Q1 2019 Earnings Calendar
Posted by Eddy Elfenbein on May 9th, 2019 at 4:39 pm

Twenty of our 25 Buy List stocks have reported their Q1 earnings this cycle. Here’s a list of reporting dates, Wall Street’s consensus estimates and actual reported results.

Morning News: May 9, 2019
Posted by Eddy Elfenbein on May 9th, 2019 at 6:57 am

Why China Decided to Play Hardball in Trade Talks

Weakest U.S. Bond Auction in Decade Validates Dimon’s Warning

U.S. Recession Would Spur ‘Massive’ Corporate Bond Losses, Eisman Says

Walmart Raises Minimum Age to Buy Tobacco Products to 21

Intel Shares Drop, Three-Year Outlook Seen Lagging Rivals

EQT and Digital Colony Agree to Buy Zayo for Over $8 Billion

New York Times Posts Higher Profit, Adds 223,000 Digital Subscribers

Novartis to Buy Takeda Eye Drug Assets in $5.3 Billion Deal

Roku’s Platform Revenue Soars, Sending the Stock Higher

Uber Is Going Public: How Today’s Tech I.P.O.s Differ From the Dot-Com Boom

The Answer to Uber’s Profit Challenge? It May Lie In Its Trove of Data

China to Bid on D.C. Metro Rail Deal as National Security Hawks Circle

Jeff Miller: Stock Exchange: Do You Trade News Cycles Or Market Cycles?

Cullen Roche: Capitalism Vs. Socialism

Michael Batnick: The Big Short, The Rorschach Test & Imagining a Different World

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Becton, Dickinson’s Fiscal Q2 Results
Posted by Eddy Elfenbein on May 9th, 2019 at 6:18 am

As reported, revenues of $4.195 billion decreased 0.6 percent.
– On a comparable, currency-neutral basis, revenues increased 3.4 percent.
– As reported, diluted earnings per share of $(0.07) increased 63.2 percent.
– As adjusted, diluted earnings per share of $2.59 decreased 2.3 percent, and increased 7.2 percent on a currency-neutral basis.
– The company reaffirmed its full fiscal year 2019 comparable, currency-neutral revenue guidance, and updated its adjusted diluted earnings per share guidance.

BD (Becton, Dickinson and Company) (NYSE: BDX), a leading global medical technology company, today reported quarterly revenues of $4.195 billion for the second fiscal quarter ended March 31, 2019. This represents a decrease of 0.6 percent from the prior-year period. On a comparable, currency-neutral basis, revenues increased 3.4 percent over the prior-year period.

“Through the second quarter we have delivered solid revenue growth and operating performance,” said Vincent A. Forlenza, chairman and CEO. “Our revised fiscal year 2019 outlook reflects recent, near-term regulatory and market pressures related to paclitaxel-coated devices and foreign currency, which will affect our EPS guidance range. We remain confident that our business is strong, fundamentals are in-tact, and we will continue to deliver value to our shareholders and customers around the world.”

Second Quarter and Six-Month Fiscal 2019 Operating Results

As reported, diluted earnings per share for the second quarter were $(0.07), compared with $(0.19) in the prior-year period. This represents an increase of 63.2 percent. Adjusted diluted earnings per share were $2.59, compared with $2.65 in the prior-year period. This represents a decrease in adjusted diluted earnings per share of 2.3 percent, or an increase of 7.2 percent on a currency-neutral basis.

For the six-month period ended March 31, 2019, as reported, diluted earnings per share were $1.98, compared with $(0.90) in the prior-year period. This represents an increase of 320.0 percent. Adjusted diluted earnings per share were $5.29, compared with $5.15 in the prior-year period. This represents an increase in adjusted diluted earnings per share of 2.7 percent, or 10.5 percent on a currency-neutral basis.

Current period adjusted results exclude, among other items, charges to record product liability reserves of $331 million and the estimated cost of a product recall of $65 million.

