Posts Tagged ‘wxs’

  • Wright Express Earns 91 Cents Per Share
    , August 3rd, 2011 at 8:55 am

    Stocks continue to plunge yet earnings for our Buy List stocks have been pretty strong. This morning, Wright Express ($WXS) announced adjusted second-quarter earnings of 91 cents per share. That’s four cents more than Wall Street was expecting. In May, Wright told us to expect Q2 earnings between 83 and 89 cents per share so they even topped their internal forecasts.

    Here are some details about the quarter:

    Total revenue for the second quarter of 2011 increased 55% to $141.3 million from $91.4 million for the second quarter of 2010. Net income to common shareholders on a GAAP basis was $40.6 million, or $1.04 per diluted share, compared with $30.0 million, or $0.77 per diluted share, for the second quarter last year.

    On a non-GAAP basis, the Company’s adjusted net income for the second quarter of 2011 increased 33% to $35.5 million, or $0.91 per diluted share, from $26.8 million, or $0.68 per diluted share, for the same period a year ago.

    Wright Express uses fuel-price derivative instruments to mitigate financial risks associated with the variability in fuel prices in North America. For the second quarter of 2011, the Company’s GAAP financial results include an unrealized $13.9 million dollar pre-tax, non-cash, mark-to-market gain on these instruments. See Exhibit 1 for a full reconciliation of adjusted net income.

    “The second quarter was another great quarter for Wright Express. We once again reported robust growth in our other payments solutions segment, and benefited from strong fleet transaction and vehicle growth, as well as higher fuel prices in our fleet segment, relative to the prior year. On the international front, we continued to perform well with the successful launch and implementation of BP’s portfolio in Australia and we are seeing solid execution in our Australian fleet business. Wright Express remains well-positioned for sustained growth as we further expand our fleet business in North America and diversify our revenues by leveraging new opportunities on the horizon,” said Michael Dubyak, Chairman, President and Chief Executive Officer.

    Wright is also updating its 2011 guidance for the second time this year. In May, the company increased its full-year EPS guidance range from $3.17 – $3.37 to $3.40 – $3.60. The new range is $3.50 – $3.62.

    “We are updating our full-year 2011 guidance as we believe that our business will experience continued solid performance through the last two quarters of 2011 in spite of the uncertainty that exists in the broader economic landscape. We expect our second half performance will continue to be driven by exceptional growth in our other payments solutions segment, organic growth in our fleet business and investments in our international opportunities,” said Steve Elder, Senior Vice President and Chief Financial Officer.

    * For the third quarter of 2011, Wright Express expects revenue in the range of $145 million to $150 million and adjusted net income in the range of $35 million to $37 million, or $0.89 to $0.95 per diluted share.

    * For the full year 2011, the Company expects revenue in the range of $550 million to $560 million and adjusted net income to be in the range of $136 million to $141 million, or $3.50 to $3.62 per diluted share.

    Third quarter 2011 guidance is based on an assumed average U.S. retail fuel price of $3.72 per gallon, and approximately 39.0 million shares outstanding. Full-year 2011 guidance is based on an assumed average U.S. retail fuel price of $3.64 per gallon and approximately 39.0 million shares outstanding. In addition, the fuel prices referenced above are based on the applicable NYMEX futures price. We are assuming the exchange rate of the Australian dollar will remain at a premium to the US dollar for the remainder of the year.

    The Company’s guidance also assumes that third quarter 2011 domestic fleet credit loss will range from 18 to 23 basis points, and that domestic fleet credit loss for full year 2011 will range from 15 to 19 basis points

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  • CWS Market Review – May 6, 2011
    , May 6th, 2011 at 9:01 am

    What an odd, bizarre and exciting week! Osama Bin Laden was killed, silver plunged and the stock market fell every day this week!

    Our Buy List continues to do much better than the overall market. Through Thursday, we’re up 10.21% for the year compared with 6.16% for the S&P 500. That’s a spread of 4.05% which is nearly the highest all year.

    Once again, by focusing on high-quality stocks and holding them through rough patches, we’ve been able to outperform the market and the vast majority of actively-managed mutual funds. This week had a theme: our stocks beating earnings followed by higher full-year guidance.

    On Monday, Moog ($MOG-A) reported fiscal Q2 earnings of 66 cents per share. That topped Wall Street’s consensus by two cents per share. As I’ve said often, what I really like to see from our stocks is a raising of full-year guidance—and that’s exactly what we got from Moog.

    This is the second time that Moog has increased their full-year guidance. In January, they raised it from $2.70 per share to $2.75 per share. On Monday, Moog raised this year’s guidance to $2.80 per share.

    So how did the shares react to this good news? By going down, of course! For the first four days of the week, Moog lost a total of 7%. Going by Thursday’s close, Moog is currently trading for 14.66 times this year’s estimate. That’s not a screaming buy, but it’s not a bad deal either. Moog is a solid stock and I think it would be an excellent buy if it dropped below $40 per share.

