Member Articles

Walmart Executing Well, Raises Guidance

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Image Source: Walmart By Brian Nelson, CFA On November 19, Walmart (WMT) reported glowing third quarter results with both revenue and non-GAAP earnings per share coming in better than the consensus forecast and the company raising its guidance. Consolidated revenue grew 5.5% in the quarter, up 6.2% in constant currency, while consolidated operating income advanced 8.2% in the period, up 9.8% in constant currency. Walmart benefited from higher gross margins, growth in membership income, and reduced losses in e-commerce. Globally, e-commerce revenue grew 27% thanks in part to increases in store-fulfilled pickup and delivery, with penetration up across all segments. Walmart U.S. comp sales increased 5.3% thanks in part to positive growth in general merchandise (transactions increased 3.1%, while average … Read more

Disney Sets Positive Long-Term Guidance

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Image Source: Valuentum By Brian Nelson, CFA Disney (DIS) reported better than expected fiscal fourth quarter results on November 15. Revenue increased 6% in the fiscal fourth quarter, while the company achieved strong 23% expansion in total segment operating income. Diluted earnings per share excluding certain items expanded to $1.14 in the quarter, up 39% from the same period a year ago. Cash flow from operations advanced to $5.5 billion, up 15% year-over-year, while free cash flow came in at $4 billion in the quarter, up 18% year-over-year. Management had the following to say about the quarter and full fiscal year results: This was a pivotal and successful year for The Walt Disney Company, and thanks to the significant progress … Read more

Cisco Raises Fiscal 2025 Guidance

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Image: Cisco’s shares have been choppy the past couple years. By Brian Nelson, CFA Cisco Systems (CSCO) reported better than expected fiscal first quarter 2025 results on November 13. Revenue of $13.8 billion came in at the high end of its guidance range, down 6% but above consensus by $70 million, while non-GAAP earnings per share of $0.91 came in above its guidance range, beating the consensus forecast by $0.04. Product orders were up 20% year-over-year and up 9% excluding the recent acquisition of Splunk. Subscription revenue now accounts for 57% of its total revenue. Management had the following to say about the quarter: Cisco is off to a strong start to fiscal 2025. Our customers are investing in critical … Read more

Home Depot Navigating Macroeconomic Uncertainty Well

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Image: Home Depot’s shares are flirting with all-time highs. By Brian Nelson, CFA On November 12, Home Depot (HD) reported better than feared third quarter results with both revenue and non-GAAP earnings per share coming ahead of the consensus forecast. Total sales increased 6.6% from the third quarter of fiscal 2023, while comparable store sales in the third quarter of fiscal 2024 fell 1.3% (consensus was at -3.27%), while comparable store sales in the U.S. fell 1.2% (consensus was at -3.3%). Customer comp transactions fell 0.6%, while comp average ticket dropped 0.8% in the third quarter versus last year. Home Depot’s adjusted operating income for the third quarter of fiscal 2024 was $5.6 billion on an adjusted operating margin of … Read more

Ameresco’s Backlog Continues to Build

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Image: Ameresco’s backlog of future business remains strong and growing. By Brian Nelson, CFA On November 7, cleantech integrator and renewable energy asset developer, Ameresco (AMRC) reported mixed third quarter results. Revenue jumped 49.4% in the quarter on a year-over-year basis, while non-GAAP earnings per share missed the consensus forecast by $0.21. Still, adjusted EBITDA in the quarter advanced 43.6% on a year-over-year basis. Cash flow from operations in the quarter was $25.1 million and $34.4 million on an adjusted basis. Management was upbeat in the press release: Our team continued to deliver excellent results with year-on-year quarterly revenue growth of 49% and record Adjusted EBITDA of over $62 million, growing 44% in the third quarter, reflecting strong demand for … Read more

Energy Transfer Now Covers Distributions with Traditional Free Cash Flow

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Image: Energy Transfer’s units have done quite well the past couple years, as the pipeline giant now covers distributions with traditional free cash flow.  By Brian Nelson, CFA Energy Transfer (ET) reported decent third quarter results November 6, even though the midstream energy company missed estimates on both the top and bottom lines. On a diluted basis, net income per common unit advanced to $0.32 from $0.15 in the year ago period. Adjusted EBITDA came in at $3.96 billion compared to $3.54 billion in the three months a year ago. Distributable cash flow for the three months ended September 30 was $1.99 billion, a $4 million increase on a year-over-year basis and in excess of the $1.1 billion in total … Read more

Gilead Raises Revenue and Non-GAAP Diluted EPS Guidance

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Image Source: Gilead  By Brian Nelson, CFA On November 6, Gilead Sciences (GILD) reported better than expected third quarter results, with both revenue and non-GAAP earnings per share beating the consensus forecast. Total third quarter product sales advanced 7% on a year-over-year basis thanks to higher sales in HIV (+9%), Veklury (+9%), as well as in Oncology (+6%) and Liver Disease (+4%). Non-GAAP diluted earnings per share came in at $2.02 in the third quarter, down from $2.29 per share in the third quarter of last year due to higher acquired in-process research and development expense as well as higher tax expense. Management had the following to say about the quarter: Gilead’s third quarter results are the strongest of the … Read more

Albemarle Pursues Efficiency in the Wake of Lower Lithium Prices

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Image Source: Albemarle By Brian Nelson, CFA On November 6, Albemarle (ALB) reported mixed third quarter results with revenue outpacing the consensus forecast, but non-GAAP earnings per share coming up a bit short. Net sales fell to $1.36 billion from $2.3 billion in the year-ago period as a result of depressed lithium prices, while adjusted EBITDA came in at $211 million versus $653 million in the same period last year. Its adjusted EBITDA margin fell 1,200 basis points in the quarter on a year-over-year basis, while adjusted diluted loss per share was $1.55. Management had the following to say about results: Our steadfast focus on execution allowed us to deliver solid third-quarter results and maintain our full-year 2024 corporate outlook … Read more

Realty Income’s AFFO Covers Dividends Paid in Third Quarter

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Image: Realty Income’s shares have seen better days. By Brian Nelson, CFA Realty Income (O) reported mixed third quarter results November 4 with revenue exceeding the consensus forecast but funds from operations coming up short. Revenue advanced 28.1% in the quarter on a year-over-year basis, with same store rental revenue up modestly (0.2%). However, net income per share and FFO per share fell to $0.30 and $0.98, respectively, from $0.33 and $1.04 in the same period a year ago. Adjusted funds from operations (AFFO) came in at $1.05 per share in the period, up from $1.02 in last year’s quarter, and comfortably higher than dividends paid per share of $0.789 over the same time. Management had the following to say … Read more

Cash-Rich Vertex Pharma Raises 2024 Product Revenue Guidance

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Image: Vertex Pharma’s shares have done quite well the past couple years. By Brian Nelson, CFA Vertex Pharma (VRTX) reported better than expected third quarter results November 4 with revenue and non-GAAP earnings per share coming in ahead of the consensus forecasts. Product revenue advanced 12% in the quarter on a year-over-year basis thanks to strong performance of its cystic fibrosis (CF) therapy TRIKAFTA/KAFTRIA. GAAP and non-GAAP net income were $1.0 billion and $1.1 billion, respectively, for both the third quarter of 2024 and the third quarter of 2023. Management was upbeat with its commentary in the press release: The third quarter marked another period of strong progress, with continued revenue growth and outstanding execution across the business, and we … Read more