Brian Nelson

Exxon Issues Fourth-Quarter Results; Yield Still Comparatively Weak

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Exxon (XOM) reported fourth-quarter results Tuesday that failed to impress. Earnings expanded a modest 2%, to $9.4 billion in the quarter, while diluted earnings per share grew 6%, to $1.97, bolstered by share buybacks during the period. We are sticking with our $78 per share fair value estimate for Exxon and continue to watch its dividend for an opportune time to capitalize on its yield ($1.88 per share annual payout; 2.2% annual yield). For the full-year 2011, earnings jumped 35% as a result of higher crude oil prices, improved refining and chemical margins, as well as gains on sales of assets. Exxon continues to feel the pinch from lower natural gas prices, however. Still, the oil-and-gas giant pulled in roughly … Read more

Amazon’s Fourth-Quarter Earnings Leave Much to Be Desired

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On Tuesday, Amazon.com (AMZN) reported fourth-quarter results that disappointed most investors. Though traders continue to dabble in the firm’s shares, we would continue to steer clear of the online retailer. Our fair value estimate range for the company remains unchanged. Net sales increased 35% in the fourth quarter, falling below the firm’s full-year growth rate and disappointing even the most conservative forecasts. Operating income declined significantly during the period, while net income also fell by more than half, to $0.38 per share. On a full-year basis, the company earned $1.37 per share, down 45%. Though revenue growth missed consensus expectations and earnings performance was poor, the company still hauled in over $2 billion in free cash flow for the year. … Read more

UPS Posts Solid Adjusted Fourth-Quarter Results; Sees Strong Package Delivery Growth in US

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UPS posted fourth-quarter results Tuesday that reinforce our long-held thesis that the US will avoid a double-dip recession despite problems within the Eurozone. We are maintaining our fair value estimate for the package handler. UPS delivered record fourth-quarter results in volume, revenue and profitability—hardly recessionary signals. Revenue in its fourth quarter jumped 5.6% as the company delivered 1.13 billion packages (up 3.6% from the same period a year ago), while adjusted operating margin expansion of 140 basis points pushed adjusted diluted earnings per share higher nearly 21%, to $1.28. The company saw increases in both US and international daily package volume thanks to robust e-commerce expansion, strong European exports and intra-regional growth in Asia. During 2011, UPS pulled in more … Read more

Pfizer, Eli Lilly Post Fourth-Quarter Results; Both Score High on Our Valuentum Dividend Cushion

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<< About our Valuentum Dividend Cushion ————————————————– << Pfizer’s (PFE) Fourth-Quarter Earnings Press Release << Pfizer’s Pipeline , Dividend Cushion: 2.9 ————————————————– << Eli Lilly’s (LLY) Fourth-Quarter Earnings Press Release << Eli Lilly’s Clinical Development Pipeline , Dividend Cushion: 2

Putting Our Fair Value Estimate of RadioShack Under Review

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RadioShack (RSH) announced after the close today that its fourth-quarter results would come in below our expectations due in large part to the underperformance of its Sprint postpaid wireless business. We plan to re-evaluate RadioShack’s position within the consumer electronics industry and expect to lower our fair value materially. We will publish an updated report shortly. << RadioShack’s press release

Reducing Our Fair Value Estimate on Fusion-iO on Lower Gross Margin Expectations

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Fusion-iO (FIO), one of the more controversial companies in our coverage universe, posted fiscal second quarter results last Tuesday. As we pointed out to investors in this note, the firm could be a revolutionary company with a very bright future. However, due to a weaker gross margin outlook as well as share dilution from the December secondary offering, we have lowered our fair value estimate on Fusion-iO to $15 per share, significantly lower than its mid-$20s price tag currently. Our biggest concern about the firm is deteriorating levels of profitability. For one, Fusion iO’s gross margin in its fiscal second quarter came in very light, at around 51%, while consensus expectations were at least 400 basis points higher. This number was also down 770 basis points from the … Read more