Member Articles

Broadcom Issues Strong Guidance, Announces Stock Split

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Image: Broadcom’s shares have done quite well in the past couple of years. We liked its fiscal second quarter results and outlook. By Brian Nelson, CFA On June 12, Broadcom (AVGO) reported second quarter fiscal 2024 results for the period ended May 5. The company beat revenue on both the top and bottom lines in the quarter. Revenue increased 43% from the year-ago period, while adjusted EBITDA increased from $5.7 billion to $7.4 billion in the quarter (59% of total revenue), making for some continued strong levels of profitability. Non-GAAP diluted earnings per share were $10.96 in the fiscal second quarter, up from $10.32 in the same quarter a year ago. Management’s commentary was positive in the press release: Broadcom’s … Read more

Oracle Misses in Q4 But Bookings Performance and Outlook Strong

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Image: Oracle’s shares have done quite well since the beginning of 2023, and management’s outlook speaks to continued strength. By Brian Nelson, CFA On June 11, Oracle (ORCL) reported fourth quarter fiscal 2024 results that missed expectations on the top and bottom line, but the company’s total remaining performance obligations increased a whopping 44% on a year-over-year basis, to $98 billion–up $18 billion from the fiscal third quarter. Total quarterly revenue advanced 4% in constant currency, while non-GAAP operating income jumped 9% in constant currency. Management commented positively in the quarterly earnings press release about the pace of orders and the visibility it provides into the coming fiscal years: In Q3 and Q4, Oracle signed the largest sales contracts in … Read more

J.M. Smucker’s Free Cash Flow Outlook Solid

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Image: J.M. Smucker’s shares have faced pressure during the past several months, but its free cash flow outlook looks solid. By Brian Nelson, CFA On June 6, J.M. Smucker (SJM) reported mixed fiscal fourth quarter results with revenue coming up a bit short relative to expectations and the bottom line coming in higher than consensus. Adjusted net sales, excluding acquisitions, divestitures, and foreign currency fluctuations advanced 3% thanks to better net price realization in its U.S. Frozen Handheld and Spreads, U.S. Retail Pet Foods, and for International and Away from Home. The company’s volume/mix increased 1% thanks to Smucker’s Uncrustables frozen sandwiches, Folgers coffee, Jif peanut butter, among other areas. Adjusted gross profit increased 15% in the quarter. Adjusted operating … Read more

Lululemon’s Fiscal First Quarter Results Well Received But Competition Remains Fierce

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Image: Lululemon’s shares have been under considerable pressure so far in 2024. By Brian Nelson, CFA On June 5, Lululemon (LULU) reported better than expected first quarter fiscal 2024 results for the period ended April 28 that beat expectations on both the top and bottom lines. Net revenue increased 10% (11% on a constant dollar basis), while comparable sales increased 6% (7% on a constant dollar basis). The company’s operating margin faced pressure in the period, but its gross margin expanded 20 basis points from last year’s period. Its diluted earnings per share came in at $2.54 in the quarter versus $2.28 per share in the same period a year ago. Management’s commentary was upbeat in the press release: In … Read more

Hewlett Packard Enterprise Reports Strong AI Systems Revenue

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Image: Hewlett Packard Enterprise is breaking out nicely. By Brian Nelson, CFA On June 4, Hewlett Packard Enterprise (HPE) reported better than expected fiscal second quarter results that showed a beat on both the top and bottom lines. The company’s revenue advanced 3% from the prior quarter last year (up 4% in constant currency), while its annualized revenue run rate came in at $1.5 billion, which was up 37% from the same period last year (up 39% in constant currency). Hewlett Packard Enterprise’s server revenue advanced 18% on a year-over-year basis in both actual dollars and in constant currency. Management spoke positively about the results and outlook: HPE delivered very solid results in Q2, exceeding revenue and non-GAAP EPS guidance. … Read more

Waste Management to Acquire Stericycle

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Image: Waste Management’s shares have done quite well the past 12-18 months. By Brian Nelson, CFA On June 3, Waste Management (WM) confirmed a prior report from the Wall Street Journal that it would acquire medical waste services company Stericycle (SRCL). The news comes a week or so after Stericycle said it was exploring a sale of the company. Waste Management will acquire Stericycle for $62 per share in cash, or for an enterprise value of ~$7.2 billion after considering Stericycle’s net debt. The agreed-upon price represents a ~24% premium to the company’s 60-day volume weighted average price as of May 23, 2024, or the last trading day before the report that made public Stericycle was up for sale. There … Read more

Costco’s Comparable Store Sales Deliver

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Image Source: Costco By Brian Nelson, CFA On May 30, Costco (COST) reported solid third quarter results for its fiscal 2024 period ended May 12. Net sales for the quarter increased 9.1% thanks to total company adjusted comparable sales performance of 6.5% and e-commerce growth of 20.7%. Net income for the quarter came in at $1.68 billion, or $3.78 per share, which beat the consensus forecast. Management talked more about the performance on the conference call: Our average transaction or ticket was up 0.5% worldwide and up 0.7% in the U.S. Foreign currencies relative to the U.S. dollar negatively impacted sales by approximately 20 basis points, while gasoline price inflation positively impacted sales by approximately 30 basis points. Moving down … Read more

Dividend Increases/Decreases for the Week of May 31

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Below we provide a list of firms that raised their dividends during the week ending May 31. 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                          BMO Financial (BMO): now CAD 1.55 per share quarterly dividend, was CAD 1.51. BW LPG (BWLP): now $1.00 per share dividend. Donaldson (DCI): now $0.27 per share quarterly dividend, was $0.25. Euro Tech Holdings (CLWT): now $0.08 per share special dividend, was $0.06. Flanigan’s (BDL): now $0.50 per share dividend, was $0.45. Lowe’s Companies, Inc. (LOW): now $1.15 per share quarterly dividend, was $1.10. … Read more

In the News: CRM, FL, DG, BBY

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Image Source: Mike Mozart By Brian Nelson, CFA Salesforce Issues Weaker-Than-Expected Outlook On May 29, Salesforce (CRM) reported mixed first quarter results with revenue missing the consensus estimate, and it issued lackluster guidance that sent shares tumbling following the report. In the quarter, revenue advanced 11% in constant currency and its first-quarter non-GAAP operating margin came in at 32.1%. Its current remaining performance obligation was $26.4 billion, up 10% in constant currency. Operating cash flow and free cash flow were up nicely in the quarter, to the tune of 39% year-over-year and 43% year-over-year, respectively. However, the rosy cash-flow performance was overshadowed by the company’s second quarter sales outlook that came in lower than the consensus forecast. Even though Salesforce … Read more

Dick’s Sporting Goods Puts Up Strong First Quarter, Raises Guidance

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Image: Dick’s Sporting Goods’ guidance pleased investors. Image Source: Dick’s Sporting Goods. By Brian Nelson, CFA On May 29, Dick’s Sporting Goods (DKS) reported excellent first quarter results that beat expectations on both the top and bottom lines. Net sales in the quarter advanced 6.2% on a year-over-year basis, while the company put up 5.2% in comparable store sales expansion (well above consensus expectations). Dick’s Sporting Goods delivered strong profitability in the quarter with a double-digit EBT (income before taxes) margin of 11.3%, as well as reported earnings per share of $3.30 on 4% EBT growth (above the Street forecast). The executive team was upbeat with their commentary in the press release: Our strong first quarter results continue to prove … Read more