Member Articles

Tesla Remains a Net Cash Rich, Free Cash Flow Generating Powerhouse

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Image: Tesla continues to attack costs with average cost of goods sold per vehicle reaching an all-time low in the fourth quarter of 2024. Image Source: Tesla By Brian Nelson, CFA Tesla (TSLA) reported disappointing fourth quarter results on January 29 with revenue and non-GAAP earnings per share coming in below the consensus forecasts. Total revenue advanced just 2% in the quarter, and total gross profit fell 6%, while income from operations dropped 23% on a year-over-year basis. Tesla’s profitability faced pressure as the firm navigated reduced S3XY vehicle average selling prices. Adjusted EBITDA, however, increased 25%, and non-GAAP earnings per share came in at $0.73, up 3% on a year-over-year basis. Tesla had the following to say about its … Read more

Altria Expects Modest Earnings Growth in 2025, Shares Yield 7.8%

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Image Source: Altria By Brian Nelson, CFA Altria (MO) reported better than expected fourth quarter results on January 30, with both revenue and non-GAAP earnings per share exceeding the consensus forecasts. Revenue, net of excise taxes advanced 1.6%, while adjusted diluted earnings per share came in at $1.29, up more than 9% on a year-over-year basis. NJOY consumables reported shipment volume advanced 15.3% in the quarter, while NJOY devices reported shipment volume increased 22.2%. In its Smokeable Products segment, net revenues fell 0.2% due to lower shipment volume, partially offset by higher pricing, while adjusted segment operating companies income (OCI) increased 5.5%. In its Oral Tobacco Products segment, net revenue increased 2.7% driven by higher pricing, while segment adjusted OCI … Read more

ASML Holding’s Bookings Soar in Fourth Quarter

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Image Source: TradingView By Brian Nelson, CFA On January 29, ASML Holding (ASML) reported better than expected fourth quarter results with revenue and GAAP earnings per share coming in ahead of the consensus forecasts. Fourth quarter net sales totaled €9.3 billion on a gross margin of 51.7%, with net income coming in at €2.7 billion. Management had previously guided net sales to be between €8.8 billion and €9.2 billion with a gross margin between 49% and 50% in the quarter. Net sales advanced 24.1% on a sequential basis, and net bookings were €7.1 billion, up considerably on a sequential basis when compared to the €2.6 billion it registered during the third quarter of 2024. Management had the following to say … Read more

IBM’s Generative AI Book of Business Doing Well

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Image Source: TradingView By Brian Nelson, CFA IBM (IBM) reported mixed fourth quarter results on January 29, with the company’s revenue coming in line with expectations and the company beating the bottom-line forecast. Revenue advanced 1% (up 2% in constant currency) as strength in software revenue (+10.4%) offset weakness in consulting (-2%) and infrastructure (-7.6%) sales. Gross profit margin increased 40 basis points, to 59.5%, in the quarter. Management was upbeat in the press release: We closed the year with double-digit revenue growth in Software for the quarter, led by further acceleration in Red Hat. Clients globally continue to turn to IBM to transform with AI. Our generative AI book of business now stands at more than $5 billion inception-to-date, … Read more

Apple Reports Best Quarter Ever Despite Declining iPhone, China Sales

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Image Source: TradingView By Brian Nelson, CFA On January 30, Apple (AAPL) reported better than expected fiscal first quarter results, with both revenue and GAAP earnings per share exceeding the consensus forecasts. Quarterly revenue was up 4% year-over-year, while quarterly diluted earnings per share advanced 10% year-over-year. Fiscal first quarter services revenue reached a record high, increasing 13.9% from the same period a year ago. Gross margin came in at 46.9%, up from 45.9% in last year’s quarter, while its operating margin came in at 34.5%, up from 33.8% in the year-ago period. Management was upbeat in the press release: …Apple is reporting our best quarter ever, with revenue of $124.3 billion, up 4 percent from a year ago. We … Read more

Visa’s Free Cash Flow Margins Are Incredible

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Image Source: Visa By Brian Nelson, CFA On January 30, Visa (V) reported strong fiscal first quarter results with revenue and non-GAAP earnings per share coming in ahead of the consensus forecasts. Net revenue increased 10% (up 11% on a constant-dollar basis), while non-GAAP net income increased 11% and non-GAAP earnings per share jumped 14% on a year-over-year basis. During the fiscal first quarter, payments volume increased 9%, total cross-border volume increased 16%, while processed transactions advanced 11%. Management spoke positively in the press release: Visa’s strong first-quarter results reflected healthy spending during the holiday season and improving trends in payments volume, cross-border volume, and processed transactions growth. We delivered 10% net revenue growth, 8% GAAP EPS growth and 14% … Read more

Meta Platforms’ Earnings Surge in Fourth Quarter

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Image Source: Meta Platforms By Brian Nelson, CFA On January 29, Meta Platforms (META) reported better than expected fourth quarter results with revenue and GAAP earnings per share outpacing the consensus forecasts. Revenue increased 21% in the quarter on a year-over-year basis, and the company was able to leverage the higher sales into a 43% increase in income from operations. Its fourth-quarter operating margin expanded 7 percentage points, to 48%. Net income increased 49%, to $20.8 billion, while diluted earnings per share advanced 50%, to $8.02. Its family daily active people (DAP) was 3.35 billion on average for December 2024, an increase of 5% on a year-over-year basis. Ad impressions across its Family of Apps increased 6% in the fourth … Read more

Microsoft Issues Fiscal Second Quarter Results

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Image Source: Microsoft By Brian Nelson, CFA On January 29, Microsoft (MSFT) reported better than expected fiscal second quarter results with revenue and GAAP earnings per share coming in ahead of the consensus forecast. Revenue increased 12% on a year-over-year basis, and Microsoft leveraged that top-line growth into a 17% increase in operating income (up 16% in constant currency). Net income increased 10%, while diluted earnings per share of $3.23 also advanced 10%. Management was upbeat in the press release: We are innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead. Already, our AI business has surpassed an annual revenue run rate of $13 billion, up 175% year-over-year. This … Read more

Lockheed Martin’s Earnings Impacted by Classified Program Losses

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Image Source: Lockheed Martin By Brian Nelson, CFA On January 28, Lockheed Martin (LMT) reported lower than expected fourth quarter results with revenue and GAAP earnings per share missing the consensus forecasts. Quarterly revenue dropped 1.3%, while net earnings for the fourth quarter came in at $527 million, or $2.22 per share, a level that includes $1.7 billion of charges for classified programs in its Aeronautics and Missiles and Fire Control (MFC) business segments. Net earnings were $1.9 billion, or $7.58 per share in the fourth quarter of 2023. Cash flow from operations was $1.0 billion in the fourth quarter of 2024, after a pension contribution of $990 million, compared to $2.4 billion in the fourth quarter of 2023. Free … Read more

NextEra Energy Reaffirms Earnings Outlook for Next Couple Years

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Image Source: NextEra Energy By Brian Nelson, CFA On January 24, NextEra Energy (NEE) reported mixed fourth quarter results with revenue missing the consensus forecast, but non-GAAP earnings per share coming in line. For the fourth quarter, net income attributable to NextEra Energy came in at $1.203 billion, or $0.58 per share, compared to $1.21 billion, or $0.59 per share, for the fourth quarter of 2023. On an adjusted basis, NextEra reported fourth-quarter earnings of $1.095 billion, or $0.53 per share, compared to $1.067 billion, or $0.52 per share, in the same period last year. Management had a lot to say about the quarter: NextEra Energy had an excellent year of execution in 2024, growing full-year adjusted earnings per share … Read more