H&R Block Inc. (HRB) announced strong third-quarter results on July 1 that included a big jump in earnings for the previous year. The board of directors recently approved a dividend hike and a substantial share repurchase program. The company is also aggressively paying down its debt.
H&R Block Inc. operates as a tax and investment consulting firm. Its three business segments consist of tax services, business services and financial services. The company was founded in 1946, carries a market cap. of $7.6 billion and is headquartered in Kansas City, Missouri.
Full-Year and Fourth-Quarter Results
H&R Block stepped up and delivered very impressive full-year and fourth-quarter results on June 30.
Full-year revenue rose 10% to $4.4 billion. Net income was up 21% to $454.5 million, producing earnings of $1.39 per share.
For the quarter, revenue was up 11% to $2.6 billion. Net income was $691.1 million, up 17% from the same period last year, producing earnings of $2.11 per share, outpacing analyst expectations of $2.03 per share.
The company noted that its tax services department scored a record performance, posting an 11.3% increase over the previous year.
Guidance Raised
After the encouraging results, H&R Block increased its guidance, saying it now expect full-year fiscal 2009 earnings to fall between $1.60 and $1.70 per share. Analysts are targeting the upper side of this range, projecting full-year earnings of $1.70.
Dividend Increase
The board of directors also voted to increase the company's dividend by 3 cents to 60 cents per share annually.
Debt Reduction and Share Repurchase Plan
H&R Block also noted that it now had outstanding debt of $441.2 million, down 63% and $750.5 million at the same time last year. The board also approved a share repurchase program of $2 billion to commence in 2009 and carry on through 2012.
The Chart
Shares of HRB spent most of 2007 in a steady decline, but this downward momentum now appears to have been disrupted as this stock is recoups its losses and once again is heading higher. More recently, shares have been pressuring the slight downward trend line right at $24.
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Thursday, July 17, 2008
(HRB) - H&R Block - Dividend Increase - Debt Reduction and Share Repurchase Plan
(X) - United States Steel Corp - 4 out of 12 analysts upped earnings expectations
United States Steel Corporation (X) is set to announce results for the second quarter on July 29. In addition to being rewarded with income, the most recent of which was a quarterly dividend of 25 cents per share, investors can expect growth from U.S. Steel as earnings per share are estimated to grow by 18% over the next 3 – 5 years. The industry average projection is a lower 10%.
Company Description
United States Steel Corporation produces steel, running major production operations in the United States, Canada and Central Europe. The company manufactures a wide range of value-added steel sheet and tubular products for the automotive, appliance, container, industrial machinery, construction, and oil and gas industries. U.S. Steel is headquartered in Pittsburgh, PA.
Estimates are on the Rise Ahead of the Next Earnings Announcement
Wall Street is upbeat on the steel maker. Five out of 11 covering analysts increased earnings projections for the 2008 full year to $16.00 per share from last month’s $15.11 per share. One of those analysts further boosted the forecast to $16.59. The most accurate estimate is a much more bullish $18.66.
For the second quarter, 4 out of 12 analysts upped earnings expectations to $3.79 per share from last month’s $3.68. One of the analysts bumped the projection higher to $3.80. The most accurate estimate is even higher at $3.91.
U.S. Steel is set to announce results for the second quarter on July 29, 2008.
Competitive Income
The company rewards its shareholders with income, the most recent of which was a quarterly dividend of 25 cents per share that was paid out on June 10, 2008. U.S. Steel’s dividend yield of 0.6% compares favorably to the industry average as most companies within U.S. Steel’s industry group pay no dividends.
Strong Growth
In late April, the company posted first-quarter net income of $235 million, which soared past the fourth-quarter net income of $35 million. Net sales reached a record $5.2 billion.
Management stated that its strong results reflected sharp improvements in its flat-rolled and European segments on strong operating performances as well as higher shipments and prices, adding that the company made excellent progress in integrating its Canadian facilities, which operated during the first quarter at the highest utilization rate in recent years.
U.S. Steel offers a return on equity (ROE) of 19%, surpassing the industry average of 16%. Its earnings per share are expected to grow by 18% over the next 3 – 5 years, beating the industry average expectation of 10%.
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(RBN) - Robbins & Myers - done an excellent job of strategically re-aligning itself
Robbins & Myers Inc. (RBN) share price has been surging since the company released its third-quarter earnings results on June 30 in which sales were up 17% from last year. This marks the 11th straight quarter that the company has been able to deliver earnings growth, an impressive accomplishment by any standard.
Robbins & Myers develops engineering equipment and systems for a number of industries worldwide. Two of the company's divisions are fluid management and process solutions. Robbins & Myers was founded in 1878, carries a market cap. of $1.66 billion and is headquartered in Dayton, Ohio.
Solid First-Quarter Results
Robbins and Myers made its shareholders happy on June 30 when the company reported excellent third-quarter results. Sales were up 17% from the same period last year, to $201 million. This produced earnings of 62 cents per share when excluding one-time items of 14 cents, safely ahead of analyst estimates by 4 cents.
This is a company that has been very good at surprising and beating analyst estimates over the last 4 quarters, having done so by an average of 7 cents, or 17.31%.
Guidance Raised
After the solid quarterly performance, Robbins went ahead and boosted its earnings guidance. The company now expects full-year 2008 earnings between $2.26 and $2.31, up from the previous range between $1.93 and $2.03. The analyst community is just a little more bullish, projecting full-year earnings of $2.32.
Strength Through Strategy
Robbins and Myers has done an excellent job of strategically re-aligning itself after suffering from certain operational and financial issues dating back to 2004. Its balance sheet is in great shape with $91.7 million in cash or convertibles, up 47% from the previous year. The company can also champion the fact that 60% of its revenue comes from international markets, which have proven to be bastions of stability as the domestic economy continues to suffer.
The Chart
Shares of RBN surged after the company's third-quarter earnings report hit the street, trading above $50 before settling slightly lower. Since then, shares have continued to pressure the high in an attempt to breakout, all the while, logging higher daily lows. This is called a wedge formation, and it is a bullish signal.
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(ME) - Mariner Energy - Analysts are even more bullish for the full year, as consensus estimates climbed 16%
Mariner Energy is taking advantage of record crude prices by posting record production numbers which translates into big profits. The company has surprised on estimates 2 out of the last 4 quarters by 5.68%. Mariner has a forward P/E of only 7.11 as earnings estimates continue to rise.
Company Description
Mariner Energy, Inc. (ME) is an exploration and production natural gas and oil company with primary operations in the Gulf of Mexico and West Texas. In the Gulf of Mexico, the company operates in the shelf, deep shelf, and deepwater. ME has been active in the Gulf of Mexico and West Texas since the mid-1980s and in the deepwater since 1996.
The company, a Zack's #1 Rank (Strong Buy) takes a two prong approach to its business. The West Texas properties provide a base of stable cash flow and secure reserves. The Gulf of Mexico properties are riskier, with high-production capabilities but exposure to hurricanes and other disruptions.
As of Dec 31, 2007, Mariner had proven reserves which were approximately 54% natural gas and 46% oil, condensate and natural gas liquids.
