Archive for July, 2021

• Fiserv Earns $1.37 per Share
  Eddy Elfenbein, July 27th, 2021 at 10:05 am

  We had two more Buy List earnings reports this morning. First up is Fiserv (FISV). The payments company reported Q2 earnings of $1.37 per share. That topped Wall Street’s consensus by nine cents per share, and it was up 47% over last year’s Q2. I was very impressed by these numbers.

  Quarterly revenue increased 20% to $3.86 billion. Internal revenue growth was 18%. That was led by 41% growth in the Acceptance segment, 5% in Fintech and 7% in Payments.

  “We had a very strong quarter driven by both macroeconomic tailwinds and the execution of our business strategy focused on winning business with new and existing clients,” said Frank Bisignano, President and Chief Executive Officer of Fiserv. “Our assets and continued innovation position us well to grow faster with financial institutions, fintechs and businesses of all sizes.”

  For the first six months of this year, Fiserv earned $2.54 per share. That’s up 32% so far this year. Some more details from the earnings report:

  Adjusted operating margin increased 510 basis points to 33.9% in the second quarter and 440 basis points to 32.7% in the first six months of 2021 compared to the prior year periods.

  Free cash flow increased by 4% to $1.72 billion in the first six months of 2021 compared to $1.66 billion in the prior year period.

  The company repurchased 5.0 million shares of common stock for $588 million in the second quarter and 10.2 million shares of common stock for $1.20 billion in the first six months of 2021.

  Now for the best news. Fiserv increased its full-year guidance. The company now expects full-year earnings between $5.50 and $5.60 per share. The previous range was $5.35 to $5.50 per share. That’s growth of 24% to 27%. Fiserv also bumped up the low end of its estimate for internal revenue growth by 1%. The new range is 10% to 12%.

  “Given our strong financial results in the first half of the year, coupled with our continued business execution, we are again raising our internal revenue growth outlook as well as our overall adjusted EPS outlook,” said Bisignano. “Our agility, speed of implementation and new product launches should continue to accelerate our growth.”

  The stock has been up as much as 4.8% today.

• Morning News: July 27, 2021
  Eddy Elfenbein, July 27th, 2021 at 7:10 am

  China Doesn’t Care How Much Money You Lose

  China Stock Rout Spreads Amid Fears of Foreign Investor Exodus

  China’s Tech Regulator Orders Companies to Fix Anticompetitive, Security Issues

  Bitcoin Tumbles After Reaching $40,000 on Amazon Speculations

  Inflation Has Arrived, but Washington Isn’t Racing to Limit Price Pops

  Biden Revives Trump’s Africa Business Initiative; Eyes Future Digital Project

  Biden’s Antitrust Team Talks Its Way to a Win

  Return to Office Hits a Snag: Young Resisters

  Groceries in 10 Minutes: Delivery Start-Ups Crowd City Streets Across Globe

  AerCap Wins Unconditional EU Okay for $30 Billion GE Deal

  GE Lifts Full-Year Free Cash Flow Target on Recovery Hopes

  Tesla Overcomes Chip Shortage to Post Record Profit

  Elon Musk Says He Is Done with Regular Earnings Calls. Tesla Investors Are Better Off.

  Jeff Bezos Offers to Cover Billions in Costs for NASA Contract

  Activision Blizzard Employees Sign Petition Denouncing Company’s ‘Abhorrent’ Response to Lawsuit

  The Pandemic Changed How We Spent Our Time

  Utah Farm Draws a Rare Breed: The American Shepherd

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• Check Point Software Earns $1.61 per Share
  Eddy Elfenbein, July 26th, 2021 at 9:40 am

  This morning, Check Point Software (CHKP) reported Q2 earnings of $1.61 per share. That beat the Street by five cents per share. Quarterly revenues increased 4% to $526 million. That beat Wall Street’s forecast of $523.77 million.

  Previously, CEO Gil Shwed said he expected Q2 revenues to range between $510 million and $535 million. For earnings, Check Point has been expecting $1.50 to $1.60 per share. So Check Point exceeded its own earnings guidance.

  “We had a good second quarter. Strong execution drove double-digit growth across CloudGuard and Harmony, and triple-digit growth in Infinity platform sales. Overall we grew our security subscription revenues by 12 percent,” said Gil Shwed, Founder and CEO of Check Point Software Technologies. “We’ve seen a 93 percent increase in ransomware attacks, as Gen V attacks are now the new norm. We believe organizations can stop the next cyber pandemic by adopting a prevention-first approach to security across the network, cloud and remote users.”

  Here are some details from the earnings report:

  Non-GAAP Operating Income: $257 million compared to $253 million in the second quarter of 2020, representing 49 percent and 50 percent of revenues in the second quarter of 2021 and 2020, respectively.

  Non-GAAP Net Income: $217 million compared to $225 million in the second quarter of 2020.

  Non-GAAP Earnings per Diluted share: $1.61 compared to $1.58 in the second quarter of 2020, a 2 percent increase year over year.

  Deferred Revenues: As of June 30, 2021, deferred revenues were $1,472 million compared to $1,338 million as of June 30, 2020, a 10 percent increase year over year.

