Archive for October, 2016

• Biogen Beats Estimates
  Eddy Elfenbein, October 26th, 2016 at 9:19 am

  This morning, Biogen (BIIB) reported Q3 earnings of $5.19 per share. That’s a very strong number. Wall Street had been expecting $4.97 per share.

  All across the board, Biogen had a very good quarter. Their star drug is Tecfidera. Last quarter, Tecfidera sales grew 10% to just over $1 billion.

  Chief Executive George Scangos announced in July he would beleaving the company, allowing a new chief to lead the company as it works to reignite growth. The biotechnology giant has also drawn takeover interest from drug companies such as Merck Co. andAllergan PLC, The Wall Street Journal reported in August.

  Overall for the third quarter, Biogen reported a profit of $1.03 billion, or $4.71 a share, up from $965.6 million, or $4.15 a share, a year earlier. Excluding the restructuring charges, among other items, per-share earnings rose to $5.19 from $4.48.

  Total revenue rose 6% to $2.96 billion. Analysts had projected adjusted earnings of $4.97 a share on sales of $2.91 billion, according to Thomson Reuters.

  The shares are up about 3.3% today.

• Morning News: October 26, 2016
  Eddy Elfenbein, October 26th, 2016 at 6:35 am

  The Chinese Politics Of The Chem China – Syngenta Deal

  Oil Price Declines Weigh on European Markets

  U.S. Judge Approves $14.7 Billion Settlement in VW Diesel Scandal

  Privacy Rule Imperils Data Riches as AT&T Pursues Time Warner

  Airbus to Ramp Up Deliveries in Bid to Meet Earnings Targets

  Bayer CEO Defends Planned Acquisition of Monsanto

  Apple Predicts a Big Holiday Bounce After Its Biggest Rival, Samsung, Falters

  Hyundai Motor’s Profit Tumbles to a Record Low

  Lockheed Martin’s Quarterly Profit Handily Beats Estimates

  IBM Watson Lends Brains to Slack’s Chatbot

  Chipotle Outlines New Initiatives to Speed Recovery

  Toyota to Recall 5.8 Million Cars in Japan, China, Europe Over Takata Airbags

  Goldman Hopes You Won’t Notice How Many People It’s Laying Off

  Josh Brown: Start Now

  Howard Lindzon: Millennials and Retail: The Myth of Shut-in Nation

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• Earnings from Express Scripts and CR Bard
  Eddy Elfenbein, October 25th, 2016 at 5:10 pm

  After the closing bell, Express Scripts (ESRX) reported Q3 earnings of $1.74 per share. That matched Wall Street’s estimate on the nose. The company had previously given us a range of $1.72 to $1.76 per share.

  Now for guidance. Express narrowed its full-year range from $6.33 – $6.43 per share to $6.36 – $6.42 per share. That translates to Q4 earnings of $1.84 to $1.90 per share. Wall Street had been expecting $1.85 per share. This was a good quarter for ESRX.

  “The healthcare industry demands that we stay ahead of future trends and deliver solutions to emerging issues facing today’s market,” said Tim Wentworth, CEO and President. “Doing so deepens the trusted relationships we have built with our clients, resulting in another strong year in terms of client retention and new sales.”

  Express also narrowed its expected retention rate for next year from 96% – 98% to 97% – 98%. It sounds minor but it’s very good to see.

  CR Bard (BCR) reported Q3 earnings of $2.64 per share. That’s up 16% from last year, and it easily topped Wall Street’s estimate of $2.56 per share.

  Timothy M. Ring, chairman and chief executive officer, commented, “The results this quarter demonstrate the continued strength of the economic engine of our business. We continue to increase investments in geographies, products, platforms, and programs that we believe can drive revenue growth longer term. During this period of increased investment in 2016, we have also been able to deliver attractive bottom-line returns for shareholders. We have increased our full-year financial guidance every quarter this year, and we are doing so again today. We expect a strong finish to what has been a very strong year for us so far.”

  Bard now expects full-year sales growth of 8% to 9%. Excluding currency, that’s 9% to 10%. For earnings, Bard sees profits ranging between $10.23 and $10.28 per share. Their previous range was $10.10 to $10.20 per share. Wall Street had been expecting $10.17 per share.

  Bard’s new range implies Q4 guidance of $2.70 to $2.75 per share. Wall Street had been expecting $2.74 per share. This was an excellent quarter for Bard.

• Wabtec Earns 94 Cents per Share
  Eddy Elfenbein, October 25th, 2016 at 8:09 am

  This morning, Wabtec (WAB) reported Q3 earnings of 94 cents per share which was five cents below expectations.

  The company also revised its guidance:

  Based on its year-to-date results and outlook for the rest of the year, Wabtec updated its full-year 2016 guidance as follows: Revenues are now expected to be down about 12 percent compared to 2015, and earnings per diluted share are now expected to be between $4.00-$4.04. This guidance does not include costs for restructuring activities or expenses related to the Faiveley Transport acquisition. Faiveley Transport is a global supplier of high added value integrated systems for the railway industry with annual revenues of about $1.2 billion.