Big Deepwater Discovery at Geauxpher Prospect
On June 17, Mariner Energy announced a significant deepwater discovery on its Geauxpher prospect located on Garden Banks Block 462. The well lied at water depths of about 2,700 feet. Mariner estimates the probable reserves on the block to be about 100 billion cubic feet of natural gas equivalent.
Mariner is the designated operator at Garden Banks 462 and shares working interest in the site with Apache Corporation. ME holds a 60% share and Apache the remaining interest.
Production is expected as soon as the end of the year.
Mariner Posts Record First Quarter Revenues and Production
On May 6, Mariner Energy reported first quarter earnings and easily beat Wall Street estimates by 15.49%, or 11 cents per share. Net income rose 89% to $72.1 million, or 82 cents per share, compared with $38.2 million, or 45 cents per share, in the first quarter of 2007.
Revenues rose 49% to a record $315.9 million from $211.6 million in the year ago period.
Production also increased 22% to 344 million cubic feet of natural gas equivalent per day (MMcfe/d). Net natural gas production rose 20%, oil production grew 29% and natural gas liquid production increased 36% compared to the first quarter 2007.
Mariner's average realized natural gas price for the quarter was $8.57 per thousand cubic feet (Mcf) compared with $8.04 per Mcf in the year ago period. The company's average realized oil price was $84.16 per barrel (Bbl) for the quarter compared with $57.76 per Bbl for the same period in 2007.
Consensus Estimates Rise for the Second Quarter and Full Year
As crude and natural gas continue to rise and the company announces new oil discoveries, consensus estimates are up. Five out of 9 covering analysts have raised consensus estimates for the second quarter by 11 cents to $1.14 from $1.03 per share in just the last 30 days. One analyst raised in the last week.
Analysts are even more bullish for the full year, as consensus estimates climbed 16% to $4.26 from $3.68 per share.
Mariner is expected to report second quarter earnings on Aug 7.
Value Fundamentals
Mariner Energy's forward P/E is only 7.11, well under the industry average of 21.27. Its price-to-book is 1.97. The company has an average five year return on equity of 10.78%.
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Wednesday, July 16, 2008
(CEDC) - Central European Distribution Corp - Estimates continue to revise their earnings estimates upward
Central European Distribution Corporation (CEDC) shares just broke through a key level of resistance and set a new 52-week and all-time high. The company's stock price has had a great year, advancing from less than $47 a share to this recent high-water mark above $77, an impressive return of more than 60%. Estimates continue to revise their earnings estimates upward.
Central European Distribution Corporation imports and distributes alcoholic beverages in Poland, Russia and Easter Europe. The company was founded in 1990, carries a market cap. of $3.16 billion and is based Bala Cynwyd, Pennsylvania.
Another Solid Quarter
CEDC reported very solid first-quarter results on Apr 30. Sales were up 37% from the same period last year to $313.6 million. On a U.S. GAAP basis, net income surged ahead, jumping to $18.5 million from a loss of $5.2 million in the same period last year. This produced earnings of 45 cents per share, ahead of analyst estimates of 28 cents per share.
This marks the third time in four quarters that CEDC has surprised and beaten analyst estimates, an impressive accomplishment in a volatile economic environment.
Growth Through Acquisition
On May 26, CEDC announced that it had officially completed its acquisition of the Russian alcohol distributor Whitehall Group. The acquisition is expected to produce an additional $200 million in annual top line revenue for CEDC, representing a 15%-20% increase in revenue from 2007.
William Carey, President and CEO commented, "The Whitehall Group is one of the premier spirit companies in Russia. The Company's portfolio is well-positioned to take advantage of the strong economic trends in Russia."
Estimates Are Up
The analyst community continues to be bullish on CEDC. In just the last 7 days the current-year estimate has advanced to $2.70 from $2.59.
The Chart
Shares of CEDC have been on a very smooth up trend for the last four months, advancing from the Mar 4 low just above $48 to current prices above $77. Only a few days ago, shares of CEDC surged past the a resistance level at $72 and set a new 52-week and all-time high.
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(WW) - Watson Wyatt Worldwide - solid ROE of 17%, far above industry average of 10%
Watson Wyatt Worldwide, Inc. (WW), which recently acquired Argentine human-resources and financial-services firm Marcu & Asociados, continues to offer a solid ROE of 17%. With the industry average ROE coming in lower at 10%, WW’s ROE is just one attribute that makes it an attractive Growth and Income pick. Watson Wyatt is slated to report fiscal fourth-quarter results on August12.
Company Description
Watson Wyatt Worldwide, Inc. is a global consulting firm. Its services include managing the cost and effectiveness of employee benefit programs; developing attraction, retention and reward strategies; advising pension plan sponsors and other institutions on optimal investment strategies; providing strategic and financial advice to insurance and financial services companies; and delivering related technology, outsourcing and data services. Watson Wyatt has 7,000 associates in 32 countries
Signs of Growth
The company recently acquired Argentine human-resources and financial-services firm Marcu & Asociados, a top HR and financial services consulting firm in Argentina.
"This acquisition positions Watson Wyatt as the clear leader in Argentina in providing human resources and actuarial consulting services to multinational and local companies," said Peter Mills, Watson Wyatt's Latin America region manager.
Shares of Watson Wyatt received a boost to the $54.00 level on the acquisition news and are trading near that level now despite a market that has been selling of since then.
The company continues to offer a solid ROE of 17%. With the industry average ROE coming in lower at 10%, WW’s ROE is just one attribute that makes it an attractive Growth and Income pick. Its net margin of 8.6%, versus the industry average of 1.5%, is another growth feature. The company’s earnings per share are projected to grow by 15% over the next 3 – 5 years, which matches the industry average.
Competitive Income
In early June, Watson Wyatt declared a regular quarterly cash dividend of $0.075 per common share. The dividend was paid out on July 15, 2008. The company’s dividend yield of 0.6% is ahead of the industry average since it is rare for other companies within WW’s industry group to pay dividends.
Increased Forecasts
Wall Street has the company’s fiscal fourth-quarter earnings estimates pegged at 80 cents per share, compared to the projections of two months ago of 78 cents. Fiscal year expectations for both the 2008 and 2009 years have also increased over the past two months
Watson Wyatt is slated to report fiscal fourth-quarter results on August 12, 2008.
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(PMC) - PharMerica Corp - earnings of 20 cents per share, ahead of analyst expectations of 13 cents
PharMerica Corporation (PMC) has been delivering solid returns to shareholders in 2008, as its stock price has been steadily climbing for most of the year. This comes in tandem with rising analyst estimates, a reflection of the fundamental strength needed to support a higher stock price. The company has also surprised and easily beaten analyst estimates in each of the last two quarters.
PharMerica Corporation is an institutional pharmacy services company in the United States. It offers services to healthcare facilities and provides management pharmacy services to hospitals. The company carries a market cap. of $662.5 million and is headquartered in Louisville, Kentucky.
First-Quarter Results
PharMerica's reported solid first-quarter results on May 8, a clear indication the company is progressing towards its goals. Revenue was $495.1 million, up from $174.7 million in the same period last year. The big jump of $320.4 million was primarily the result of a one-time transaction.
