Lennar Navigating Fluctuating Interest Rate Environment Well
June 18, 2024
Image: Lennar has been a strong performer since the beginning of 2023. By Brian Nelson, CFA On June 17, homebuilder Lennar (LEN) reported better than expected second quarter results for fiscal 2024. Total revenues increased 9%, while diluted earnings per share leapt to $3.45 in the quarter from $3.01 in the same period a year ago. New orders jumped 19%, to 21,293 homes, while the firm’s backlog stood at 17,873 homes with a dollar value of $8.2 billion. Deliveries in the quarter increased 15%, to 19,690 homes. Its average sales price, net of incentives, per home delivered came in at $426,000 in the second quarter, while its homebuilding gross margin was up 10 basis points from last year, to 22.6%.
Adobe’s Outlook Doesn’t Disappoint
June 17, 2024
Image: Adobe’s shares are getting back on track after it issued a strong outlook for fiscal 2024. By Brian Nelson, CFA On June 13, Adobe (ADBE) reported better than expected second quarter results for fiscal 2024. Revenue grew 10% on a year-over-year basis (11% in constant currency), while diluted earnings per share came in at $4.48 on a non-GAAP basis. Non-GAAP operating income was $2.44 billion in the quarter, while the firm exited the period with $17.86 billion in remaining performance obligations. Management had the following to say about the quarter in the press release: Adobe achieved record revenue of $5.31 billion driven by strong growth across Creative Cloud, Document Cloud and Experience Cloud. Our highly differentiated approach to AI
Broadcom Issues Strong Guidance, Announces Stock Split
June 13, 2024
Image: Broadcom’s shares have done quite well in the past couple of years. We liked its fiscal second quarter results and outlook. By Brian Nelson, CFA On June 12, Broadcom (AVGO) reported second quarter fiscal 2024 results for the period ended May 5. The company beat revenue on both the top and bottom lines in the quarter. Revenue increased 43% from the year-ago period, while adjusted EBITDA increased from $5.7 billion to $7.4 billion in the quarter (59% of total revenue), making for some continued strong levels of profitability. Non-GAAP diluted earnings per share were $10.96 in the fiscal second quarter, up from $10.32 in the same quarter a year ago. Management’s commentary was positive in the press release: Broadcom’s
Oracle Misses in Q4 But Bookings Performance and Outlook Strong
June 12, 2024
Image: Oracle’s shares have done quite well since the beginning of 2023, and management’s outlook speaks to continued strength. By Brian Nelson, CFA On June 11, Oracle (ORCL) reported fourth quarter fiscal 2024 results that missed expectations on the top and bottom line, but the company’s total remaining performance obligations increased a whopping 44% on a year-over-year basis, to $98 billion–up $18 billion from the fiscal third quarter. Total quarterly revenue advanced 4% in constant currency, while non-GAAP operating income jumped 9% in constant currency. Management commented positively in the quarterly earnings press release about the pace of orders and the visibility it provides into the coming fiscal years: In Q3 and Q4, Oracle signed the largest sales contracts in
J.M. Smucker’s Free Cash Flow Outlook Solid
June 10, 2024
Image: J.M. Smucker’s shares have faced pressure during the past several months, but its free cash flow outlook looks solid. By Brian Nelson, CFA On June 6, J.M. Smucker (SJM) reported mixed fiscal fourth quarter results with revenue coming up a bit short relative to expectations and the bottom line coming in higher than consensus. Adjusted net sales, excluding acquisitions, divestitures, and foreign currency fluctuations advanced 3% thanks to better net price realization in its U.S. Frozen Handheld and Spreads, U.S. Retail Pet Foods, and for International and Away from Home. The company’s volume/mix increased 1% thanks to Smucker’s Uncrustables frozen sandwiches, Folgers coffee, Jif peanut butter, among other areas. Adjusted gross profit increased 15% in the quarter. Adjusted operating
Lululemon’s Fiscal First Quarter Results Well Received But Competition Remains Fierce
June 6, 2024
Image: Lululemon’s shares have been under considerable pressure so far in 2024. By Brian Nelson, CFA On June 5, Lululemon (LULU) reported better than expected first quarter fiscal 2024 results for the period ended April 28 that beat expectations on both the top and bottom lines. Net revenue increased 10% (11% on a constant dollar basis), while comparable sales increased 6% (7% on a constant dollar basis). The company’s operating margin faced pressure in the period, but its gross margin expanded 20 basis points from last year’s period. Its diluted earnings per share came in at $2.54 in the quarter versus $2.28 per share in the same period a year ago. Management’s commentary was upbeat in the press release: In
Hewlett Packard Enterprise Reports Strong AI Systems Revenue
June 5, 2024
Image: Hewlett Packard Enterprise is breaking out nicely. By Brian Nelson, CFA On June 4, Hewlett Packard Enterprise (HPE) reported better than expected fiscal second quarter results that showed a beat on both the top and bottom lines. The company’s revenue advanced 3% from the prior quarter last year (up 4% in constant currency), while its annualized revenue run rate came in at $1.5 billion, which was up 37% from the same period last year (up 39% in constant currency). Hewlett Packard Enterprise’s server revenue advanced 18% on a year-over-year basis in both actual dollars and in constant currency. Management spoke positively about the results and outlook: HPE delivered very solid results in Q2, exceeding revenue and non-GAAP EPS guidance.
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