Segment Results

In the BD Medical segment, as reported, worldwide revenues for the quarter of $2.180 billion increased 0.4 percent over the prior-year period, or 3.8 percent on a comparable, currency-neutral basis. The segment’s results were driven by performance in the Medication Management Solutions, Diabetes Care and Pharmaceutical Systems units. Performance in the Medication Delivery Solutions unit reflects a tough comparison to the prior year, as well as distributor inventory adjustments during the quarter in the United States.

For the six-month period ended March 31, 2019, BD Medical revenues were $4.316 billion as reported, which represents an increase of 7.2 percent over the prior-year period. On a comparable, currency-neutral basis, BD Medical revenues increased 4.5 percent.

In the BD Life Sciences segment, as reported, worldwide revenues for the quarter of $1.052 billion decreased 4.2 percent from the prior-year period. On a comparable, currency-neutral basis, revenues increased 2.7 percent. Revenue growth was driven by performance in the Biosciences and Preanalytical Systems units. Growth in the Diagnostic Systems unit reflects a tough comparison to the strong flu season in the prior-year period.

For the six-month period ended March 31, 2019, BD Life Sciences revenues were $2.108 billion as reported, which represents a decrease of 1.6 percent from the prior-year period. On a comparable, currency-neutral basis, BD Life Sciences revenues of $2.099 billion increased 3.7 percent.

In the BD Interventional segment, as reported, worldwide revenues for the quarter of $0.963 billion increased 1.1 percent over the prior-year period, or 3.5 percent on a comparable, currency-neutral basis. The segment’s results were driven by performance in the Urology and Critical Care and Peripheral Intervention units. Growth in the Surgery unit reflects a tough comparison to the prior-year period.

For the six-month period ended March 31, 2019, BD Interventional revenues were $1.932 billion as reported, which represents an increase of 70.2 percent over the prior-year period. On a comparable, currency-neutral basis, BD Interventional revenues increased 4.6 percent.

Geographic Results

As reported, second quarter revenues in the U.S. of $2.341 billion increased 0.7 percent from the prior-year period. On a comparable basis, U.S. revenues increased 2.2 percent over the prior-year period. Growth in the U.S. was driven by performance in the BD Medical and BD Interventional segments. BD Life Sciences’ growth in the U.S. reflects the aforementioned comparison to a strong flu season in the prior year in the Diagnostic Systems unit.

As reported, revenues outside of the U.S. of $1.854 billion decreased 2.3 percent from the prior-year period. On a comparable, currency-neutral basis, revenues outside of the U.S. increased 4.9 percent over the prior-year period. International revenue growth was driven by strong performance in China and EMA.

For the six-month period ended March 31, 2019, U.S. revenues were $4.728 billion as reported, which represents an increase of 18.7 percent over the prior-year period. On a comparable basis, U.S. revenues of $4.724 billion grew 4.1 percent over the prior-year period. As reported, revenues outside of the U.S. of $3.628 billion grew 9.2 percent over the prior-year period. On a comparable, currency-neutral basis, revenues outside the U.S. of $3.623 billion grew 4.5 percent over the prior-year period.

Fiscal 2019 Outlook for Full Year

As reported, the company expects full fiscal year 2019 revenues to increase 8.0 to 9.0 percent, compared to 8.5 to 9.5 percent previously communicated, due to the estimated additional negative impact from foreign currency. The company continues to estimate full fiscal year 2019 revenues will increase 5.0 to 6.0 percent on a comparable, currency-neutral basis.

The company expects adjusted diluted earnings per share to be between $11.65 and $11.75, resulting in growth of approximately 12.0 percent on a currency-neutral basis. This is a decrease from previously issued guidance of approximately 13.0 to 14.0 percent growth, and is due to recent regulatory and market pressures related to paclitaxel-coated devices. Including the estimated additional unfavorable impact of foreign currency, adjusted diluted earnings per share are expected to grow approximately 6.0 to 7.0 percent over fiscal 2018 adjusted diluted earnings per share of $11.01.