  Cash Balances, Marketable Securities and Short Term Deposits: $4,002 million as of June 30, 2021, compared to $3,959 million as of June 30, 2020.
  Cash Flow: Cash flow from operations of $264 million compared to $252 million in the second quarter of 2020, a 4 percent increase year over year.

  Share Repurchase Program: During the second quarter of 2021, the company repurchased approximately 2.7 million shares at a total cost of approximately $325 million.

  On the earnings call, the company said that subscription revenues rose by 12%.

  Also on the earnings call, Shwed said he sees Q3 earnings ranging between $1.54 and $1.64 per share on revenue of $515 million to $540 million. Wall Street had been expecting $1.58 per share on revenue of $527.98 million.

  CHKP didn’t alter its previous full-year earnings range of $6.45 to $6.85 per share. That’s a little surprising to me. Given the first two quarters and Q3 guidance, I think they could have narrowed guidance, or raised the low end.

• Morning News: July 26, 2021
  Eddy Elfenbein, July 26th, 2021 at 7:08 am

  Crypto Nomads: Surfing the World for Risk and Profit

  Leaders in Cryptocurrency Industry Move to Curb the Highest-Risk Trades

  The Blocksize War: The Book That Explains Bitcoin’s Religious Schism

  Law Without Order: Investors Grapple with China’s Regulatory Risk

  China’s New Private Tutoring Rules Put Billions of Dollars at Stake

  U.S. Real Yields Fall to Record Low Amid Growth Concerns

  Fed Now Facing Twin Inflation, Growth Risks As Virus Jumps and Supply Chains Falter

  Child Tax Credit Payments Have Begun. Should You Opt Out?

  Rookie Bankers Sour on Wall Street’s Pitch of Big Pay and Long Hours

  Boeing’s Talent Exodus Threatens Turnaround After 737 Max Crisis, Pandemic

  Credit Suisse Brain Drain Hits Investment Bank in Top Deals Year

  Marlboro Maker CEO Says The Company Plans To Stop Selling Smokes In The U.K.

  Israel’s Spat with Ben & Jerry’s Overshadows Its Spyware Scandal

  Sorry to Say: You Probably Shouldn’t Claim Social Security at 62

  Make a Call on Quitting Your Job Without Any Regrets

  A Painting or an NFT of It: Which Will Be More Valuable?

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• 1,000-Fold in 89 Years
  Eddy Elfenbein, July 23rd, 2021 at 1:10 pm

  The S&P 500 is up to another new all-time intra-day high today. The S&P 500 has been as high as 4,407.54 today.

  Here’s an interesting historical footnote. The index is close to being up 1,000 fold from its Great Depression low. On July 8, 1932, the index closed at 4.41. (Technically, it was the old S&P 90 before 1957.)

  On our Buy List, we have new highs from Broadridge Financial Solutions (BR), Danaher (DHR), Moody’s (MCO), Middleby (MIDD), Thermo Fisher (TMO) and Zoetis (ZTS). Also, Intercontinental Exchange (ICE) is very close to a new high.

• Morning News: July 23, 2021
  Eddy Elfenbein, July 23rd, 2021 at 7:04 am

  Invest in China, but Without Illusions

  Investors Eye COVID-19 Spread, Golden Cross to Gauge U.S. Dollar Trajectory

  Fed Seen Speeding Taper of MBS in Early-2022 Start to Pullback

  ‘The B Word’ Bounced Between Boring and Bewildering

  Crypto Nomads: Surfing the World for Risk and Profit

  ‘I Feel Conflicted’: Crypto’s Offshore Trading Moguls Talk Shop

  Silicon Valley’s Best Pandemic Ever

  For Airlines, It’s Looking More Like 2019 Again

  Intel Says Chip Shortage Could Drag into 2023 as Outlook Barely Clears Street View

  Zomato Shares Soar in Red-Hot Start for First Indian Unicorn to Go Public

  Twitter Posts Fastest Revenue Growth Since 2014 in Pandemic Rebound

  ‘Change is Coming’ to Streaming, Says Jason Kilar, the WarnerMedia Chief

  From ‘Congratulations’ to ‘Fully Canceled’: California Cafe Owners Hit Roadblock

  Did Avocado Cartels Kill the Butterfly King?

  Why Hasn’t Climate Change Put a Dent in Luxury Real Estate?

  Kaseya Gets Master Decryption Key After July 4 Global Attack

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• Abbott Earns $1.17 per Share
  Eddy Elfenbein, July 22nd, 2021 at 7:24 am

  Abbott Laboratories (ABT) today announced financial results for the second quarter ended June 30, 2021.

  Second-quarter sales of $10.2 billion increased 39.5 percent on a reported basis and 35.0 percent on an organic basis, which excludes the impact of foreign exchange.

  Second-quarter GAAP diluted EPS was $0.66 and adjusted diluted EPS, which excludes specified items, was $1.17, reflecting 105.3 percent growth versus the prior year.

  Abbott continues to project full-year 2021 diluted EPS from continuing operations on a GAAP basis of $2.75 to $2.95 and full-year adjusted diluted EPS from continuing operations of $4.30 to $4.50, reflecting strong, double-digit growth versus the prior year.

