Brian Nelson

Union Pacific’s Free Cash Flow Generation Remains Robust

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Image Source: Union Pacific By Brian Nelson, CFA Union Pacific (UNP) recently reported third quarter results that missed expectations on both the top and bottom lines, but the company remains one of our favorite railroads. Its operating revenue grew 3% in the quarter, to $6.1 billion, thanks to increased volume and core pricing gains that were only partially offset by business mix and lower fuel surcharge revenue. Freight revenue, excluding fuel surcharges, advanced 5% in the period, while revenue carloads grew 6% in the quarter. Union Pacific’s operating ratio improved 310 basis points in the quarter, to 60.3%, thanks in part to lower fuel prices. In the quarter, operating income increased 11%, while net income increased 9% and earnings per … Read more

Verizon Covering Dividends with Free Cash Flow

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Image Source: Verizon By Brian Nelson, CFA Verizon (VZ) recently reported mixed third quarter results, with revenue missing the consensus forecast and non-GAAP earnings per share edging out the market’s expectations by a penny per share. On a consolidated basis, total third-quarter operating revenue was essentially flat compared to the same period a year ago, while the company’s net income of $3.4 billion was weighed down by severance charges. Consolidated adjusted EBITDA for the third quarter came in at $12.5 billion, up from $12.2 billion in last year’s quarter. Adjusted earnings per share, excluding special items, was $1.19 in the quarter, down from $1.22 in the year-ago period. Management had the following to say about the quarter: This has been … Read more

Dick’s Sporting Goods Raises 2024 Guidance

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Image Source: Dick’s Sporting Goods By Brian Nelson, CFA On November 26, Dick’s Sporting Goods (DKS) reported better than expected third quarter results with revenue and non-GAAP earnings per share coming in above expectations. Net sales in the quarter advanced 0.5%, powered by a 4.2% in comparable store growth, which lapped 1.9% growth in the same period a year ago. Non-GAAP earnings per share fell 4%, to $2.75, but this was weakened by an unfavorable impact from a calendar shift to the tune of $0.35. Adjusted for this, non-GAAP earnings per share increased 8.8% in the quarter. Management was upbeat in the press release: Our strong third quarter results demonstrate the significant momentum we have in our business. We continue … Read more

Dividend Increases/Decreases for the Week of November 29

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Below we provide a list of firms that raised their dividends during the week ending November 29. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week                          AG Mortgage Investment Trust Pfd Shs (MITT.PR.C): now $0.733 per share quarterly dividend, was $0.500. Akastor ASA (AKRYY): now $2.812 per share annual dividend, was $0.233. Banco do Brasil S.A. (BDORY): now $0.0626 per share quarterly dividend, was $0.0254. Blue Owl Capital III (OBDE): now $0.37 per share quarterly dividend and $0.05 per share supplemental dividend, was $0.06. Delta Galil Industries (DELTF): now $0.31 … Read more

Yum Brands’ Taco Bell Division Remains Its Gem

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Image Source: Yum Brands By Brian Nelson, CFA Yum Brands (YUM) recently reported third quarter results that came up a bit short relative to the market’s forecast. The owner of KFC, Taco Bell, Pizza Hut, and Habit Burger experienced worldwide system sales growth, excluding foreign currency translation, of 1%, which reflects 5% unit expansion, including 1,029 gross new units in the quarter. Same store sales fell 4% at KFC and Pizza Hut, while they expanded 4% at Taco Bell in the quarter. Unit growth was most prevalent in its KFC Division, where the number of units expanded by 7%. GAAP operating profit and core operating profit advanced 1% and 3% in the quarter, respectively, led by 11% expansion in its … Read more

Deere’s Fiscal Fourth Quarter Results Better Than Feared

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By Brian Nelson, CFA Deere (DE) reported better than expected fiscal fourth quarter results November 21 that showed the company beat expectations on both the top and bottom lines. Worldwide net sales and revenues fell 28% in the quarter, while reported net income per share fell to $4.55 compared with $8.26 per share for the fiscal fourth quarter of last year. Deere ended the quarter with a hefty net debt position. Though the headline results weren’t great, they were better than feared. Management had the following to say about the quarter: Amid significant market challenges this year, we proactively adjusted our business operations to better align with the current environment. Together with the structural improvements made over the past several … Read more

Nvidia’s Gross Margins Facing Pressure But Still Very Healthy

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Image: Nvidia’s shares have surged higher in recent years. By Brian Nelson, CFA Nvidia (NVDA) reported better than expected fiscal third quarter 2025 results on November 20 with both revenue and non-GAAP earnings per share coming in ahead of forecasts. Revenue was up 94% on a year-over-year basis in the quarter, while Data Center revenue was up 112%. Both were quarterly records. Nvidia’s non-GAAP gross margin of 75% in the quarter was unchanged from the same period a year ago. Non-GAAP operating margin was 66.3% in the quarter, up from 63.8% in the prior-year period. Non-GAAP earnings per share was $0.81 in the quarter, more than doubling from last year’s mark and beating consensus by $0.06. CEO Jensen Huang had … Read more

Walmart Executing Well, Raises Guidance

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Image Source: Walmart By Brian Nelson, CFA On November 19, Walmart (WMT) reported glowing third quarter results with both revenue and non-GAAP earnings per share coming in better than the consensus forecast and the company raising its guidance. Consolidated revenue grew 5.5% in the quarter, up 6.2% in constant currency, while consolidated operating income advanced 8.2% in the period, up 9.8% in constant currency. Walmart benefited from higher gross margins, growth in membership income, and reduced losses in e-commerce. Globally, e-commerce revenue grew 27% thanks in part to increases in store-fulfilled pickup and delivery, with penetration up across all segments. Walmart U.S. comp sales increased 5.3% thanks in part to positive growth in general merchandise (transactions increased 3.1%, while average … Read more

Disney Sets Positive Long-Term Guidance

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Image Source: Valuentum By Brian Nelson, CFA Disney (DIS) reported better than expected fiscal fourth quarter results on November 15. Revenue increased 6% in the fiscal fourth quarter, while the company achieved strong 23% expansion in total segment operating income. Diluted earnings per share excluding certain items expanded to $1.14 in the quarter, up 39% from the same period a year ago. Cash flow from operations advanced to $5.5 billion, up 15% year-over-year, while free cash flow came in at $4 billion in the quarter, up 18% year-over-year. Management had the following to say about the quarter and full fiscal year results: This was a pivotal and successful year for The Walt Disney Company, and thanks to the significant progress … Read more

Cisco Raises Fiscal 2025 Guidance

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Image: Cisco’s shares have been choppy the past couple years. By Brian Nelson, CFA Cisco Systems (CSCO) reported better than expected fiscal first quarter 2025 results on November 13. Revenue of $13.8 billion came in at the high end of its guidance range, down 6% but above consensus by $70 million, while non-GAAP earnings per share of $0.91 came in above its guidance range, beating the consensus forecast by $0.04. Product orders were up 20% year-over-year and up 9% excluding the recent acquisition of Splunk. Subscription revenue now accounts for 57% of its total revenue. Management had the following to say about the quarter: Cisco is off to a strong start to fiscal 2025. Our customers are investing in critical … Read more