    On Wednesday, it was Wright Express’ ($WXS) turn for the beat-and-guide-higher dance. For Q1, WXS earned 75 cents per share which was six cents more than estimates. Wright raised its 2011 guidance by 23 cents per share! The old EPS range was $3.17 to $3.37. The new EPS range is $3.40 to $3.60. That’s a huge increase. Wright also raised its revenue guidance from $497 million to $517 million to a new range of $533 million to $553 million.

    Much like Moog, Wright Express didn’t react well to the good news, although Wright’s reaction wasn’t nearly as bad as Moog’s was. The issue is probably that Wright said that it’s looking to issue debt to fund some future acquisitions. I’m not terribly wild about growth through acquisition. I strongly prefer organic growth.

    Shares of WXS mostly scattered between $54 and $55 on Wednesday and Thursday. I suppose we shouldn’t be too disappointed since WXS has had a great rally over the last six months. Ever since the earnings report from last November, WXS is up over 40% for us. Perhaps a bit of a rest is needed. My take is that Wright Express is a good buy below $53 per share.

    In last week’s CWS Market Review, I said Nicholas Financial ($NICK) could “earn as much as 40 cents per share.” It turns out, I got that exactly right. Make no mistake–this was an outstanding quarter for NICK. A little over two years ago, the shares got down as low as $1.64. That means the stock was going for four times quarterly earnings that were just two years away.

    I continue to believe that Nicholas Financial is a great bargain. As I see it, the company can earn between $1.60 and $1.70 per share this fiscal year (which ends in March). I think it’s very reasonable that NICK could trade as high as $17 per share. Obviously, the stock isn’t there just yet (Thursday’s close was $12.98).

    If you’re not familiar with Nicholas Financial, they make used-car loans. This is a great business to be in. What’s different about NICK is that they hold their funds to maturity and their accounting tends to be very conservative. What impresses me is that NICK’s loan portfolio has improved dramatically over the last several quarters. Nicholas Financial is a great buy below $14.

    This Monday, Sysco ($SYY) will be the final stock on our Buy List to report Q1 earnings. I’m very curious to find out how much money Sysco earned last quarter. The company had a poor earnings report three months ago and the stock hasn’t performed very well this year. Sysco tends to be a very steady stock, so the market was a bit rattled by the weak earnings report.

    Wall Street currently expects Sysco to report earnings on Monday of 41 cents per share. My numbers say Sysco will earn 43 cents per share. I also like that the dividend currently yields 3.63%. Since bonds have done well lately, Sysco now yields 0.46% more than a 10-year Treasury bond. Sysco is a good buy up to $30 per share.

    A few other stocks have been doing well for us. Jos. A Bank ($JOSB) just hit a new 52-week high. Oracle ($ORCL) got as high as $36.50 before pulling back the past few days. Johnson & Johnson ($JNJ) also started to show some strength (finally!) after raising its dividend.

    One of the recent positives for the stock market is the decline in bond yields. So many people have been expecting yields to rise. Every down tick is seen as the beginning of the end, but bonds keep holding up well. I think this is good for us for two reasons. One is that bonds provide tougher competition for investors’ money than stocks do, and that should lead to higher stock prices. Also, lower bond yields means that it’s less expensive for companies to borrow money, and that helps profit margins.

    This is a very good market for patient investors. Our Buy List just had another great earnings season. As always, I urge you to be patient and well-diversified. The stock market is definitely swinging our way!

    That’s all for now. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

  • Wright Express Beats and Guides Higher
    , May 4th, 2011 at 9:15 am

    Wright Express ($WXS) just released an amazing earnings report. The company had Q1 earnings of 75 cents per share which was six cents more than Wall Street’s estimate. Quarterly revenue jumped 43.3% to $120.1 million which also beat estimates.

    For Q2, Wright sees earnings coming in between 83 cents and 89 cents per share. But I was really impressed by the new guidance. As I’ve said before, few things impress me more than when a company raises its full-year guidance. Wright raised its 2011 guidance by 23 cents per share. The old EPS range was $3.17 to $3.37 and the new range is $3.40 to $3.60.

    Wright said:

    Given the strong results during the first quarter, we are increasingly confident in our ability to deliver solid performance as we head into the second quarter. We are raising our guidance for the full-year 2011 to reflect the strength we saw during the first three months of the year, coupled with higher fuel prices, a lower tax rate and a stronger Australian dollar.

    Not all companies issue quarterly or full-year guidance. I particularly like companies that do. As I see it, guidance is a matter of trust. I like to know where I stand with my stocks. I don’t mind terribly if a company reduces its guidance, as long as we know with enough lead time. Problems always come up. But I really like hearing that guidance is being raised. That’s probably the best news that long-term investors can get.