Manhattan Associates got a jolt higher when it easily exceeded estimates in the first quarter. It new client list is impressive and pulled in some seven-figure deals. A deeper look at the fundamentals reveals impressive numbers. Just over the past week, this year's earnings estimates have increased a dime to $1.40 per share.
Full Analysis
Manhattan Associates, Inc. (MANH) develops and provides supply chain software solutions for the planning and execution of supply chain activities worldwide. Its solutions include Supply Chain Process Platform, Supply Chain Platform Applications, Supply Chain Solution Suites, and X-Suite Solutions.
Supply Chain Platform Applications provides event and schedule tracking, alerts and notifications, inventory, order and shipment visibility, and analytics and reporting services.
Strong First Quarter
Last week, the company reported strong first-quarter results. The Atlanta-based company posted net income of $7.4 million, or 30 cents per share, compared with $5.4 million, or 19 cents per share, in the year-ago period. Excluding an expense for stock-based compensation and other items, the company reported adjusted earnings of 35 cents per share. Analysts expected 23 cents per share. Revenue climbed to $88.3 million from $78.2 million. Analysts forecast $84.6 million in revenue.
“We’re pleased with our performance in the first quarter of 2008. License revenue in all three regions was solid. EMEA and APAC posted very strong growth over the prior year’s first quarter. And while overall the Americas license revenue was equal to the prior year’s results, the U.S. portion of the Americas posted license revenue growth of more than 10 percent,” said Pete Sinisgalli, president and chief executive officer of Manhattan Associates.
“Overall revenue growth for the quarter was 13 percent, marking our 14th quarter in a row of 10-plus percent revenue growth. Moreover, our earnings grew substantially in the quarter. With a strong start to 2008, we are optimistic about our prospects for the full year and are raising our earnings per share guidance by $0.07 per share,” he added.
Digging Deeper
A deeper look at the fundamentals reveals impressive numbers. Just over the past week, this year's earnings estimates have increased a dime to $1.40 per share. Two out of the three covering analysts have raised their forecasts for the current year. MANH has posted an average surprise of 10.1% over the past four quarters. The stock is attractively valued with a PEG ratio of 1.2.
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Thursday, May 01, 2008
MANH - Manhattan Associates - Two out of the three covering analysts have raised their forecasts for the current year
SOHU - Sohu.com - stock is attractively valued with a PEG ratio of 0.8
Sohu.com, Inc. recently reported an excellent quarter and guided higher. Its sponsorship of the 2008 Olympic Games should boost revenues going forward as well. Earnings estimates really took off after the company's report. Analysts are now expecting $1.86 per share for the current year, up nine cents from a week ago.
Full Analysis
Sohu.com, Inc. (SOHU) provides a range of online products and services to consumers and businesses in the People's Republic of China. Its products and services to businesses include brand advertising and sponsored search.
The company's products and services to users include aggregated content on various topics, including news, entertainment, sports, business and finance, automobile, real estate, information technology, and women.
Earnings Boom
Earlier this week, the company said that its first quarter profit quadrupled on strong advertising and online game revenue. For the three months ending March 31, Beijing-based Sohu said it earned US$21.6 million (euro13.8 million), or 55 cents (35 euro cents) per share, up from US$4.5 million, or 12 cents per share, for the same quarter of 2007. Revenue surged 156% to US$84.8 million (euro54.4 million), it said.
The company said its revenues were strong despite a quarter that included the Chinese New Year, usually a slow time for Chinese business, and the country's worst snowstorms in decades. China's population of Internet users rose to 221 million in February, possibly tying the United States as the world's largest, the official Xinhua News Agency said last week, citing government data.
Guiding Higher
Additionally, management guided second-quarter revenues above analyst estimates, which caused the stock to rocket higher. For the quarter, Sohu expects revenue of $93 million to $96 million. Analysts anticipate revenue of $77.4 million.
Dr. Charles Zhang, Chairman and CEO of Sohu.com, stated, "We are very pleased with our first quarter of 2008, which was our third consecutive quarter in which we reported record total revenues and record revenues in each category, as well as record non-GAAP net income. We believe that these results are made possible only by our long-term strategic vision regarding the Chinese Internet space, such as our sponsorship of the 2008 Beijing Olympics."
Earnings estimates really took off after the company's report. Analysts are now expecting $1.86 per share for the current year, up nine cents from a week ago. Next year's numbers rose 22 cents to $2.32 per share. SOHU has posted an average surprise of 18.8% over the past four quarters. The stock is attractively valued with a PEG ratio of 0.8.
