Archive for February, 2019

  • Fiserv Earned 84 Cents per Share
    , February 7th, 2019 at 4:23 pm

    Fiserv (FISV) just reported Q4 earnings of 84 cents per share. That was at the low end of their guidance and it was two cents below Wall Street’s estimate. For the year, Fiserv made $3.10 per share.

    “We are pleased with our 2018 results, which include acceleration of our internal revenue growth rate along with our 33rd consecutive year of double-digit adjusted earnings per share growth,” said Jeffery Yabuki, President and Chief Executive Officer of Fiserv. “Sales results in the quarter were our strongest in history setting us up for continuing growth expansion.”

    Despite the earnings miss, Fiserv had Q4 earnings growth of 24%. Operating margin came in at 33.4%.

    The company repurchased 25.5 million shares of common stock for $1.91 billion in 2018, which included 8.9 million shares of common stock for $689 million in the fourth quarter.

    In January 2019, Fiserv was named one of FORTUNE Magazine World’s Most Admired Companies® for the sixth consecutive year. The company received high marks for its long-term investment value, financial soundness, people management and social responsibility, and was also noted for its use of corporate assets, quality of management and innovation.

    Agreement to Merge with First Data Corporation

    On January 16, 2019, Fiserv announced that it had entered into a definitive merger agreement to acquire First Data Corporation in an all-stock transaction for an equity value of approximately $22 billion as of the announcement. The transaction is expected to close during the second half of 2019 subject to customary closing conditions, regulatory approvals and shareholder approval for both companies. The corresponding press release and additional materials are available in the “Investor Relations” section of fiserv.com.

    Outlook for 2019

    Fiserv expects internal revenue growth in a range of 4.5 to 5 percent for 2019. The company also expects adjusted earnings per share in a range of $3.39 to $3.52, which represents growth of 10 to 14 percent, as adjusted for the Lending Transaction. The company’s outlook for 2019 does not include any impact related to its proposed transaction with First Data Corporation.

    “We enter 2019 with strong momentum and a continuing focus on providing differentiated value for clients, associates and shareholders,” said Yabuki.

  • Broadridge Financial Solutions Earns 56 Cents per Share
    , February 7th, 2019 at 9:06 am

    Broadridge Financial Solutions (BR) bombed its earnings report. For its fiscal second quarter, BR earned 56 cents per share which is 15 cents less than estimates. Total revenues fell 6% to $953 million.

    Management tried to put a happy spin on the results.

    “Broadridge had a strong second quarter and is well positioned for the full year 2019 and beyond,” said Tim Gokey, Broadridge’s President and CEO. “We generated strong increases in recurring revenue, record closed sales, and earnings in-line with our expectations, all of which further strengthen our ability to deliver future growth. As anticipated, event-driven revenues declined significantly, returning to more normalized levels from a near-record quarter a year ago.

    “We enter our seasonally strong second half with positive momentum and on track to achieve our full-year guidance, including 5-7% recurring fee growth and 9-13% Adjusted EPS growth. Broadridge also remains well positioned to deliver on our three-year growth objectives,” Mr. Gokey added.

    Their fiscal 2019 guidance is unchanged. BR sees revenue growth of 3% to 5%, operating margin at 16.5% and EPS growth of 9% to 13%.

    For Q3, the company sees revenue between $1.195 billion and $1.245 billion and earnings of $1.40 to $1.56 per share. Wall Street had been expecting $1.53 per share.

  • ICE Earns 94 Cents per Share
    , February 7th, 2019 at 8:20 am

    Three more earnings reports today. This morning, Intercontinental Exchange (ICE) said they made 94 cents per share for their Q4. That’s two cents more than expectations. Revenues rose 14% to $1.3 billion. ICE’s operating margin was 58%. For the year, ICE made $3.59 per share. That’s up 21% over 2017.

    “2018 marked our 13th consecutive year of record revenues – a track record directly attributable to customer demand for our risk management solutions and the investments we’ve made to enhance our technology, expand our content and broaden our distribution,” said ICE Chairman & Chief Executive Officer, Jeffrey C. Sprecher. “As we look to 2019, we remain focused on bringing mission-critical solutions to our customers and delivering value to our stockholders.”

    Scott A. Hill, ICE Chief Financial Officer, added: “In addition to record revenues, we generated record cash flows in 2018, enabling us to return nearly $1.8 billion in capital to stockholders, more than any year in our history. As we enter 2019, we remain committed to prudent capital management and a disciplined approach to investment to support continued growth and to enhance long-term stockholder value.”

    ICE is also raising its dividend by 15%. The quarterly dividend is increasing from 24 cents to 27.5 cents per share. The dividend is payable on March 29 to stockholders of record as of March 15.

