SunPower Corporation has been heating up portfolios lately. The stock is almost at $90, up from the upper $50's in March. The company posted a 4.8% surprise in its recent quarter. Six of the nine covering analysts have raised their forecasts over the past month. During that time, this year's earnings estimates have increased 18 cents to $1.68 per share.
Full Analysis
SunPower Corporation (SPWR) designs, develops, manufactures, markets and sells high-performance solar electric power technology products, systems and services worldwide for residential, commercial and utility-scale power plant customers. The company's semiconductor-based solar cells and solar panels, which convert sunlight into electricity, are manufactured using proprietary processes and technologies based on over 15 years of research and development.
SPWR operates through two business segments: Components and Systems. SunPower's solar power products are sold through its Components segment. The Systems segment, formerly known as PowerLight Corporation before the merger with SunPower in January 2007, develops, engineers, manufactures and delivers large-scale solar power systems. The company s solar power systems, which generate electric energy, integrate solar cells and panels manufactured by SunPower and other suppliers.
The company believes that its solar cells have the highest conversion efficiency available for the mass market. SunPower's proprietary all back-contact solar cell design results in conversion efficiencies up to 50% higher per unit area than conventional solar cells.
As an early to market participant, management believes that SunPower is increasingly recognized as a technology leader within the solar industry and with customers, specifically associating the SunPower brand with advantages in efficiency, system performance and appearance.
The experience of the management team is also a plus in this ever-changing industry. SunPower's executive officers have an average of over 20 years of experience in the solar or high technology industries. The management team has a diverse set of industry skills and global operating experience, including backgrounds spanning the solar, electric utility, semiconductor and optical media industries, as well as expertise running high-volume, low-cost manufacturing operations, complex organizations and managing rapid growth.
The company posted a 4.8% surprise in its recent quarter. Six of the nine covering analysts have raised their forecasts over the past month. During that time, this year's earnings estimates have increased 18 cents to $1.68 per share. Analysts are expecting earnings to surge another 82% next year to $3.06 per share.
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Tuesday, April 29, 2008
SPWR - SunPower Corp - Six of the nine covering analysts have raised their forecasts over the past month
LLL - L-3 Communications - Five out of 10 analysts lifted full-year 2008 expectations
L-3 Communications Holdings, Inc. (LLL) is trading very close to its 52-week high after announcing first-quarter results last week. Earnings of $1.54 cents per share topped the consensus estimate by 2% and surpassed the year-prior $1.29. Net sales increased 6% to $3.5 billion on a year-over-year basis. L-3 is currently yielding 1.1%, a much more rewarding dividend yield than the industry average.
Full Analysis
L-3 Communications is a prime contractor in aircraft modernization and maintenance, C3ISR (Command, Control, Communications, Intelligence, Surveillance and Reconnaissance) systems and government services. L-3 is also a leading provider of high technology products, subsystems and systems. The company reported 2007 sales of $14 billion.
Growth
The company is trading very close to its 52-week high after announcing first-quarter results last week. Earnings of $1.54 cents per share topped the consensus estimate by 2% and surpassed the year-prior $1.29. Net sales increased 6% to $3.5 billion on a year-over-year basis.
"Our businesses performed well across all segments in the 2008 first quarter," said Michael T. Strianese, president and chief executive officer of L-3. �We continued to generate strong gains in sales, operating income and EPS. We had record quarterly funded orders of $4.1 billion and ended the quarter with record funded backlog of $10.1 billion.
Income
L-3 Communications added that during the first quarter, it continued to focus on shareholder value by repurchasing $283 million of common stock and paying cash dividends of $37 million. The company upped its dividend by 20% to 30 cents per share. L-3 is currently yielding 1.1%, a much more rewarding dividend yield than the industry average.
Estimates
Wall Street forecasts shot up on the company's strong report. Five out of 10 analysts lifted full-year 2008 expectations to $6.68 per share from last week's $6.59. The most accurate projection is even higher at $6.70.
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NUE - Nucor Corp - five of eight covering analysts have boosted their current-quarter estimates
Nucor Corp. (NUE) shares have been on quite a run for the last three months, advancing from their lows beneath $50 on Jan 23 to the recently established 52-week and all-time high above $75. The company reported solid first quarter results on Apr 17 in which revenue was up 32% to $4.97 billion. Nucor has also acquired two scrap metal processors this year in order to temper its exposure to higher volatility in scrap metal prices.
Nucor Corporation engages in the manufacture and sale of steel and steel products in North America. The company has a market cap. of $22.21 billion, was founded in 1940 and is based in Charlotte, North Carolina.
First Quarter Results
Nucor reported strong first quarter results on Apr 17 that included a significant jump in revenue. Net income was up 7.5% from the same period last year to $409.8 million. Revenue jumped 32% from the same period last year to $4.97 billion. This produced earnings of $1.41 per share, well ahead of analyst expectations, who were projecting earnings of $1.33 per share.
This marks the third time in the last three quarters that the company has surprised and beaten analyst estimates, having done so by an average of 10 cents, or 8%.
