Archive for October, 2021

• Earnings from Cerner and Church & Dwight
  Eddy Elfenbein, October 29th, 2021 at 2:03 pm

  We had two more earnings reports today. Cerner (CERN) has been stuggling for us this year, but we got some good news today. The healthcare-IT firm said it made 86 cents per share for its Q3. That’s up 19% from last year. Revenue rose 7% to $1.468 billion and free cash flow increased by 32% to $312 million.

  “During the third quarter, we delivered solid revenue growth, expanded Adjusted Operating Margin (non-GAAP) by 150 basis points and increased Adjusted Diluted EPS (non-GAAP) by nearly 20%,” said Mark Erceg, Executive Vice President and Chief Financial Officer. “The organizational transformation and productivity measures implemented earlier this year and additional on-going product focus and cost control initiatives are strengthening our business. A clear focus on cash generation is also having a positive impact as evidenced by a 32% increase in Free Cash Flow (non-GAAP) for the quarter. The increase in Free Cash Flow (non-GAAP) and our strong balance sheet allowed us to repurchase $375 million of shares during the quarter, which brings our year-to-date purchases to $1.1 billion.”

  Those are solid numbers. For Q4, Cerner expects revenue “to grow upper-mid-single digits.” For earnings, Cerner sees EPS growth of 10% to 13%.

  Let’s do some math. Since Cerner made 78 cents per share for last year’s Q4, that implies earnings for this year’s Q4 of 86 to 88 cents per share. For the first three quarters of this year, Cerner has made $2.42 per share. The new guidance implies full year earnings of $3.28 to $3.30 per share. That’s an increase to the previous guidance of at least $3.25 per share.

  The shares gapped up nearly 7% at today’s open, but it’s backed off some since then.

  Three months ago, Church & Dwight (CHD) said that Q3 was going to be weak. The consumer-products company projected earnings of 70 cents per share which was well below Wall Street’s forecast. The official word was that they were “temporarily constrained by supply.”

  Well, I guess they were a little conservative. Today we learned that C&D made 80 cents per share for its Q3.

  Matthew Farrell, Chief Executive Officer, commented, “Our brands once again experienced strong consumption in Q3. Organic sales growth of 3.7% is on top of 9.9% organic growth in Q3 2020. In the U.S. we grew consumption in 12 of the 16 categories, with five categories exceeding double digit growth. Consumption continues to outpace shipments as supply chain disruptions continue. Global online sales grew 2.2% (on top of 102% growth in Q3 2020) and as a percentage of total sales has expanded to 14.3% in Q3.

  Church & Dwight now expects full-year sales growth of 5.5% and 4% organic sales growth. For earnings, the company expects 61 cents per share. That would come to $3 per share for the entire year. The shares got a small pop after the report.

• Morning News: October 29, 2021
  Eddy Elfenbein, October 29th, 2021 at 7:02 am

  Greece Is Getting Rewired For The Future

  The World’s Biggest Immigration System Offers Lessons for a Disrupted World

  Detroit’s Chip Woes Drag on U.S. Economic Growth

  How Apple is Gaining Smartphone Customers During a Chip Shortage

  Microsoft Set to Be World’s Most Valuable Stock as Apple Slides

  Oil Executives Grilled Over Industry’s Role in Climate Disinformation

  Chevron Posts Highest Profit in 8 Years on Surging Oil, Gas Prices

  ExxonMobil Posts Highest Quarterly Profit in Nearly Four Years

  How a Mistake by YouTube Shows Its Power Over Media

  Wall Street Starts to Doubt Facebook, Its Longtime Darling

  Facebook Renames Itself Meta

  Could a New Name Help Facebook After All?

  Meta Shares Spike — But It’s a Canadian Materials Company, Not the Rebranded Facebook

  Amazon Slaps a $9.95 Fee on Whole Foods Deliveries. And Walmart Pounces

  The 37-Year-Olds Are Afraid of the 23-Year-Olds Who Work for Them

  A $532 Million NFT Sale Was a Sham

  How Cheesecake to Go Saved the Cheesecake Factory

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• Stryker Earned $2.20 per Share
  Eddy Elfenbein, October 28th, 2021 at 4:19 pm

  After the bell, Stryker (SYK) had a big earnings miss. For Q3, the company made $2.20 per share which was eight cents below Wall Street’s consensus.