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HP - Helmerich & Payne -
Helmerich & Payne, Inc. (HP) is scheduled to announce second-quarter results on May 1, 2008. This Growth & Income pick performed well in the past, hitting 52-week highs and currently trades near that level. The company announced solid fiscal first quarter results in late January, noting that operating income for the quarter reached a new record level. HP is yielding 0.4% while the majority of the companies in the oil and gas drilling industry do not pay out a dividend.
Full Analysis
Helmerich & Payne, Inc. is primarily a contract drilling company, engaging in the contract drilling of oil and gas wells in the United States and internationally. The company provides drilling rigs, equipment, personnel, and camps on a contract basis to explore for and develop oil and gas from onshore areas and from fixed platforms, tension-leg platforms, and spars in offshore areas.
Growth
This Growth & Income pick exhibits growth both technically and fundamentally. On the technical side, HP’s share price has been steadily rising since the company was last featured on March 28, 2008. Then HP’s share price was trading near a 52-week high and has broken through that level since, currently trading near a new 52-week high .
Regarding fundamental growth, Helmerich & Payne announced solid fiscal first quarter results in late January. HP noted that operating income for the quarter reached a new record level, adding that its continued growth was driven by the U.S. land segment, where revenue days as well as average daily rig revenue and margins were up again sequentially. The strong results more than offset operating income reductions in the company's offshore and international land segments.
The company delivered quarterly earnings per share that exceeded Wall Street estimates by about 5%, and projections for the future are on the rise. Full-year 2008 forecasts have been increased ahead of the company’s second-quarter report, which is scheduled for release on May 1, 2008. Current projections of $4.13 per share are above last month’s $4.11. The most accurate estimate is more bullish $4.24.
Income
In addition to growth, HP stands out in its industry by also offering income. It is yielding 0.4% while the majority of the companies in the oil industry do not pay out a dividend.
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FLR - Fluor Corp - ROE of 21% crushes the industry average of 6%
Fluor Corporation (FLR) is a solid Growth & Income pick that will be reporting first-quarter results on May 12, 2008. In late February, the company posted record results for 2007 and upped its guidance for 2008. Net earnings for 2007 soared 102% year-over-year to a record $533 million. Wall Street estimates are on the rise with current forecasts of $5.61 climbing from $5.46 over the past 90 trading days. Fluor also offers income, sporting a dividend yield of 0.6%, which is above the industry average, and FLR’s ROE of 21% crushes the industry average of 6%.
Full Analysis
Fluor Corporation provides services on a global basis in the fields of engineering, procurement, construction, operations, maintenance and project management. Headquartered in Irving, Texas, Fluor is a FORTUNE 500 company with revenue of $16.7 billion in 2007.
In late February, the company posted record results for 2007 and upped its guidance for 2008. Net earnings for 2007 soared 102% to a record $533 million, or $5.85 per share, from the year-prior $263 million, or $2.95 per share.
"2007 was the best year in the company's history, with record-breaking financial performance across all key metrics," said Chairman and Chief Executive Officer Alan Boeckmann. "Global demand for energy, infrastructure and basic materials are fueling substantial opportunities, and when combined with our $30 billion backlog, we expect Fluor to continue to deliver strong growth in 2008."
Revenue for the quarter climbed 30% to $4.7 billion, versus the previous year’s $3.6 billion. FLR mentioned that revenue growth reflected significant increases in the Oil & Gas, Industrial & Infrastructure and Power segments.
The company lifted its earnings guidance for 2008 to a range of $5.10 to $5.50 per share, from a range of $4.90 to $5.30 per share. Wall Street was in agreement with Fluor’s outlook, and analysts have been more bullish since. Current Street forecasts of $5.61 were increased from $5.46 over the past 90 trading days.
FLR’s dividend yield for 0.6 is above the industry average and its ROE of 21% crushes the industry average of 6%.
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NUE - Nucor Corp - Within the last 30 days, 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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FRO - Frontline Ltd. - analyst community has upgraded their earnings projections
Frontline Ltd. (FRO) shares have been on a nice run for the past three months, advancing from less than $35 on Jan 22 to their current location of over $55. Much of the recent price strength comes after the company's very strong fourth-quarter and full-year results, reported on Feb 14. Frontline is enjoying robust sales and strong pricing power due to the incredible surge in the energy markets.
