Big Lots, Inc. is growing operating profits and generating ample cash flow despite a difficult retailing environment. It's recently reported fourth quarter produced a nice earnings surprise. Over the past four quarters, it has posted an average surprise of 39.7%.
Full Analysis
Big Lots, Inc. (BIG), through its subsidiaries, operates as a broadline closeout retailer in the United States. The company offers its products under four merchandising categories: consumables, home, seasonal and toys, and other.
The consumables category includes food, health and beauty, plastics, paper, and pet departments. The home category includes domestics and home decor departments. Seasonal and toys category includes toys, lawn and garden, trim-a-tree, and various holiday-oriented departments. The other category primarily includes electronics, apparel, home maintenance, small appliances, and tools.
Click here to find out more!
The shares rose a few weeks ago as an analyst said the closeout retailer is poised for growth and initiated coverage with a "Buy" rating. Soleil Securities Group analyst Jeffery Stein said in a note to investors that Big Lots, which specializes in buying closeout items from other retailers and selling them at a discount, has streamlined its business model to grow earnings even in a weak consumer spending environment.
In early March, the company reported fourth quarter net income of $92.0 million, or $1.04 per diluted share, for the 13 week fourth quarter of fiscal 2007. This compares to net income of $104.3 million, or $0.94 per diluted share for the 14 week fourth quarter of fiscal 2006. For the 52 week fiscal 2007 ended February 2, 2008, net income was $158.5 million, or $1.55 per diluted share, compared to net income of $124.0 million, or $1.11 per diluted share, for the 53 week fiscal 2006. Analysts expected $0.83 per share.
BIG estimated fiscal 2008 income from continuing operations will be in the range of $1.70 to $1.80 per diluted share compared to income from continuing operations (on a non-GAAP basis) of $1.41 per diluted share for fiscal 2007. This guidance for EPS growth in the range of 21% to 28% compared to last year is based on an expected increase in comparable store sales of approximately 1% to 2% and continued expense leverage.
Commenting on fiscal year 2007 results, Steve Fishman, Chairman and Chief Executive Officer stated, "Our continued focus on our WIN strategy enabled us to drive record EPS performance at Big Lots in 2007. We expanded our operating profit rate, turned our inventory faster, and generated nearly $250 million of cash flow in what most people have described as a very difficult economic environment."
The company has an awesome history of beating estimates. Over the past four quarters, it has posted an average surprise of 39.7%. During that time, current year earnings estimates have risen 14 cents to $1.74 per share. Analysts expect a further increase of 13.5% in earnings growth next year.
Content Courtesy: Zacks Investment Research
#1 Ranked Stocks Highlight Archive
To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions.
| Blog Home| VitalStocks Home
Thursday, April 24, 2008
BIG - Big Lots - average surprise of 39.7% over the past four quarters
ABT - Abbott Labs - 36th consecutive year that Abbott has increased its dividend payout
Abbott Laboratories (ABT) recently posted first-quarter results, demonstrating strong growth. Earnings and sales increased with help from the company's blockbuster drug Humira. ABT is a rewarding pick from a dividend perspective as well. The company increased its quarterly dividend to 36 cents per share, which is 10.8% higher. ABT’s dividend yield is very competitive within its industry, at 2.8%, as most pharmaceuticals do not pay a dividend.
Full Analysis
Abbott is a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company employs more than 68,000 people and markets its products in more than 130 countries. The company is headquartered in north suburban Chicago.
Growth
First-quarter results were announced in mid-April, demonstrating strong growth. Excluding special items, earnings totaled 63 cents per share, beating the year-prior result. Revenue jumped 14% to $6.77 billion, up from $5.95 billion last year. Worldwide sales in the first quarter were up 13.8%, reaching $6.8 billion. The company's blockbuster drug Humira was a big contributor to the sales growth. The medication, which also treats other autoimmune diseases, is used in dozens of countries and was recently approved for use in Japan.
“Abbott started 2008 with a strong first quarter, following double-digit sales and earnings growth last year,” said Miles D. White, chairman and chief executive officer, Abbott. "In addition, we received five key new product approvals during the quarter. The continued productivity of our late-stage pipeline, combined with the underlying strength of our broad mix of businesses, gives us a high level of confidence in our future growth outlook."
In March 2008 Abbott announced it would conclude their 31 year-long joint venture (TAP) with Takeda Pharmaceutical Products. It is expected to be finalized by the second quarter of this year. Per the terms, Abbott will receive full-rights to prostate cancer drug Lupron as well as the research and sales staff attributed to it and will receive cash payments up to $1.5 billion over the next five years based on the sales of other of TAP’s products. Takeda will retain rights to the ulcer drug Prevacid and take full ownership of the pipeline.
Abbott issued its earnings guidance for the full-year 2008 of $3.20 to $3.25 per share. For the second quarter, the company’s outlook ranges between 78 cents to 80 cents.
Analysts are forecasting 2008 earnings of $3.24 per share and a second-quarter profit of 79 cents per share.
Income
ABT is a rewarding pick from a dividend perspective as well. The company increased its quarterly dividend to 36 cents per share, which is 10.8% higher. Abbot said the dividend is payable May 15, 2008, to shareholders of record at the close of business on April 15, 2008. The company added that this marks the 36th consecutive year that Abbott has increased its dividend payout and the 337th consecutive dividend paid by Abbott. ABT’s dividend yield is very competitive within its industry at 2.8%, while most pharmaceuticals do not pay a dividend.