  Net sales increased 11.3% while organic net sales increased 4.5%.

  “Our teams showed strong resilience and delivered solid quarterly financial results despite a resurgence of COVID-19 that intensified through the quarter,” said Kevin Lobo, Chair and Chief Executive Officer. “This latest spike mostly impacted our U.S. implant related businesses as scheduled procedures were deferred. Despite those impacts, we delivered strong growth in our MedSurg and NeuroTech businesses and are ready to support our customers as the pandemic recedes.”

  For guidance:

  We now expect 2021 organic net sales growth to be in the range of 7% to 8% from 2019, and now expect adjusted net earnings per diluted share(2) to be in the range of $9.08 to $9.15, including the full year impact of the acquisition of Wright Medical. If foreign currency exchange rates hold near current levels, we expect EPS will be positively impacted by approximately $0.05 to $0.10 for the full year.

  That’s down from the previous guidance for organic sales growth of 9% to 10% and earnings between $9.25 and $9.40 per share.

  We had new highs today from Intercontinental Exchange (ICE), Moody’s (MCO), Sherwin-Williams (SHW), Thermo Fisher Scientific (TMO) and Zoetis (ZTS).

• More Earnings Reports Today
  Eddy Elfenbein, October 28th, 2021 at 2:53 pm

  We had a few more Buy List earnings report today.

  This morning, Check Point Software (CHKP) said it made $1.65 per share. That was five cents better than estimates. Revenue grew 5% to $534 million. Analysts were expecting $530 million.

  Check Point said it expects full-year earnings of $6.81 to $7.01 per share. That’s an increase from the previous guidance of $6.45 to 6.85 per share.

  That works out to a Q4 range of $1.99 to $2.19 per share.

  During Q3, Check Point bought back 2.64 million shares for $325 million. The company is expanding its buy back authorization by $2 billion.

  The stock has been up as much as 4% today, although it’s trading off its high.

  For Q3, Hershey (HSY) said it made $2.10 per share. That beat the Street by 10 cents.

  The chocolate folks also increased their earnings guidance. Previously, Hershey said it expects earnings growth of 8% to 10%. Now they say it will be 11% to 13%. That works out to a range of $6.98 to $7.11 per share. That implies Q4 earnings of $1.49 to $1.62 per share.

  Intercontinental Exchange (ICE) said it made $1.30 per share for Q3 while sales rose 28% to $1.8 billion. Earnings beat the Street by eight cents per share. The shares got to a new high today of $137.99. In March 2020, ICE traded as low at $63.51 per share.

  Moody’s (MCO) earned $2.69 per share for Q3. Expectations were for $2.52 per share. Revenue increased 13% to $1.5 billion.

  For the third time this year, Moody’s has raised its full-year guidance. The original range was $10.30 to $10.70 per share. Then it went to $11.00 to $11.30 per share. In July, it went to $11.55 to $11.85 per share. And now, it’s up to $12.15 to $12.35 per share.

  That works out to a Q4 range of $2.18 to $2.38 per share. Moody’s is up over 3% today and it reached a new 52-week high.

• US GDP Grew by 2.0% in Q3
  Eddy Elfenbein, October 28th, 2021 at 12:31 pm

  The government released its initial estimate for Q3 GDP growth. They said the economy grew at a 2% rate in Q3. That’s annualized and adjusted for inflation. This figure will be updated two more times.

  A 2% rate of growth isn’t that good, even though it’s positive. This means that the post-pandemic rebound is most likely over. This was the slowest rate of growth since the second quarter of 2020. Wall Street had been expecting growth of 2.8%.

  Declines in residential fixed investment and federal government spending helped hold back gains, as did a surge in the U.S. trade deficit, which widened to a near-record $73.3 billion in August.

  The drops mostly offset increases in private inventory investment, a meager gain in personal consumption, state and local government spending, and nonresidential fixed investment.

  Consumer spending, which makes up 69% of the $23.2 trillion U.S. economy, increased at just a 1.6% pace for the most recent period, after rising 12% in the second quarter.

  Spending for goods tumbled 9.2%, spurred by a 26.2% plunge in expenditures on longer-lasting goods like appliances and autos, while services spending increased 7.9%, a reduction from the 11.5% pace in Q2.

