Earlier this month, I had the opportunity to sit in on a presentation by and meet the management of CEA Industries, which is based in Louisville CO. CEA became a public company in 2011. Back then, it was exclusively a provider of controlled environment agricultural solutions through its subsidiary, Surna Cultivation Technologies LLC, with a focus on the cannabis market. The market for its products was hot, but competition stiffened. The stock fell from a high of $72.75 in January 2018 to a low of just over $0.50 in June 2024 when it completed a 1-for-12 reverse split. At this time, the stock trades around $8.70 per share with a market cap of $7.3 million.
Continue readingPublic Service Enterprise Group (PEG) 25Q1 Update
Public Service Enterprise Group (PEG) reported 25Q1 operating revenues of $3.22 billion, up 16.7% from 24Q1, due to base rate increases and higher volumes associated with the cold winter weather. Diluted GAAP EPS was $1.18 vs. $1.06 last year. My GAAP EPS estimate was $1.32. 25Q1 operating income rose 16.4%, in line with the increase in revenues. However, the gains in operating income were more than offset by other items, including lower gains on trust investments and higher interest expense. All of the increase in GAAP net income, therefore, was due to a decline in the effective tax rate from 15.4% to 4.5%. Operating earnings per share, a non-GAAP measure, was $1.43 vs. $1.31 a year ago and well above my estimate of $1.23.
Continue readingHewlett Packard Enterprise (HPE) 25Q2 Update
HPE reported a 25Q2 GAAP diluted loss of $0.82 per share vs. 24Q2’s income of $0.24. The loss was due to a $1.36 billion ($1.03 per share) impairment charge taken against HPE’s Hybrid Cloud business. The charge was prompted by an increase in the weighted average cost of capital (used to value the business), which was attributed to changes in financial markets and macroeconomic environment from the tariff talk and geopolitical concerns. Non-GAAP EPS was $0.42, matching the prior year and above my estimate of $0.30. Net revenue of $7.63 billion was 5.9% higher than last year and exceeded my estimate of $7.44 billion.
Continue readingThe Campbell’s Company (CPB) 25Q3 Update
The Campbell’s Company (CPB) reported 25Q3 diluted GAAP EPS of $0.22, compared with last year’s $0.45 and my estimate of $0.57. The shortfall was due primarily to an impairment charge taken against its Late July chips business and lower than projected profitability in the Meals & Beverages (M&B) and Snacking businesses. Non-GAAP EPS of $0.74 was below 24Q3’s $0.76, but matched my estimate. Net sales were $2.48 billion, up 4.5% from 24Q3, due to the Sovos Brands acquisition and 1% growth in organic net sales.
Continue readingAmerican Water Works (AWK) 25Q1 Update
AWK reported 25Q1 EPS of $1.05, up from $0.95 in 24Q1 and above my estimate of $0.98. Operating revenues rose 13.0% to $1.14 billion. Billed water service volumes were up 2.5% and estimated average prices increased 9.5%. Military and contract services revenues rose 12.0%. Consolidated operating and maintenance expenses rose 12.5%, with increases across all cost categories. Operating income increased 13.8% to $371 million. Net interest costs rose 22.0%. Net income increased 10.8% to $205 million.
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Pfizer Inc (PFE) 25Q1 Update
Pfizer (PFE) reported 25Q1 revenues of $13.7 billion, down 7.8% from 24Q1 and 6.5% below my estimate. The shortfalls from the prior year and my estimate were due to much lower than anticipated sales of Paxlovid. Sales of Pfizer’s two COVID-19 treatments have been volatile and are hard to forecast. GAAP EPS was $0.52, down from $0.55 in 24Q1, but matched my estimate. Non-GAAP EPS of $0.92 exceeded last year’s $0.82 and my estimate of $0.75.
Continue readingMerck & Co (MRK) 25Q1 Update
25Q1 sales decreased 1.6% to $15.5 billion and were 2.0% below my estimate. Excluding currency, sales rose 1%. Sales gains in KEYTRUDA, WINREVAIR and Animal Health offset a 41% drop in GARDASIL sales, as a sharp drop in sales in China was only partially offset by gains in other regions. With margin increases and the non-repeat of a $626 million acquisition charge, GAAP diluted EPS rose 7.2% to $2.01, above my estimate of $1.64. Non-GAAP diluted EPS increased 7.4% to $2.22, exceeding my estimate of $1.90, as I did not adequately consider the absence of the 24Q1 acquisition charge. Restructuring costs were also lower and margins otherwise higher than I anticipated.
Continue readingNew Jersey Resources (NJR) 25Q2 Update
25Q2 GAAP diluted EPS was $2.02 and net financial earnings per basic share (NFEPS), a non-GAAP measure, was $1.78. That compares with 24Q2 GAAP EPS of $1.22 and NFEPS of $1.41. I had projected GAAP EPS of $1.58 and NFEPS of $1.59. The improvement in 25Q2’s NFE vs 24Q2 was due primarily to stronger than expected performance in the Energy Services business achieved by capitalizing on natural gas price volatility. Better results in Energy Services more than offset lower than projected profitability in Natural Gas Distribution.
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Tagged New Jersey Resources, New Jersey Resources Corp., NJR stock research
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Spire Inc (SR) 25Q2 Update
Spire reported 25Q2 GAAP EPS of $3.51, down from $3.58 in 24Q2. Non-GAAP, net economic EPS (NEEPS) was $3.60, up from $3.45. I had projected GAAP and NEEPS of $3.75. Operating revenues of $1.05 billion were down 6.8% YOY and 8.9% below my estimate, mostly due again to lower purchased gas adjustments at Spire Missouri.