Net income totaled $3.3 million, compared with net income of $0.5 million in the same period last year. This figure includes $4.1 million (tax effected $2.3 million) for integration, merger related costs and other charges.
Gross profit was $72.5 million, and profit margin came in at 14.6%, compared to gross profit of $21.9 million and profit margin of 12.5% in the first quarter of 2007.
Beating Estimates
This produced earnings of 20 cents per share, ahead of analyst expectations of 13 cents. This is the second consecutive quarter that the company has handily beaten analyst estimates, reporting earnings of 21 cents in the previous quarter, 13 cents ahead of analyst expectations of 8 cents.
Estimates Rising
As the company advances and executes its growth plans, the analyst community continues to boost their estimates. The current-year estimate is now projecting earnings of 80 cents per share, up from 71 cents 90 days ago.
The Chart
Shares of PMC have had a remarkable run in 2008, advancing from less than $15 to the recent high-water mark of over $23. After establishing this new 52-week and all-time high, this stock has pulled back and is taking a breather. There appears to be considerable support at the $21.50 level.
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(MDU) - MDU Resources Group - ago. But in the last 30 days, consensus estimates have moved sharply higher
MDU Resources Group scored a record first quarter as its oil and natural gas division continues to bring in big profit. The company has surprised on estimates 2 of the last 4 quarters by an average of 2.38%. MDU Resources has a forward P/E of 14.08.
Company Description
MDU Resources Group Inc. (MDU) provides energy and transportation infrastructure within a diverse group of businesses in three core areas of energy, construction materials and utility resources.
The company, headquartered in Bismarck, ND, operates 5 different business segments including natural gas and oil production, natural gas pipelines and energy services, construction materials and contracting, construction services, and electric and natural gas utilities.
Five Business Segments
In the Natural Gas and Oil Production segment, through the Fidelity Exploration & Production Co., MDU is engaged in natural gas and oil exploration primarily in the Rocky Mountain and Mid-Continent regions and in the Gulf of Mexico.
In the Natural Gas Pipeline and Energy Services segment, through WBI Holdings, Inc., the company provides natural gas transportation, underground storage and gathering services through regulated and non regulated pipeline systems primarily in the Rocky Mountain and northern Great Plains.
In the Construction Minerals and Mining segment, MDU operates under the Knife River Corporation which mines aggregates and markets crushed stone, sand, gravel and related construction materials, including ready-mixed concrete, cement, and asphalt.
In the Construction Services segment, the company operates as MDU Construction Services Group, Inc. which specializes in electrical line construction, pipeline construction, inside electrical wiring and cabling, mechanical services and the manufacture of specialty equipment.
Finally, the company also operates three energy distributors in its Electric and Natural Gas Utilities segment.
Electric and Gas Utilities Montana-Dakota Utilities Co., generates electricity and distributes natural gas in Montana, North Dakota, South Dakota and Wyoming, Great Plains Natural Gas Co. distributes natural gas in western Minnesota and southeastern North Dakota and Cascade Natural Gas Corp. serves 65 communities in Washington and 28 in Oregon.
Growing Through Acquisitions
MDU has been acquiring companies recently. On May 19, the company announced it had agreed to buy Amador Transit Mix, Inc., a ready-mix concrete producer in Sutter Creek, CA. Amador will become a part of Knife River Corporation, in the construction materials segment. The price of the acquisition was not disclosed.
On July 1, MDU announced it had entered into a $328 million agreement to acquire Intermountain Gas Company in a cash-for-stock transaction. Intermountain Gas will expand the company's Electric and Natural Gas segment.
Intermountain serves 300,000 customers in Idaho, including the Boise metropolitan area. Intermountain saw recent customer growth of approximately 4.5% annually. With the acquisition, MDU will service 930,000 customers nationwide.
MDU Reports Record First Quarter Earnings
On May 2, MDU Resources Group reported first quarter earnings that beat Wall Street estimates by 8.33%, or 3 cents a share. Earnings from continuing operations rose 72% to $70.9 million, or 39 cents per share, from $41.2 million, or 23 cents per share, in the first quarter of 2007.
The quarter was powered by record quarterly earnings in the natural gas and oil production segment which rose 65% over 2007. Production grew 8%.
In April, Fidelity Exploration & Production Company announced positive initial results from its first two operated wells in the middle Bakken formation in North Dakota. The company is increasing its drilling plans and now expects to explore approximately 50 to 60 wells in 2008 in the Bakken.
The pipeline and energy services business also had a great quarter, as earnings grew by 25% over a year ago. Total throughput grew by 6%.
As expected, the construction materials segment struggled as the U.S. economy and residential construction slowed. The company said construction workloads, margins and product volumes from existing operations declined sharply in the quarter. However, the huge gains in the energy segment more than made up for any losses in the construction group.
2008 Guidance Rises
With energy prices continuing to rise, the company raised its 2008 full year earnings guidance to a range of $1.85 from $2.10 per share. The previous guidance had called for a range of $1.60 to $1.90 per share.
Consensus Estimates Up for the Second Quarter and 2008
Brokerage analysts responded to the revised guidance forecast and raised estimates 2 months ago. But in the last 30 days, consensus estimates have moved sharply higher, above the company's guidance range.
For the second quarter, estimates rose 5 cents to 56 cents from 51 cents in the last month. For the full year, 50% of the covering analysts raised estimates in the last 30 days. Consensus estimates now call for $2.24 per share, up 8%. This is 14 cents higher than the top of the company's forecast. MDU reports second quarter earnings on Aug 4.
Value Fundamentals
MDU Resources Group has a forward P/E of 14.08, under the industry average of 20.63. Its price-to-book is 2.43. The company has a solid five year average return on equity (ROE) of 14.23%. MDU also pays a dividend, with a current yield of 1.70%.
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Tuesday, July 15, 2008
(UNF) - UniFirst - surprised on estimates the last three quarters on average of 22.37%
UniFirst reported a record third quarter as the uniform manufacturing and laundry business remains hot. The company has surprised on estimates the last three quarters on average of 22.37%. UniFirst has a forward P/E of 14.07.
Company Description
UniFirst Corporation (UNF) manufactures workplace uniforms, protective clothing and facility services products. The company has 200 customer service, distribution and manufacturing facilities that service 200,000 customer locations in 46 U.S. states, Canada, and Europe.
UniFirst, a Zack's #1 rank (Strong Buy), has been in the business of renting, leasing and selling work clothes since 1936. UNF services 98 of the top 100 metropolitan markets in the United States and a majority of Canada.
The largest portion of the business is the Uniform Rental Service program, which provides a uniform, weekly cleaning, maintenance and any needed replacements for a weekly fee. The company also is big in the laundry services area, with plants throughout the U.S. and Europe.
UNF also specializes in cleaning and decontaminating garments worn by workers who maintain and refuel nuclear power and nuclear processing equipment.
The company's third business segment is distribution and manufacturing. UNF has three manufacturing facilities in the US and Mexico which produce millions of garments. By keeping the manufacturing in-house, it allows the company to provide a certain level of customization for customers.