Guidance
Nucor provided second-quarter earnings guidance between $1.55 and $1.60 per share that has since been upgraded by the analyst community. Within the last 30 days, five of eight covering analysts have boosted their current-quarter estimates, pushing the consensus estimate 6 cents higher to its current projection of $1.70 per share.
Strategic Cost Savings Acquisitions
Nucor has mentioned that it has struggled with the challenges presented by significant fluctuations in scrap metal prices. Average scrap and scrap substitute cost per/ton jumped 29% to $333 in the first quarter. In an effort to quell this volatility, Nucor purchased scrap processor David J. Joseph Co. for $1.44 billion earlier in the year. Nucor also announced that earlier in the month it had purchased Galamba Metals Group, which operates 16 scrap-processing facilities in Kansas, Missouri and Arkansas.
In spite of the awesome run in its stock price over the last three months, Nucor shares still look very attractively priced. Projected earnings for this year are pegged at $6.59 per share. With the stock trading at $77, its forward P/E multiple is just a pinch under 12X.
The Chart
As previously mentioned, NUE shares have had a nice run over the last three months, advancing from less than $50 to their current location of over $75. In the process, a new 52-week and all-time high has been established. Just yesterday, shares finally broke above the level of resistance they had been pressuring for the last two weeks. This is a very nice short-term development. With a strong quarter behind it, and a bullish earnings projections to support share growth, this company's stock looks well positioned to continue its upward ascent. Take a look at the chart below.
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GDI - Gardner Denver - Analysts Raise Estimates For the Second Quarter and the Year
Gardner Denver isn't seeing a global slowdown in the industrial sector, as the company saw orders increase 19% in the first quarter compared to 2007. Gardner Denver has surprised on estimates three out of the last four quarters on average of 13.12%. The company has a 2008 P/E of 12.82.
Full Analysis
Gardner Denver, Inc. (GDI), headquartered in Quincy, IL, is a global manufacturer of highly engineered reciprocating, rotary and vane compressors, liquid ring pumps and blowers for various industrial and transportation applications, pumps used in the petroleum and industrial markets, and other fluid transfer equipment serving chemical, petroleum, and food industries.
The company's products are sold in a variety of markets such as industrial movement, environmental processes, healthcare applications and energy production.
Gardner Denver has two business segments: Compressor and Vacuum Products and Fluid Transfer Products.
In the Compressor and Vacuum Products segment, GDI manufactures rotary screw, reciprocating, sliding vane and centrifugal compressors; positive displacement, centrifugal and side channel blowers; and liquid ring pumps and engineered systems for industrial and commercial use.
In the Fluid Transfer Products segment, the company manufactures various pumps, water jetting systems and related aftermarket parts used in oil and natural gas well drilling, and loading arms, swivel joints, couplers, valves, fall protection and access equipment used to load and unload ships, tank trucks and rail cars.
Gardner Denver Beats Wall Street Estimates for the First Quarter
On Apr 23, Gardner Denver announced first-quarter earnings and surprised on estimates by 18.75%, or 15 cents a share. Net income was $50.9 million, or 95 cents per share, 19% higher than the first-quarter in 2007. Analysts expected 80 cents a share.
Revenues increased 12% to $495.7 million. Orders increased 19% year-over-year. The company generated $65 million in cash during the quarter, compared to $37 million in the year ago period. It was the highest first-quarter level in the company's history. GDI used the extra cash to buy back $44.1 million in shares.
The company saw strong demand in the first quarter.
"Gardner Denver's strong performance in the first quarter of 2008 was the result of continued demand from nearly all of the industrial end market segments and geographies we serve," said Barry L. Pennypacker, Gardner Denver's President and Chief Executive Officer.
GDI Raises Guidance For 2008
The company is cautiously optimistic about 2008. It raised the guidance outlook for the full year to the range of $3.65 to $3.75 per share. GDI also forecast the second quarter earnings per share in the range of 88 cents to 92 cents a share.
"We continue to expect global economic growth to slow for the remainder of 2008, although demand in Europe and Asia may remain strong later into the year than previously expected. Compressor and Vacuum Products orders in the first quarter were outstanding, reflecting broad demand for standard products, OEM applications, and engineered products, which we expect to continue through the second quarter," said Mr. Pennypacker.
"In the second half of 2008, we anticipate that the rate of growth will slow. Given that Compressor and Vacuum Products backlog grew, compared to December 31, 2007, despite the continuing reduction in past due orders, we are slightly more optimistic in our outlook than in early February. We expect shipments to remain strong through the end of the third quarter and are cautiously optimistic for the fourth quarter of 2008," he said.
Analysts Raise Estimates For the Second Quarter and the Year
Given the strong quarter and the raised guidance estimates from the company, it's no surprise that all of the covering analysts raised estimates for both the quarter and the year within the last week.
Consensus estimates for the second quarter rose five cents to 91 cents from 86 cents a share. For the full year, consensus estimates rose by 39 cents to $3.74 from $3.35 per share, which is the high end of the company's guidance range.
Gardner Denver's 2008 P/E is 12.82, under the industry average of 14.45. Its price-to-book is 2.06, also under the industry average of 2.54. The company, a Zacks #1 Rank (Strong Buy), has an average five year return on equity (ROE) of 12.75%.
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