Continue readingGE Healthcare Technologies (GEHC) 25Q1 Update
GEHC reported 25Q1 revenues of $4.78 billion, up 2.7% YOY and in line with my estimate. Revenues rose 5.5% in Pharmaceutical Diagnostics (PDx), 3.8% in Imaging, 1.0% in Advanced Visual Solutions and 0.8% in Patient Care Solutions (PCS). U.S. sales rose 6.9%, partially offset by declines of 0.7% in China and 1.5% in the rest of the world. Organic orders jumped 10% YOY, resulting in a book-to-bill of 1.09 times.
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AT&T (T) 25Q1 Update
AT&T reported 25Q1 GAAP EPS of $0.61, compared with $0.41 in the prior year period. Non-GAAP EPS of $0.51 was up from $0.48. I had projected GAAP EPS of $0.39 and non-GAAP EPS of $0.49.
Continue readingOrganon & Co (OGN) 25Q1 Update
Organon (OGN) reported 25Q1 GAAP diluted EPS of $0.33, down from $0.78 a year ago. Non-GAAP EPS was $1.02, down from $1.22. I had anticipated GAAP EPS of $0.61 and non-GAAP EPS of $0.92. Revenues of $1.51 billion declined 6.7% from $1.62 billion a year ago. More than half of the revenue decline was due to the loss of exclusivity on Atozet in France and Rosuzet in Japan. Sales of biosimilars fell 17.1% to $141 million, due to higher discounts of Renflexis and choppy sales in Brazil.
Continue readingMatthews International Corp (MATW) 25Q2 Update
Matthews International Corporation (MATW) reported 25Q2 revenues of $427.6 million, down 9.3%. Sales at its Memorialization business fell 7.4%, due to the normalization of U.S. death rates after COVID. Industrial Technology’s sales plunged 30.4%, as the energy storage solutions business suffered the lingering effects of the Tesla litigation as well as declines in its warehouse automation business. Sales at its SGK Solutions business rose 6.7%.
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Spire Inc (SR) 25Q1 Update
Spire reported 25Q1 GAAP EPS of $1.34, down from $1.52 in 24Q1. Non-GAAP, net economic EPS (NEEPS) was $1.34, down from $1.47. I had anticipated economic EPS of $1.49. Operating revenues of $669.1 million were down 11.1% YOY and 14.6% below my estimate, mostly due to lower purchased gas adjustments implemented in November.
Continue readingNew Jersey Resources (NJR) 25Q1 Update
25Q1 GAAP diluted EPS was $1.31 and net financial earnings per basic share (NFEPS), a non-GAAP measure, was $1.29. That compares with 24Q1 GAAP EPS of $0.91 and NFEPS of $0.74. I had projected GAAP EPS of $1.19 and NFEPS of $1.18. The improvement in 25Q1’s NFE vs 24Q1 was due to a $54.9 million gain recorded on the $132.5 million sale of NJR’s Sunlight Advantage, its 91 megawatt (MW) residential solar portfolio. NJR also benefited from new higher base rates at its New Jersey Natural Gas (NJNG) utility.
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Public Service Enterprise Group (PEG) 24Q4 Update
Public Service Enterprise Group (PEG) reported 24Q4 operating revenues of $2.46 billion, down 5.4% from 23Q4. Diluted GAAP EPS was $0.57 vs. $1.09 last year. 24Q4 operating income fell 35.7%, as the company last year booked mark-to-market gains on derivatives that did not repeat this year. It also benefited from gains last year on its Nuclear Decommission Trust investments which reversed to a modest loss this year. Excluding those exceptional items, non-GAAP operating EPS was $0.84 vs. $0.54 in 23Q4 and slightly above my 24Q4 estimate of $0.83.
Continue readingBristol-Myers Squibb (BMY) 25Q1 Update
25Q1 net revenue decreased 5.6% to $11.2 billion, as declines in Eliquis and Revlimid were only partially offset by an increase in Opdivo. BMY’s growth portfolio posted a 16.1% YOY revenue increase, the slowest in a year; while the legacy portfolio suffered a 20.3% decline. Yet, adjusted gross margin rose 240 bp to 73.1%, due mostly to product mix; marketing, selling & administrative (MS&A) expenses fell 33%; and R&D expense dropped 16%, due to strategic initiatives and lower acquisition-related costs (including lower stock cash settlements). IPRD fell from $12.9 billion last year to $188 million, due to the non-repeat of 24Q1’s $12.1 billion Karuna acquisition write-off. Thus, GAAP EPS was $1.20, reversing 24Q1’s $5.89 loss, and non-GAAP EPS was $1.80 vs. a loss of $4.40. I had anticipated revenue of $11.6 billion, GAAP EPS of $1.09 and non-GAAP EPS of $1.62. Net revenue fell short of my estimate (but exceeded the consensus revenue estimate); while earnings exceeded my estimates.
Continue readingBaker Hughes (BKR) 25Q1 Update
BKR reported 25Q1 GAAP diluted EPS of $0.40 vs. 24Q1’s $0.45 and my estimate of $0.55. Net income was lower than expected due mostly to a $140 million loss from the change in fair value of certain equity securities. Total revenue of $6.43 billion was essentially flat from a year ago and 1.2% below my estimate. Operating income increased 10% to $752 million on higher services margin and lower SG&A and R&D costs, but was 3.7% below my estimate. Non-GAAP EPS was $0.51, compared with $0.43 last year, but below my estimate of $0.54. Adjusted EBITDA was $1.04 billion, up 10.0% from 23Q4, but 3.1% below my estimate. During the quarter, Ahmed Moghal was named Chief Financial Officer of Baker Hughes, replacing Nancy Buese.