UniFirst Reports Record Revenues and Earnings for the Third Quarter
On July 2, UniFirst reported third quarter earnings that beat Wall Street estimates by 11.54%, or 9 cents per share. Net income rose 23.8% to $16.9 million, or 87 cents per share, from $13.7 million, or 71 cents a share in the year ago period. Analysts expected 78 cents per share.
For the first nine months of the fiscal year, net income increased 41.6% to $48.7 million, or $2.52 per share, from $34.4 million, or $1.78 per share in 2007.
Revenues jumped 10.8% to a record $254.6 million for the third quarter. For the first three quarters, revenues surged 14.5% to a record $772.2 million. However, the first three quarters were one week longer than fiscal 2007. That extra week occurred in the second quarter of 2008.
The revenue increase was due primarily to growth in the core laundry segment, which represents about 90% of the company's consolidated revenues. Core laundry revenues grew 11.5% for the third quarter compared to 2007.
Higher energy costs are impacting UNF as the company operates a fleet of delivery trucks but the company is, for now, offsetting those increases with lower payroll costs.
Analysts Raise Estimates for the Fourth Quarter
In response to the record earnings in the third quarter and statements from UniFirst that they still believe the year will be a record year for the company, consensus estimates have been rising on the fourth quarter as well as the full year.
In the last week, fourth quarter estimates increased by 4 cents to 68 cents per share from 64 cents per share. For the full year, consensus estimates are up 4% in the last week to $3.19 from $3.08 per share.
Value Fundamentals
UniFirst's forward P/E is 14.07. Its price-to-book is 1.65. The company has a one year return on equity (ROE) of 11.36%. As an added bonus, UNF also has a current dividend yield of 0.30%.
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(WOR) - Worthington Industries - surprised on estimates two out of the last four quarters on average of 20.59%
Worthington Industries reported record sales for the fourth quarter and the year as the company flexed its pricing power on its flat-rolled steel. The company has surprised on estimates two out of the last four quarters on average of 20.59%. Worthington has a forward P/E of 12.70.
Company Description
Worthington Industries, Inc. (WOR) is a large independent steel processor of flat-rolled steel and a manufacturer of metal products such as metal framing, pressure cylinders, automotive past model service stampings, metal ceiling grid systems and laser welded blanks. The company operates 67 facilities in 11 countries, including 12 in the United States.
Worthington, a Zacks #1 Rank (Strong Buy), has three primary business units and nine joint ventures. For example, Worthington Steel, one of the primary businesses, is a supplier of hot-roll and cold-roll cut-to-length steel sheets to the John Deere Harvester Works in East Moline, Ill., and the John Deere Ottumwa Works in Ottumwa, Iowa, for combine, baler and mower conditioner parts.
Worthington Industries manages its business in a hub and spoke model with Worthington Steel serving as the hub in the model. All the other segments and joint ventures are the spokes and all consume flat rolled steel.
Worthington Reports Record Sales in the Fourth Quarter
On June 26, Worthington Industries reported fourth quarter and fiscal 2008 earnings and beat Wall Street estimates by 71.43% for the fourth quarter. Fourth quarter net income was $53.9 million, or 68 cents per share, compared to $38.2 million, or 45 cents pre share in the fourth-quarter of 2007.
Income included a $4.9 million pre-tax restructuring charge which negatively impacted the quarter by 4 cents per share. Excluding the charge, earnings were 72 cents per share compared to analysts' estimates of 30 cents per share.
Sales rose 10% to a record $868.9 million, from $786.6 million in the year ago period. Fiscal year 2008 also saw a sales record as sales grew 3% to $3,067.2 million from $2,971.8 million.
The Pressure Cylinders segment led the company for the quarter and the year, as it set a new quarterly record for net sales and units shipped and an annual record for net sales. It saw strength as volumes increased in both Europe and North America. The Metal Framing segment, which had been struggling, returned to profitability for the quarter.
The Steel Processing segment also saw healthy quarterly gains, as net sales jumped 14% to $412.7 million from $360.5 million in the fourth quarter 2007. The company is seeing pricing power as prices were up 18% over the prior year. Volumes actually declined 3% as there was weakness in toll processing, which is tied to the struggling automotive markets.
Consensus Estimates for the First Quarter and Full Year 2009 Rise
Brokerage analysts responded to the big fourth quarter surprise by raising estimates for the first quarter 2009 and the full year 2009. Consensus estimates for the first quarter jumped 22% to 55 cents from 45 cents per share. For 2009, consensus estimates are up 11% to $1.56 from $1.40 per share.
Share Repurchase Program Continues
The company announced a 10 million share repurchase program on June 13, 2005. During 2008, WOR repurchased 6,451,500 shares, of which 5,551,000 went to close out the 2005 program. The remaining 900,500 shares were allocated to a 10 million share repurchase program authorized on September 26, 2007.
Total outstanding shares at the end of 2008 equaled 79.3 million shares. Purchases under the program may continue from time to time as market conditions warrant.
Value Fundamentals
Worthington Industries' forward P/E is 12.70, under the industry average of 16.05. Its price-to-book is 1.77. The company has a solid average five year return on equity (ROE) of 15.96%. As an added bonus, the company pays a dividend yield of 3.40%.
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(FRO) - Frontline - current-year estimate is up to $5.70 per share from $4.05 per share 90 days ago
Frontline, Ltd. (FRO) shares recently traded lower after hitting a new 52-week and all-time high above the $72 mark in late June. This stock is currently pressuring a key support level and looks well positioned to rebound. At these levels, especially when considering the nice dividend Frontline pays, this stock looks like a great deal.
Frontline, Ltd. engages in the ownership and operation of oil tankers and bulk carriers. The company's fleet consists of 86 ocean tankers. The company was founded in 1948, carries a market cap. of $4.50 billion, and is based in Hamilton, Bermuda.
Frontline's share value appreciation comes in response to the company's excellent fundamentals, on display when Frontline reported excellent second-quarter results on May 22.
Another Strong Quarter
Revenue was up more than 52% to $528 million. Net income also grew considerably, jumping to $221 million from $159 million in the same period last year. This produced earnings of $2.95, which includes gains from selling assets and the spin-off of a subsidiary.
Frontline noted that the strong quarterly results were a product of higher rates in the spot markets. The spot earnings for the company's double hull VLCC and Suezmax vessels were $104,700 and $53,700 in the first quarter, compared to $43,600 and $37,500 in just the fourth quarter of 2007.
A Big, Fat Dividend
Frontline has a reputation of paying a very hefty quarterly dividend, and they didn't disappoint this quarter when it paid out $2.75 per share.
Estimates Are Up
Analyst earnings estimates have been somewhat volatile within the last month, but the macro-level trend is very strong. The current-year estimate is up to $5.70 per share from $4.05 per share 90 days ago.
Based upon this earnings projection, this stock is attractively priced, carrying a forward P/E multiple of just over 11.5X.
Strategy in Play
On July 2, Frontline announced that it had successfully delivered its fourth and final heavy lift vessel, which concludes the conversion process of four Suezmax ships into heavy lift vessels. The expected net cash generation of $28 million in the second and third quarter will positively effect Frontline's dividend payment. The total gain on the deal is expected to be $285 million.
