Brian Nelson

Priceline Approaches $1,000

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Online travel broker Priceline (click ticker for report: ) reported stellar second quarter results Thursday afternoon. Revenue surged 27% year-over-year to $1.7 billion, slightly above consensus estimates. Non-GAAP earnings per share jumped 24% year-over-year to $9.70, far ahead of consensus expectations. Free cash flow year-to-date totaled $740 million, an impressive 25% of total revenue. Our Fair Value Estimates Are Forward-Looking After finishing its acquisition of Kayak in May, Priceline posted gross bookings (total amount spent on travel/rental cars/etc.) of $10.1 billion, 38% higher than the same period a year ago. International bookings drove the lion’s share of the growth, surging 44% year-over-year to $8.6 billion. Image Source: PCLN 2Q 2013 With such robust growth, we think a few trends are … Read more

Rio Tinto Improves Cash Flow in Weak Mining Environment

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Key Takeaways ·         Cost cuts helped Rio Tinto stomach weak commodity end markets. ·         Production increases buffered weak iron ore prices. ·         China remains a key driver of growth. Country data flow continues to contradict. ·         We continue to hold Rio Tinto in our Best Ideas Newsletter portfolio…but we think it could be a wild ride. Best Ideas Newsletter portfolio holding Rio Tinto (click ticker for report: ) announced weak, but better-than-expected, financial performance for the first half of 2013 Thursday. Earnings per share declined 71% year-over-year to $0.93, though revenue declined only 3% year-over-year to $24.5 billion as production increases were able to partially offset commodity price weakness. Underlying earnings per share, which is adjusted for one-time charges, exchange rates, and write-downs, … Read more

Monster Beverage Takes Market Share

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Health concerns and broader category demand headwinds couldn’t stop Monster Beverage (click ticker for report: ) from posting decent second quarter growth. Net sales increased 6.5% year-over-year to $631 million, slightly below consensus estimates, but still a solid number in our view. Earnings per share increased 4.6% year-over-year to $0.62, again falling slightly short of consensus estimates, but by no means terrible given some of the legal issues surrounding the company. Demand for Monster products isn’t experiencing the same robust growth as is it did years ago, but we are seeing the company outperform many of its peers. According to the data that management from Nielsen on the conference call, Monster’s comparable sales jumped 16.4% year-over-year during July at convenience … Read more

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