Continue readingGE Vernova (GEV) 25Q1 Update
GE Vernova (GEV) posted 25Q1 revenues of $8.0 billion, up 21.3% YOY. Operating income swung from a loss of $289 million to income of $43 million. With pension and other income, net of interest costs, pre-tax earnings swung from a loss of $95 million in 24Q1 to earnings of $333 million in 25Q1. Net earnings were $254 million or $0.93 per diluted share, reversing last year’s loss of $130 million or $0.47 per share. The company does not define adjusted (non-GAAP) EPS. However, the Street apparently does, as actual 25Q1 EPS was reported on the business media portals as $0.85 per share, above the $0.37 consensus estimate. I had anticipated GAAP EPS of $0.40 and non-GAAP EPS of $0.19 per share.
Continue readingGE Aerospace (GE) 25Q1 Update
25Q1 revenue was $9.9 billion, up 10% over 24Q1. Commercial Engine & Services (CES) revenue rose 14.4%, while Defense & Propulsion Technologies (DPT) was essentially flat. CES segment profit jumped 36%, with a 420 bp rise in margin to 27.5%. DPT segment profit rose 16%, as margin rose 160 bp to 12.7%. Insurance profit was up 0.5% to $205 million. Excluding insurance, corporate & other costs declined from $203 million of costs to $167 million.
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Mistras Group (MG) 24Q4 Update
Mistras Group reported 24Q4 EPS of $0.17 vs. 23Q4’s loss of $0.08 and my estimate of $0.14. Revenues of $172.7 million declined 5.1%, due to a 10.1% decline in Mistras’s largest industry served, Oil & Gas, that was only partially offset by increased revenues elsewhere. Gross profit declined 4.3% to $51.3 million, as a 20 bp increase in gross margin only partially offset the decline in revenues. SG&A costs fell by 7.5 million or 17.6% to $35.4 million, which management attributes to the success of its Project Phoenix reorganization initiative. Since Project Phoenix is substantially complete, reorganization costs were $1.3 million in the quarter, down from $6.25 million a year ago. Thus, despite the drop in revenues, income from operations was $10.5 million, up from $0.7 million in 23Q4. With lower interest expense offset by a swing from an income tax benefit to expense, the company recorded net income of $5.2 million, reversing 23Q4’s loss of $2.5 million.
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Hewlett Packard Enterprise Co (HPE) 25Q1 Update
HPE reported 25Q1 GAAP diluted EPS of $0.44 vs. 24Q1’s $0.29. Non-GAAP EPS was $0.49 vs. $0.48. Net revenue of $7.85 billion was 16.3% higher than last year and exceeded my estimate of $7.54 billion. EPS was above my estimates of $0.35 (GAAP) and $0.48 (non-GAAP). The excess in earnings over my GAAP estimate was due to a $244 million ($0.17 per share) gain on sale of the Communications Technology Group (CTG). This was excluded from non-GAAP EPS, but higher acquisition/divestiture related expenses and restructuring costs more than offset the CTG gain. Operating earnings were 32% below my projections due mostly to margin pressure in the server business (as well as the loss of CTG earnings). HPE recorded a free cash flow outflow of $0.9 billion, worse than 24Q1’s $0.4 billion outflow.
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Citius Pharmaceuticals (CTXR) 25Q1 Update
Citius Pharmaceuticals (CTXR) posted a 25Q1 loss of $9.8 million or $1.30 per share. I had projected a loss of $7.0 million or $0.93 per share. Operating expenses, including R&D, G&A and (non-cash stock-based compensation, were greater than expected across the board. The company’s cash burn – negative cash flow from operating activities – was also higher than projected at $4.7 million vs. my projection of $4.1 million.
Continue readingThe Campbell’s Company (CPB) 25Q2 Update
The Campbell’s Company (CPB) reported 25Q2 diluted GAAP EPS of $0.58, compared with last year’s $0.68. Non-GAAP EPS of $0.74 was below last year’s $0.80 and my estimate of $0.79. Net sales were $2.69 billion, up 9.3% from 24Q2, due to the Sovos Brands acquisition, but 3.8% below my estimate of $2.79 billion. Organic net sales declined 1% YOY. The shortfall on revenues was offset by lower than anticipated operating expenses, including restructuring charges. The primary reason for the earnings shortfall vs. my estimate, therefore, was a higher than expected effective tax rate.
Continue readingAmerican Water Works (AWK) 24Q4 Update
AWK reported 24Q4 EPS of $1.23, up from $0.88 in 23Q4 and above my estimate of $1.13. Operating revenues rose 16.4% to $1.20 billion. Water and wastewater revenues increased 13.8%, with billed water service volumes up 4.4% and estimated average prices up 9.6%. Military and contract services revenues jumped 51%, due to the timing of capital projects. Consolidated operating and maintenance expenses increased 2.5%, mostly due to higher production and customer billing costs, which more than offset declines in other cost categories. Operating income increased 33.8% to $400 million. Net interest costs rose 16.5%. Thus, net income increased 39.8% to $239 million.
Continue readingOrganon (OGN) 24Q4 Update
24Q4 revenues were $1.59 billion, up 3% at constant currency but down 0.4% YOY and 2.8% below my estimate. GAAP diluted EPS was $0.42, compared with 23Q4’s $2.13 and my estimate of $0.60. Non-GAAP EPS of $0.90 was above last year’s $0.88, but below my estimate of $0.97.
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Pfizer (PFE) 24Q4 Update
Pfizer (PFE) reported 24Q4 revenues of $17.8 billion, up 24.7% from 23Q4 and 3.4% above my estimate. Sales of Comirnaty were much stronger than expected, but that was mostly offset by lower than projected sales of Paxlovid. GAAP EPS was $0.07, reversing last year’s loss of $0.60 but below my estimate of $0.27 due to unanticipated impairment charges. Non-GAAP EPS of $0.63 exceeded last year’s $0.10 and my estimate of $0.55.
