Member Articles

Booking Holdings’ Revenue Accelerates in Fourth Quarter

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Image Source: Booking Holdings By Brian Nelson, CFA On February 20, Booking Holdings (BKNG) reported better than expected fourth quarter results with revenue and non-GAAP earnings per share exceeding the consensus forecast. Room nights grew 13% compared to the fourth quarter of 2023, while gross bookings advanced 17% year-over-year (up 18% on a constant-currency basis) in the quarter. Revenue increased 14% (up 15% on a constant-currency basis) from the same period a year ago, better than the 11% (up 12% on a constant currency basis) it recorded for all of full year 2024. Adjusted earnings per share was up 30% on a year-over-year basis, while adjusted EBITDA advanced 26%. Management had the following to say about the results: We are pleased … Read more

Walmart’s Earnings Outlook Falls Short of Expectations

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Image Source: Walmart By Brian Nelson, CFA On February 20, Walmart (WMT) reported better than expected fiscal fourth quarter results, but issued guidance lower than what the Street was looking for. Revenue increased 4.1%, or 5.3% in constant currency in the quarter, while its gross margin rate advanced 53 basis points. Operating income increased $0.6 billion, or 8.3% (adjusted up 9.4% constant currency) thanks to higher gross margins, growth in membership income and improved economics in eCommerce, which grew revenue 16% led by store-fulfilled pickup and delivery. Global advertising revenue advanced 29%, including 24% for Walmart Connect in the U.S. Adjusted earnings per share came in at $0.66 in the quarter, up from $0.60 in the same period a year … Read more

Albemarle Has Line of Sight to Breakeven Free Cash Flow in 2025

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Image Source: Albemarle By Brian Nelson, CFA On February 12, Albemarle (ALB) reported weak fourth quarter results with both revenue and non-GAAP earnings per share falling below the consensus forecast. Revenue dropped nearly 48% in the quarter due to lower pricing and volumes in its Energy Storage division, but net income, adjusted EBITDA, and diluted earnings per share attributable to common shareholders swung to profitability in the fourth quarter. Adjusted diluted loss per share improved to $1.09 from $5.19 in the same period a year ago. Management had the following to say in the press release: We are taking decisive actions to reduce costs, optimize our conversion network and increase efficiencies to preserve our long-term competitive position. As we look … Read more

Cisco Ups Fiscal 2025 Guidance Again

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Image Source: Cisco By Brian Nelson, CFA On February 12, Cisco Systems (CSCO) reported strong fiscal second quarter results with a beat on both the top and bottom lines. Revenue of $14.0 billion advanced 9% on a year-over-year basis, above the high end of the company’s guidance range. Non-GAAP earnings per share increased 8% year-over-year, to $0.94 per share, also coming in above the company’s guidance range. Product orders were up 29% from the same period last year, while they advanced 11%, excluding Splunk. AI Infrastructure orders were more than $350 million, bringing the total for the first half of its fiscal year to roughly $700 million. Management was upbeat in the press release: Cisco’s strong quarterly results were driven … Read more

Vertex Pharma Is One of Our Favorite Biotechs

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Image: Vertex Pharma has performed quite well since the beginning of 2023. By Brian Nelson, CFA Vertex Pharma (VRTX) reported mixed fourth quarter results February 10 with revenue outpacing the consensus forecast, but non-GAAP earnings per share coming in a bit light relative to expectations. In the quarter, product revenue increased 16% thanks to the continued performance of TRIKAFTA/KAFTRIO. In the U.S., net product revenue increased 17%, while net product revenue outside the U.S. increased 14%. GAAP and non-GAAP net income in the quarter came in at $913 million and $1.0 billion, respectively, lower than the $969 million and $1.1 billion, respectively, for the fourth quarter of 2023. Management had the following to say about the quarter in the press … Read more

Philip Morris’ Smoke-Free Portfolio Continues to Deliver

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Image: Philip Morris’ shares have done quite well of late. By Brian Nelson, CFA Philip Morris (PM) reported better than expected fourth quarter results February 6 that revealed a beat on both the top and bottom lines. In the fourth quarter, net revenue grew 9.2% (9% organically), while gross profit advanced 15.1%. Philip Morris’ smoke-free business accounted for 40% of its total net revenues and approximately 42% of gross profit, up 0.7 percentage points and 0.9 percentage points, respectively, versus the same quarter last year. There is now an estimated 38.6 million adult users of Philip Morris’ smoke-free products, which is up 5.3 million versus December 2023. Management had the following to say about performance in the press release: 2024 … Read more

Amazon Expects Elevated Capital Spending in 2025

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Image: Amazon’s stock has done quite well in recent months. By Brian Nelson, CFA Amazon (AMZN) reported better than expected fourth quarter results February 6 that showed a beat on both the top and bottom lines. Net sales advanced 10% in the quarter on a year-over-year basis and 11% excluding foreign exchange. North America sales increased 10%, International segment sales increased 8% (9% excluding changes in foreign exchange rates), while AWS sales increased 19%, to $28.8 billion, slightly lower than expectations. Operating income surged higher to $21.2 billion in the fourth quarter, up from $13.2 billion in the same period last year. Net income increased to $20 billion in the fourth quarter, equating to $1.86 per diluted share, up from … Read more

Chipotle’s Long-term Growth Prospects Are Impressive

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Image Source: Valuentum By Brian Nelson, CFA On February 4, Chipotle (CMG) reported fourth quarter results that were in-line with the consensus forecasts for the top and bottom lines. Total revenue in the fourth quarter increased 13.1%, while comparable restaurant sales advanced 5.4% consisting of higher transactions of 4% and a 1.4% increase in average check. The company’s operating margin increased ~20 basis points, to 14.6%. Its restaurant level operating margin fell to 24.8% from 25.4% in last year’s quarter, however, due to higher food, beverage and packaging costs as well as higher labor expenses. Adjusted diluted earnings per share nonetheless advanced 19%, to $0.25. During the quarter, Chipotle opened 119 company-owned restaurants with 95 of the locations including a … Read more

Alphabet’s Cash Flow Soars in Fourth Quarter

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Image Source: TradingView By Brian Nelson, CFA On February 4, Alphabet (GOOG) (GOOGL) reported mixed fourth quarter results with revenue missing the consensus forecast, but GAAP earnings per share outpacing what Wall Street was looking for. Total revenue in the fourth quarter advanced 12%, while operating income leapt 30.7% (thanks to a five percentage point improvement in its operating margin) and net income jumped 28.3%. Diluted earnings per share rose 31.1%, to $2.15 per share, in the quarter. We continue to like Alphabet as a top weighting in the Best Ideas Newsletter portfolio. Management had the following to say about the quarter: Q4 was a strong quarter driven by our leadership in AI and momentum across the business. We are … Read more

Phillips 66 Outlines Strategic Priorities

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Image Source: TradingView By Brian Nelson, CFA Phillips 66 (PSX) reported fourth quarter results on January 31 with non-GAAP earnings per share coming in ahead of the consensus forecast. The company reported fourth-quarter earnings of $8 million, or $0.01 per share, and an adjusted loss of $61 million, or $0.15 per share. Earnings in the quarter were impacted by $230 million pre-tax of accelerated depreciation related to its Los Angeles Refinery. In the fourth quarter, it returned $1.1 billion to shareholders through dividends and share repurchases. Phillips 66 registered record NGL fractionation and LPG export volumes in Midstream and set a record clean product yield in Refining. Management had the following to say about the quarter and outlook: During the … Read more