Estimated adjusted diluted earnings per share for fiscal 2019 excludes potential charges or gains that may be recorded during the fiscal year, such as, among other things, the non-cash amortization of intangible assets, acquisition-related charges, and certain tax matters. BD does not attempt to provide reconciliations of forward-looking non-GAAP earnings guidance to the comparable GAAP measure because the impact and timing of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of BD’s financial performance.

“Cerner Controls a Quarter of Electronic Medical Records Market”
Posted by Eddy Elfenbein on May 9th, 2019 at 5:53 am

From the Kansas City Business Journal:

Cerner Corp., along with its competitor Epic Systems Corp., ruled the electronic health record (EHR) market in 2018, with a combined 85 percent market share in the large, 500-plus-bed hospital space, according to KLAS Research reports cited in Healthcare Dive. Epic holds a 58 percent share, while Cerner holds 27 percent.

The split is closer when it comes to all acute care hospitals in the U.S. In this larger market, Epic has a 28 percent market share and North Kansas City-based Cerner (Nasdaq: CERN) claims 26 percent of the market.

Although fewer large hospitals and health systems are buying EHRs — 80 percent of all doctors will be working at a facility that uses an EHR system by the end of this year according to Business Insider — Cerner signed the most new hospitals last year. This is due, in part, to a 10-year, $10 billion contract with the U.S. Department of Veterans Affairs. The contract, won in May 2018, includes 147 acute care and 20 specialty contracts.

In February, the VA terminated a $624 million 2015 contract with Epic and Leidos Holdings Inc. (NYSE: LDOS) so that it could adopt Cerner’s patient scheduling system, Millennium. It’s unclear how much Cerner’s new contract is worth.

In contrast, Cerner lost 65 Millennium EHR customers in the private hospital sector, including 52 from a single health system.

EHR purchases in 2018 were higher than previous years, with the continued consolidation of the health care market helping to drive those 445 deals. Since 2014, a fifth of all EHR switches at acute care hospitals have stemmed from mergers and acquisitions, according to KLAS.

Disney Beats Earnings
Posted by Eddy Elfenbein on May 8th, 2019 at 6:32 pm

After the bell, Disney (DIS) earned $1.61 per share. That was three cents better than estimates. The stock is up a bit after hours.

Walt Disney Co’s theme parks lifted quarterly earnings past Wall Street targets on Wednesday, helping offset big investments to support the media and entertainment company’s bid to draw audiences to streaming media.

Shares of Disney rose 1.5 percent to $137 in after-hours trading.

“Avengers: Endgame”, the end of a decade-long superhero series with $2.2 billion in box office sales worldwide, will stream exclusively on Disney+ starting Dec. 11, the company announced.

Growth at Disney parks in the United States boosted results above analyst expectations. From January to March, Disney reported adjusted earnings per share of $1.61, ahead of analyst estimates of $1.58, according to IBES data from Refinitiv. Heavy investment accounted for a 13 percent drop from a year ago by that measure.

Revenue rose 3 percent to $14.92 billion. Analysts had been expecting a small decline.

Disney is trying to transform from a cable TV leader to a streaming media powerhouse that, like Netflix Inc, sells subscriptions directly to consumers. Costs to build digital services will weigh on profits for several years, the company has said.

Its biggest streaming bet, the family-oriented Disney+, is set to launch in November. The company told analysts in April that it expects Disney+ to achieve profitability in fiscal 2024.

The just-ended quarter reflected the purchase of film and TV assets from 21st Century Fox, which brought Disney more content for its streaming future.

For the quarter, the direct-to-consumer and international unit recorded a loss of $393 million from streaming costs.

Disney also recorded a $353 impairment charge from its ownership stake in media startup Vice.

In the theme park unit, net income hit $1.5 billion as more visitors showed up at Walt Disney World in Florida and at Hong Kong Disneyland, and occupied hotel nights increased.