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GE Healthcare Technologies (GEHC) 24Q4 Update
GEHC reported 24Q4 revenues of $5.32 billion, up 2.2% YOY and slightly below my estimate of $5.39 billion. Revenues were flat in the Imaging and Patient Care Solutions (PCS) segments, but rose 4.1% in Advanced Visual Solutions (AVS) and 9.3% in Pharmaceutical Diagnostics (PDx). Excluding an approximate 200 bp decline from China, sales were up 4% Orders rose 6% YOY with a book-to-bill of 1.09X.
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AT&T (T) 24Q4 Update
At its Investor Day held on Dec. 3, AT&T outlined its vision for the next stage of its evolution. It aims to drive growth in its consumer broadband business by expanding its fiber optic footprint, increasing the number of fiber locations from 29 million in 2024 to 50 million in 2029. With faster data speeds, fiber trumps cable in service quality; so the company is targeting a penetration rate of 50% of fiber locations over time. It also seeks to convince the 60% of its fiber subscribers who are not AT&T Mobility customers to sign up through converged offers. With this strategy, AT&T seeks double-digit growth in consumer broadband revenues over the next several years.
Continue readingMerck & Co (MRK) 24Q4 Update
24Q4 sales rose 6.8% to $15.6 billion. Excluding currency, sales rose 9%. Once again, a high teens percentage gain in KEYTRUDA sales more than offset declining sales in most of the rest of the portfolio. GAAP diluted EPS was $1.48, compared with 23Q4’s loss of $0.48 and my estimate of $1.74. Non-GAAP diluted EPS was $1.72 vs. last year’s $0.03 and my $1.84 estimate. The shortfall against my estimate was due mostly to acquisition related charges, including $700 million related to licensing agreements with LaNova (for its anti-PD-1/VEGF bispecific antibody), and Hansoh Pharma (for its investigational preclinical oral small molecule GLP-1 receptor agonist), and higher operating expenses related to strategic investments supporting Merck’s pipeline and other key growth drivers.
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Bristol-Myers Squibb (BMY) 24Q4 Update
24Q4 net revenue rose 7.5% to $12.3 billion, with gains in Eliquis and the growth portfolio more than offsetting LOE-related declines in Revlimid, Pomalyst, Sprycel and Abraxane. Growth portfolio net revenues rose 9.5% sequentially and 29% YOY. Gross margin fell from 76.1% to 61.0% because of intangible asset impairments and product mix. Non-GAAP gross margin declined 240 bp to 76.0%. Marketing, selling & administrative expenses were flat. R&D expenses rose 29% due to acquisitions and IPRD impairment charges. Thus, GAAP EPS was $0.04, below 23Q4’s $0.83 and my estimate of $0.54. Non-GAAP EPS of $1.67 exceeded last year’s $1.63 and my estimate of $1.44.
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Matthews Intl (MATW) Files 3M Share Shelf Registration
On March 11, 2025, Matthews International Corporation (MATW) filed a three million share shelf registration under form S-3 with the U.S. Securities and Exchange Commission. Along with the shelf, it also filed a prospectus under which it would issue 1.25 million shares (out of the three million share shelf).
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Baker Hughes 24Q4 Update
BKR reported 24Q4 GAAP diluted EPS of $1.18 vs. 23Q4’s $0.43 and my estimate of $0.66. Its net income was higher than expected due mostly to a large income tax benefit. Operating income was 34% below my estimate, mostly because of unanticipated restructuring and impairment charges. Non-GAAP EPS was $0.70, compared with $0.51 last year, but matched my estimate of $0.70. Revenues of $7.36 billion rose 7.7% vs. 23Q4 and exceeded my estimate of $7.21 billion. Adjusted EBITDA was $1.24 billion, up 13.7% from 23Q4, but 3.8% below my estimate.
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GE Vernova 24Q4 Update
GE Vernova (GEV) posted 24Q4 revenues of $10.6 billion, up 5%, with growth in both equipment and services. Operating income more than doubled from $195 million to $593 million, as did net income from $205 million to $484 million. GAAP EPS likewise surged from $0.72 to $1.72. The company does not provide a non-GAAP EPS metric. 24Q4 results fell short of my estimates, across the board.
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GE Aerospace 24Q4 Update
24Q4 revenue was $10.8 billion, up 14% over 23Q4. Commercial Engine & Services (CES) revenue jumped 19% and Defense & Propulsion Technologies (DPT) rose 4.5%. CES segment profit surged 54%, with a 640 bp increase in margin to 28.2%. DPT segment profit rose 3%, as margin slipped 10 bp to 9.6%. Corporate and other costs rose 12.7% to $311 million. Profit from the run-off insurance operations was $481 million, up nearly 5-fold from 23Q4. Other income was $346 million, up from $16 million. The company sold its remaining interest in GE Healthcare.
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Matthews Intl (MATW) 25Q1 Update
Matthews International Corporation (MATW) reported 25Q1 revenues of $401.8 million, down 10.7%. Sales at its Memorialization business fell 8.5%, which the company attributes to a decline in U.S. death rates. Industrial Technology’s sales plunged 27.7%, mostly in energy storage solutions (from the Tesla litigation) and lower warehouse automation sales. Sales at its SGK Solutions business, which is scheduled to be sold this year, rose 0.2%.
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CPI Too Hot? Here’s My Take.
Yesterday, the Bureau of Labor Statistics reported that the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5% on a seasonally adjusted basis is January, after rising 0.4% in December. Year-over-year, the increase was 3.0%, up from 2.9% in December.
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Initiating Coverage of Matthews Intl Corp (MATW)
The stock of Matthews International Corporation (MATW) has lost more than half of its value since 2017. Over that time, the company has struggled to sustain its profitability due to the earnings deterioration in its SGK Brand Solutions’ business; the ongoing secular shift favoring cremations over burials in its Memorialization segment; and sales and profitability challenges in its Industrial Technology businesses.