  Raymond T. Betler, Wabtec’s president and chief executive officer, said: “Our transit business continues to perform well, while the freight markets remain challenging due to overall rail industry conditions and the sluggish global economy. We have continued to focus on controlling what we can by aggressively reducing costs, generating cash and investing in our growth opportunities, including acquisitions. At the same time, we are progressing toward completion of the Faiveley Transport acquisition and remain excited by its growth and improvement opportunities.”

  WAB had previously lowered its full-year guidance to a range of $4 to $4.20 per share. The previous range had been $4.30 to $4.50 per share.

• Morning News: October 25, 2016
  Eddy Elfenbein, October 25th, 2016 at 7:11 am

  German Business Climate Hits 2-1/2 Year High in October

  Samsung and Hyundai Troubles Weigh on South Korea’s GDP

  Another Day, Another Record Low for the Chinese Yuan

  U.S. Said to Be Closing in on Venezuelan Asset Seizures, Charges

  AT&T’s Ambitious Advertising Plans With Time Warner Deal

  Apple Boosted by IPhone 7 Demand, Slowing Pace of Sales Decline

  Buick Up, Honda And Subaru Down, Says Consumer Reports

  ChemChina Ready For Concessions To Clinch Delayed Syngenta Deal in 2017

  New York Times Company Buys The Wirecutter

  DuPont Boosts Profit Forecast Amid Rise in Revenue

  Baker Hughes Posts Bigger Loss On Impairment Charges

  Even Tata CEOs Said to Be Kept in Dark Over Chairman’s Ouster

  Self-Driving Truck’s First Mission: A Beer Run

  Roger Nusbaum: Big Merger Monday

  Jeff Carter: Where VCs Are Putting Their Money

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• LGI Homes (LGIH)
  Eddy Elfenbein, October 24th, 2016 at 11:52 am

  The WSJ highlights LGI Homes (LGIH), a Texas-based homebuilder. Unlike others in the industry, LGI focuses on entry-level homes, and is seeing a booming business.

  The key: LGI’s extensive marketing operation. The company sends out 400,000 targeted fliers each week to apartment complexes and other rental units within a 25-mile radius of its new home developments.

  “Tired of paying rent?” reads one LGI flier from the Phoenix area. “Own a new home for $799/mo.”

  LGI also notes in its fliers that its homes may not require a down payment. That is because home buyers may be able to qualify for rural home buyer programs run by the U.S. Department of Agriculture or loans from the U.S. Department of Veterans Affairs.

  To close the deal, LGI instructs prospective buyers to call a toll-free number to set up an appointment for viewing a home.

  “They know what they’re paying on rent, and if that number on the flier is lower, that’s going to open their eyes,” said Rick Palacios Jr., director of research at John Burns Real Estate Consulting.

  The WSJ notes that the company is experiencing very rapid growth. LGI builds its homes in more remote areas in order to keep costs down. According to the WSJ, LGI’s average sale price is $197,450. That “compares with $362,000 and $290,400 for large builders Lennar Corp. and D.R. Horton Inc., respectively.”

  

• The Changing Nature of the Investment Business
  Eddy Elfenbein, October 24th, 2016 at 10:46 am

  I wanted to highlight these three recent news items because they all demonstrate major trends changing the investment industry.

  Hedge Fund Investors Withdrew $28.2 Billion in Third Quarter

  The Dying Business of Picking Stocks

  How Banks Are Losing Clients to Their Own Employees

  Number of hedge funds, mutual funds, ETFs: 28,700

  Number of Starbucks locations: 23,768

  — Morgan Housel (@morganhousel) October 24, 2016

  It’s true. Nowadays, they’ll pretty much let ANYONE start an ETF.

• Morning News: October 24, 2016
  Eddy Elfenbein, October 24th, 2016 at 7:09 am

  Chinese State-owned Banks Seen Selling Dollars to Shore Up Yuan

  EU Presses Walloons Over Key Canada Trade Deal Ceta

  Italy’s Monte dei Paschi Set to Approve Business Plan

  These Banks Just Made a Huge Leap in International Blockchain Transactions

  Who’s Behind the Deal Between AT&T and Time Warner?

  TD Ameritrade, Toronto-Dominion Buy Scottrade for $4 Billion

  Microsoft to Hike UK Enterprise Prices After Brexit Pounds Sterling

  These 2 Major Aircraft Gear Makers Have Agreed to a $6.4 Billion Merger

  Dick’s Wins Auction for U.S. Business of Bankrupt Golfsmith

  Philips Profit Lifted by Health-Care Business

  China Oceanwide Joins Spree With $2.7 Billion Genworth Bid

  PayPal Surging, Can It Last?

  Chinese Firm Says Its Cameras Were Used to Take Down Internet

  Cullen Roche: Three Things I Think I Think

  Jeff Miller: When Will the Trading Range Be Broken?

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• Are Headwinds Growing for the Market?
  Eddy Elfenbein, October 23rd, 2016 at 8:32 am

• Stocks that Could Move Big on Earnings
  Eddy Elfenbein, October 22nd, 2016 at 9:29 am