“Increased ticket prices haven’t put visitors off, and hotels continue to be a major driver of additional spending,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown. “It’s easy to get caught up in the hype surrounding new films … but it’s the less glamorous Media Networks and Parks that pay the lion’s share of the bills.”

Overall net income jumped 85 percent, to $5.4 billion, thanks to Disney’s acquisition of a controlling stake in Hulu through the Fox acquisition.

Media networks, a division that includes ESPN and ABC, reported $2.2 billion in operating income for the quarter.

The movie studio reported profit of $534 million, lifted by “Captain Marvel,” which was a global hit but did not reach the level of “Black Panther” and “Star Wars: The Last Jedi” a year earlier.

Morning News: May 8, 2019
Posted by Eddy Elfenbein on May 8th, 2019 at 7:09 am

China Defaults Hit Record in 2018. 2019 Pace Is Triple That

Tariff War Renewed? How the U.S.-China Talks Could Play Out

Are Trump’s Tariffs Bolstering the U.S. Economy? Nope.

Eyeing IPO Riches, Uber Drivers Go On Strike in UK Ahead of U.S. Action

Google Says It Has Found Religion on Privacy

Lyft’s First Results After I.P.O. Show $1.14 Billion Quarterly Loss

Enbridge Seeking At Least Eight-Year Oil Shipping Commitments on Canada Mainline, Worrying Small Producers

JPMorgan Poised to Be First Foreigner to Get Majority in China Fund Venture

Bristol-Myers Sells $19 Billion of Bonds to Fund Celgene Purchase

McDonald’s Joins the Meatless Burger Trend in One of Its Biggest Markets

Amazon’s Latest Store Proves the Cashless Dream is Dead

GM Stock Could Be Undervaluing the Cruise Division

Nick Maggiulli: When Does Market Timing Work?

Jeff Carter: The Liquidity Premium

Howard Lindzon: Lindzanity – Episode 3 – Ross Hoffman From Mailroom to Board Room, Following Your Instincts, Salaries are Overrated and Betting on Yourself

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Broadridge Earns $1.59 per Share
Posted by Eddy Elfenbein on May 7th, 2019 at 7:30 am

Reaffirming Fiscal Year 2019 Guidance for Recurring Revenue Growth

Reaffirming Fiscal Year 2019 Guidance for Double-Digit EPS Growth

Raising Fiscal Year 2019 Closed Sales Guidance with Year-to-Date at Record $161 million

Broadridge Financial Solutions (BR) today reported financial results for the third quarter and nine months ended March 31, 2019 of its fiscal year 2019. Results for the three and nine months ended March 31, 2019 compared with the same period last year were as follows:

“After a solid third quarter, Broadridge is very well-positioned to deliver strong full-year results. In addition, we continue to make progress on key growth initiatives including next generation regulatory communications and adding clients to our industry-leading technology platforms,” said Tim Gokey, Broadridge’s President and Chief Executive Officer. “Our sales pipeline remains strong which, combined with our sales over the first three quarters of the year, positions us well for future growth.

“We are raising our full-year Closed sales guidance and reaffirming our fiscal year 2019 guidance for recurring revenue growth and EPS growth. Our ability to deliver double-digit adjusted EPS growth reflects the strength of the Broadridge business model and the growth of our recurring revenue. As we close out fiscal year 2019, we remain confident that we are on track to deliver long-term growth and achieve the three year objectives we laid out at our 2017 Investor Day,” Mr. Gokey added.

Net Earnings and Earnings per Share

For the third quarter of fiscal year 2019:

Net earnings increased 58% to $172 million, compared to $109 million for the prior year period.
Adjusted Net earnings increased 56% to $189 million, compared to $121 million for the prior year period.
Diluted earnings per share increased 61% to $1.45, compared to $0.90 for the prior year period.
Adjusted earnings per share increased 59% to $1.59, compared to $1.00 for the prior year period.

