Earnings for Fiserv and Moog

We had two more earnings reports from our Buy List. After yesterday’s closing bell, Fiserv (FISV) said it made 95 cents per share for the first quarter which was a penny below Wall Street’s consensus (some services the consensus at 97 cents). The stock is getting hit by about 6.6% in today’s trading.
Frankly, I’m not too worried about a pullback in Fiserv. The stock has had a good run so some profit-taking is to be expected. The most important news in yesterday’s report is that the company stuck by its full-year EPS forecast of $3.96 to $4.07. My forecast is for $4.05.
Let’s remember what Barron’s said recently about Fiserv:

Because Fiserv’s business is so steady, many investors value it on free cash flow, which has exceeded reported earnings in recent years — a favorable trend. Free cash flow hit $668 million in 2009, up from $603 million in ’08. The company is guiding Wall Street to expect more than $700 million this year. With a market value of $8.2 billion, investors are getting a free-cash-flow “yield” of nearly 9%, at a time when corporate-bond investors are happy to accept 5% or 6%. The stock historically has traded above 14 times free cash flow. With nearly $5 a share of free cash penciled in for 2011, that multiple suggests a price target near 70.

I agree.
Moog‘s (MOG-A) earnings report caught us by surprise. We knew it was coming soon, but didn’t realize it was today.
Nevertheless, the company reported earnings of 55 cents a share which was three cents better than Wall Street’s expectation. Moog made 55 cents per share in the same quarter one year ago.
This was the second quarter of Moog’s fiscal year. Overall, the company’s earnings are bouncing back nicely. In 2008, they earned $2.75 per share and that dropped to $1.98 per share last year. Last November, Moog said to expect EPS for this fiscal year between $2.15 and $2.35. They reiterated that in February. Today, Moog said it now expects $2.35 per share, so that’s good news.
This is from the company’s press release:

The Company’s twelve month backlog of $1.1 billion is up over 20% from a year ago.
The Company has updated its guidance for the year. Sales for the year will be down very slightly from $2.12 billion to $2.1 billion, but the Company increased its forecast for net earnings and earnings per share. Net earnings are now projected at $107.4 million and earnings per share at $2.35, an increase of 19% over the previous fiscal year.
“The Company’s second quarter results exceeded our plan, particularly in Aircraft and in Space and Defense,” said R.T. Brady, Chairman and CEO. “Our Components Group delivered another solid performance. Wind energy and Medical Devices sales are developing a little more slowly than we’d planned but both show signs of improvement. The overall result will be a year better than our original forecast and we’re now forecasting a 19% improvement in earnings per share.”

Although it’s one of the quietest stocks on the Buy List, Moog is having a very good year. The shares are up over 30% for us and the year is only one-third over.
Both Moog and Fiserv are excellent buys.

Posted by on April 30th, 2010 at 11:21 am

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.