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Citius Pharmaceuticals (CTXR) 24Q4 Update
Citius Pharmaceuticals (CTXR) posted a 24Q4 loss of $11.8 million or $1.64 per share. Excluding an estimated $6 million milestone payment, which I had incorrectly expensed rather than capitalized, I had projected a $12.5 million or $1.73 per share loss. During the quarter, the company reported in August that the FDA has approved LYMPHIR, a treatment for relapsed and refractory cutaneous T-cell lymphoma (CTCL) for patients who have received at least one prior systemic therapy. Also in August, it completed the acquisition of TenX Acquisition, now known as Citius Oncology (CTOR), in which it held a 92.3% equity stake immediately after the closing. In November, Citius completed a 1-for-25 reverse stock split in order to maintain its NASDAQ listing. It also raised $3 million from the sale of common stock and warrants under its at-the-market equity offering agreement with H.C. Wainwright & Co.
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Toll Brothers (TOL) 24Q4 Update
Toll Brothers’ 24Q4 EPS was $4.63, up 12.6% from 23Q4’s $4.11. My estimate was $4.24. Consensus was $4.34. Deliveries of 3,431 units increased 24.5% YOY. The average sales price per unit fell 11.3% to $950,000, mostly on sales mix. Adjusted gross margin of 27.9% was 150 bp below 23Q4. The home SG&A expense ratio rose 10 bp to 8.3%. New orders increased 30.4% YOY to 2,658 units, 12.6% above my estimate. Ending backlog was down 5.1% in units and 3.2% in dollar value.
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Hewlett Packard Enterprise Co (HPE) 24Q4 Update
HPE reported 24Q4 GAAP diluted EPS of $0.99 vs. 23Q4’s $0.49. Non-GAAP EPS was $0.58 vs. $0.52. Net revenue of $8.46 billion rose 15.1% vs. last year and exceeded my estimate of $8.25 billion. GAAP EPS was above my estimate of $0.82, but non-GAAP EPS was below my $0.65 estimate. Most of the differences were due to a higher gain on the sale of the H3C stake than I had projected, which was excluded from non-GAAP EPS. Operating earnings were 4% below my projections. Free cash flow of $1.5 billion was double 23Q4’s $669 million and exceeded my estimate of $1.2 billion.
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The Campbell’s Company 25Q1 Update
The Campbell’s Company (CPB) reported 25Q1 diluted GAAP EPS of $0.72, compared with last year’s $0.78. Non-GAAP EPS of $0.89 was below last year’s $0.91, but ahead of my estimate of $0.82. Net sales were $2.77 billion, up 10.1% from 24Q1, due to the Sovos Brands acquisition, but 3.3% below my estimate of $2.87 billion. Organic net sales declined 1% YOY. The primary reason for the earnings beat vs. my estimate was lower than expected administrative expenses. The company reported that its cost cutting initiative, including the integration of Sovos, is ahead of plan.
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Tagged Campbell Soup Company, CPB stock research, The Campbell's Company
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New Jersey Resources Corp (NJR) 24Q4 Update
24Q4 GAAP diluted loss per share was $0.91 and net financial earnings per basic share (NFEPS), a non-GAAP measure, was $0.89. That compares with 23Q4 GAAP EPS of $0.38 and NFEPS of $0.30. I had projected GAAP EPS of $0.94 and NFEPS or $0.92.
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Spire (SR) 24Q4 Update
Spire reported a 24Q4 GAAP loss of $0.51 per share, better than 23Q4’s $0.66 loss. Its non-GAAP, net economic loss per share (NEEPS) was $0.54, also improved over 23Q4’s $0.78 loss, but worse than my $0.41 loss estimate. Operating revenues of $293.8 million were down 5.3% YOY and 8.0% below my estimate.
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Mistras Group (MG) 24Q3 Update
Mistras Group reported 24Q3 EPS of $0.20 vs. 23Q3’s loss of $0.34 and my estimate of $0.24. Revenues of $182.7 million were up 1.9%, as a 3.6% decline in Mistras’s largest segment, Oil & Gas, was more than offset by gains in most other segments. Gross profit rose 0.4% to $54.6 million, with gross margin declining 40 bp to 29.9%. SG&A costs declined $0.5 million to $38.9 million. Reorganization costs were $2.1 million, down from $2.7 million. The company recorded $0.9 million of legal settlement income and $1.5 million of non-recurring other income. Thus, Mistras’s non-GAAP EPS was $0.20, compared with $0.18 a year ago and my estimate of $0.23. Adjusted EBITDA of $23.3 million was up 7.7% over 23Q3 but below my estimate of $26.2 million. Free cash flow of $13.2 reversed last year’s negative free cash flow of $13.3 million, but fell short of my estimate of $19.0 million.
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Merck & Co (MRK) 24Q3 Update
24Q3 sales rose 4.3% to $16.7 billion. Excluding currency, sales rose 7%. Once again, a double-digit gain in KEYTRUDA sales more than offset declining sales in the rest of the portfolio. GAAP diluted EPS was $1.24, below 23Q3’s $1.87 and my estimate of $1.43. Non-GAAP diluted EPS was $1.57 vs. last year’s $2.13 and my $1.68 estimate. All of the shortfall against my estimate (and more) was due to a $750 million ($0.28 per share) charge taken for the acquisition of MK-1045, an investigational bispecific antibody for the treatment of B-cell associated cancers, partially offset by $170 million ($0.05 per share) of collaboration income from Daiichi Sankyo. That MK-1045 acquisition was announced on October 1; so it was not included in Merck’s guidance or my projections.
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Pfizer (PFE) 24Q3 Update
Pfizer (PFE) reported 24Q3 revenues of $17.7 billion, up 33.8% from 23Q3, and 13% above my estimate. The key driver of the revenue beat came from Paxlovid, which posted sales of $2.7 billion, beating my estimate of $400 million. GAAP EPS was $0.78, reversing last year’s loss of $0.42 and trouncing my estimate of $0.25. Non-GAAP EPS of $1.06 compared with last year’s loss of $0.42, and was well above my estimate of $0.61.
