Brian Nelson

Distribution Coverage Deteriorates at Linn Energy

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Highly controversial oil producer Linn Energy (click ticker for report: ) announced mediocre second quarter results Thursday morning. Distributable cash flow (DCF) per unit declined 7% year-over-year to $0.65, even though net income rose 24% year-over-year to $1.47 per unit. Image Source: LINE 2Q 2013 Slides Among the most important metrics to watch at Linn Energy is its distribution coverage ratio. Not only is the shareholder base of Linn Energy highly interested in distributions, but the health of the firm is dependent on being able to generate cash flows to pay out distributions. If a firm’s cash flow is deteriorating, not only can the distribution be at risk, but the business itself could come under pressure. For its second quarter, … Read more

Dividend Increases for the Week Ending August 9 Included Leggett & Platt and Mondelez

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Below we provide a list of firms that upped their dividends for the week ending August 9. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here (or use our ‘Symbol’ search box in our website header). Firms Raising Their Dividends This Week Anadarko Petroleum (APC): now $0.18 per share quarterly dividend, was $0.09. Badger Meter (BMI): now $0.18 per share quarterly dividend, was $0.17. Bank Mutual Corp (BKMU): now $0.03 per share quarterly dividend, was $0.02. Cogent Communications (CCOI): now C$0.14 per share quarterly dividend, was $0.13. Gamco Investors (GBL): now $0.06 per share quarterly dividend, was $0.05. Hampden Bancorp (HBNK): now $0.06 per share quarterly … Read more

Energy Transfer Partners’ Distribution Growth Could Return

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Wednesday afternoon, Dividend Growth Newsletter portfolio holding Energy Transfer Partners (click ticker for report: ) announced solid second quarter results marked by nice growth in distributable cash flow (DCF). Because of its many acquisitions, revenue was significantly higher than the prior-year period at $11.6 billion, in-line with consensus expectations. Earnings per share were also significantly higher year-over-year at $0.53, which is also far better than consensus estimates. Ultimately, for a yield instrument like Energy Transfer Partners, cash flow metrics are far more important than headline numbers. After the Linn Energy (click ticker for report: ) distributable cash flow debacle, ETP has improved its distributable cash flow reporting, providing investors with DCF attributable to the partners of ETP. This excludes DCF … Read more

Tesla: The Electric Engine That Could

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Electric carmaker Tesla (click ticker for report: ) zoomed past the Street’s expectations when it reported second quarter results Wednesday afternoon. Revenue exceeded consensus estimates, growing 14-fold year-over-year to $405 million. Adjusted earnings per share swung to a profit of $0.20, well above the loss expected from consensus expectations. The firm wasn’t free cash flow positive like it was in the previous quarter, but CEO Elon Musk noted that the negative operating cash flow was mainly a timing issue as several ZEV credits sat in receivables. Demand Is Robust We had no doubt about the strong demand for Tesla’s vehicles–the surprise during the quarter was to see the superb execution from the EV maker. Tesla was producing 400 vehicles per … Read more

3D Systems Can Hardly Meet Demand

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Three dimensional printing pioneer 3D Systems (click ticker for report: ) reported fantastic second quarter results. Revenue surged 45% year-over-year to $121 million, handily exceeding consensus expectations. Non-GAAP earnings per share increased 11% year-over-year to $0.20, slightly below consensus estimates. For a firm in a high revenue growth phase, free cash flow is solid year-to-date at $9 million, equal to 6% of total revenue. Image Source: DDD 2Q 2013 Presentation Revenue growth was broad-based, as ‘Products’ revenue surged 60% year-over-year to $83.4 million. ‘Services’ revenue grew at a slightly lower rate, up 19% year-over-year to $37 million. 3D Systems also posted decent gross-margin expansion, up 40 basis points firmwide to 51.8%. ‘Printers and other products’ gross margins surged 250 basis … Read more

Why Zoetis’ Second Quarter Was Decent

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Former Pfizer (click ticker for report: ) business unit Zoetis (ZTS) announced solid second quarter results Tuesday morning. Zoetis is relatively new as a public company, and this was the first time it reported results as a completely separate entity. Zoetis focuses on animal nutrition for both livestock and domesticated animals and is among the few animal nutrition “pure plays” available to investors. In the period, revenue increased 2% on a year-over-year basis (4% excluding currency), to $1.1 billion, roughly in-line with consensus estimates. Adjusted net income per share rose 3% year-over-year to $0.35, also consistent with consensus expectations. The majority of Zoetis’ revenue comes from the US (39% in the second quarter), where revenue grew 4% year-over-year to $437 … Read more

Emerson’s Cash Flow Remains Strong

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Dividend Growth Newsletter portfolio holding Emerson Electric (click ticker for report: ) posted another slow quarter Tuesday morning. Revenue declined 2% year-over-year to $6.3 billion in its third quarter (ended June), slightly below consensus expectations. Earnings per share, adjusted for one-time charges, declined 7% year-over-year to $0.97. Although headline results were relatively weak, free cash flow increased 20% year-over-year to $850 million, equal to 13% of total revenue. On the positive side, Emerson announced it was selling 51% of its embedded computing and power business to private equity firm Platinum Equity for $300 million. The deal caused a $0.05 repatriation charge as the firm had to bring back foreign-held cash, but the big charge came from the $503 million goodwill … Read more

Lone Ranger Can’t Ruin Disney’s Free Cash Flow

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Tuesday after the market close, media conglomerate Disney (click ticker for report: ) announced slightly disappointing third-quarter results. Revenue fell slightly short of consensus expectations, growing 4% year-over-year to $11.6 billion. Earnings grew a mediocre 2% year-over-year to $1.03 per share (excluding one-time items), which was actually slightly better than consensus estimates. Though headline numbers were weak, free cash flow for the third quarter surged 27% year-over-year to $2.7 billion, equal to 23% of total revenue. The big disappointment during the third quarter came from Disney’s Studio Entertainment business. Revenue declined 2% year-over-year to $1.6 billion, while operating income fell 36% year-over-year to $201 million. This comes as no surprise as The Lone Ranger is already considered a flop. Since … Read more

Why We Didn’t Get Excited About First Solar

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Tuesday afternoon, solar panel maker First Solar (click ticker for report: ) announced disappointing second-quarter results, confirming some of the issues we have long held with its business. Valuentum subscribers know that we don’t like the firm’s long-term prospects considering the industry’s ultra-competitiveness and First Solar’s forecast of weak gross margins. During the quarter, revenue at First Solar declined 46% year-over-year, to $520 million, more than $200 million short of consensus estimates. Earnings per share were 71% lower than a year ago, coming in at $0.37, again well below consensus expectations. Free cash flow was also materially weaker, registering $168 million (down 49% year-over-year) and equal to 32% of revenue. Image Source: FSLR 2Q 2013 Earnings Slides The situation for … Read more

ADP Issues Decent Fiscal Fourth Quarter, Strong Guidance

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On Thursday morning, payroll processing firm Automatic Data Processing (click ticker for report: ) announced decent fourth quarter results. Revenue increased 7% year-over-year to $2.8 billion, roughly in-line with consensus estimates. Earnings were a penny shy of consensus expectations, increasing 6% year-over-year to $0.55. ADP benefits greatly from increased employment, particularly since the firm is synonymous with payroll processing and management. Revenue from its ‘Employer Services’ division grew 8% year-over-year during the quarter to $2 billion. Management noted that growth was organically driven, as the firm didn’t make many acquisitions. Bookings increased at a double-digit pace during the fourth quarter, and we saw its pretax operating margins jump 120 basis points year-over-year. Client retention for the segment was robust during 2013 … Read more