The Chart
As previously mentioned, shares of FRO recently dipped lower after setting a new 52-week and all-time high. This stock is now pressuring a key support level just above $59. The stochastic is also signaling that this stock is trading in over sold territory.
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(ENS) - EnerSys - Revenue was up more than 40% from the same period last year
EnerSys (ENS) shares rallied after the company reported excellent fourth-quarter results on June 12. Since then shares have traded lower but now appear to have found a stabilization point. This stock is still well in the green for the year, an impressive accomplishment in this environment.
EnerSys develops and distributes industrial batteries. It also offers such related products as power chargers and sells its products both domestically and internationally. EnerSys was founded in 1999, carries a market cap. of $1.62 billion and is headquartered in Reading Pennsylvania.
Impressive Fourth-Quarter and Full-Year Results
Enersys shares recently surged higher after the company reported very strong fourth-quarter and full-year results on June 12.
Revenue was up more than 40% from the same period last year to $581.9 million. Net income came very close to doubling, jumping to $19.5 million from $10.6 million last year. This produced adjusted net earnings of 42 cents per share, safely ahead of analyst expectations of 38 cents per share.
Net earnings for fiscal 2008 were $59.7 million, up from $45.2 million in fiscal 2007.
Estimates Revised Upward
After the impressive full-year and fourth-quarter results, EnerSys boosted its full-year guidance. The current-year estimate now stands at $2.09, up 24 cents from just seven days ago.
Enersys also distinguishes itself in a number of key statistical categories. Its net profit margin stands at 2.95% against the industry average of 1.58%. The company's ROE is an impressive 11.14%, easily trumping the industry average of 7.45%. Enersys also has a strong balance sheet, boasting a debt to equity ratio of just .54%.
The Chart
This stock rallied from on news of the great quarter, eventually topping off at over $37 a share. Since then, shares have retreated but now appear to have formed a short-term bottom between $31 and $33. Moving forward, the key to the formation is this stock's ability to jump past the resistance level just above $33.
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(BG) - Bunge Limited - current estimates at $9.58 per share, versus last month’s $7.47
Bunge Limited (BG) sees solid growth ahead as evidenced by the company’s recent increase of its full-year 2008 guidance from a range of $7.10 to $7.40 per share to $9.35 to $9.65 per share. Wall Street is in agreement, pegging current estimates at $9.58 per share, versus last month’s $7.47. In addition to the promise of growth, Bunge will reward investors with income in the form of a 0.7% dividend yield, which is more than what is being paid by the other companies within BG’s industry group.
Company Description
Bunge Limited is a global agribusiness and food company with integrated operations. The company manufactures fertilizer and animal feed for farmers; originates oilseeds and grains from the world's primary growing regions and transports them to customers worldwide; crushes oilseeds to make meal for the livestock industry and oil for the food processing, food service and biofuel industries; produces bottled oils, mayonnaise, margarines and other food products for consumers; and mills wheat and corn for food processors, bakeries, brewers and other commercial customers.
Bullish Forecasts
In late June, the company increased of its full-year 2008 guidance from a range of $7.10 to $7.40 per share to $9.35 to $9.65 per share.
Wall Street is in agreement, pegging current estimates at $9.58 per share, versus last month’s $7.47.
Increased Income
In addition to the promise of growth, Bunge will reward investors with income in the form of a 0.7% dividend yield, which is more than what is being paid by the other companies within BG’s industry group.
In late May, the company hiked its regular quarterly cash dividend from 17 cents per share to 19 cents. Bunge noted that the new dividend is payable on September 3, 2008 to shareholders of record on August 15, 2008.
Solid Growth Attributes
Bunge offers a return on equity (ROE) of 18%, which is ahead of the industry average of 15%.
In late April, the company reported first-quarter results, stating that it capitalized on strong global market conditions and generated outstanding operating results.
First-quarter earnings per share of $2.10 surged past the year-prior 5 cents and slammed the consensus estimate with a 94% positive surprise.
Results for the second quarter will be announced on July 24, 2008.
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(MEE) - Massey Energy - on track to be in control of more than two thirds of the remaining Central Appalachian coal reserves
Massey Energy Company (MEE), which is scheduled to release results for the second quarter on July 31, has seen bullish estimate revisions from Wall Street. Analysts have current full-year 2008 earnings forecasts pegged at $3.11 per share, up a penny from last month’s projection and 11 cents higher than the expectations of two months ago.
Company Description
Massey Energy is the largest producer of Central Appalachian coal. It is the fourth largest coal company in the United States based on produced coal revenue. Its subsidiaries serve more than 125 utility, industrial and metallurgical customers around the world. With 19 mining complexes located throughout the Central Appalachian coalfields, Massey is well positioned to serve its customers.
Recent Events
In mid-May, Massey Chairman and Chief Executive Officer Don Blankenship spoke stockholders at an annual meeting, noting that he believes the company's reserves "will prove to be more valuable than those of any other North American coal company."
He said, "We have nearly tripled our reserve base" and "our reserve share has increased from less than 7%, when this management team began to lead the Company, to nearly 38% today."
The company's expects its position to improve even further. Blankenship said, "If the current trends continue, Massey is on track to be in control of more than two thirds of the remaining Central Appalachian coal reserves in just 10 years."
Massey Energy noted that it currently owns or controls more than 2 billion tons of high quality coal reserves in Central Appalachia. It produces some of the highest quality coal in the world with diverse characteristics that enable it to meet the demands of nearly any coal market in the world.
Income
Also in mid-May, the company declared a quarterly dividend of 5 cents per share, which was paid out on July 8, 2008. Massey offers a dividend yield of about 0.2%.
Higher Earnings Projections
Massey Energy has seen bullish estimate revisions from Wall Street. Analysts have current full-year 2008 earnings forecasts pegged at $3.11 per share, up a penny from last month’s projection and 11 cents higher than the expectations of two months ago.
The company’s earnings per share are estimated to grow by 35% over the next 3 – 5 years, topping the industry average expectation of 20%.
The Next Earnings Report
Look for Massey Energy to release results for the second quarter on July 31, 2008.
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(ACN) - Accenture Ltd - highest-ever quarterly revenues and earnings per share
Accenture Ltd. (ACN) is not just sustaining itself in this tough environment, it is actually prospering, having recently reported excellent third-quarter results that were ahead of analyst estimates. After dipping lower in late 2007, the company's share price is once again in rally mode, producing excellent gains for the last 5 months.
Accenture Ltd. provides professional consulting services in a wide range of disciplines and industries. The company was founded in 1995, carries a market cap. of $24,5 billion and is based in Hamilton, Bermuda.
Another Strong Quarter
Accenture made investors happy on June 17 when the company reported very strong third-quarter results. Revenue was up to $6.10 billion, a 20% increase form the same period last year. Earnings per share were a record 74 cents, a 36% increase form last year.
Estimates Are Up
Accenture also boosted its full-year earnings guidance, now projecting earnings between $2.63 and $2.65 per share, up from the previous range of $2.55 to $2.60
Beating Estimates
This is the fourth time in four quarters that Accenture has surprised and beaten analyst estimates, having done so by an average of five cents, or 7.71%.