Continue readingPublic Service Enterprise Group (PEG) 24Q3 Update
Public Service Enterprise Group (PEG) reported 24Q3 operating revenues of $2.64 billion, up 7.6% from 23Q3. Diluted GAAP EPS was $1.03 vs. $0.27 last year. 24Q3 operating income rose 16%, but most of the gain vs. the prior year was due to positive swings in pension costs and gains on trust investments. Non-GAAP operating EPS was $0.90 vs. $0.85 in 23Q3 and below my estimate of $0.93.
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Bristol-Myers Squibb (BMY) 24Q3 Update
24Q3 net revenue rose 8.4% to $11.9 billion, with gains in Eliquis, Reblozyl, Breyanzi and Opdivo as well as other medicines from BMY’s growth portfolio more than offsetting an LOE-related decline in Sprycel. Growth portfolio net revenues rose 4% sequentially and were up 25% YOY. GAAP EPS of $0.60 was below 23Q3’s $0.93 and also below my estimate of $0.73. The decline in earnings was due mostly to a $492 million negative swing in other (income)/expense and a higher acquired in-process R&D charge. Non-GAAP EPS of $1.80 was below last year’s $2.00 but above my estimate of $1.58.
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Organon & Co (OGN) 24Q3 Update
24Q3 revenues were $1.58 billion, up 4.1% year-over-year and up 5% at constant currency. GAAP diluted EPS was $1.38, compared with 23Q3’s $0.23, but above my estimate of $0.63. Non-GAAP EPS of $0.87 was even with last year, but below my estimate of $1.06. The consensus estimate was $0.90.
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American Water Works (AWK) 24Q3 Update
AWK reported 24Q3 EPS of $1.80, up from $1.66 in 23Q3 and above my estimate of $1.67. Operating revenues rose 13.4% to $1.32 billion. Water and wastewater revenues increased 11.3%, with billed water service volumes up 2.8% and estimated average prices up 7.6%. Military and contract services revenues jumped 44%, due to the timing of capital projects. Consolidated operating and maintenance expenses increased 13.8%, mostly due to higher purchased water cost and usage, increased employee-related costs and higher project-related costs. Operating income rose 13.6% to $543 million; but the increase was partially offset by higher interest costs. Thus, net income increased 8.4%.
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GE Healthcare Technologies (GEHC) 24Q3 Update
GEHC reported 24Q3 revenues of $4.86 billion, up 0.9% YOY and matching my estimate of $4.90 billion. Revenues were flat, except Life Support Solutions (within the PCS segment), where sales rose 16.8%, and the PDx segment, up 12.5%. Sales in China fell 22%. Excluding China, sales grew 4.8%, led by gains of 8% in the U.S. and 5% in the rest of the world (excluding EMEA). Orders increased 1%, but were up mid-single digits excluding China.
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AT&T (T) 24Q3 Update
AT&T reported a 24Q3 GAAP loss of $0.03 per share, reversing last year’s $0.48 profit and falling short of my $0.56 estimate. The loss was entirely due to a $4.4 billion impairment charge taken against its Business Wireline segment. Non-GAAP EPS was $0.60, below last year’s $0.64, but a penny ahead of my $0.59 estimate. Revenues of $30.2 billion were down slightly from 23Q3’s $30.4 billion and lower than my estimate of $30.7 billion. Free cash flow was $3.1 billion in the quarter, a sliver below 23Q3’s $3.2 billion but more than twice my estimate of $1.3 billion.
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Baker Hughes (BKR) 24Q3 Update
BKR reported 24Q3 GAAP diluted EPS of $0.77 vs. 23Q3’s $0.51 and my estimate of $0.63. Non-GAAP EPS was $0.67, compared with $0.42 last year and my estimate of $0.65. Revenues of $6.9 billion rose 4.0% vs. 23Q3, but was 4.3% below my projections due to lower than expected services sales. Orders of $6.68 billion fell 21.6% YOY, against an especially tough prior year comparison. Adjusted EBITDA was $1.21 billion, up from $983 million in 23Q3, as adjusted EBITDA margin increased by 270 bp to 17.5%. Free cash flow (CFOA minus capex plus dispositions) was $754 million vs. $592 million in 23Q3.
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GE Vernova (GEV) 24Q3 Update
GE Vernova (GEV) reported a 24Q3 GAAP diluted loss per share of $0.35 compared with 23Q3’s pro forma loss of $0.62. This quarter saw a big increase in SG&A from standalone corporate and higher restructuring costs. Excluding those and other exceptional items, I estimate that non-GAAP EPS (which is not defined by the company) was $0.07, compared with a loss of $0.94 in 23Q3. The Power and Electrification segments reported higher adjusted EBITDA, but Wind’s negative EBITDA increased. Free cash flow jumped from zero to $1.0 billion, due to working capital management and other non-operating factors.
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GE Aerospace (GE) 24Q3 Update
GE Aerospace reported 24Q3 revenues of $9.8 billion, up 5.8% vs. the prior year; GAAP EPS from continuing operations was $1.56, compared with 23Q3’s $0.20; and non-GAAP EPS was $1.15 vs $0.92. Results exceeded my estimates of $1.18 for GAAP EPS and $1.09 for non-GAAP adjusted EPS.
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Initiating Coverage on Spire Inc (SR)
Spire Inc. (NYSE:SR) is a public utility holding company based in St. Louis, MO. The company operates in three segments: Gas Utility, Gas Marketing and Midstream. Its Gas Utility segment accounts for 93% of Spire’s operating revenues and 80% of its operating income. The segment includes (a) Spire Missouri, which is the largest natural gas distribution utility system in Missouri; (b) Spire Alabama, a gas distribution utility that was acquired in 2014 and operates in central and northern Alabama and serves the city of Birmingham; (c) Spire Gulf, which serves the city of Mobile AL; and (d) Spire Mississippi, which serves south-central Mississippi.