  The downshift came amid a 0.7% decline in disposable personal income, which fell 25.7% in Q2 amid the end of government stimulus payments. The personal saving rate declined to 8.9% from 10.5%.

  Federal government spending fell by 4.7%, which the Commerce Department said was due to a halt in services and processing for the Paycheck Protection Program, a pandemic-era initiative aimed at providing bridge funding to businesses impacted by the shutdown.

  .

  It’s too early to say we’re headed for a recession, but we won’t see the kind of numbers we saw in the four quarters prior to this.

  

• Morning News: October 28, 2021
  Eddy Elfenbein, October 28th, 2021 at 7:07 am

  Global Supply Constraints Deal Heavy Blow to Japanese Firms

  From Beers to Cars, German Consumers Face Higher Prices

  China Hurries to Burn More Coal, Putting Climate Goals at Risk

  Biden’s Tax Plan Gets Shredded Down in Battle to Raise Revenue

  Is the Billionaire Tax Legal?

  The Bitcoin ETF Race Is Over—and Also Just Beginning

  Matt Damon to Promote Crypto.com in Race to Attract New Users

  After Archegos, Credit Suisse Is Gripped by Paralysis and Dread

  Boomer Wealth Is Surging in Florida, Leaving Workers Behind

  Comcast Quarterly Revenue Tops Estimates Despite Slowdown in Cable Business

  Third Point Has Big Shell Stake, Urges Energy Giant to Break Up

  Hertz Links Up With Uber to Offer 50,000 Tesla Rentals

  Starbucks Plans Pay Hike in Bid to Keep U.S. Hourly Workers

  Twitter Stock Is Plummeting After Earnings. Don’t Blame Apple’s Privacy Changes.

  Facebook Is Bad. Fixing It Rashly Could Make It Much Worse.

  Cigarette Sales Went Up Last Year for the First Time in 20 Years

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• Earnings from Fiserv, Silgan and Thermo
  Eddy Elfenbein, October 27th, 2021 at 10:41 am

  We had three more Buy List earnings reports this morning.

  Let’s start with Fiserv (FISV). For Q3, the company earned $1.47 per share. That beat the Street by two cents per share. Fiserv now expects 2021 revenue growth of 11% and EPS between $5.55 and $5.60. That’s an increase of five cents to the lower end.

  Fiserv’s new range implies Q4 earnings of $1.54 to $1.59 per share. Wall Street had been expecting $1.58 per share.

  Traders aren’t pleased with these results. The stock has been down as much as 10% this morning.

  Silgan Holdings (SLGN) reported Q3 earnings of $1.02 per share which was two cents below estimates. Net sales for the third quarter rose 10.9% to $1.65 billion. The increase “was the result of higher net sales in all segments.”

  Silgan lowered the upper end of its full-year guidance by five cents per share. The new range is $3.30 to $3.40 per share. That implies Q4 earnings of 69 to 79 cents per share. Wall Street had been expecting 74 cents per share.

  Shares of Silgan are up slightly this morning.

  Thermo Fisher Scientific (TMO) said it made $5.76 per share for Q3. That easily beat Wall Street’s estimate of $4.67 per share.

  Q3 revenue increased by 9% to $9.33 billion. Of that, COVID-19 response revenue was $2.05 billion. Thermo’s adjusted operating margin was 29.8%, compared with 32.9% in the third quarter of 2020.

  Thermo is increasing its full-year revenue guidance by $1.2 billion to $37.1 billion. That’s revenue growth of 15%. The company is also raising its EPS guidance by $1.30 to $23.37. That’s growth of 20% over last year.

  AFLAC (AFL) will be reporting after today’s close.

• Morning News: October 27, 2021
  Eddy Elfenbein, October 27th, 2021 at 7:09 am

  Pastries and Persuasion: How a Global Tax Deal Got Done

  European Central Bank Expected to Hold Steady as Economy Slows and Inflation Soars

  Investors Are Getting Very Greedy Again

  Japan Stays Tough on Cannabis as Other Nations Loosen Up

  Shiba Inu Surges to Record as Robinhood Petition Passes 300,000

  The Surprise Reason Why Tesla & SpaceX Billionaire Elon Musk Supports Dogecoin Over Shiba Inu, Bitcoin And Ethereum

  U.S. Demand for Oil Surges, Depleting Tanks in Oklahoma

  Fed Faces Showdown as Supply, Demand and ‘Patience’ Collide

  Workers Press for Power in Rare Advance for U.S. Labor Movement

  Anonymity No More? Age Checks Come to the Web.

