Earnings Analysis: Home Depot

Yesterday, Home Depot announced the results from its second quarter operations.  If you look back at my previous 2 quarterly reports (here and here), you'll notice how I used the screaming baseball video to describe the results of those quarters.  I figured I'll spare you from that again, but that ball is clearly still screaming - in fact it might be accelerating it's trip through space.  That's how strong the results from the quarter were.  They reported sales of $28.1B, which resulted in a beat of last years sales by 6.2% and beat estimates by $300M.  Earnings also topped expectations of $2.21, coming in at $2.25 - a 14.2% increase from the same quarter a year ago.  Same store sales also blew away expectations, which were expected to be in the high 4% to low 5% area, with results of 6.2% and the US had 6.6% same store comps.  So results were exceptionally impressive.

Next up, management pushed guidance up again for the second quarter in a row and this guide up was no …

Earnings Analysis: Ionis Pharmaceuticals (IONS)

Ionis Pharmaceuticals had a lot going on last week.  I'll do my best to summarize it all within the earnings analysis to simplify my work.  We'll start with the earnings announcement.  Ionis announced the results from their second quarter operations on Tuesday and provided what has been viewed as a set of mixed results.  Earnings were reported as a loss of nine cents, below analyst consensus of a four cent loss.  Revenues, however, beat expectations of $92.1M, coming in at $104.1M.  Headlines jumped out talking about missing marks and the stock dropped rather significantly - approximately 8% on that day alone.  

During the course of the quarter, SPINRAZA, a therapy for spinal muscular atrophy, went commercial and made an impressive first move.  Their partner, Biogen Idec, announced $204M in SPINRAZA sales, as the drug is clearly making inroads for intended patients.  When this was announced, earnings estimates for Ionis were dramatically altered.  Originally, estimates were at …

Earnings Analysis: Cedar Fair (FUN)

Earlier this week, Cedar Fair announced their second quarter earnings results.  Revenues came in at $393M and earnings came in at $0.55, both were significant misses to expected targets of $405.88M and $1.04, respectively.  All this despite the fact that the company continues to report record quarterly revenues, expecting another year of record results, and increased attendance.  This seems to be a very mixed message.  Were these good results or bad?  Who was right, who was wrong, and what does this mean going forward?  I hope I can dig into this a little and create some sense from it.

First off, let's look at the story the earnings and revenues misses tells.  Earnings, which typically drives headlines was off a whopping 47%.  That's a huge miss.  However, revenues were off only a little over 3%.  That's a disappointing miss, but it's no 47%, so that's a plus.  Something happened between revenues and earnings, so what was it?  Are expenses out of control?  When look…

Stock Analysis: Ionis Pharmaceuticals (IONS)

I wanted to provide a quick update after yesterdays chilling move in the stock of Ionis Pharmaceuticals.  The stock, which was down over 11% at one point during the day, closed down just over 8%.  There weren't any announcements from the company, its newest subsidiary Akcea (yeah, I have some catching up to provide here), or the FDA.  The cause for the swoon were the explosive earnings results that came out of Biogen Idec, which Ionis partnered with on the creation of the SMA therapy Spinraza.  Analyst expectations for sale of the drug were at $70M for the quarter, but the real results were almost three times that, coming in at $203M.  The partnership deal between Biogen and Ionis provides a royalty fee of between 11 and 13 percent of those revenues, meaning that we can expect the company to announce income between $22M and $26M for this one therapy alone - much more than was expected for the quarterly results.  The stock surged in the pre-market hours to open at $63, only to cras…

Earnings Analysis: Honeywell (HON)

Honeywell announced their second quarter results on July 21.  Results were a solid beat with earnings hitting the high end of guidance at $1.80, beating analyst estimates of $1.78.  Sales also beat expectations of $9.98B, coming in at $10.1B.  In addition, they handily beat estimates for organic growth registering 3% on what was guided to be a flat to 2% organic growth quarter.  This is a nice acceleration in organic growth, which fits the guidance that the company provided 6 months, or so, ago when there was a lot of concern with -2% decline in organic growth, which was fueled by lackluster performance in the aero group - primarily in the private jets and helicopters spaces.  Margins, overall, were up 50 basis points and free cash flow is up 39% year to date compared to last year.  Finally, they raised guidance on both earnings and sales, with the lower end of the earnings guidance provided raised ten cents to $7.00 while sales edged up to a range of $39.3 - $40B.

Looking a little dee…

Earnings Analysis: Citigroup (C)

Citigroup announced their second quarter results on Friday.  Earnings beat expectations of $1.13 by posting results of $.  They also delivered top line results of $17.9B, which beat expectations of $17.67B.  Despite the beats, the stock has struggled to rise since the announcement, falling 1.1% last week.  

The results were strong, with the company losing less than expected.  They increased revenues by 2% compared to last year and are up 3% on the year so far.  Branded cards were particularly strong in North America, showcasing the strength for this area as the acquisition of the Costco cards are starting to bear fruit.  All regions increased their revenues with international strength showing the health returning to the global economy.  Equity market trading revenues were down 11% due to low volatility, however, this is better than was expected.  The company returned $2.2B of capital to the shareholders in the quarter, including repurchasing 6% of the outstanding shares.  This also hel…

Earnings Analysis: Pepsico (PEP)

Last Tuesday Pepsico helped kick off my earnings season by beating both top and bottom line expectations.  Earnings came in at $1.46 and revenues were $15.71B compared with average estimates of $1.40 and $15.61, respectively.  Overall, the reporting results were good, however there was some hair in there.  

For the good, organic revenue grew to 3.1%, pulling up the year to date number to 2% growth.  Targets stayed in line for an "at minimum" 3% organic revenue growth for the year.  The company was able to pass on price increases, which is always a good sign for consumer strength.  Growth outside of the US was strong and encouraging.  The snacks division, in particular, was exceptionally strong in Latin America and Europe, though it also performed well (over 3% reported growth) too.  The story continues to be intact and the management team continues to deliver on their words better than any other CPG company in the industry right now.

Not everything was perfect, though.  Operat…