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 $4.08 billion, and is based in Hamilton, Bermuda.
Fourth-Quarter and Full-Year Results
Frontline reported very strong fourth-quarter and full-year results on Feb 14. Fourth-quarter income jumped more than 50% to $202.3 million. Full-year income was also up nicely as well, increasing 11% and advancing to $574.4 million. Full-year earnings were up to $7.68 per share from earnings of $6.90 per share in fiscal 2006.
Frontline noted that the day rates it charges for all three classes of its carriers increased from just the last quarter, a reflection of the demand the company is experiencing for its services. Frontline said that its VLCCs, Suezmax tankers and Suezmax OBO carriers were priced at $45,700, $33,100 and $42,400, respectively compared with $36,000, $25,000 and $41,300 respectively in the third quarter.
Frontline also noted that it currently carries a total of $819.9 million of cash and cash equivalents.
Rising Estimates
In reaction to the solid fourth-quarter and full-year results and the favorable pricing environment, the analyst community has upgraded their earnings projections. The current-quarter estimate has jumped from $1.77 per share 90 days ago to its current projection of $2.64 per share. The next-year estimate has also received significant upgrades, advancing from $2.84 90 days ago to its current projection of $4.24 per share.
Another attractive component of Frontline shares is the fat dividend that the company likes to pay. In the fourth quarter, based upon the strong results, Frontline paid a $2.00 dividend per share owned.
No only is Frontline carrying attractive growth and momentum characteristics, it also has reasonable valuations. With its next-year earnings projected at $4.24 per share, this company carries a forward P/E multiple just a pinch below 13X.
The Chart
And finally, as previously mentioned, the company's stock price has been performing. In just the last three months share of FRO have returned over 60%. On a slightly longer term basis, looking back to last June, the company's stock has broken above a downward sloping trend-line that had been pressuring its share price. With this level effectively breached, the next target is the 52-week and all-time high, just above $64. Take a look at the chart below and the nice breakout that has just recently occurred.
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CPO - Corn Products - Company Raises 2008 Earnings Guidance By 10%
Corn Products International saw profits rise 18% in the first quarter as the world's agricultural market remains hot. The company has beaten Wall Street estimates three out of the last four quarters by an average of 8.39%. Corn Products has a forward P/E of 14.28.
Full Analysis
Corn Products International, Inc. (CPO) is the largest producer of dextrose in the world and manufactures starches, high fructose corn syrups and glucose. The company, headquartered in Westchester, IL, provides a variety of ingredients to customers in 60 industries including food, beverages, pharmaceuticals, animal feed, corrugating, paper and textiles. The company has 35 plants in 15 countries.
Corn Products, a Zacks #1 Rank (Strong Buy), has three business segments: North America, South America and Asia/Africa.
The company's North America segment includes Canada, Mexico and the United States. CPO is the only North American corn refiner with full-scale starch and sweetener facilities in all three NAFTA countries.
In South America, Corn Products is among the largest corn refiners with operations in Argentina, Brazil, Chile, Columbia, Ecuador, Peru and Uruguay.
The company processes corn and tapioca in Asia/Africa with operations in China, Kenya, Pakistan, South Korea and Thailand. It also has licensing agreements in South Africa.
Corn Products Easily Beats Analysts' Estimates for the First Quarter
On Apr 22, Corn Products announced first quarter earnings and beat Wall Street estimates by 19.72%, or 14 cents a share. Net income rose 29% to $64 million, or 85 cents per share, compared to $50 million, or 66 cents per share in the year-ago quarter. Analysts expected 71 cents per share.
It was the ninth consecutive quarter of sales records. Net sales rose 22% to $931 million compared to $762 million in the first-quarter 2007. Sales rose in all three business segments: in North America sales were up 15%, in South America sales were up 36%, and in Asia/Africa sales grew 30% compared to 2007. Sales were higher mainly due to favorable pricing power.
Profit rose 18% to $173 million compared to $146 million in 2007 due to strong pricing actions and product mix in North and South America. Margins fell slightly to 18.6% from 19.2% a year ago.
The Company Raises 2008 Earnings Guidance By 10%
On the strength of the first quarter numbers, Corn Products is optimistic about the rest of 2008.
The company raised guidance for the year to the range of $2.90 to $3.15 from its earlier forecast of $2.65 to $2.85. CPO expects a 12% to 22% increase in earnings per share over 2007. The gain includes 5 cents from the company's holdings in CME Group. Net sales are expected to reach $4 billion compared to $3.39 billion in 2007.