    ICE provides guidance for several metrics except EPS. Wall Street had been expecting 2019 earnings of $3.90 per share and that appears a little over-optimistic. Shares of ICE are currently down about 3%.

  • Morning News: February 7, 2019
    , February 7th, 2019 at 7:11 am

    Bank of England Warns Damage to U.K. Economy From Brexit Has Risen

    National Australia Bank Chiefs to Resign in Wake of Damaging Report

    Long, Strange Trip: How U.S. Ethanol Reaches China Tariff-Free

    Trump Loves the New Nafta. Congress Doesn’t.

    Consumer Protection Bureau Aims To Roll Back Rule For Payday Lending

    SunTrust, BB&T to Combine in All-Stock Merger

    After Uproar, Instacart Backs Off Controversial Tipping Policy

    General Motors: $2 Billion Profit on Strong Truck Sales

    The Microsoft, Amazon, IBM & Google Clouds Enable Emerging Technologies – And Everything Else

    Spotify Is Acquiring Pair of Podcasting Companies, Signaling Broad Ambitions

    Video Game Stocks Get Clobbered, and Fortnite Is To Blame

    Amazon Changes Business Structures in India to Bring Big Seller Back

    Cullen Roche: Banning Stock Buybacks is Stupid

    Roger Nusbaum: The 23 Year Rule & Simplicity Is Important in Life & Investing

    Jeff Miller: Are The Momentum Bulls High?

    Be sure to follow me on Twitter.

  • Cramer on Disney
    , February 6th, 2019 at 11:17 am

  • Cognizant Earns $1.13 per Share
    , February 6th, 2019 at 8:56 am

    We had one Buy List earnings report this morning. Cognizant Technology Solutions (CTSH) reported Q4 earnings of $1.13 per share. That’s a pretty good number. It’s up from $1.03 per share for Q4 2017, and it beat the company’s own forecast. Three months ago, the IT-outsourcer told us to expect earnings of at least $1.05 per share. Wall Street had been expecting $1.06 per share. In constant currency, quarterly revenue rose 8.8%.

    “Cognizant executed well in 2018, diversifying our revenue base and client roster, and investing to build distinctive leadership in six advanced digital capabilities,” said Francisco D’Souza, Vice Chairman and Chief Executive Officer. “Forming the core of our digital strategy, these capabilities are instrumental in helping clients digitize and transform their entire enterprises, which we call being digital at scale. Digital continues to permeate and power every industry, creating a substantial market opportunity for us across the industries, geographies, and buyer groups we serve. With a disciplined plan for executing our digital strategy, we’ve set Cognizant up for the next stage of sustainable strong growth and value creation.”

    For the year, Cognizant made $4.57 per share. Just a reminder that CTSH originally said they expected to make at least $4.53 this year. Then in May, they lowered that to $4.47, and Wall Street freaked out. We ignored it. Three months ago, they raised their full-year forecast to $4.50 per share, and it turns out, they beat that by seven cents per share. For the year, the company’s operating margin was 20.7%. I like that. They’ve previously said that their long-term target is for 21%.

    Now let’s look at guidance. For 2019, Cognizant sees earnings of at least $4.40 per share. Wall Street had been expecting $4.45 per share.

    The other big news from Cognizant is that Brian Humphries will be taking over as CEO on April 1 from Francisco D’Souza who has been CEO since 2007. D’Souza has done a great job, and he’ll remain a member of the board.

  • Morning News: February 6, 2019
    , February 6th, 2019 at 7:13 am

    Some Central Banks Have Gold Fever and It Might Be Sensible

    With Savings to Burn, Russia Turns (Again) to a State-Led Spending Plan

    Wall Street Veteran Says U.S.-China Deal Will Be Sell Trigger

    Qatar and Exxon Mobil Plan $10 Billion Gas Investment in Texas

    What the State of the Union Means for Business

    How Trump’s Latest Plan to Cut Drug Prices Will Affect You

    EU rejects Siemens and Alstom, Aurubis and Wieland Mergers

    Spotify Rises on Podcast Acquisitions, Robust Subscriber Growth

    Bet Everything on Electric: Inside Volkswagen’s Radical Strategy Shift

    Inside Wisconsin’s Disastrous $4.5 Billion Deal With Foxconn

    Presto! One Little Line Transforms Disney’s Results

    SoftBank’s Son Unveils $5.5 Billion Buyback, Laments Share Price

    Nick Maggiulli: Even God Couldn’t Beat Dollar-Cost Averaging

    Cullen Roche: How The Patient Investor Sees the World More Clearly

    Jeff Carter: Take Care of Your Investors

    Be sure to follow me on Twitter.