“After a solid third quarter, Broadridge is very well-positioned to deliver strong full-year results. In addition, we continue to make progress on key growth initiatives including next generation regulatory communications and adding clients to our industry-leading technology platforms,” said Tim Gokey, Broadridge’s President and Chief Executive Officer. “Our sales pipeline remains strong which, combined with our sales over the first three quarters of the year, positions us well for future growth.

“We are raising our full-year Closed sales guidance and reaffirming our fiscal year 2019 guidance for recurring revenue growth and EPS growth. Our ability to deliver double-digit adjusted EPS growth reflects the strength of the Broadridge business model and the growth of our recurring revenue. As we close out fiscal year 2019, we remain confident that we are on track to deliver long-term growth and achieve the three year objectives we laid out at our 2017 Investor Day,” Mr. Gokey added.

Morning News: May 7, 2019
Posted by Eddy Elfenbein on May 7th, 2019 at 7:16 am

A $400 Billion Wave of Japanese Cash May Be Heading Overseas

How the Rise of Developing Countries Has Disrupted Global Trade

Lagarde Issues New Trade Warning Amid ‘Unfavorable’ Trump Tweets

Trade Talks Are Foundering on Mistrust and Arrogance

Federal Reserve Warns as Risky Corporate Debt Exceeds Peak Crisis Levels

Anadarko Says It Now Favors Occidental Bid Over Chevron

Silicon Valley Is Coming For Your House

As IPO Looms, Uber Clings to Hard-Knuckled Tactics in Pursuit of Growth

BMW Profit Slumps on Weaker Markets, $1.6 Billion Provision

Vodafone Steps Up Fight for Liberty Deal With German Access Offer

Tyson Says Hog Disease Impact to Linger for Years

Kraft Heinz to Restate Financial Results Following Investigation

Joshua Brown: Charlie Munger on Commission-Based Brokers and Bankers

Cullen Roche: Three Things I Think I Think – Berkshire, Jobby Jobs and Chase Tweets

Roger Nusbaum: It’ OK To Be Skeptical & Is The Harvard Endowment Making A Huge Mistake?

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Good Day for Our Buy List
Posted by Eddy Elfenbein on May 7th, 2019 at 5:06 am

This will probably jinx us, but Monday was a very good day for our Buy List. While the S&P 500 fell 0.45%, our Buy List gained 0.41%. That’s a big outperformance for one day.

Our biggest winner was Continental Building Products (CBPX), which gained 6.6%. Our wallboard stock is an unusual one because its results have been good but the share price hasn’t done much. It’s almost like Disney up until a month ago.

Except for CBPX, there weren’t any outstanding gains on Monday. Instead, it seems like there was an unusual number of stocks that gained 1% to 2% for us. FactSet (FDS), Moody’s (MCO) and Smucker (SJM) all made new 52-week highs.

Morning News: May 6, 2019
Posted by Eddy Elfenbein on May 6th, 2019 at 7:02 am

Europe Is Reining In Tech Giants. But Some Say It’s Going Too Far.

Stocks Tumble as Trump Trade Threat Reverberates

Trump’s Tariff Threat Leaves Beijing Stalling on Next Talks

Fed Faces Tough Sell on Inflation Framework

Why A 60-65% Market Loss Would Be Run-Of-The-Mill

Occidental Ups Its Cash Offer for Anadarko

Warren Buffett’s Case for Capitalism

5 Insights from the 2019 Berkshire Hathaway Annual Meeting

Boeing Believed a 737 Max Warning Light Was Standard. It Wasn’t.

Facebook ‘Labels’ Posts By Hand, Posing Privacy Questions

SoftBank Has a Big Sprint Problem on Its Hands Without T-Mobile

Boeing Did Not Disclose 737 MAX Alert Issue to FAA for 13 Months

Michael Batnick: Animal Spirits, Re-Kindled: The Big Short

Jeff Carter: Does Culture Eat Strategy For Lunch?

Ben Carlson: How Compounding Works in the Stock Market, Investing Lessons from the Reigning Jeopardy Champ & 4 Overlooked Investment Decisions

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