Archive for May, 2018

  • Continental Building Products Earned 36 Cents per Share
    , May 3rd, 2018 at 4:11 pm

    Continental Building Products, Inc. (NYSE:CPBX) (the “Company”), a leading manufacturer of gypsum wallboard and complementary finishing products, announced today results for the first quarter ended March 31, 2018.

    Highlights of First Quarter 2018 as Compared to First Quarter 2017

    Net income increased 11.6% to $13.6 million
    Earnings per share increased 16.1% to $0.36
    Net sales decreased 3.2% to $116.8 million on wallboard volumes down 5.4%
    Gross margin increased to 25.8% compared to 25.7%
    EBITDA1 decreased to $31.3 million down 4.9% compared to $33.0 million
    Deployed $6.4 million in capital investments
    Deployed $14.6 million to repurchase 530,600 shares of common stock
    Outlook for full year 2018 unchanged

    “We delivered higher gross margins in the first quarter while facing a challenging operating environment, including lower volumes as expected given strong pre-buy activity in advance of our January 1, 2018 price increase and poor weather for our regions. Our ability to improve gross margins while overcoming a tightening freight and labor market reflects our sharp focus on operating discipline and our low cost highly efficient assets” stated Jay Bachmann, President and Chief Executive Officer.

    Mr. Bachmann continued, “We delivered strong quarterly earnings of $0.36 per share. In addition to the benefits of tax reform and the accretive benefit of our stock repurchase plan, we believe this is a direct result of our Bison Way continuous improvement efforts and the payback we are already receiving from high-return capital projects. As we look forward to the balance of the year, we are encouraged by the pace of wallboard demand in our markets, which supports our unchanged outlook for full year 2018. At the same time, we remain focused on deploying our strong cash flow to improve our cost position through further investments in high-return capital projects while continuing to repurchase shares as a key avenue to return value to shareholders.”

    First Quarter 2018 Results vs. First Quarter 2017

    Wallboard sales volumes decreased to 615 million square feet (MMSF) for the first quarter 2018, compared to 650 MMSF in the prior year quarter. Net sales were down 3.2% to $116.8 million, compared to $120.6 million in the prior year quarter, primarily due to a 5.4% decrease in wallboard volumes attributable to strong customer pre-buy activity during the fourth quarter 2017 in anticipation of a previously announced January 1, 2018 price increase, partially offset by an increase in average mill net price compared to the prior year quarter.

    Operating income was $20.8 million, compared to $21.7 million in the prior year quarter. This decrease was primarily attributable to lower wallboard volumes. SG&A expense was $9.4 million compared to $9.3 million in the prior year quarter, or 8.1% of net sales compared to 7.7% in the prior year quarter.

    Interest expense decreased 6.7% to $2.7 million, compared to $2.9 million in the prior year quarter, reflecting higher investment income and capitalized interest partially offset by the rise in LIBOR.

    Net income for the first quarter 2018 increased 11.6% to $13.6 million, or $0.36 per share, compared to $12.2 million, or $0.31 per share, in the prior year quarter. The $1.4 million increase in net income is primarily a result of the decrease in provision for income taxes under the new tax rates effective for 2018.

    Balance Sheet and Cash Flow

    As of March 31, 2018, the Company had cash on hand of $63.8 million and total outstanding borrowing under the term loan agreement of $270.9 million. During the first quarter 2018, the Company generated cash flows from operations of $13.7 million and deployed $6.4 million in capital investments.

    In February 2018, the Company’s Board of Directors authorized an expansion of its stock repurchase program from up to $200 million to up to $300 million. The program’s expiration date was also extended from the end of 2018 to the end of 2019. During the first quarter 2018, the Company repurchased 530,600 shares of its common stock under its repurchase program at an aggregate purchase price of $14.6 million, representing 1.4% of its outstanding shares as of December 31, 2017. As of March 31, 2018, against the expanded program, the Company has repurchased $117.9 million of our common stock at an average price of $21.84 per share and had a remaining capacity of $182.1 million for future repurchases.

    Forward-Looking Outlook For the Full Year 2018

    SG&A is expected to be in the range of $39 – $40 million
    Cost of goods sold inflation per unit is expected to be at 3% to 5% partly offset by approximately $5 million of savings from high return capital projects
    Total capital expenditures are expected to be in the range of $30 – $35 million
    Maintenance capital spending is expected to be approximately $15 million
    High-return capital spending is expected to be in the range of $15 – $20 million
    Depreciation and amortization is expected to be in the range of $43 – $46 million
    Effective tax rate is expected to be in the range of 22% – 24%

  • Four More Earnings Reports this Morning
    , May 3rd, 2018 at 8:52 am

    We have five Buy List earnings reports today, and four of them came this morning.

    Becton, Dickinson (BDX) earned $2.65 per share for Q1 which was two cents better than expectations. The company is also raising its full-year guidance by five cents per share at both ends. BDX now sees 2018 coming in between $10.90 and $11.05 per share.

    Ingredion (INGR) reported $1.94 per share for Q1. That was five cents ahead of expectations. They cut their 2018 range to between $7.90 and $8.20 per share. The previous range was $8.10 to $8.50.

