Brian Nelson

IBM Raises Full-Year Revenue Growth and Free Cash Flow Outlook

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Image Source: TradingView By Brian Nelson, CFA On October 22, IBM (IBM) reported third quarter results that exceeded consensus expectations on both the top and bottom lines. Revenue of $16.3 billion was up 9% (7% in constant currency), as software revenue grew 10% (9% in constant currency), consulting revenue grew 3% (2% in constant currency), and infrastructure revenue grew 17% (15% in constant currency). Operating (non-GAAP) gross profit margin totaled 58.7% in the quarter, up 1.2 percentage points, while its operating (non-GAAP) pre-tax income margin totaled 18.6%, up 2 percentage points. Year-to-date, net cash from operating activities came in at $9.2 billion with free cash flow of $7.2 billion. Management had the following to say about the quarter: This quarter … Read more

Tesla Faces Earnings and Margin Pressure But Free Cash Flow Soars

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Image Source: Tesla By Brian Nelson, CFA On October 22, Tesla (TSLA) reported mixed third quarter results, with revenue beating the consensus forecast, but non-GAAP earnings per share missing expectations. Total revenue increased 12%, to $28.1 billion, but total gross profit increased a modest 1%, as its GAAP gross margin was squeezed 185 basis points in the period. Income from operations came in at $1.6 billion, which dropped 40% year-over-year, as its operating margin fell 501 basis points. Adjusted EBITDA fell 9% with its adjusted EBITDA margin dropping 348 basis points. Non-GAAP net income fell 29%, while non-GAAP earnings per share fell 31% in the quarter. Management summarized its quarterly performance as follows: In Q3, the Tesla team achieved record … Read more

AT&T Expects Strong Free Cash Flow in Coming Years

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Image Source: TradingView By Brian Nelson, CFA On October 22, AT&T (T) reported mixed third quarter results with revenue missing the consensus forecast, but GAAP earnings per share coming in line with expectations. Revenue in the third quarter totaled $30.7 billion, up from $30.2 billion in the year-ago quarter, up 1.6%. AT&T benefited from higher Mobility, Consumer Wireline and Mexico revenues, strength that was partially offset by a decline in Business Wireline. Adjusted operating income in the quarter was $6.6 billion versus $6.5 billion in last year’s quarter. Adjusted EBITDA was $11.9 billion in the quarter versus $11.6 billion in the year-ago period. Cash flow from operating activities was $10.2 billion, consistent with the year-ago quarter, while capital spending dropped … Read more

Netflix Reports Mixed Third Quarter Results

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Image Source: Netflix By Brian Nelson, CFA On October 21, Netflix (NFLX) reported mixed third quarter results with revenue coming in line with expectations, but GAAP earnings per share missing the consensus forecast. In the third quarter, revenue grew 17% due to membership growth, pricing adjustments and increased ad revenue, but its operating margin of 28.2% came in below guidance calling for 31.5% due to a $619 million expense related to an ongoing dispute with Brazilian tax authorities. Excluding this expense, Netflix would have exceeded its third-quarter operating margin forecast, and management noted that it doesn’t expect the matter to have a material impact on future results. Diluted earnings per share of $5.87 was better than the $5.40 mark it … Read more

Philip Morris’ Smoke-Free Portfolio Continues to Outperform

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Image Source: Philip Morris By Brian Nelson, CFA On October 21, Philip Morris (PM) reported better than expected third quarter results with both revenue and non-GAAP earnings per share exceeding the consensus forecasts. Third quarter net revenues increased 5.9% on an organic basis, reflecting higher combustible tobacco pricing and favorable volume/mix driven by higher smoke-free products volume, offset in part by lower volumes and unfavorable mix for cigarettes. Philip Morris’ shipment volume increased 0.7% with smoke-free product (SFP) volumes up 16.6%, with all SFP categories growing strongly. Cigarette volumes declined 3.2%, with weakness in all regions. Adjusted operating income increased 7.5% on an organic basis. Adjusted diluted earnings per share grew 17.3%, to $2.24, and by 13.1% excluding currency. Management … Read more

