Member Articles

Adobe’s Fiscal Fourth Quarter Outlook Comes Up Short of Expectations

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Image: Adobe’s shares traded down on a weaker than expected fiscal fourth quarter outlook. By Brian Nelson, CFA Adobe (ADBE) reported better than expected fiscal third quarter 2024 results on September 12, but the company’s outlook left something to be desired. In the quarter, Adobe grew revenue 11%, while non-GAAP earnings per share came in at $4.65, both above the consensus forecast. Non-GAAP operating income was $2.52 billion, while non-GAAP net income reached $2.08 billion. Operating cash flow was $2.02 billion, up from $1.87 billion in the year-ago quarter, while it exited the period with remaining performance obligations (“RPO”) of $18.14 billion. During the quarter, Adobe bought back 5.2 million shares. Free cash flow in the quarter was $1.96 billion. … Read more

Kroger Raises Identical Sales Growth Outlook

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Image: Kroger’s shares have been choppy during the past couple years. By Brian Nelson, CFA On September 12, Kroger (KR) reported mixed second quarter results with revenue coming up short of the consensus forecast, but non-GAAP earnings per share exceeding what the Street was looking for. Total sales advanced 0.2% in the quarter helped by identical sales without fuel increasing 1.2%, which lapped a 1% increase in identical sales growth during the same quarter a year ago. Adjusted earnings per share in the quarter came in at $0.93, down modestly from the year-ago period. Commentary in the press release was upbeat: Kroger achieved solid results in the second quarter demonstrating the strength and resiliency of our model. We are growing … Read more

Medtronic Raises Fiscal 2025 Guidance

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By Brian Nelson, CFA Medical device giant Medtronic (MDT) recently reported fiscal first quarter fiscal 2025 results that came in better than expectations. Adjusted revenue was $8 billion in the quarter led by 5.3% organic growth. Adjusted diluted earnings per share was $1.23, up 2.5% and 7.5% in constant currency. In the quarter, its Cardiovascular segment experienced 6.9% organic growth, its Neuroscience segment experienced 5.3% organic growth, its Diabetes segment experienced 12.6% organic growth, while its Medical Surgical segment experienced 1% organic growth. Year-to-date, operating cash flow was $1 billion, while free cash flow was $0.5 billion. ESG Matters Image Source: Medtronic Medtronic has a number of long-term sustainability objectives that are worth mentioning. It expects to reduce greenhouse gas … Read more

Oracle Expects Increased Revenue Growth Throughout Fiscal 2025

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Image: Oracle’s shares have performed quite well during the past couple years. By Brian Nelson, CFA Oracle (ORCL) reported better than expected fiscal first quarter results on September 9, with revenue and non-GAAP earnings per share exceeding the consensus forecast. Total revenue expanded 7% in the quarter (up 8% in constant currency), while non-GAAP earnings per share advanced 17%, to $1.39 (up 18% in constant currency). Cloud services revenue advanced 21% (up 22% in constant currency), while cloud license and on-premise license revenues increased 7% (up 8% in constant currency). Non-GAAP operating income increased 13%, to $5.7 billion, up 14% in constant currency, while its non-GAAP operating margin came in at 43%. Non-GAAP net income increased 18%, to $4 billion, … Read more

Broadcom Misses with Guidance for Its Fiscal Fourth Quarter

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Image: Broadcom’s shares fell after the company issued fiscal fourth quarter guidance that came up short with respect to the consensus estimate. By Brian Nelson, CFA On September 5, Broadcom Inc. (AVGO) reported better than expected fiscal third quarter results with revenue and non-GAAP earnings per share exceeding the consensus forecast. Revenue was up 47% from the same quarter a year ago, while non-GAAP diluted earnings per share was $1.24 for the period. Adjusted EBITDA came in at 63% of revenue, while traditional free cash flow, as measured by cash flow from operations less all capital spending, of $4.89 billion amounted to 37% of revenue. Management was upbeat with its comments in the press release: Broadcom’s third quarter results reflect … Read more

Dividend Increases/Decreases for the Week of September 6

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Below we provide a list of firms that raised their dividends during the week ending September 6. 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                          AGL Energy Limited (AGLXY): now $0.1421 per share semi-annual dividend, was $0.0987. 6Phillips Edison (PECO): now $0.1025 per share monthly dividend, was $0.0975. AEGON (AEG): now $0.178 per share semi-annual dividend, was $0.172. Brady (BRC): now $0.24 per share quarterly dividend, was $0.23. Clinuvel Pharmaceuticals (CLVLY): now $0.0299 per share annual dividend, was $0.0234. Fairfax Financial Holdings Limited RESET CV PFD I (FFH.PR.I:CA): now … Read more

Casey’s General Stores Is Executing Well

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Image: Shares of Casey’s General Stores have done quite well since the beginning of 2022. By Brian Nelson, CFA Casey’s General Stores (CASY) reported decent fiscal first quarter results on September 4. Total revenue advanced 5.9% as inside same-store sales increased 2.3% from the prior year, resulting in 7.9% growth on a two-year stacked basis. Its inside margin was 41.7%, while total inside gross profit increased 10.4% from the same period a year ago. Same-store fuel gallons were up 0.7% with the company generating a fuel margin of 40.7 cents per gallon. Total fuel gross profit increased 5.9%. Management was upbeat in the press release: Casey’s started the fiscal year off on the right foot and delivered another solid quarter … Read more

Dollar General’s Business Model Challenged By Walmart’s Strength

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Image: Dollar General’s shares have been under considerable pressure the past couple years. By Brian Nelson, CFA Dollar General (DG) recently reported second-quarter results that left a lot to be desired. Revenue of $10.2 billion missed estimates by $170 million, while GAAP earnings per share came in at $1.70, missing the consensus forecast by $0.09. Same-store sales increased 0.5%, while operating profit fell 20.6% and diluted earnings per share dropped more than 20%. Management was disappointed with the performance: We made important progress on our Back to Basics plan in the second quarter, However, despite advancing several of our operational goals and driving positive traffic growth, we are not satisfied with our financial results, including top line results below our … Read more

Dick’s Sporting Goods Beats Second Quarter Numbers, Raises 2024 Outlook

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Image: Dick’s Sporting Goods has performed nicely since the beginning of 2022. By Brian Nelson, CFA Dick’s Sporting Goods (DKS) reported solid second quarter results September 4 with both revenue and non-GAAP earnings per share beating the consensus forecast. Net sales increased 7.8% in the quarter, while comparable sales growth totaled 4.5% for the period, lapping 2% from the year-ago period. Reported earnings per diluted share were $4.37 in the quarter, up 55% versus the same period a year ago. Management was upbeat in the press release: Our strong second quarter demonstrated the continued success of our long-term strategies and how DICK’S is truly differentiated within the industry. We are very enthusiastic about the significant growth opportunities ahead of us, … Read more

NextEra Energy’s Outlook Looks Great

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Image Source: NextEra Energy By Brian Nelson, CFA NextEra Energy (NEE) recently reported mixed second quarter results with revenue coming in light, but non-GAAP earnings per share exceeding the consensus forecast. On an adjusted basis, NextEra Energy’s earnings for the second quarter of 2024 were $0.96 per share, up from $0.88 per share in the same period a year ago. Management’s outlook, as provided in the press release, was quite upbeat: NextEra Energy delivered strong second-quarter results, increasing adjusted earnings per share by more than 9% year-over-year, reflecting continued solid financial and operational performance at both our businesses. At FPL, we continued to invest to support strong customer growth, while keeping O&M low and reliability high. At NextEra Energy Resources, … Read more