    Church & Dwight (CHD) had earnings of 63 cents per share. That was two cents better than estimates. They reaffirmed full-year guidance of $2.24 to $2.28 per share. CHD increased their expected sales growth to 9%.

    Intercontinental Exchange (ICE) earned 90 cents per share. Wall Street had been expecting 88 cents per share.

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

  • Morning News: May 3, 2018
    , May 3rd, 2018 at 7:07 am

    U.S. Weighs Curbs on Chinese Telecom Firms Over National-Security Concerns

    Fed Holds Rates Steady, but Indicates Increases Will Continue

    Amazon Threatens Seattle Over New Tax That Would Help the Homeless

    Tesla’s Elon Musk Turns Conference Call Into Sparring Session

    In IPO Letter, Xiaomi CEO Explains Innovation at `Honest’ Prices

    Coming to a Yard Sign Near You: Warren Buffett’s Berkshire Hathaway

    Fitbit Earnings: ‘Stepped Up Our Game,’ Says CFO

    Apple CEO Tim Cook Is ‘Very Optimistic’ About U.S.-China Relations

    Spotify’s Loss Narrows but Misses Expectations

    Bitcoin Will Hit $20K in 2018. Here’s Why Ethereum Is a Better Bet, Says Reddit Cofounder

    China Shunning U.S. Soybeans on Trade Tensions, Bunge CEO Says

    The Cautionary Tale of Zynga’s Founder and His Potential Redemption

    Michael Batnick: $100,000,000,000

    Jeff Carter: The State of Private Investing

    Ben Carlson: Larry Kudlow’s Strong Dollar is Easier Said Than Done & Micro Bubbles

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  • Cerner Earns 58 Cents per Share
    , May 2nd, 2018 at 4:08 pm

    Cerner (CERN) today announced results for the 2018 first quarter that ended March 31, 2018.

    Bookings in the first quarter of 2018 were $1.398 billion, an increase of 12 percent compared to $1.250 billion in the first quarter of 2017.

    First quarter revenue was $1.293 billion, an increase of 3 percent compared to $1.260 billion in the first quarter of 2017.

    On a U.S. Generally Accepted Accounting Principles (GAAP) basis, first quarter 2018 net earnings were $160.0 million and diluted earnings per share were $0.48. First quarter 2017 GAAP net earnings were $173.2 million and diluted earnings per share were $0.52.

    Adjusted Net Earnings for first quarter 2018 were $193.9 million, compared to $197.8 million of Adjusted Net Earnings in the first quarter of 2017. Adjusted Diluted Earnings Per Share (EPS) were $0.58 in the first quarter of 2018 compared to $0.59 of Adjusted Diluted EPS in the year-ago quarter. Analysts’ consensus estimate for first quarter 2018 Adjusted Diluted EPS was $0.58.

    Adjusted Net Earnings and Adjusted Diluted Earnings Per Share are not recognized terms under GAAP. These non-GAAP financial measures should not be substituted for GAAP net earnings or GAAP diluted earnings per share, respectively, as measures of Cerner’s performance, but instead should be utilized as supplemental measures of financial performance in evaluating our business. Please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results,” where our non-GAAP financial measures are defined and reconciled to the most comparable GAAP measures.

    Other Highlights:

    First quarter operating cash flow of $409.0 million.

    First quarter Free Cash Flow of $255.7 million. Free Cash Flow is a non-GAAP financial measure defined as GAAP cash flows from operating activities less capital purchases and capitalized software development costs. Please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results.”

    First quarter days sales outstanding of 73 days, up from 71 days in the year-ago period.

    Total backlog of $14.63 billion. Backlog reflects the adoption of the new revenue recognition guidance effective for this quarter, which will be further discussed in Cerner’s Form 10-Q. Certain provisions within such guidance impact how we calculate backlog. Backlog amounts disclosed in prior periods have not been adjusted to reflect the adoption of the new revenue recognition guidance, and are not comparable to, the current period presentation.

    “Our results in the first quarter included strong bookings and cash flow and in-line earnings, but our revenue was below expected levels,” said Zane Burke, President. “Our mixed results and revised outlook reflect the delay of a large contract and a less predictable end market. However, we remain optimistic about our long-term growth opportunities due to our strong market position and portfolio of solutions and tech-enabled services that align with the pressures health care stakeholders are facing.”

    Future Period Guidance

    Cerner currently expects:

    Second quarter 2018 revenue between $1.310 billion and $1.360 billion.

    Full year 2018 revenue between $5.325 billion and $5.450 billion, down from a range of $5.450 billion to $5.650 billion.

    Second quarter 2018 Adjusted Diluted Earnings Per Share between $0.59 and $0.61.

    Full year 2018 Adjusted Diluted Earnings Per Share between $2.45 and $2.55, down from a range of $2.57 to $2.73.

    Second quarter 2018 new business bookings between $1.350 billion and $1.550 billion.

  • The Fed’s Policy Statement
    , May 2nd, 2018 at 2:02 pm

    No rate change as expected. The WSJ highlights the changes compared to the last statement.

    Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen and that economic activity has been rising at a moderate rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Recent data suggest that growth of household spending moderated from its strong fourth-quarter pace, while business fixed investment continued to grow strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

    Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with further gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in the medium term and labor market conditions will remain strong. Inflation on a 12-month basis is expected to run near the Committee’s symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced.

    In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1-1/2 to 1-3/4 percent. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.

    In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

    Voting for the FOMC monetary policy action were Jerome H. Powell, Chairman; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Randal K. Quarles; and John C. Williams.

    Futures market update:
    June meeting: 100% chance of a rate hike
    August meeting: 10.4% for another hike
    September meeting: 77.1% for another hike
    November meeting: 13% for a third hike
    December meeting: 47.1% for a third hike

  • Sagging Staples
    , May 2nd, 2018 at 11:38 am

    I’m usually a fan of Consumer Staples stocks. The reason is that they tend to have very stable financials. With sectors like homebuilders, even the best ones can see their profits and revenues soar from one year to the next. The Staples, by contrast, are far less hectic.

    That’s why it’s such a surprise to me to see how weak Staples have been for the last two years. Check out this chart of the Staples divided by the S&P 500.

    Notice how Staples led when the economy was falling apart. That’s the usual pattern. Staples lag when the economy is good, and they lead when things are bad. Apparently, things are good. Still, I’m surprised by how constant the trend has been.

    Colgate, General Mills, Hershey, Kellogg, Kraft-Heinz, Pepsi and P&G are all at new 52-week lows today. These aren’t just ordinary stocks – these are some of the soundest names on Wall Street.

  • Morning News: May 2, 2018
    , May 2nd, 2018 at 7:07 am

    Fed Likely on Hold, But Rising Inflation to Be in Focus

    Banks Expect Oil Prices to Remain High

    Milk Is Risky Business. Got Futures?

    Apple Allays iPhone Worries, Adds $100 Billion to Buyback Plans

    Xerox CEO Quits in Win for Carl Icahn

    Snap’s Slowdown Stirs Doubt on Redesign, Triggering Share Plunge

    Sprint and T-Mobile C.E.O.s Are in Washington to Sell Their Merger. Here’s What They’ll Confront.

    Under Armour Still Under Siege in the US

    Federal Government Sends Warning To Vaping Companies

    Warren Buffett’s Chinese Car Bet Has Plunged $9 Billion

    3 Lessons All Leaders Should Learn From The Letter to Shareholders By Amazon CEO Jeff Bezos

    Tesla Sued For More Than $2 Billion, Accused of Copying Design of Nikola Hydrogen Trucks

    Nick Maggiulli: The Process Matters

    Lawrence Hamtil: Industry Factors Matter More Than You Think

    Roger Nusbaum: “A Compensation Scheme Masquerading As An Asset Class”

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  • Fiserv Earns 76 Cents per Share
    , May 1st, 2018 at 4:07 pm

    After the bell, Fiserv (FISV) reported Q1 earnings of 76 cents per share. That’s an increase of 23% over last year. Wall Street had been expecting 73 cents per share.

    “Our first quarter performance is consistent with our expectations for the full year,” said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “Results in the quarter were punctuated by a 23 percent increase in adjusted earnings per share and double-digit sales growth.”

    Quarterly revenue rose 4% to $1.37 billion. Their operating margin was 32.5%. That’s very good. During the quarter, Fiserv bought back 5.7 million shares of stock for $398 million. They have another 15.8 million shares left in the current authorization.

    Fiserv reiterated its full EPS forecast of $3.02 to $3.15 per share. That’s an increase of 22% to 27% over last year. The previous guidance was a pre-split level of $6.05 to $6.30 per share. Fiserv also expects internal revenue growth of at least 4.5% this year.

    The stock closed today at $71.63 per share. The 52-week high came on March 16, when FISV hit $74.46 per share.

  • Morning News: May 1, 2018
    , May 1st, 2018 at 7:04 am

    Trump Delays Tariff Decisions for E.U., Canada and Mexico

    This Summer Is Expected To Have Highest Gas Prices We’ve Seen In Years

    BP Profit Beats Estimates Even as Oil-Spill Fines Boost Debt

    Marathon to Become Top U.S. Refiner With $23 Billion Andeavor Buy

    Tesla Doesn’t Burn Fuel, It Burns Cash

    Murder On The Disoriented Express?

    HNA Scuttles Deal for Scaramucci’s SkyBridge

    Twitter Spikes Following New Live Content And Advertising Deal With Disney

    Scotland Ends Cheap Booze as Minimum Price Starts

    Letting Sprint and T-Mobile Merge Is a Terrible Idea

    The Jeff Bezos Approach to Handling Criticism Is A Good Rule Everyone Should Follow

    U.S. Jury Convicts Former Autonomy CFO of Fraud in H-P Deal

    Cullen Roche: Three Things I Think I Think – Marx, Value Stocks & Bitcoin

    Ben Carlson: Schrodinger’s Portfolio

    Howard Lindzon: Momentum Monday…and Big Changes to My 8 to 80 List

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