Brian Nelson

Goldman Sachs Beats Third Quarter Estimates, Puts Up Strong Economic Returns

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Image: Goldman Sachs’ shares have done well the past couple years. By Brian Nelson, CFA On October 15, Goldman Sachs (GS) reported better than expected third-quarter results with revenue and GAAP earnings per share topping the consensus forecast. Net revenue and net earnings in the quarter came in at $12.7 billion and $2.99 billion, respectively, while diluted earnings per common share was $8.40 for the third quarter of 2024, better than the consensus forecast of $6.92 per share. Net revenues were up 7% year-over-year thanks to higher net revenues in Global Banking & Markets and Asset & Wealth Management, offset in part by lower net revenues in Platform Solutions, while diluted earnings per share was modestly lower on a year-over-year … Read more

Johnson & Johnson’s Shares Look Fairly Valued

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By Brian Nelson, CFA Johnson & Johnson (JNJ) reported third-quarter results on October 15 that beat the consensus forecast for both revenue and non-GAAP earnings per share. The company posted adjusted operational sales growth of 5.4% thanks to 6.4% expansion in Innovative Medicine and 3.7% growth in MedTech, while adjusted earnings per share came in at $2.42 in the quarter, down 9% as acquired IPR&D impacted results. Year-to-date free cash flow came in approximately $14 billion, up from $12 billion in the year ago period. J&J noted that it continues to advance its pipeline, including approvals for TREMFYA in ulcerative colitis and RYBREVANT + LAZCLUZE in non-small cell lung cancer. Management commentary was upbeat in the quarter:  Johnson & Johnson’s … Read more

UnitedHealth Remains a Free Cash Flow Generating Powerhouse

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Image: UnitedHealth’s shares have done well the past few years, but a gloomy outlook for 2025 has prompted a selloff. By Brian Nelson, CFA United Health (UNH) reported better than expected third quarter results on October 15. Third quarter revenue grew $8.5 billion, to $100.8 billion, thanks to growth in people served at Optum and UnitedHealthcare. Adjusted earnings from operations came in at $9 billion, which includes the Change Healthcare business disruption impacts, but excludes the cyberattack and direct response costs. Adjusted earnings per share was $7.15 in the quarter. The big concern in the quarter was the firm’s medical care ratio: The third quarter 2024 medical care ratio was 85.2% compared to 82.3% last year. Among factors contributing to … Read more

JPMorgan Continues to Generate Value for Shareholders

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Image Source: Hakan Dahlstrom By Brian Nelson, CFA JPMorgan (JPM) reported excellent third quarter results on October 11. Reported revenue of $42.7 billion and GAAP earnings per share of $4.37 both beat the consensus forecast. Credit costs were $3.1 billion, which included $2.1 billion of net charge-offs and $1 billion in net reserve build. Average loans were up 1% year-over-year, while average deposits advanced at a similar rate. For the third quarter, JPMorgan reported an ROE of 16% and ROTCE of 19%, both measures indicating nice value generation for investors. CEO Jamie Dimon had the following to say about the quarter and current economic conditions: The Firm reported strong underlying business and financial results in the third quarter, generating net income … Read more

Dividend Increases/Decreases for the Week of October 11

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Below we provide a list of firms that raised their dividends during the week ending October 11. 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                          Agree Realty (ADC): now $0.253 per share monthly dividend, was $0.250. American Mobile Dental Corp. (AMBD): now $0.7085 per share quarterly dividend. AMFI Corp. (AFIPA): now $275.00 per share dividend, was $270.00. Avient (AVNT): now $0.27 per share quarterly dividend, was $0.26. Bank of Hawaii Corporation DEP SHS SER B (BOH.PR.B): now $0.5000 per share quarterly dividend, was $0.2223. Calvin B. Taylor Bankshares (TYCB): … Read more

Domino’s Pizza Remains an Attractive Long-Term Story

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By Brian Nelson, CFA On October 10, Domino’s Pizza (DPZ) reported mixed third quarter fiscal 2024 results with GAAP earnings per share coming in above expectations, while revenue came up short relative to the Street’s forecast. Excluding foreign currency impacts, global retail sales expanded 5.1% thanks to higher supply chain, U.S. franchise advertising and U.S. franchise royalties and fees revenues, while U.S. same store sales growth came in at 3%. International same store sales growth, excluding foreign currency impacts, was 0.8%, while it grew global net stores by 72 in the quarter. Excluding foreign currency impacts, income from operations advanced 5.7% in the period thanks to gross margin dollar growth within supply chain and higher U.S. franchise royalties and fees. … Read more

PepsiCo Experiencing Subdued Growth, Business Disruptions Due to Geopolitical Tensions

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Image: PepsiCo has traded sideways for most of the past couple years. By Brian Nelson, CFA On October 8, PepsiCo (PEP) reported mixed third-quarter results with revenue coming up a bit short of consensus and non-GAAP earnings per share beating the Street’s forecast. The headline numbers weren’t great with net revenue falling 0.6% and earnings per share falling 5%. Organic revenue growth was 1.3% in the third quarter (consensus was for 3% growth), with core earnings per share coming in at $2.31, with core constant currency operating profit up 6% and core constant currency earnings per share up 5%. On an organic revenue basis, Frito-Lay North America experienced a 1% decline, while Quaker Foods North America fell 13%. PepsiCo Beverages … Read more

Dividend Increases/Decreases for the Week of October 4

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Below we provide a list of firms that raised their dividends during the week ending October 4. 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                          Almacenes Exito S.A. American Depositary Share, each representing eight (8) Common Shares (EXTO): now $0.0369 per share quarterly dividend, was $0.0116. Alphamin Resources Corp. (AFM:CA): now CAD 0.06 per share interim dividend, was CAD 0.03. American Financial (AFG): now $0.80 per share quarterly dividend, was $0.71. Arrow Financial (AROW): now $0.28 per share quarterly dividend, was $0.27. Bank OZK (OZK): now $0.41 per share … Read more

Nike In the Midst of a CEO Transition, Withdraws Full Year Guidance

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Image: Nike’s shares have been under pressure as the firm continues to underperform. By Brian Nelson, CFA On October 1, Nike (NKE) reported mixed first-quarter fiscal 2025 results, with revenue coming up short relative to the consensus estimate, while GAAP earnings per share came in ahead of what the Street was looking for. The headline numbers for Nike weren’t great. First quarter revenue fell 10% on a reported basis, while Nike Brand and Nike Direct revenues dropped 10% and 13% on a reported basis, respectively. Wholesale revenues fell 8% on a reported basis, Converse sales fell 15% on a reported basis, while diluted earnings per share of $0.70 was down 26% year-over-year. Nike is in the midst of a management … Read more

Carnival Corp. Experiencing Strong Demand

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Image: Carnival’s shares have traded sideways since the beginning of 2024. By Brian Nelson, CFA On September 30, Carnival (CCL) reported better than expected third quarter results for its fiscal 2024. Third quarter revenue reached an all-time high of $7.9 billion, which was $1 billion better than the year-ago period. The company posted record operating income and adjusted EBITDA in the quarter. Third-quarter net income came in at $1.7 billion, which was 60% better than what it recorded in the same period last year. Management commentary was positive in the press release, particularly as it relates to visibility into future revenue: We delivered a phenomenal third quarter, breaking operational records and outperforming across the board. Our strong improvements were led … Read more