Lowe’s First Quarter Results Come in Better Than Feared
May 21, 2024
By Brian Nelson, CFA On May 21, Lowe’s (LOW) reported better-than-expected first quarter results for the period ended May 3, 2024, that showed a revenue decline of ~4.4%, but not one that was as great as feared. Comparable store sales fell 4.1% in the quarter, but this performance also came in better than the consensus forecast that expected a ~5.6% decline. Diluted earnings per share came in at $3.06 in the quarter versus adjusted diluted earnings per share of $3.67 last year. Management commentary was upbeat in the press release: We are pleased with our start to spring, driven by strong execution and enhanced customer service. This quarter we rolled out our new DIY loyalty program nationally, expanded same-day delivery
Walmart Winning Business as Consumers Remain Cost Conscious
May 16, 2024
Image Source: Walmart By Brian Nelson, CFA On May 16, Walmart (WMT) reported better than expected first quarter results for its fiscal 2025. Strength was evident across the board. Consolidated revenue increased 6% (5.8% in constant currency), while its consolidated gross margin increased 42 basis points. Walmart U.S. comp sales increased 3.8%, while total U.S. comps, excluding fuel, came in at 3.9% in the period. The big box giant’s consolidated operating income increased 9.6% in the quarter, while adjusted operating income advanced 13.7%. Global e-commerce and its advertising business fared well, too, with sales increasing 21% and 24%, respectively, in the quarter. Adjusted earnings per share of $0.60 beat consensus, and management noted that inventory levels, which dropped in the
Cisco Still Looks Cheap, Shares Yield ~3.2%
May 16, 2024
Image Source: Cisco By Brian Nelson, CFA On May 15, Cisco Systems (CSCO) reported better than feared third quarter results for its fiscal 2024. Revenue faced pressure, falling 13% on a year-over-year basis, as management noted that customers continue to implement “products on-hand.” Non-GAAP earnings per share of $0.88 beat consensus. Management spoke of a dynamic market environment, while mentioning some stabilization of demand: We delivered a solid Q3 performance in what remains a dynamic environment. Our unique ability to bring together networking, security, observability, and data enables Cisco to offer our customers unrivaled digital resilience for the AI era. Revenue, gross margin and non-GAAP EPS in Q3 were at the high end or above our guidance range, both including
Home Depot Sees Softness in Some Larger Discretionary Projects
May 14, 2024
Image Source: Home Depot continues to experience some softness in sales of big ticket items. By Brian Nelson, CFA On May 14, Home Depot (HD) reported mixed first quarter results that showed revenue and earnings pressure, but the firm’s bottom line continued to hold up well relative to expectations. Total reported sales fell 2.3% in the quarter, while comparable store sales declined 2.8%, with comps declining 3.2% in the U.S. in the period. Net earnings for the first quarter dropped to $3.63 per share compared to $3.82 per share in the same period a year ago. Management noted some softness in its business to start the spring: The team executed at a high level in the quarter, and we continued
Energy Transfer Ups Adjusted EBITDA Guidance for 2024
May 13, 2024
Image: Energy Transfer’s financials are in much better shape than they were years ago. By Brian Nelson, CFA On May 8, Energy Transfer (ET) reported strong first-quarter 2024 results. Adjusted EBITDA for the three months ended March 31 came in at $3.88 billion, which was nicely higher than the $3.43 billion mark it achieved in the same period last year. Distributable cash flow [DCF] in the quarter came in at $2.36 billion, which was materially better than the $2.01 billion registered during the first quarter of 2023. During the first quarter of 2024, the company’s crude oil transportation volumes increased 44%, which set a new record. Crude oil terminal volumes increased 10%, NGL fractional volumes increased 11%, NGL exports increased
Disney Expects Strong Adjusted EPS Growth, Free Cash Flow
May 13, 2024
Image: Disney’s shares have struggled, but management is working hard to get back on track. By Brian Nelson, CFA Disney (DIS) reported mixed second quarter results for fiscal 2024 on May 7 that showed revenue coming in a bit lighter than expectations, but non-GAAP earnings per share beating the consensus forecast. The company continues to recover from recent missteps, with the firm generating double-digit percentage growth in adjusted earnings per share in the period. Management had a lot of positive things to say about the quarter: Our strong performance in Q2, with adjusted EPS up 30% compared to the prior year, demonstrates we are delivering on our strategic priorities and building for the future. Our results were driven in large
Qualcomm’s Dividend Strength Is Undeniable
May 10, 2024
Image: Qualcomm remains a tremendous free cash flow generator. By Brian Nelson, CFA Back on May 1, Qualcomm reported solid second quarter results for fiscal 2024, for the period ending March 24, 2024. Revenue edged up 1% higher, while earnings before taxes on a non-GAAP basis increased 11% year-over-year. Non-GAAP net income jumped 14% from last year’s quarter, while non-GAAP diluted earnings per share advanced 13%. Though its top line performance was rather modest, we liked how the firm was able to leverage that growth into strong earnings momentum. Management was upbeat on its quarter and outlook: We are pleased to report strong quarterly results, with EPS exceeding the high end of our guidance. We are excited about our continued
Main Street’s Dividend May Be Worth a Look
May 10, 2024
Image: Shares of Main Street have caught a bid recently, and commentary from management remains encouraging. By Brian Nelson, CFA On May 9, Main Street Capital (MAIN) reported first quarter results for 2024. Net investment income came in at $89.8 million, or $1.05 per share, while distributable net investment income was $94.4 million, or $1.11 per share. The business development company generated total investment income of $131.6 million in the quarter and put up “an industry leading position in cost efficiency.” Impressively, Main Street Capital generated a return on equity of 17.2% on an annualized basis for the quarter and 19.3% for the trailing twelve-month period. Main Street Capital’s net asset value was $29.54 at the end of March, and
Starbucks Surprises Investors with Weak Fiscal Second Quarter Results
May 7, 2024
Image: Starbucks’ shares face some challenges as the firm struggles to right the ship. By Brian Nelson, CFA On April 30, Starbucks (SBUX) surprised investors with very weak second-quarter 2024 results that showed a miss on both the top and bottom lines. During the fiscal second quarter, global comparable store sales fell 4% as comparable transactions dropped 6%. Weakness was prevalent. North America and U.S. comp sales fell 3%, while international comparable store sales dropped 6%. China comps dropped 11% due to a 8% decline in average ticket and a 4% drop in comparable transactions. During the quarter, Starbucks opened 364 net new stores. Management admitted that it dropped the ball in the quarter: In a highly challenged environment, this
Amazon’s Operating Income Growth Is Solid
May 6, 2024
Image: Amazon’s shares have made a solid run higher since the beginning of 2023. By Brian Nelson, CFA On April 30, Amazon (AMZN) reported better-than-expected first quarter results that showed net sales increasing 13% thanks in part to AWS segment sales growth of 17%. Operating income exploded higher to $15.3 billion in the first quarter compared to $4.8 billion in the same period a year ago thanks to particularly strong performance at its North America segment as well as its AWS segment, where operating income jumped to $9.4 billon from $5.1 billion in the same period a year ago. Amazon’s net income jumped to $10.4 billion from $3.2 billion in the year-ago period. Management was upbeat on the performance: It