Lockheed Martin Raises 2025 Guidance

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Image Source: TradingView By Brian Nelson, CFA On October 21, Lockheed Martin (LMT) reported better than expected third quarter results, with revenue and GAAP earnings per share exceeding the consensus forecasts. Third quarter sales of $18.6 billion increased compared to $17.1 billion in the third quarter of 2024. Net earnings in the third quarter were $1.6 billion, or $6.95 per share, compared to $1.6 billion, or $6.80 per share in the third quarter of last year. Cash flow from operations was $3.7 billion in the third quarter, compared to $2.4 billion in the third quarter of 2024. Free cash flow was $3.3 billion in the third quarter, compared to $2.1 billion in the third quarter of last year. Management had … Read more

Taiwan Semiconductor Looks to Strong Q4

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Image Source: TSMC By Brian Nelson, CFA On October 16, Taiwan Semiconductor Manufacturing (TSM) reported better than expected third quarter results, with the top and bottom line exceeding the consensus forecasts. In U.S. dollars, third quarter revenue was $33.1 billion, which increased 40.8% year-over-year. Gross margin for the quarter was 59.5% (1.7 percentage points higher than 3Q24), operating margin was 50.6% (3.1 percentage points better than 3Q24), and net profit margin was 45.7%. Management was upbeat on the outlook: Our business in the third quarter was supported by strong demand for our leading-edge process technologies Moving into fourth quarter 2025, we expect our business to be supported by continued strong demand for our leading-edge process technologies. In the third quarter, … Read more

ASML Holding’s Net Bookings Beat Expectations

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Image Source: TradingView By Brian Nelson, CFA On October 15, ASML Holding (ASML) reported mixed third quarter results with revenue coming in a bit light relative to forecasts, but GAAP earnings per share exceeding the consensus estimate. Third quarter total net sales increased modestly year-over-year and totaled €7.5 billion on a gross margin of 51.6%. Net income came in at €2.1 billion. Quarterly net bookings in the quarter were €5.4 billion, better than the consensus estimate of €4.9 billion, of which €3.6 billion is EUV (extreme ultraviolet lithography). Management had the following to say about the results: Our third-quarter total net sales of €7.5 billion and gross margin of 51.6% were in line with our guidance, reflecting a good quarter … Read more

Dividend Increases/Decreases for the Week of October 17

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Below we provide a list of firms that raised their dividends during the week ending October 17. 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                          A.O. Smith Corporation (AOS): now $0.36 per share quarterly dividend, was $0.34. Agree Realty (ADC): now $0.262 per share monthly dividend, was $0.256. Banner (BANR): now $0.50 per share quarterly dividend, was $0.48. Canadian Apartment Properties Real Estate Investment Trust (CAR.UN:CA): now CAD 0.1292 per share monthly dividend, was CAD 0.1291. Citizens Financial Group (CFG): now $0.46 per share quarterly dividend, was $0.42. DBM … Read more

PepsiCo’s Earnings Stagnate While Organic Revenue Expands

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Image Source: TradingVIew By Brian Nelson, CFA On October 9, PepsiCo (PEP) reported third quarter results that came in better than expected on the top and bottom lines. Net revenue increased 2.6% thanks to a 1.3% increase in organic revenue performance. Earnings per share, however, fell 11%, to $1.90, while core earnings per share of $2.29. Core constant currency earnings per share dropped 2% in the quarter. PepsiCo Goods North America experienced a decline of 3% on an organic basis, while PepsiCo Beverages North America increased 2% organically. Organic revenue in its International Beverages Franchise fell 1%, while organic revenue increased nicely in the EMEA (+5.5%) and Latin America Foods (+4%) divisions. Organic revenue increased 1% in its Asia Pacific … Read more