The company noted that it was able to boost its operating income 27% and expand its operating margin by .70% from the same period last year.
Multi-Regional Growth
Accenture experienced strong growth in a number of its business regions, including the Europe, Middle East and Africa region in which revenues were up 23% in US dollars to $2.16 billion. Domestically sales were up 17%.
William Green, Chairman and CEO of Accenture said, "Our excellent results in the third quarter include our highest-ever quarterly revenues and earnings per share. We see strong momentum in our business."
The Chart
As previously mentioned, shares of ACN have had a very solid year, advancing from $32 to a high-point of over $42. This stock is now within striking distance of its 52-week and all-time high at $44.
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(EP) - El Paso Corp - estimate has advanced to its current projection of $1.49 per share from $1.14
El Paso Corporation (EP) is taking significant measures to drive revenue and enhance its profitability. The company announced that it has restructured its hedging strategy to provide it with more exposure to rising energy prices. In addition, El Paso continues to grow its pipeline capacities by focusing on key projects. The company's share price is up 25% on the year.
El Paso Corp. is a natural gas explorer and producer that operates a substantial distribution pipeline consisting of 42,000 miles. The company was founded in 1928, carries a market cap. of $13.74 billion and is headquartered in Houston, Texas.
An Impressive Quarter
El Paso made its shareholders happy on May 8 when the company reported solid first-quarter results. Revenue was up 24% to $1.27 billion. Net income dropped to $219 million from $629 million due to a one-time sale and discontinued operations. After adjusting for one-time items, earnings were up to 33 cents from 18 cents in the same period last year.
The company also noted that it is expecting higher full-year earnings due to a revised hedging strategy that "has enabled us to particpipate in improved natural gas and oil prices."
Rising Estimates
As energy prices have continued to surge, so have analyst estimates for El Paso. The current-year estimate has advanced to its current projection of $1.49 per share from $1.14 90 days ago.
Zacks analyst Neil Malkin said that, "El Paso's onshore future looks solid. With an average production weighted reserve to production ratio of 10 years, the company should be able to maintain high single-digit growth rates into the next decade. The E&P is forecasted to grow production between 8%-12% over the next three to four years. This, coupled with favorable oil and gas prices, should lead to higher margins and earnings growth and will offer investors continued strength in the near term."
The Chart
After setting a new 52-week and all-time high on July 2 above $22 a share, this stock has taken a little breather, settling at the $20 mark. If shares can hold in this area, they should be well positioned to once again challenge the high. On a longer term basis, this company is operating in a very high-demand and high-growth sector.
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Thursday, July 10, 2008
(CRMT) - America's Carmart - earnings of 51 cents per share, blowing past analyst expectations of 28 cents per share
America's Carmart, Inc. (CRMT) is barreling forward and producing very impressive results for shareholders in a very challenging environment. The company's fourth-quarter results, reported just last week, contained big improvements in both revenue and income from the same period last year. After the solid performance, shares of CRMT rallied and set a new 52-week high.
America's Carmart, Inc. operates as an automotive retailer in the United States. At the end of 2007 the company operated a total of 92 stores, mostly in Souther states such as Arkansas and Oklahoma. America's Car-Mart was founded in 1981, carries a market cap. of $225 million and is headquartered in Bentonville, Arkansas.
Awesome Fourth-Quarter Results
America's Car-Mart's share price has been bucking the overall trend of the market, advancing in the face of significant economic pressure. Much of this recent strength comes after the company's excellent fourth-quarter results, reported on June 26.
Revenue grew to $76.5 million, a 29.2% increase from the same period last year. Net income totaled $6.05 million, a nice jump from last year's $2.1 million. This produced earnings of 51 cents per share, blowing past analyst expectations of 28 cents per share.
A History of Beating Estimates
This is the fourth time in the last four quarters that the company has surprised and beaten estimates, having done so by an average of 11 cents, or 52%.
Estimates Are Up
After the solid quarter, the analyst community boosted their earnings estimates. The current-year estimates now stands at $1.40 per share, up from $1.21 only 30 days ago.
Valuations
Based upon this earnings projection, this stock looks reasonably priced, carrying a forward P/E multiple of 14X, about right in line with the overall market.
The Chart
CRMT got a nice jolt after the company reported strong fourth-quarter results on June 26, sending shares hurtling higher to a new 52-week high just above $19. As it stands, shares are pressuring a key level of resistance at $20, but have yet to breach this area and advance
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(FLO) - Flowers Foods - earnings of 39 cents per share, outpacing analyst expectations of 35 cents
Flowers Foods, Inc. (FLO) has distinguished itself from other companies in 2008 by producing very steady investor returns. Much of the recent strength comes on the heels of the company's excellent first-quarter results, reported on May 22.
Flower Foods, Inc. produces baked goods in the United States. The company distributes its products to bakeries and grocery stores. Flowers Foods was founded in 1919, carries a market cap. of $2.63 billion and is headquartered in Thomasville, Georgia.
Most investors would quickly dismiss a baked goods company from an aggressive growth portfolio, but Flowers definitely fits the mold, as seen by the company's impressive first-quarter results, reported on May 22.
First-Quarter Results
Sales increased to $676.7 million, up 10.9% from the same period last year. Net income also jumped ahead, coming in at $35.8 million, a 25.6% increase from last year. This produced earnings of 39 cents per share, outpacing analyst expectations of 35 cents.
This is a company that has a track record of surprising and beating analyst estimates, having done so over the last four quarters by an average of 2 cents, or 8.6%.
Share Repurchasing
The company noted that it continued to move forward with its share repurchase plan, purchasing 256,248 shares of its common stock for $5.8 million at an average price of $22.75. Since the inception of the share repurchase plan, the company has acquired 19.4 million shares of its common stock for $286.2 million, an average of $14.76 per share. Flowers also noted that it paid dividends totaling $11.5 million during the quarter.
After the solid quarter, the analyst community boosted its guidance, following the lead of Flowers. The current-year estimate is currently pegged at $1.20 per share, up 7 cents from last month.
The Chart
As previously mentioned, shares of FLO have been solid performers in 2008, posting very steady gains in a highly volatile environment. After setting a new 52-week high in late May this stock has traded mostly sideways for the last few weeks, with shares recently advancing to the top of the channel to once again challenge the high.
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(CSIQ) - Canadian Solar - estimate has advanced to $1.95 per share from $1.53 90 days ago
Canadian Solar Inc. (CSIQ) shares have been very volatile in 2008, consistent with many other solar stocks and the overall market. Recently, after setting a new 52-week high, this stock has traded lower and is now pressuring a key level of support. The company reported awesome first-quarter results in April and analyst estimates have been steadily advancing over the last 90 days.
Canadian Solar Inc. designs and develops solar module products for both residential and commercial applications. The company was founded in 2001, carries a market cap. of $929.3 million and is headquartered in Markham, Canada.
First-Quarter Results
Canadian Solar reported its first-quarter results on May 13 that demonstrate the growth this industry is experiencing as an alternative energy developer/supplier.
Revenue was up to $171.2 million, a 34% increase from the same period last year. Net income totaled $19 million, up from a loss of $3.9 million in the same period last year. This produced earnings of 61 cents per share, blowing past analyst estimates of 29 cents per share.
