Brian Nelson

Meta Platforms Expects Significant Capex Growth in 2025

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Image: Meta’s capital spending continues to be on the rise, but its free cash flow generation remains robust. By Brian Nelson, CFA Meta Platforms (META) reported better than expected third quarter results October 30 with revenue and GAAP earnings per share coming in better than expected. Revenue grew 19% on a year-over-year basis (20% on a constant currency basis), while its operating margin advanced ~3 percentage points. Net income increased 35%, while GAAP diluted earnings per share rose to $6.03, up 37% and beating the consensus expectation by $0.74. Family daily active people [DAP] increased 5% year-over-year, while ad impressions delivered across its Family of Apps rose 7% year-over-year. Average price per ad increased 11% year-over-year. Total costs and expenses … Read more

Apple’s Fiscal Fourth Quarter Report Shows Strength

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Image: Apple’s shares continue to flirt with all-time highs. By Brian Nelson, CFA Apple (AAPL) reported better than expected fiscal fourth quarter results October 31 that showed a beat on both the top and bottom lines. Revenue increased 6% year-over-year, to $94.9 billion, while the company posted adjusted diluted earnings per share of $1.64, up 12% year-over-year, after excluding a one-time charge related to the impact of the reversal of the European General Court’s State Aid decision. Management had the following to say about the quarter: Today Apple is reporting a new September quarter revenue record of $94.9 billion, up 6 percent from a year ago. During the quarter, we were excited to announce our best products yet, with the … Read more

Altria Reaffirms 2024 Full Year Guidance

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Image: Altria’s shares have recovered nicely during 2024. By Brian Nelson, CFA Altria (MO) reported better-than-expected third quarter results on October 31. Revenues net of excise tax increased 1.3% as the company experienced higher net revenues in its Oral Tobacco Products segment, while adjusted diluted earnings per share advanced 7.8%, to $1.38, which was $0.03 better than the consensus forecast. Management had the following to say about the quarter: Altria delivered outstanding results in the third quarter. The smokeable products segment delivered solid operating companies income growth behind the resilience of Marlboro, and in the oral tobacco products segment, our MST brands continued to drive profitability while on! maintained momentum in the marketplace. We also continued to reward shareholders through … Read more

Booking Holdings Experiencing Strong Performance in Europe

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Image: Booking Holdings’ shares soar to all-time highs. By Brian Nelson, CFA Booking Holdings (BKNG) reported excellent third quarter results October 30 that showed a beat on both the top and bottom lines. Total revenues increased 9% from the prior-year quarter, as room nights booked increased 8% and gross travel bookings increased 9% from the prior-year quarter. Net income was flat with respect to the prior-year quarter, while net income per diluted common share came in 7% higher than the year-ago quarter. Adjusted net income increased 9% from the prior-year quarter, while adjusted net income per diluted share advanced 16%, to $83.89, which beat expectations by $6.51. Management spoke of momentum behind its business in the press release: We are … Read more

Microsoft Remains a Net-Cash-Rich, Free-Cash-Flow Generating Powerhouse

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Image: Microsoft’s shares continue to flirt with all-time highs. By Brian Nelson, CFA On October 30, Microsoft (MSFT) reported excellent fiscal first quarter fiscal 2025 results, with both revenue and GAAP earnings per share coming ahead of the consensus forecast. In the quarter, revenue increased 16%, while operating income advanced 14%. Net income increased 11% (up 10% in constant currency) on a year-over-year basis, while diluted earnings per share of $3.30 was 10% higher than the year-ago period, beating consensus by $0.19. Management had the following to say about the quarter: AI-driven transformation is changing work, work artifacts, and workflow across every role, function, and business process. We are expanding our opportunity and winning new customers as we help them … Read more

Republic Services Pricing Strength Continues to be Evident

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Image Source: Republic Services By Brian Nelson, CFA Republic Services (RSG) reported mixed third quarter results October 29, with revenue coming in a bit light relative to the consensus forecast, while non-GAAP earnings per share outpaced what the Street had been looking for. The trash taker posted 6.5% revenue growth with 4.2 percentage points coming from organic means, while 2.3 percentage points came from acquisitions. Adjusted earnings per share came in at $1.81, beating consensus expectations by $0.20. Management had the following to say about the quarter: Our strong performance during the third quarter is a direct result of executing our strategic priorities. By pricing ahead of cost inflation and effective cost management, we delivered double-digit growth in adjusted EBITDA and … Read more

Chipotle Targets 7,000 Restaurants in North America

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By Brian Nelson, CFA Chipotle (CMG) reported mixed third quarter results October 29 with revenue coming in a bit light relative to expectations and non-GAAP earnings per share outpacing the consensus forecast. Total revenue increased 13% in the quarter thanks to a 6% increase in comparable restaurant sales and new restaurant openings. Comparable restaurant sales missed the consensus estimate calling for 6.4% growth. Still, Chipotle’s comparable restaurant sales growth consisted of higher transactions of 3.3% and a 2.7% increase in average check, a combination we view positively. The burrito-maker’s operating margin was 16.9% in the quarter (consensus was at 15.7%), up from 16%, while adjusted diluted earnings per share came in at $0.27, up from $0.23 in the prior-year period. … Read more

Visa Reports Strong Fiscal Fourth Quarter Results

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Image: Visa’s shares look poised to break out to new all-time highs. By Brian Nelson, CFA Visa (V) reported better than expected fiscal fourth quarter results on October 29 with both revenue and non-GAAP earnings per share outpacing the consensus forecast. Net revenue increased 12% on a year-over-year basis, while non-GAAP net income increased 13%. During the fiscal fourth quarter, on a constant currency basis, payments volume increased 8%, while cross-border volume increased 13% and processed transactions advanced 10%. Non-GAAP earnings per share advanced 16% in the quarter, to $2.71, beating the consensus forecast by $0.13. Management was upbeat in the press release: Visa had a robust fourth quarter to finish a very strong fiscal year. I am proud of … Read more

Momentum Across Alphabet’s Business Is “Extraordinary”

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Image: Shares of Alphabet look poised to break out to all-time highs. By Brian Nelson, CFA Alphabet (GOOG) (GOOGL) reported fantastic third quarter results October 29 that showed a beat on both the top- and bottom lines. Consolidated revenue increased 15% in the quarter (16% on a constant-currency basis), to $88.3 billion, versus consensus of $86.2 billion, with Google Services, total, revenue increasing 13% and Google Cloud revenue increasing 35%. ‘Google Search & other’ revenue and ‘YouTube ads’ revenue both increased 12.2% in the quarter, very healthy growth rates. Revenue for Google Network dipped modestly on a year-over-year basis, while Google subscriptions, platforms and devices revenue advanced 28%. Total operating income increased 34% in the quarter, with its operating margin … Read more

Enterprise Product Partners’ DCF Covered Its Distributions 1.7x in Third Quarter

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Image: Enterprise Products Partners’ units have done well the past couple years. By Brian Nelson, CFA On October 29, Enterprise Products Partners (EPD) reported third quarter results that came in slightly lower than expected. The midstream energy company reported net income attributable to common unitholders of $1.43 billion, or $0.65 per diluted unit, reflecting an 8% increase versus the $1.35 billion ($0.60 per diluted unit) it recorded in the third quarter of last year. Management had the following to say about the quarter: Enterprise reported another strong quarter as recently completed organic growth assets generated new sources of earnings and cash flow. Operationally, we set 5 volumetric records including 7.5 billion cubic feet per day of inlet natural gas processing … Read more