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Campbell Soup (CPB) 24Q4 Update
Campbell Soup Company (CPB) reported 24Q4 diluted GAAP loss per share of $0.01, compared with last year’s profit of $0.41. Non-GAAP EPS of $0.63, above last year’s $0.50, and matching my estimate of $0.63. Net sales were $2.39 billion, up 10.9% from 23Q4, due entirely to the acquisition of Sovos Brands. Organic net sales declined 1% vs. the prior year. The 24Q4 GAAP loss was due mostly to impairment charges of $129 million ($0.33 per share) associated with the sale of the Pop Secret popcorn business and also with certain salty snacks and cookie trademarks, collectively known as Allied Brands.
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Hewlett Packard Enterprise (HPE) 24Q3 Update
HPE reported 24Q3 GAAP diluted EPS of $0.38, above 23Q3’s $0.35. Non-GAAP EPS was $0.50 vs. $0.49 last year. Net revenue of $7.71 billion rose 10.1% vs. the previous year. Results exceeded my estimates of $7.60 billion in revenue, $0.32 for GAAP EPS and $0.47 for non-GAAP EPS. Revenue growth was near the high end of management’s guidance, while both GAAP and non-GAAP EPS exceeded the high end of management’s guidance.
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Recent Trends in the Economy and Financial Markets
Stocks logged another month of gains in August, but once again September, it has started off with a sharp sell-off.
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GE Aerospace (GE) 24Q2 Update
GE Aerospace reported 24Q2 revenues of $9.1 billion, up 3.9% year-over-year; GAAP EPS from continuing operations was $1.20, compared with 23Q2’s $1.09; and non-GAAP EPS was $1.20 vs $0.74. The mean estimates of analysts were $8.6 billion for revenues and non-GAAP EPS of $0.99.
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Toll Brothers (TOL) 24Q3 Update
Toll Brothers’ 24Q3 EPS was $3.60, down 3.5% from 23Q3’s $3.73. My estimate was $3.18. Consensus was $3.31. Deliveries of 2,814 units increased 11.5% YOY. The average sales price per unit fell 8.6% to $968,200. Adjusted gross margin of 28.8% was 50 bp below 23Q3. The home SG&A expense ratio rose 40 bp to 9.0%. New contracts increased 10.9% YOY to 2,490 units, 2.5% below my estimate. Ending backlog was down 7.2% in units and 10.3% in dollar value. Based upon 24Q3 results and management’s guidance, I now project fiscal 2024 EPS of $14.62, 18.3% above fiscal 2023’s EPS of $12.36.
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Diversified Healthcare Trust (DHC) Follow Up
Last year at this time, when I last wrote about DHC, the Trust had proposed to merge with another RMR Group affiliate, Office Properties Income Trust (OPI). That merger proposal was scuttled by opposing DHC shareholders.
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Citius Pharmaceuticals (CTXR) 24Q3 Update
Citius Pharmaceuticals (CTXR) posted a 24Q3 loss of $10.9 million or $0.06 per share, matching my estimate. R&D expense fell by $1.0 million or 26.6% vs. the prior year, while general & administrative expense increased $1.1 million or 28.8%. The company is reducing its clinical development activity and gearing up for the launch of LYMPHIR.
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New Jersey Resources (NJR) 24Q3 Update
24Q3 GAAP diluted loss per share was $0.12 and net financial loss per basic share, a non-GAAP measure, was $0.09. That compares with 23Q3 GAAP EPS of $0.02 and net financial earnings per share (NFEPS) of $0.10. I had projected positive EPS and NFEPS. The consensus estimate predicted a net financial loss per share of $0.05.
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Organon (OGN) 24Q2 Update
24Q2 revenues were $1.607 billion, down 0.1% year-over-year, but up 2% at constant currency. GAAP diluted EPS was $0.76, below 23Q2’s $0.95, but above my estimate of $0.67. Non-GAAP EPS of $1.12 was behind last year’s $1.31, but a penny ahead of my estimate of $1.11. The consensus estimate was $1.08.
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GE Healthcare (GEHC) 24Q2 Update
GE Healthcare Technologies (GEHC) reported 24Q2 revenues of $4.84 billion, up 0.5% YOY and but 1.9% below my estimate. Excluding currency and acquisitions, revenue increased 1%. Revenues declined in all segments, except PDx, which rose 12.5%. Sales in China fell 15%. Excluding China, global sales growth was 4%. Orders increased 3% (or 6%, excluding China).
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Pfizer (PFE) 24Q2 Update
Pfizer (PFE) reported 24Q2 revenues of $13.3 billion, up 4% from 23Q2, but 4.5% below my estimate. The shortfall from projections was due mostly to lower than expected sales of Comirnaty, Prevnar, Paxlovid and Abrysvo. Pfizer’s GAAP EPS was $0.01, down from $0.41 in 23Q2 and below my estimate of $0.14. The decline in GAAP earnings was caused by a $1.3 billion charge related to the company’s Manufacturing Optimization Program and a $230 million IPRD asset impairment charge associated with discontinuing a product development program. Non-GAAP EPS of $0.60 was below last year’s $0.67, but better than my estimate of $0.48.
Continue readingMistras Group (MG) 24Q2 Update
Mistras Group reported 24Q2 EPS of $0.20 vs. 23Q2’s $0.01 and my estimate of $0.11. Revenues of $189.8 million were up 7.8%, with all industry segments posting gains, including double-digit gains in segments that had been experiencing steady declines. Gross profit rose 12.9% to $56.1 million, with gross margin rising 140 bp to 29.6%. SG&A costs declined $0.5 million to $41.0 million. Reorganization costs were $0.5 million, down from $1.2 million. Excluding those and other exceptional items, Mistras’s non-GAAP EPS was $0.21, compared with $0.05 a year ago and my estimate of $0.13. Adjusted EBITDA was $22.1 million, up 45% over 23Q2 and above my estimate of $16.9 million.