  Diagnostics sales increased 62.8 percent on a reported basis and 57.2 percent on an organic basis in the second quarter. Global COVID-19 testing-related sales were $1.3 billion in the second quarter.

  Nutrition sales increased 11.9 percent on a reported basis and 9.5 percent on an organic basis in the second quarter. Sales performance was led by double-digit growth in Adult Nutrition globally.

  Established Pharmaceuticals sales increased 16.4 percent on a reported basis and 14.5 percent on an organic basis in the second quarter. Sales performance was led by double-digit growth in several countries, including India, China, Russia, and several countries across Latin America.

  Medical Devices sales increased 51.3 percent on a reported basis and 45.1 percent on an organic basis in the second quarter. Compared to pre-pandemic sales in 2019, Medical Devices sales increased 19.2 percent on a reported basis and 15.6 percent on an organic basis in the second quarter, led by double-digit growth in Electrophysiology, Heart Failure, Structural Heart and Diabetes Care.

  “We’re achieving very strong growth across our portfolio,” said Robert B. Ford, president and chief executive officer, Abbott. “Perhaps most impressively, excluding COVID testing-related sales, our sales grew more than 11 percent on an organic basis compared to pre-pandemic levels in the second quarter of 2019, which demonstrates the fundamental strength of our performance.”

  (…)

  Abbott projects 2021 diluted earnings per share from continuing operations under GAAP of $2.75 to $2.95. Abbott forecasts specified items for the full-year 2021 of $1.55 per share primarily related to intangible amortization, restructuring and cost reduction initiatives, including expenses to align its COVID-19 testing-related business with current and projected demand, expenses associated with acquisitions and other net expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $4.30 to $4.50 for full-year 2021.

• Danaher Earns $2.46 per Share
  Eddy Elfenbein, July 22nd, 2021 at 7:18 am

  Danaher Corporation (DHR) today announced results for the second quarter 2021. All results in this release reflect only continuing operations unless otherwise noted.

  For the quarter ended July 2, 2021, net earnings were $1.7 billion, or $2.28 per diluted common share which represents an 84.0% year-over-year increase from the comparable 2020 period. Non-GAAP adjusted diluted net earnings per common share were $2.46 which represents a 71.0% increase over the comparable 2020 period.

  Revenues increased 36.5% year-over-year to $7.2 billion, with 31.5% non-GAAP core revenue growth.

  Operating cash flow for the second quarter was $2.1 billion, representing a 46.5% increase year-over-year, and non-GAAP free cash flow was $1.8 billion, representing a 41.0% increase year-over-year.

  For the third quarter 2021, the Company anticipates that non-GAAP core revenue growth will be in the mid- to high-teens percent range.

  For the full year 2021, the Company now anticipates that the non-GAAP core revenue growth rate including Cytiva will be approximately 20%.

  Rainer M. Blair, President and Chief Executive Officer, stated, “Broad-based strength across the portfolio helped us deliver over 30% core revenue growth and outstanding earnings per share growth and cash flow generation. We continued to make significant growth investments during the quarter, strengthening our organic growth trajectory and enhancing our portfolio with the announcement of our pending acquisition of Aldevron.”

  Blair continued, “We believe the combination of our leading portfolio and DBS-driven execution differentiates Danaher today and provides a strong foundation for sustainable, long-term outperformance.”

• Morning News: July 22, 2021
  Eddy Elfenbein, July 22nd, 2021 at 5:31 am

  ECB Set to Promise Even Longer Support to Charge Inflation

  The Saudi Prince of Oil Prices Vows to Drill ‘Every Last Molecule’

  China’s Vast Network of Gray-Market Shoppers Grounded by the Pandemic

  U.S.-China Goods Trade Booms as If Virus, Tariffs Never Happened

  FTC Unanimously Backs New Policy Supporting Your Right to Repair Your Own Devices

  Flush From Reddit Rally, GameStop Plots Store Revival

  Robinhood’s Guinea Pig for Upending Public Offerings: Itself

  Skipping the Olympics Is ‘Not an Option’ for Many Advertisers

  The Amazonification of Space Begins in Earnest

  Hamptons Home Prices Surge to a Record as Pickings Get Slimmer

  Tesla Factory in Berlin Runs Into Activists, Red Tape and Lizards

  Hyundai Motor Q2 Net Profit Soars, Expects Chip Shortage to Ease

  Harley-Davidson Just Launched Its Own Craigslist

  Billionaire Who Missed Out on TikTok Is Trying to Beat It

  Big 3 Drug Distributors, J&J Reach Landmark $26 Billion Opioid Settlement

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• Another Bounce off the 50-DMA
  Eddy Elfenbein, July 21st, 2021 at 10:48 am

  The S&P 500 is gaining more ground today. Once again, the 50-DMA is acting like a trampoline.

  Every time we’ve gotten close to the 50-DMA, the market has bounced. Every time.

  This morning, Coca-Cola (KO) reported very good earnings. The company beat estimates and raised its full-year forecast.