Content Courtesy: Zacks Investment Research
#1 Ranked Stocks Highlight Archive
To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions.
| Blog Home| VitalStocks Home
CEL - Cellcom Israel - net profit margin is 14.4% compared to the industry average of 3.34%
Cellcom Israel Ltd. (CEL) shares have been rallying for the last two weeks after briefly dipping lower and trading beneath the $30 mark. With this stock trading above $34, it is now once again in range to challenge the 52-week and all-time high just above $35. The fundamentals support the share growth trajectory, with the company reporting excellent full-year and fourth-quarter results on Mar 18. In addition, estimates continue to rise. The current-year estimate has tacked on six cents in just the last 30 days, moving to its current projection of $2.41 per share.
Cellcom Israel Ltd. is an Israeli based cellular service provider with over 3 million subscribers. The company was established in 1994, was listed on the New York Stock Exchange in 2006 and carries a market cap of $3.25 billion.
Strong Fourth-Quarter and Full-Year Results
Cellcom reported very strong fourth-quarter and full-year results on Mar 18 that demonstrated this company's strong growth trajectory.
Fourth-quarter revenue was up 10.7% from the same period last year to $412 million. Net income jumped 31.7% to $48 million, producing earnings of 49 cents per share, well ahead of analysts expectations who were looking for earnings of 42 cents per share. This marks the fourth time in four quarters that Cellcom has surprised and beaten analyst estimates, having done so by an average of 15 cents, or 38%.
Full-year fiscal 2007 revenue was up 7.6% to $1.573 billion. Full-year net income grew 56.2% to $227 million, producing earnings of $2.33 per share.
Cellcom crossed the three million customer mark in 2007, making it Israel's largest cellular provider. The company also noted that much of its growth in profitability was driven by a 12% increase in airtime minutes, higher revenues from content services as well as ongoing cost efficiencies.
Stock Performance
This company also stacks up very well against its industry competition in both ROE and profit margin. Its net profit margin is 14.4% compared to the industry average of 3.34%.
As previously mentioned the company's stock price has been accelerating in the last two weeks after temporarily taking a breather and dipping below the $30 mark. Since then, shares have trade above $34, a very nice short-term gain of more than 13%.
Moving forward, the key to the chart is the 52-week and all-time high just beyond $35. With shares being reinforced by the fundamentals, and a nice short-term up trend very much in play, this stock looks well positioned to challenge its peak and advance into higher territory.
Content Courtesy: Zacks Investment Research
#1 Ranked Stocks Highlight Archive
To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions.
| Blog Home| VitalStocks Home
MIR - Mirant Corp - forward P/E of 13.00, under the industry average of 19.74
Mirant is using its size to generate outsized profits in the electricity market. The company is giving $4.6 billion back to shareholders in the form of stock repurchases. Mirant is trading at 13x forward earnings.
Full Analysis
Mirant Corporation (MIR) is a diversified electricity and natural gas company with 13 generating plants in California, Maryland, Massachusetts, New York and Virginia. The plants produce as much as 10,300 megawatts of electricity, enough to power about 10 million homes, for wholesale and large retail customers.
The company's strategy is to be located close to large metropolitan areas where demand for energy is high such as San Francisco, Washington, D.C., Boston and New York City.
Mirant's plants run on different fuels; either oil, gas or coal. Half of the company's plants can be switched from one fuel type to another, enabling Mirant to better control costs as fuel prices change.
On Feb 29, the company reported fourth-quarter and full-year earnings. Mirant reported net income of $805 million for 2007, or $2.91 per share, compared to net income of $309 million in 2006, or $1.04 per share. For the fourth-quarter, the company increased net income by 60% to $191 million, or 72 cents per share, compared to $94 million, or 35 cents per share, in 2006.
Mirant actually missed estimates for the fourth quarter by six cents. Analysts expected 78 cents per share. But Mirant has surprised on estimates three out of the last four quarters by an average of 35.77%.
The company reported that the fourth-quarter net income increase was the result of higher energy prices and capacity revenues in the Mid-Atlantic region and lower net interest because of increased cash balance from dispositions completed earlier in the year which was offset by lower realized value from hedging.
Returning $4.6 Billion to Shareholders
The company is in the midst of a huge return of cash to its shareholders. On Nov 9, 2007, MIR announced it would return a total of $4.6 billion, with the first stage consisting of a $1 billion accelerated share repurchase program.
"We have made good progress on our previously announced share repurchase program and through February 25, 2008, Mirant has purchased $1.602 billion of stock, reducing basic shares outstanding to just under 214 million," said Edward R. Muller, chairman and chief executive officer.
"We have decided to return the remaining $2.6 billion through open market purchases, but will continue to evaluate the most efficient method to return the cash to stockholders," he said.
As of Dec 31, 2007, the company had cash and cash equivalents of $4.961 billion and total outstanding debt of $3.095 billion.
Raising 2008 Guidance
On Feb 29, Mirant raised its 2008 adjusted EBITDA guidance to $925 million from $907 million. The company also provided initial 2009 adjusted EBITDA guidance of $1.011 billion.
First Quarter and 2008 Consensus Estimates Rise
Brokerage estimates for the first quarter and the full year have been rising over the last 30 days. Consensus estimates for the first quarter are up four cents to 71 cents from 67 cents per share. For the full year, estimates rose two cents to $3.02 from $3.00 per share.
The company, a Zacks #1 Rank (Strong Buy), has a forward P/E of 13.00, under the industry average of 19.74. Its price-to-book is 1.92. Analysts expect earnings growth of 16.5% in 2008.
Content Courtesy: Zacks Investment Research
#1 Ranked Stocks Highlight Archive
To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions.
| Blog Home| VitalStocks Home