  Who’s Building Facebook’s Metaverse? Meet CTO Andrew Bosworth

  Hertz Teams With Uber, Carvana in Major Shift to Electric Cars

  China Covid Spike Wipes $4 Billion Off Hot Pot Firm This Week

  The Newest Power Player in Luxury’s First Family

  McDonald’s Sales Soar on Higher Prices, Newer Menu Items

  Coca-Cola Earnings Top Estimates as Consumers Drink More Beverages Away from Home

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• Sherwin-Williams Earns $2.09 per Share
  Eddy Elfenbein, October 26th, 2021 at 10:53 am

  This morning, Sherwin-Williams (SHW) reported Q3 earnings of $2.09 per share. That missed Wall Street’s consensus by one penny per share.

  Quarterly sales increased 0.5% to $5.15 billion. The company estimated that “raw material availability” hurt sales by a high-single-digit percentage.

  “Demand remains strong across our pro architectural and industrial end markets; however, results in the quarter were significantly impacted by ongoing and industry-wide raw material supply chain challenges,” said Chairman, President and Chief Executive Officer, John G. Morikis. “Consolidated net sales increased less than 1%, as raw material availability negatively impacted total sales by a high single digit percentage, of which approximately 75% of the impact was in The Americas Group. The raw material availability challenges combined with higher raw material costs significantly pressured gross margins in the quarter. We continue to implement price increases to offset higher raw material costs across the business and are confident margins will recover as inflation headwinds eventually subside. Despite the near-term margin pressure, cash flow generation remained strong during the quarter, enabling us to invest in long-term strategic growth initiatives, open 19 new stores, announce two acquisitions and purchase 1.675 million shares.

  “In The Americas Group, underlying demand in our professional architectural businesses remains robust. We expect delayed projects to be completed as raw material availability improves, and our team is aggressively pursuing additional business. In the Consumer Brands Group, our sales remained down double-digits, driven by difficult comparisons to the prior year, consumers returning to the workplace, raw material availability issues and the divestiture of the Wattyl business. Growth in the Pros Who Paint category in this segment was not enough to offset the lower North America DIY demand and raw material availability challenges. In the Performance Coatings Group, all businesses and regions delivered growth, most by double digit percentages.”

  Here’s how the quarter breaks down. Diluted net income was $1.88 per share. There’s another 21 cents per share from an acquisition-related amortization expense. That adds up to $2.09 per share which is down from $2.76 per share for last year’s Q3.

  The good news is that Sherwin is standing by its full-year guidance of $8.35 to $8.55 per share.

• Morning News: October 26, 2021
  Eddy Elfenbein, October 26th, 2021 at 7:07 am

  Central Banks Are Getting Serious About Digital Money

  Climate Tech Start-Ups Have Raised a Record $32 Billion Globally So Far in 2021

  Rising Prices, Once Seen as Temporary, Threaten Biden’s Agenda

  This Year’s Thanksgiving Feast Will Wallop the Wallet

  Mr. Market Agrees Inflation Isn’t a Blip: Authers’ Indicators

  No End in Sight for Labor Shortages as U.S. Companies Fight High Costs

  A Fight Over Biden’s Pick for a Banking Watchdog Gets Nasty

  White House to Name Rosenworcel as F.C.C.’s First Female Leader

  Facebook’s Algorithms Increasingly in Sights of U.S. Lawmakers

  Tesla Value Tops $1 Trillion After Hertz Orders 100,000 Cars

  World’s Richest Person Elon Musk Is Now Worth More Than Exxon

  Jeff Bezos’ Rocket Company Wants to Build a Space Station

  UBS’s U.S. Wealth Management Push Lacks Oomph

  Gaming Brand FaZe Clan to Go Public via SPAC Merger with $1 Billion Valuation

  Gene Freidman, ‘Taxi King’ Who Upended His Industry, Dies at 50

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