  • Torchmark Earns $1.56 per Share
    , February 5th, 2019 at 4:15 pm

    This afternoon, Torchmark (TMK) reported Q4 earnings of $1.56 per share. That met expectations. For the year, Torchmark made $6.13 per share. That’s up from $4.82 per share for 2017.

    Here are some highlights:

    Net income as an ROE was 12.3%. Net operating income as an ROE excluding net unrealized gains on fixed maturities was 14.6%.

    Life underwriting margin at Globe Life Direct Response increased over the year-ago quarter by 6% and health underwriting margin at Family Heritage Agency increased over the year-ago quarter by 15%.

    Life premiums increased over the year-ago quarter by 7% at American Income Agency and health premiums increased over the year-ago quarter by 8% at Family Heritage Agency.

    Net life sales and net health sales at Liberty National Agency increased over the year-ago quarter by 6% and 9%, respectively.

    Average producing agent count increased over the year-ago quarter by 10% at Family Heritage Agency.

    1.5 million shares of common stock were repurchased during the quarter and 4.4 million shares were repurchased during the year.

    For this year, Torchmark sees earnings of $6.50 to $6.70 per share. Wall Street had been expecting $6.61 per share. That means the stock is going for about 12.5 times this year’s earnings.

  • Disney Beats Earnings
    , February 5th, 2019 at 4:10 pm

    After the closing bell, Disney (DIS) reported very good earnings for their fiscal Q1. The company earned $1.84 per share which beat estimates by 29 cents per share. Revenue fell to $15.30 billion but that beat expectations of $15.14 billion.

    Disney, whose assets include cable networks such as ESPN and film studios like Marvel, is making a push into streaming services as more consumers drop their pay-TV package in favor of cheaper options that can be watched through an internet connection. The company launched ESPN+ last year and plans to launch Disney+, a streaming service of its movies and original programming, later this year.

    The company said that its direct-to-consumer and international segment posted revenue of $918 million and an operating loss of $136 million in its first quarter ended Dec. 29. due to increased costs related to ESPN+ and the upcoming launch of Disney+.

    On the earnings call, Disney said that it expects investment in those ventures to negatively impact the segment’s year-over-year operating income by $200 million in the second quarter.

    Revenue in Disney’s media networks business, which includes ESPN, rose 7 percent to $5.92 billion in the first quarter, compared to the year-earlier period, while its parks business was up 5 percent to $6.82 billion. Studio entertainment revenues fell 27 percent to $1.8 billion thanks to the strong performance of Star Wars: The Last Jedi and Thor: Ragnarok in the prior-year quarter compared to Mary Poppins Returns and The Nutcracker and the Four Realms this year.

    The company expects its pending $71.3 billion acquisition of a majority of assets from Twenty-First Century Fox to aid its strategy in streaming. The deal is expected to provide Disney with additional media assets for its new streaming service and would also give Disney a larger stake in the streaming service Hulu.

    But Disney’s direct-to-consumer push comes with risks: It’s hard to turn a profit on streaming services, which usually entail high content and technology costs but offer lower prices than traditional cable to attract consumers.

    The stock rose a little bit in the after-hours session.

  • Cerner Earns 63 Cents per Share
    , February 5th, 2019 at 4:08 pm

    Cerner (CERN) reported Q4 earnings of 63 cents per share, up from 58 cents per share in Q4 of 2017. Cerner’s result matched Wall Street’s forecast. Q4 revenue rose 4% to $1.366 billion. For the year, Cerner made $2.45 per share and revenue rose 4% to $5.366 billion.

    The healthcare IT firm also they’ll initiate a quarterly dividend of 15 cents per share starting in the third quarter.

    “We finished the year on a solid note and in line with full-year expectations,” said Brent Shafer, Chairman and CEO. “After one year at Cerner, I have confirmed my initial view that we have significant opportunity to grow and create value in health care, and we are refining our operating model so we can innovate at scale, deliver value to clients faster, and grow profitably. Our confidence in Cerner’s growth outlook, combined with strong cash flow and balance sheet, put us in a position to return capital to shareholders by initiating a quarterly dividend. This move along with the existing share repurchase program underscores our commitment to delivering shareholder value.”

    Cerner expects:

    Q1 2019 revenue between $1.365 billion and $1.415 billion, and 2019 revenue between $5.650 billion and $5.850 billion.

    Q1 EPS between $0.60 and $0.62, and 2019 EPS between $2.57 and $2.67.

    First quarter 2019 new business bookings between $1.100 billion and $1.300 billion.