"Our North and South American businesses should continue to drive our improved performance for the balance of 2008," said Sam Scott, chairman, president and chief executive officer of Corn Products International. "We still expect lower results in Asia/Africa due to the cost and volume challenges in South Korea we have previously discussed."
Corn Products also expects results in the first half of 2008 to be stronger than the second half, due to higher raw material costs.
Analysts Raise Estimates for the Second Quarter and the Full Year
Brokerage analysts scrambled to raise estimates after the company's guidance forecast and strong first quarter report.
Estimates for the second quarter rose 10 cents to 83 cents per share from 73 cents per share in just the last week. For the year, estimates rose to come in line with the company's guidance, rising 29 cents to $3.11 from $2.82 per share. That's at the higher end of the company's guidance range.
Analysts also expect earnings per share growth in 2008 of 20.23%.
Corn Products's 2008 P/E is 14.28, under the industry average of 18.33. Its price-to-book is 1.96. As an added bonus, the company currently has a dividend yield of 1.00%.
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PH - Parker Hannifin - Raises Full Year Guidance on Strong Sales
Parker Hannifin sees strong growth in all of its global markets, even in a slowing North America, as the industrial sector continues to outperform. The company has a long history of rewarding shareholders, having increased its dividend 52 consecutive years. Parker Hannifin has beaten Wall Street estimates the last four quarters on average of 6.73%. It has a forward P/E of 13.45.
Full Analysis
Parker Hannifin Corporation (PH) manufactures motion and control technologies systems, including hydraulic systems, for the commercial, mobile, industrial and aerospace markets. The company operates in 43 countries around the world.
On Apr 7, the company increased its hydraulic technology capabilities by acquiring Vansco Electronics, a manufacturer of electronic controls, displays and terminals, communication and operator interfaces, and sensors. Vansco employs 1,005 people in facilities in Canada, the United States, Finland, Belgium, and the United Kingdom.
In 2007, Vansco saw sales of approximately $180 million, with approximately 83% of the sales made in Parker's Industrial North America reporting segment. Terms of the deal were not disclosed.
Parker Reports a Record Third Quarter
On Apr 22, Parker Hannifin reported third-quarter earnings that beat Wall Street estimates by 11.19%, or 15 cents a share. Net income rose 22% to $255.4 million, or $1.49 per share, from $209.3 million, or $1.19 per share, in the year-ago period. Analysts expected $1.34 per share.
Sales increased 14.4% to $3.2 billion from $2.8 billion, a quarterly record. Of the growth in the quarter, 4.3% was organic, 4.0% was the result of strategic acquisitions, and the remainder was from the movement of foreign currency exchange rates.
Each of the segments saw sales rise during the quarter. The Industrial International segment led all segments with sales increasing 32.2%. The Industrial North America segment, despite the slowing economy, saw sales rise 3.7% compared to a year ago, and the Aerospace segment increased sales 7.7%.
The Climate & Industrial Controls segment was the laggard, rising only 0.5% compared to a year ago. That segment was adversely impacted by the ongoing weakness in the automotive, residential construction and heavy duty trucks markets.
PH Raises Full Year Guidance on Strong Sales
The company is bullish going into its fourth quarter and raised guidance for the year. PH raised guidance to the range of $5.40 to $5.60 from its previous forecast of $5.15 to $5.40 per share.
"Since fiscal 2008 continues to be strong overall, we have again raised our earnings guidance," said Don Washkewicz, Chairman, CEO and President.
"Orders are growing in Europe, Asia, Latin America and North America. Many of our key markets, including Aerospace, continue to grow. For other markets, especially those in North America which have been in recession, we are positioned to benefit when they return to more normal growth levels," he said.
Analysts Raise Estimates on the Fourth Quarter and the Year
In response to the company's increased guidance, brokerage analysts raised estimates for the fourth-quarter and the full year. For the quarter, consensus estimates rose five cents to $1.45 from $1.40 per share. For the year, analysts raised to be in-line with the company's guidance. Consensus estimates rose by seven cents to $5.46 from $5.39 a share.
Parker Hannifin's 2008 P/E is 13.45. Its price-to-book is 2.60. The company's five year average return on equity is an outstanding 15.29%. PH also pays a dividend, which it has increased for 52 consecutive years, among the top five longest-running dividend-increase records in the S&P 500 index. The current dividend yield is 1.10%.
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