Brian Nelson

IBM Expects to Generate $13.5+ Billion in Free Cash Flow in 2025

by

Image Source: TradingView By Brian Nelson, CFA IBM (IBM) recently reported second quarter results that came in better than expected on both the top and bottom lines. Revenue of $17 billion was up 8% and up 5% at constant currency. Software revenue advanced 10%, up 8% at constant currency, while consulting revenue was up 3%, flat at constant currency. Infrastructure revenue was up 14%, up 11% at constant currency. Non-GAAP gross margin was up 230 basis points, while non-GAAP pre-tax income margin jumped 110 basis points. Management had the following to say about the results: We once again exceeded expectations for revenue, profit and free cash flow in the quarter. IBM remains highly differentiated in the market because of our … Read more

Chipotle Now Expects Flat Comps for 2025

by

Image Source: Valuentum By Brian Nelson, CFA On July 23, Chipotle (CMG) reported disappointing second quarter results with non-GAAP earnings per share coming in line with the consensus forecast, but revenue missing what the Street was looking for. Total revenue increased 3% in the quarter thanks to new restaurant openings, but comparable restaurant sales fell 4% due to lower transactions, and its operating margin dropped to 18.2%, down from 19.7% in the prior-year period. The Street had been looking for a 2.9% decline in comp sales in the quarter. Restaurant level operating margins fell to 27.4% from 28.9% in last year’s quarter. Adjusted diluted earnings per share was $0.33 in the quarter, down 2.9% from the second quarter of last … Read more

Alphabet Puts Up Excellent Second Quarter Results

by

Image Source: TradingView By Brian Nelson, CFA On July 23, Alphabet (GOOG) (GOOGL) reported excellent second quarter results with revenue and GAAP earnings per share coming in better than the consensus forecast. Consolidated Alphabet revenue in the second quarter increased 14%, or 13% in constant currency on a year-over-year basis. The company noted “robust momentum across the business,” with “Google Search & other, YouTube ads, Google subscriptions, platforms, and devices, and Google Cloud each deliver(ing) double-digit growth in Q2.” Google Services revenue increased 12% in the quarter, while Google Cloud revenues increased 32% in the period. Management had the following to say about the results: We had a standout quarter, with robust growth across the company. We are leading at … Read more

NextEra Energy’s Outlook for the Next Few Years Looks Solid

by

Image Source: NextEra Energy By Brian Nelson, CFA NextEra Energy (NEE) reported mixed second quarter results July 23 with revenue coming in slightly lower than forecast, but non-GAAP earnings per share exceeding the consensus forecast. On an adjusted basis, NextEra Energy’s earnings in the quarter were $2.164 billion, or $1.05 per share, compared to $1.968 billion, or $0.96 per share in the second quarter, of 2024. Management had the following to say about the results: NextEra Energy delivered strong second-quarter results with adjusted earnings per share increasing by 9.4% year-over-year. We believe the continued strong financial and operational performance at both FPL and NextEra Energy Resources positions us well to meet our overall objectives for the year. During the quarter, … Read more

Philip Morris’ Smoke-Free Portfolio Continues to Gain Traction

by

Image Source: TradingView By Brian Nelson, CFA Philip Morris (PM) reported mixed second quarter results July 22, with revenue coming in slightly below expectations, but non-GAAP earnings per share exceeding the consensus forecast. Net revenues increased 7.1% on a reported basis and 6.8% on an organic basis. Its smoke-free business experienced a 15.2% increase in revenue, with 14.5% of that organic. Its combustible portfolio showed a 2.1% increase in revenue, with 2% of that organic. Operating income increased 7.8% on a reported basis in the quarter, while it expanded 14.9% on an organic basis versus the second quarter of 2024. Adjusted diluted earnings per share, excluding currency, increased 18.9% in the quarter. Management had the following to say about the … Read more

Lockheed Martin Announces Program Losses

by

Image Source: TradingView By Brian Nelson, CFA Lockheed Martin (LMT) recently reported disappointing second quarter results that showed a miss on the top line versus consensus and pre-tax losses on programs of $1.6 billion and other charges of $169 million, combining to impact earnings per share by $5.83. Second quarter sales came in at $18.2 billion, up from $18.1 billion in the second quarter of 2024. Net earnings of $1.46 per share compared to $6.85 per share in last year’s quarter. Cash from operations was $201 million compared to $1.9 billion in last year’s quarter, while free cash flow dipped into negative territory, compared to $1.5 billion in the second quarter of 2024. Management had the following to say about … Read more

Domino’s Same Store Sales Growth Beats Expectations

by

Image Source: Domino’s By Brian Nelson, CFA On July 21, Domino’s (DPZ) reported mixed second quarter results with revenue beating the consensus forecast but GAAP earnings per share coming in lower than expectations. Revenue increased 4.3% in the quarter due to higher supply chain revenues, higher U.S. franchise royalties and fees and higher U.S. franchise advertising revenues. U.S. same store sales growth was 3.4% in the quarter, beating expectations calling for a 2.2% advance. International same store sales growth was 2.4%, beating expectations calling for a 1.6% increase. Adjusted income from operations increased 14.9% due to higher U.S. franchise royalties and fees, as well as gross margin dollar growth within supply chain. Management had the following to say about the … Read more

Kinder Morgan Expected to Capitalize on Natural Gas Demand

by

Image Source: TradingView By Brian Nelson, CFA On July 16, Kinder Morgan (KMI) reported mixed second quarter results with revenue beating the consensus forecast, but non-GAAP earnings per share coming in line with expectations. Second quarter net income attributable to KMI was $715 million, up 24% from the same period a year ago. Adjusted EBITDA advanced 6%, to $1.97 billion from the same period last year. Management had a lot to say about the quarterly results and outlook: With historic growing natural gas demand forecasts, a positive federal regulatory environment, and highly supportive federal permitting agencies, the future for our company is very bright. We will continue to reap the benefit of a business model structured around long-term take-or-pay, fee-based … Read more

Johnson & Johnson Raises 2025 Guidance

by

Image Source: J&J By Brian Nelson, CFA On July 16, Johnson & Johnson (JNJ) reported better than expected second quarter results with both revenue and non-GAAP earnings per share exceeding the consensus forecast. The healthcare giant reported adjusted operational sales growth of 3% in the quarter (2.4% growth in Innovative Medicine and 4.1% growth in MedTech) and adjusted earnings per share of $2.77, down modestly on a year-over-year basis. Free cash flow was ~$6.2 billion in the quarter, also down from $7.5 billion that it registered in the second quarter of last year. Management had the following to say about the results: Today’s strong results reflect the depth and strength of Johnson & Johnson’s uniquely diversified business operating across both … Read more

Netflix Raises 2025 Revenue and Margin Guidance

by

Image Source: Netflix By Brian Nelson, CFA On July 17, Netflix (NFLX) reported better than expected second quarter results with revenue and GAAP earnings per share beating the consensus forecast. The company grew revenue 15.9% in the quarter on a year-over-year basis, and its operating margin was 34.1%, up roughly seven percentage points on a year-over-year basis. Both revenue and operating income came in above its guidance due to foreign exchange and the timing of certain expenses. Net income came in at $3.1 billion in the quarter, up from $2.1 billion in last year’s quarter, while diluted earnings per share came in at $7.19, up from $4.88 in the second quarter of 2024 (+47% year-over-year). Netflix’s top line continues to … Read more