Brian Nelson

Crown Castle’s AFFO In Excess of Cash Dividends Paid

by

Image: Crown Castle’s shares look to be bottoming, and the firm’s AFFO is expected to remain well above cash dividends paid during 2024. By Brian Nelson, CFA On July 17, Crown Castle (CCI) reported mixed second quarter results in which adjusted funds from operations (AFFO) beat expectations, while revenue came in a bit light. The headline numbers weren’t great. Site rental revenues fell 9% in the second quarter of 2024, while net income dropped 45%. Adjusted EBITDA fell 15%, while AFFO dropped 21% on a per-share basis, to $1.62. On an organic basis, things looked a bit better. Organic contribution to site rental billings was $63 million, up 4.7% from the same period a year ago after excluding an unfavorable … Read more

Domino’s Suspends Long-term Global Net Store Growth Guidance

by

Image: Domino’s shares have done well since the beginning of 2023, but visibility into its long-term global net store growth has become murky given problems at one of its master franchisees. By Brian Nelson, CFA On July 18, Domino’s Pizza (DPZ) reported mixed second-quarter results that showed a slight miss on the top line, but a solid beat on the bottom line. Excluding foreign currency impacts, global retail sales increased 7.2% thanks to “higher supply chain, U.S. franchise advertising and U.S. franchise royalties and fees revenues,” while U.S. same store sales growth expanded 4.8% and international same store sales growth, excluding foreign currency, advanced 2.1%. Global net store growth was 175 in the quarter. The company’s U.S. company-owned gross margin … Read more

Taiwan Semiconductor Impresses in Second Quarter, Gives Strong Outlook

by

Image: Taiwan Semiconductor reported better-than-expected second quarter results. By Brian Nelson, CFA Taiwan Semiconductor (TSM) reported strong second quarter results on July 18. On a year-over-year basis, second-quarter revenue advanced more than 40%, while net income and diluted earnings per share increased more than 36%. Taiwan Semiconductor is experiencing strong momentum behind its operations as second-quarter revenue and net income showed a 13.6% and 9.9% sequential increase, respectively. Its revenue growth in the quarter was also better than guidance. The company’s gross margin, operating margin, and net profit margin were 53.2%, 42.5%, and 36.8% in the quarter, respectively. Its gross margin and operating margin came in ahead of guidance. During the second quarter, shipments of 3-nanometer accounted for 15% of … Read more

Johnson & Johnson Finetunes 2024 Bottom Line Guidance

by

Image: J&J’s shares have faced pressure since the beginning of 2023. By Brian Nelson, CFA Johnson & Johnson (JNJ) reported better-than-expected second quarter results on July 17. The company put up adjusted operational growth excluding the COVID-19 vaccine of 7.1%, while adjusted earnings per share was $2.82, up 10.2% on a year-over-year basis. The company’s Innovative Medicine division experienced an 8.8% worldwide operational revenue increase, excluding the COVID-19 vaccine, thanks to strength in DARZALEX, ERLEADA, TREMFYA, STELARA, SPRAVATO, and its Other Oncology segment. Its MedTech worldwide operational revenue advanced 4.4% thanks to strength in electrophysiology products and Abiomed in its Cardiovascular segment. Management had the following to say about the quarter: Johnson & Johnson’s second quarter performance reflects our relentless … Read more

ASML Holding Reports Strong Bookings in Second Quarter

by

Image: ASML Holding has been a strong stock performer since the beginning of 2023. By Brian Nelson, CFA On July 17, ASML Holding (ASML) reported disappointing second quarter 2024 results where revenue fell 10% and operating income dropped 18.9% from the same period a year ago. Net income fell 18.7% in the quarter on a year-over-year basis, with diluted net income per share falling to €4.01 from €4.93 in the same period a year ago. Though the firm’s second quarter performance left a lot to be desired, its bookings number of €5.6 billion (€2.5 billion were EUV) in the quarter was strong, coming in better than the €4.5 billion in bookings won in the same period last year. Management had … Read more

UnitedHealth Group Reports Messy Second Quarter Results

by

Image: UnitedHealth Group’s shares have been choppy since the beginning of 2023. By Brian Nelson, CFA UnitedHealth Group (UNH) reported messy second quarter results on July 16 that showed a beat on the bottom line, but in-line performance on the top line. The healthcare giant reported revenue of $98.9 billion, up $6 billion from the same period a year ago thanks to “strong expansion in people served domestically at its Optum and UnitedHealthcare” divisions. Second quarter earnings from operations came in at $7.9 billion, which included a $1.1 billion headwind from “unfavorable cyberattack effects.” Adjusted earnings from operations, which include business disruption impacts but exclude cyberattack direct response costs and the reclassification of its remaining South American operations as held … Read more

Fastenal’s Revenue Beat a Positive Read Through to the Broader Economy

by

Image: Fastenal’s second quarter results were a positive read through to the broader economy. By Brian Nelson, CFA On July 12, Fastenal Company (FAST) reported mixed second quarter results where revenue modestly exceeded the consensus forecast, while the company’s GAAP earnings per share was in-line. For the first six months of 2024, net sales advanced 1.8%, while operating income fell 1.4% and net income dropped 0.5%. Diluted earnings per share of $1.03 for the first six months of the year was 0.7% lower than the mark achieved over the same period a year ago. During the second quarter, the company “experienced higher unit sales…primarily due to growth with larger customers and Onsite locations opened in the last two years.” Fastenal … Read more

JPMorgan Chase’s Return on Capital Shines in Second Quarter

by

Image Source: Hakan Dahlstrom By Brian Nelson, CFA On July 12, JPMorgan Chase (JPM) reported second quarter results that beat expectations on the top line, but came up a bit short on the bottom line. Managed net revenue came in at $51.0 billion, up 20%, while the company’s provision for credit losses swelled to $3.05 billion. Net income was $18.15 billion in the quarter, resulting in earnings per share of $6.12. Net income excluding significant items of $13.1 billion was $4.40 per share. Return on common equity was 23% in the quarter, while return on common equity was 28%. CEO Jamie Dimon’s commentary on the quarter is found below: The Firm performed well in the second quarter, generating net income of … Read more

Dividend Increases/Decreases for the Week of July 12

by

Below we provide a list of firms that raised their dividends during the week ending July 12. 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 (EXTO): now $0.0113 per share quarterly dividend, was $0.0112. América Móvil (AMX): now $0.2608 per share annual dividend, was $0.2560. Ameren Illinois Company PFD 4.92% (AILLM): now $1.232 per share quarterly dividend, was $1.175. Amerigo Resources Ltd. (ARREF): now CAD 0.04 per share quarterly dividend, was CAD 0.03. AptarGroup (ATR): now $0.45 per share quarterly dividend, was $0.41. … Read more

Delta Air Lines Speaks of Industry Fare Pressures

by

Image Source: Colin Brown By Brian Nelson, CFA Delta Air Lines (DAL) reported disappointing second-quarter results on July 11 with both revenue and non-GAAP earnings per share coming in lower than expected. The company put up record June quarter revenue, which reached $15.4 billion on an adjusted operating basis, up 5.4% from the same period a year ago, but the Street was looking for more. Earnings per share of $2.36 also missed the consensus forecast. Though airlines have largely rationalized capacity in recent years, fare pressures are starting to weigh on performance. We maintain our view that airlines are not long-term investments given their leverage to a cyclical economy and volatile jet fuel prices. Management had the following to say about … Read more