Company CEO Dr. Shawn Qu noted that the company's solid results were a product of strong demand, favorable pricing and increased solar cell production.
During the earnings call Canadian Solar reaffirmed its revenue guidance for the second quarter, between $185 and $190 million.
Analyst Estimates Are Up
As the company progresses towards its goals, the analyst community has been raising their estimates. The current-year estimate has advanced to $1.95 per share from $1.53 90 days ago.
This stock is a little bit pricey at this level, carrying a P/E multiple close to 18X, but when looking forward to next-year's projected earnings, this stock does look significantly more attractive, with an earnings projection of $3.09. If Canadian Solar pulls through and hits this earnings projection this stock looks dirt cheap right now.
The Chart
Like many other solar stocks, shares of CSIQ have been very volatile in 2008, trading as high as $51 and as low as $15. After recently setting a new 52-week and all-time high this stock has once again dipped lower and is pressuring a key support level at $30.
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(BTU) - Peabody Energy - soared past the consensus estimate by 44%
Peabody Energy Corp. (BTU) has seen analysts raise earnings estimates over the past few months with a slight increase occurring in just the past week. The company is scheduled to release results for the second quarter on July 23. Peabody posted first-quarter results in late April. Quarterly revenues increased 15% to a record $1.28 billion on a year-over-year basis. Income from continuing operations of 26 cents per share soared past the consensus estimate by 44%.
Company Description
Peabody Energy is the world's largest private-sector coal company. Its coal products fuel approximately 10 percent of all U.S. electricity generation and 2 percent of worldwide electricity.
Last year Peabody shipped 238 million tons of coal and racked up $4.6 billion in revenues. The company has 340 electricity generating and industrial customers in nearly 40 states and 19 countries.
Look for Earnings in a Couple Weeks
The coal company is scheduled to release results for the second quarter on July 23.
Income
Peabody declared a regular quarterly dividend of six cents per share in late April, which was paid out in May 29. The dividend translates into a current yield that matches the industry average at 0.3%, which matches the industry average.
Growth
A couple days before the dividend declaration, the company posted first-quarter results. Quarterly revenues increased 15% to a record $1.28 billion on a year-over-year basis. Income from continuing operations of 26 cents per share soared past the consensus estimate by 44%.
"Peabody's strategy to expand our global platform and target high-growth, high-demand markets is delivering significantly improved performance based on very strong coal markets and recent international price settlements," said Peabody Chairman and Chief Executive Officer Gregory H. Boyce. "We believe that the outstanding global fundamentals for coal are resulting from structural changes in the supply-demand balance. Growing economies are being fueled by coal and world coal expansion cannot keep pace with demand."
The company’s return on equity (ROE) of 16% signals growth and is higher than the industry average of 15%.
Growth should continue to be the theme for BTU as its earnings per share are expected to grow by 20%, in line with the industry average.
Higher Estimates
Peabody increased its full-year 2008 targets, pegging income from continuing operations at $2.20 to $3.00 per share.
Wall Street lifted earnings forecasts to be in line with the company’s outlook and has been increasing the estimates further since then.
Analysts upped full-year 2008 estimates to $2.67 per share from last week’s $2.65 and the two months-ago level of $2.57.
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(QCOM) - QUALCOMM - ROE of 20%, four times the industry average of 5%
QUALCOMM Inc. (QCOM) is holding up well in a bearish market, trading near a 52-week high. The company offers a ROE of 20%, four times the industry average of 5%. Its yield of 1.4% stands out as the company operates in an industry that virtually pays no dividend. Wall Street is bullish on the wireless telecommunications player. Five of 11 covering analysts boosted earnings estimates for the fiscal year ending September 2008. Current forecasts of $1.91 are above last month’s $1.87.
Company Description
QUALCOMM Incorporated designs, manufactures, and markets digital wireless telecommunications products and services.
Earnings Report Coming Up
The company, which is trading near a 52-week high in a bearish market, is set to report results for its fiscal third quarter on July 23, 2008.
Higher Forecasts
In mid-June, the company stated that together with its partners, QCOM continues to deliver the compelling and affordable devices, applications and services wireless consumers demand, adding that the fundamental drivers of its business remain strong, and based on the current business outlook QUALCOMM is raising its fiscal 2008 pro forma earnings per share guidance.
On Wall Street, five of 11 covering analysts boosted earnings estimates for the fiscal year ending September 2008. Current forecasts of $1.91 are above last month’s $1.87.
Solid Growth
In late April, QUALCOMM posted fiscal second quarter results. Earnings per share of 47 cents outpaced the year-prior total and matched the consensus estimate. Revenues of $2.61 billion climbed 17% on a year-over-year basis and 7% sequentially.
The company offers a return on equity ROE of 20%, four times the industry average of 5%.
Competitive Income
QCOM’s yield of 1.4% stands out as the company operates in an industry that virtually pays no dividend.
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(TRA) - Terra Industries - authorizing a share buyback program of 9.5 million, it has repurchased 6.7 million shares
Terra Industries Inc. (TRA) has been cashing in on the big boom in the agriculture market. Terra's first-quarter result were unbeleivable, with net income jumping to over $100 million from just $5.9 million in the same period last year. Amazingly, this stock looks under valued at its current levels.
Terra Industries Inc. produces nitrogen and methanol products for agricultural and industrial markets both domestically and internationally. The company was founded in 1964, carries a market cap. of $4.37 billion and is headquartered in Sioux City, Iowa.
First-Quarter Results
Soaring global demand for agricutural goods has created a windfall of profits for many ag. producers. In an attempt to increase production capacities, many of these cash-heavy producers have turned to crop addatives like fertalizers to boost yields. This dynamic enabled Terra to report exceptional first-quarter results on Apr 24.
Revenue jumped to $574.7 million, up from $500.9 million in the same period last year. Net income totaled $100.2 million, up from just $5.9 million last year. This produced earnings of 97 cents per share, outpacing analyst estimates of 89 cents.
Cash Heavy and Buying Shares
Terra also announced that it had boosted its cash balance by $282 million to $817 million. The company also noted that since authorizing a share buyback program of 9.5 million, it has repurchased 6.7 million shares.
Estimates Are Up
As these fertilizer companies have been posting insane results, the analyst community has scrambled to keep pace with their estimates. The current-year estimate now stands at $4.59 per share, up from $4.08 90 days ago.
Valuations
Once again, this is a growth stock that has very attractive valuations, a very unique charecteristic. TRA's forward P/E multiple stands at just a pinch over 10X.
The Chart
In spite of this company's attractive valuations, its stock has traded mostly sideways in 2008. The last three times this stock has dipped lower, it has logged a higher low and rebounded. This is a bullish technical signal. The key level and next target for this stock is $52
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(FDO) - Family Dollar Stores - Analysts Raise Estimates for the Fourth Quarter and the Year
Bucking the trend, Family Dollar Stores is thriving in a tough retail environment. The company has beaten Wall Street estimates three out of the last four quarters by an average of 7.78%. The company has a forward P/E of 14.06.
