Member Articles

Honeywell Adjusts Full Year 2024 Guidance

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Image: Honeywell’s shares have traded sideways the past couple years. By Brian Nelson, CFA Honeywell (HON) reported mixed third quarter results October 24 with revenue coming in a bit light relative to the consensus forecast and non-GAAP earnings per share beating what the Street was looking for. Sales came in at $9.7 billion in the quarter, up 6%, while organic sales advanced 3%. Its operating margin was 19.1%, down from 20.9% in the prior year period due mostly to an impairment related to classifying its personal protective equipment (PPE) business as assets held for sale. The company’s segment profit increased 6% in the quarter, and its segment margin came in at 23.6%–above the high end of prior guidance by 30 … Read more

Clean Energy Idea GE Vernova Reaffirms 2024 Guidance

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Image: GE Vernova shares have powered higher as of late. By Brian Nelson, CFA GE Vernova (GEV) reported mixed third quarter results on October 23 with revenue beating expectations, but GAAP earnings per share coming in lower than expected. Total revenue increased 8% (10% organically) in the third quarter with growth in both equipment and services. Total orders came in at $9.4 billion, up 17% organically, with particular strength in services (+28% organically). Adjusted EBITDA came in at $243 million on an adjusted EBITDA margin of 2.7%, up from $205 million and 2.5% in the same period a year ago. Management was positive in the press release: GE Vernova had a solid third quarter, delivering double-digit orders and continued revenue … Read more

Tesla’s Margins, Free Cash Flow Swell in Third Quarter

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Image: Tesla has returned to a free cash flow rich entity. By Brian Nelson, CFA Tesla (TSLA) reported solid third quarter earnings on October 23. Total revenues increased 8%, while gross profit increased 20% in the quarter, as gross margins expanded nearly 200 basis points. Income from operations was up 54% thanks to more than a 320 basis-point improvement in its operating margin. Adjusted EBITDA advanced 24% in the quarter on a year-over-year basis thanks to a 240 basis-point improvement in its EBITDA margin. Non-GAAP net income increased 8% year-over-year, while non-GAAP diluted earnings per share increased 9% year-over-year. Tesla’s total production was 469,796 in the quarter, up 9%, while total deliveries increased 6%, both on a year-over-year basis. Management … Read more

NextEra Energy Reaffirms Outlook

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Image: NextEra Energy’s shares have bounced back nicely from their October 2023 lows. By Brian Nelson, CFA On October 23, NexEra Energy (NEE) reported solid third-quarter results with net income attributable to NextEra Energy on a GAAP basis of $1.852 billion, or $0.90 per share, which compares to $1.219 billion, or $0.60 per share, for the third quarter of last year. On an adjusted basis, third quarter earnings came in at $2.127 billion, or $1.03 per share, compared to $1.92 billion, or $0.94 per share, in the third quarter of last year. Management had a lot to say in the press release: NextEra Energy delivered strong third-quarter results, increasing adjusted earnings per share by approximately 10% year-over-year, reflecting continued solid … Read more

Boeing Burning Through Cash

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  Image: Boeing’s shares have seen better days. By Brian Nelson, CFA Aerospace giant Boeing (BA) reported disappointing third quarter results on October 23, with revenue and non-GAAP earnings per share coming in lower than expected. Revenue fell 1% in the quarter, while the firm posted large operating and net losses, which reflected impacts from the IAM strike and previously announced charges on its commercial (777X, 767) and defense (T-7A, KC-46A Tanker, Commercial Crew, and MQ-25) programs. GAAP loss per share was $9.97, while core non-GAAP loss per share came in at $10.44. These numbers aren’t reflective of Boeing’s long-term earnings power, but they showcase the challenges the firm continues to face. Management acknowledged that the path ahead will be … Read more

Starbucks Posts Lower Than Expected Performance, Turnaround Will Take Time””

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Image: Starbucks’ shares have been volatile the past couple years. By Brian Nelson, CFA Starbucks (SBUX) is in the midst of transition, and new CEO Brian Niccol will have his hands full getting the company back on track. On October 22, Starbucks announced preliminary results for its fiscal fourth quarter, and the outlook wasn’t rosy. For the fourth quarter of fiscal 2024, Starbucks’ global comparable store sales fell 7%, while consolidated net revenues declined 3%, to $9.1 billion. GAAP earnings per share came in at $0.80, down 25% on a year-over-year basis. Non-GAAP earnings per share fell 24% in the quarter. Here is a summary of its fiscal fourth quarter results: The company’s results were primarily driven by softness in … Read more

Lockheed Martin Raises 2024 Guidance, F-35 Program in Focus

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Image: Lockheed Martin’s shares have done well of late. By Brian Nelson, CFA On October 22, Lockheed Martin (LMT) reported mixed third quarter results with revenue coming up short relative to the consensus forecast but non-GAAP earnings per share beating what the market had been expecting. Net sales advanced 1% on a year-over-year basis, while net earnings of $1.6 billion fell from $1.7 billion in the third quarter of last year. Net earnings per share came in at $6.80, up from $6.73 per share in the year-ago period. Cash flow from operations was $2.4 billion, down from $2.9 billion in the same period last year, while free cash flow was $2.1 billion in the third quarter of 2024, down from … Read more

Philip Morris Raises 2024 Guidance, Shares Catapult to All-Time Highs

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Image: Shares of Philip Morris catapult to all-time highs. By Brian Nelson, CFA On October 22, Philip Morris (PM) reported better than expected third quarter results that showed a beat on both the top and bottom lines. Reported net revenue advanced 8.4% on 11.6% organic growth in the quarter. Gross profit increased 9.5% on reported basis and 13% organically. Operating income was up 8.4% on a reported basis and 13.8% organically versus the prior year’s quarter. Adjusted diluted earnings per share, excluding currency, came in 18% higher versus last year’s quarter, to $1.97 per share. Management was pleased with the performance: In the third quarter, we delivered exceptionally strong performance, with record quarterly net revenues and earnings per share. This … Read more

Procter & Gamble Maintains Outlook for Fiscal 2025

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Image: P&G maintained its outlook for fiscal 2025, as shares flirt with all-time highs. By Brian Nelson, CFA On October 18, Procter & Gamble (PG) reported mixed first-quarter fiscal 2025 results with revenue coming in lower than the consensus forecast, while non-GAAP earnings per share edged out what the Street was looking for. Fiscal first quarter revenue fell 1% versus the prior year’s quarter, while organic sales advanced 2%, lapping 7% growth in the prior year period. A one percent increase from higher pricing and a one percent increase in organic volume drove the organic sales increase. Organic sales were strong in its Grooming (+3%), Health Care (+4%), and Fabric & Home Care (+3%) segments, while Beauty (-2%) weighed on … Read more

Netflix Continues to Deliver on Content and Engagement, Free Cash Flow Robust

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Image: Netflix’s shares are trading at all-time highs. By Brian Nelson, CFA On October 17, Netflix (NFLX) reported better than expected third quarter results with both revenue and GAAP earnings per share coming ahead of the consensus forecast. In the quarter revenue grew 15% on a year-over-year basis (21% on an F/X neutral basis), while the firm put up an operating margin of 29.6% versus 22.4% in the year-ago period. Global streaming paid memberships advanced 14.4%, to 282.72 million, as the firm recorded 5.07 million global streaming paid net additions on a sequential basis. Third quarter operating income advanced 52% year-over-year in the quarter. Net cash provided by operating activities was $2.32 billion in the quarter, while the firm hauled … Read more