved in the same quarter of 2023. Nonetheless, Target CEO Brian Cornell was optimistic in his comments in the press release: Our first quarter financial performance was in line with our expectations on both the top and bottom line, tracking