Company Description
Family Dollar Stores, Inc. (FDO) is a discount store chain with more than 6,430 stores in 44 states. Headquartered in Matthews, NC, the company's stores are smaller than the big-box retailers, only 7,500 to 9,500 square feet, which FDO uses to its advantage to operate everywhere from rural towns to dense urban neighborhoods.
FDO, a Zacks #1 Rank (Strong Buy), opened 300 new stores and closed 43 stores during the fiscal year ended Sept 1, 2007. Its strategy is to sell no frills merchandise mostly priced under $10.00.
Family Dollar Beat Wall Street Estimates for the Third Quarter by 12.20%
On July 2, Family Dollar reported third quarter earnings and surprised on estimates by 12.20%, or 5 cents per share. Net income rose 7.1% to $64.7 million, or 46 cents, compared to $60.4 million, or 40 cents, in the third quarter 2007.
Sales increased 2.9% to $1.702 billion versus $1.655 billion in the year ago period. Comparable store sales increased 0.1%. The company said an increase in the average customer transaction offset the lower customer traffic.
For the first three quarters of the year, sales rose 0.3% to $5.22 billion compared to $5.20 billion in 2007. Additionally, in 2008, the first three quarters also had one less week than the same period in 2007. Comparable store sales decreased 0.3%.
Similarly, as in the third quarter, the first three quarters saw lower customer traffic but the average customer transaction was higher during the period.
The company acknowledged the tough retail environment.
"We have made significant investments in our business to enable us to manage better in these uncertain times, and we are seeing tangible benefits," said Howard Levine, Chairman and Chief Executive Officer.
"In addition, our intense focus on controlling expenses and mitigating inventory risk has resulted in net income growth and an improvement in inventory productivity, despite flat comparable store sales," he said.
Family Dollar Provides Fourth Quarter Guidance
FDO expects the federal stimulus payments to impact sales in the fourth quarter but the company doesn't know by how much. Comparable store sales for June are expected to increase by approximately 6%, which is above the company's original sales plan.
Family Dollar sees comparable store sales increasing 4 to 6% compared to the fourth quarter of 2007. Earnings per share for the full year are forecast to be in the range of $1.58 to $1.62 per share. The company expects to open 200 new stores and close about 75 stores for the year.
Analysts Raise Estimates for the Fourth Quarter and the Year
In response to the company's third quarter earnings report and full year guidance, eight out of nine covering analysts raised estimates for the fourth quarter on average of 3 cents to 32 cents per share from 29 cents per share.
For the full year, all covering analysts raised estimates in the last week by an average of 9 cents to $1.60 from $1.51 per share, which is in-line with the company's forecasted earnings guidance.
Share Buyback Program
Family Dollar has been repurchasing shares. During the first three quarters, FDO repurchased approximately 3.7 million shares of its common stock for a total cost of $97.7 million. The company has authorization to purchase an additional $133 million going forward under the program.
Value Fundamentals
Family Dollar's forward P/E is 14.06. Its price-to-book is 2.46, slightly under the industry average of 2.5.
The company has an excellent five year average return on equity of 18.30%. In addition to the share repurchase program, FDO has a current dividend yield of 2.20%.
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(CPE) - Callon Petroleum - Earnings are soaring
Earnings are soaring at Callon Petroleum as crude and natural gas prices rise. The company has surprised on estimates each of the last four quarters by an average of 112.13%. Even though the stock has been on a run in recent months, Callon trades at only 6.67 times forward earnings.
Company Description
Callon Petroleum Company (CPE) is an oil and natural gas exploration company with properties in the Gulf Coast region.
CPE, a Zacks #1 Rank (Strong Buy), operates predominantly in Louisiana, Alabama and offshore in the Gulf of Mexico.
Like many of the exploration companies, Callon's strategy is to enhance shareholder value by growing production, its reserves and cash flow. Recently, the company has changed its growth emphasis from acquiring producing properties to acquiring acreage that can be developed and explored.
Callon pays no dividend, preferring to use its cash flow for exploration opportunities.
Callon Petroleum Crushed Wall Street Estimates by 150% in the First Quarter
On May 7, Callon Petroleum reported first quarter earnings that surprised on estimates by 150%, or 21 cents per share. Net income rose 25% to $7.6 million, or 35 cents per share, compared to $5.8 million, or 27 cents per share, in the first quarter of 2007. Analysts had expected only 14 cents per share.
Oil and gas sales totaled $45 million from production of 42.1 million cubic feet of natural gas equivalent per day (MMcfe/d) compared to sales of $45.5 million from production of 60.3 MMcfe/d during the first quarter of 2007.
Average prices on natural gas and crude are soaring compared to 2007. The average natural gas price rose $9.50 versus $7.97 in 2007. Average crude oil prices jumped to $86.66 from $55.53 in the year ago period. The average prices reflect the company's hedging strategy.
CPE Provides Production Guidance for the Second Quarter
On May 7, the company issued production guidance for the second quarter of a range of 36 to 40 million cubic feet of natural gas equivalent per day (MMcfe/d). For the full year, the production forecast calls for a range of 41 to 45 MMcfe/d.
Consensus Estimates Rising for the Second Quarter and the Full Year
As crude prices continue to move higher, consensus estimates have been rising. In just the last 30 days, estimates for the second quarter are up 13% to 43 cents from 38 cents per share.
For the full year, estimates jumped 20% in the last month to $1.72 from $1.43. Consensus estimates for the full year rose 79% in just the last 90 days.
Analysts estimate year-over-year earnings growth of 142.72% in 2008.
Value Fundamentals
Callon Petroleum's forward P/E is only 6.67. Its price-to-book is 1.66, well under the industry average of 3.02.
Content Courtesy: Zacks Investment Research
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Tuesday, July 08, 2008
(FCN) - FTI Consulting - new 52-week and all-time high - Increased Demand For Services
FTI Consulting, Inc. (FCN) is in the remarkably unique position of actually benefiting from the turmoil in the financial sector and overall economic environment. As a consulting advisor to distressed businesses, the company's first-quarter profit jumped sharply behind the momentum of strong demand for its services.
FTI Consulting, Inc. provides consulting services to organizations confronting the legal, financial, and reputational issues. The company serves numerous industries, including energy and financial both domestically and worldwide. FTI was founded in 1982 and is based in Baltimore, Maryland.
Strong First-Quarter Results
Shares of FCN recently moved back into the green after temporarily dipping lower in spite of the company's strong first-quarter results, reported on May 7.
Revenue came in at $307.1 million, up 34.9% from the same period last year. Net income jumped ahead to $31.3 million, up sharply from $15.3 million in the same period last year. This produced earnings of 59 cents, easily ahead of analyst expectations of 47 cents.
This is the fourth time in four quarters that FTI has surprised and beaten analyst estimates, having done so by an average of 7 cents, or 14.10%.
Increased Demand For Services
FTI President and CEO Jack Dunn commented on the effect the economic environment has had on demand for the company's services and its revenue, saying, "the global credit crisis in its various forms continued to be a significant driver of work across all of our business segments."
Analyst Upgrades
After the solid first-quarter results, the analyst community boosted their earnings estimates. The current-year estimates is now pegged at $2.58 per share, up from $2.46 60 days ago.
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