Three More Earnings Reports this Morning

This morning Intercontinental Exchange (ICE) reported Q2 earnings of 75 cents per share. Although this was one penny below estimates, it was ICE’s 17th-straight quarter of revenue growth. EPS was up 9% over last year.

The company offered Q3 guidance, but not for EPS:

• ICE’s third quarter 2017 GAAP operating expenses are expected to be in a range of $545 million to $555 million and adjusted operating expenses are expected to be in a range of $480 million to $490 million.
• ICE’s interest expense is expected to be $47 million in the third quarter and $49 million in the fourth quarter, including the effect of refinancing ICE’s October bond maturity.
• ICE’s adjusted effective tax rate is expected to be approximately 31% for the third quarter.
• ICE’s diluted share count for the third quarter is expected to be in the range of 590 million to 595 million weighted average shares outstanding.

The shares are currently down about 3% this morning.

Cognizant Technology Solutions (CTSH) earned $0.93 for Q2. That was two cents above the Street’s consensus. Previously, the company said to expect earnings of at least 89 cents per share. Quarterly revenue rose 8.9% to $3.67 billion. Cognizant had said to expect revenue between $3.63 and $3.68 billion.

“Cognizant delivered strong second-quarter results, which reflect our continued progress in helping clients achieve the value of digitizing their entire enterprises, or what we call being digital at scale,” said Francisco D’Souza, Chief Executive Officer. “We remain dedicated to accelerating our shift to digital services and solutions as we continue to invest in our core business and execute our margin improvement and capital return programs.”

Cognizant also raised their sales and earnings guidance for this year. The company expects Q3 earnings of at least 94 cents per share. They also upped their full-year guidance by three cents. They now see 2017 earnings of at least $3.67 per share.

CTSH expects Q3 revenue between $3.73 billion and $3.78 billion and full-year revenue between $14.70 billion and $14.84 billion. Previously, Cognizant expected 2017 revenue to range between $14.56 billion and $14.84 billion.

“Our second quarter results and improved full year outlook demonstrate solid execution in our plan to drive sustainable revenue growth while increasing margins,” said Karen McLoughlin, Chief Financial Officer. “Our strong balance sheet and cash flows continue to support both our capital return program and our investments in the business to drive future growth.”

Axalta Coating Systems (AXTA) reported adjusted Q2 earnings of 31 cents per share which was below the Street’s view of 39 cents per share. Net sales rose 2.3% to $1.09 billion. Part of the reason for the miss was a drop in paint prices.

The miss also seems to have been caused by the mess in Venezuela.

The deconsolidation of our Venezuelan operations came as a result of a lack of exchangeability between the Venezuelan bolivar and the U.S. dollar coupled with our financial outlook for the foreseeable future. This lack of exchangeability restricted our Venezuelan subsidiary’s ability to pay dividends or settle intercompany obligations, which limited our ability to realize the benefits of our Venezuelan operations. In accordance with the applicable accounting guidance, we have deconsolidated our Venezuela operations and will account for our investment at cost going forward. Our cost investment is now valued at $0 at June 30, 2017 which has resulted in a pre-tax charge of $70.9 million for the three months ended June 30, 2017. We will no longer report the consolidated results of our Venezuelan operations.

For 2017, Axalta now expects:

• Net sales growth of 7-8% as-reported; 8-9% ex-FX, including acquisition contribution of 6-7%
• Adjusted EBITDA of $940-970 million
• Interest expense of ~$150 million
• Income tax rate, as adjusted, of 22-24%
• Free cash flow of $440-480 million
• Capital expenditures of ~$130 million
• Depreciation and amortization of ~$350 million
• Diluted shares outstanding of 246-249 million

Continental Building Products (CBPX) will report after the close.

Posted by on August 3rd, 2017 at 11:16 am


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