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Merck & Co (MRK) 24Q2 Update
24Q2 sales increased 7.2% to $16.1 billion. Excluding currency, sales rose 11%. The sales gain came almost entirely from an increase of $1.0 billion in Keytruda. However, a few recently launched medicines posted solid sales, including Wellireg, Winrevair and Reblozyl
Continue readingAmerican Water Works (AWK) 24Q2 Update
AWK reported 24Q2 EPS of $1.42, down from $1.44 in 23Q2 and below my estimate of $1.48. Operating revenues rose 4.7% to $1.14 billion. Billed water service volumes declined 0.4%, but this was more than offset by an estimated 5.3% increase in average prices. Operating and maintenance expenses increased 3.2%, mostly due to higher purchased water cost and usage, increased employee-related costs and higher other operating expenses. Operating income rose 3.9% to $449 million; but the increase was offset by higher interest costs and a higher effective tax rate. Net income decreased 1.1%.
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Public Service Enterprise Group (PEG) 24Q2 Update
Public Service Enterprise Group (PEG) reported 24Q2 operating revenues of $2.42 billion, unchanged from 23Q2. PSE&G’s operating revenues rose 26.2% to $1.86 billion. PSEG Power & Other’s net revenues, excluding sales to affiliates, fell 24.2% to $0.68 billion. 24Q2 diluted GAAP EPS was $0.87 vs. $1.18 last year. Non-GAAP operating EPS was $0.63 vs. $0.70. 24Q2 Non-GAAP EPS was below my estimate of $0.75. Compared to my projections, the shortfall in non-GAAP earnings was due entirely to proportionately higher mark-to-market gains (which are excluded from non-GAAP earnings).
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AT&T (T) 24Q2 Update
AT&T reported 24Q2 GAAP EPS of $0.49, below last year’s $0.62 and my estimate was $0.58. Non-GAAP EPS was $0.57, below last year’s $0.63 and my estimate of $0.62. Free cash flow was $4.6 billion in the quarter, above 23Q2’s $4.2 billion and my estimate of $3.6 billion.
Continue readingBristol-Myers Squibb (BMY) 24Q2 Update
24Q2 net revenue rose 8.7% to $12.2 billion, with a solid gains in Opdivo, Eliquis and a bevy of medicines from BMY’s growth portfolio, more than offsetting an LOE-related decline in Revlimid. Growth portfolio net revenues rose 17% sequentially and 26% YOY, with triple-digit gains in Camzyos and Sotyktu and 50% gains in Opdualag, Zeposia and Breyanzi. GAAP EPS of $0.83 was 16% below 23Q2, but in line with my estimate. The decline in earnings was due to impairment charges taken against two products and higher acquisition-related costs. Non-GAAP EPS of $2.07 was better than last year’s $1.75 and above my estimate of $1.88.
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Baker Hughes (BKR) 24Q2 Update
BKR reported 24Q2 GAAP diluted EPS of $0.58 vs. 23Q2’s $0.40 and my estimate of $0.47. Non-GAAP EPS was $0.57 compared with $0.39 last year and my estimate of $0.48. Revenues of $7.5 billion rose 13.1% vs. 23Q2, and were 4.8% above my projections. Orders of $7.53 billion rose 0.7% YOY, with a doubling of Climate Technology Solutions orders (off of a low base) offsetting slight declines in OFSE and Gas Technology. Adjusted EBITDA was $1.13 billion, up from $907 million in 23Q2. Adjusted EBITDA margin improved by 140 bp to 15.8%. Free cash flow was $106 million vs. $623 million in 23Q2.
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GE Vernova (GEV) 24Q2 Update
In its first quarter since being spun off by General Electric on April 2, GE Vernova (GEV) reported GAAP diluted EPS of $4.69 compared with a pro forma loss of $0.55 in 23Q2. This quarter’s results included an $847 million pretax gain from the sale of a portion of its Steam Power business (estimated $3.07 per share) and a $254 million benefit ($0.92 per share) from an arbitration refund in its dispute with a multiemployer pension plan Excluding those and other exceptional items, I estimate that non-GAAP EPS was $0.09, compared with a loss of $0.50 in 23Q2. Revenues rose 3% to $8.2 billion. All segments reported higher adjusted EBITDA. Free cash flow, according to my calculations, jumped from $1.1 billion to $2.0 billion.
Continue readingNew Jersey Resources (NJR) 24Q2 Update
24Q2 GAAP diluted EPS was $1.22 and net financial earnings per basic share (NFEPS), a non-GAAP measure, was $1.40. That compares with 23Q2 GAAP EPS of $1.13 and NFEPS of $1.15. The results exceed my expectations. The consensus NFEPS estimate was $1.22.
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Toll Brothers (TOL) 24Q2 Update
Toll Brothers’ 24Q2 EPS was $4.55, up 60% from 23Q2’s $2.85. Excluding a $1.17 profit from a land sale, 24Q2 EPS was $3.38. My estimate was $3.06. Deliveries of 2,641 units increased 6% YOY. The average sales price per unit rose 0.3% to $1.0 million. Adjusted gross margin of 28.2% was 10 bp below 23Q2. The SG&A expense ratio fell 10 bp to 9.0%. New contracts jumped 30% YOY to 3,041 units, far exceeding my estimate. Ending backlog was down 6.4% in units and 18.8% in dollar value. Based upon 24Q2 results and management’s guidance, I now project fiscal 2024 EPS of $13.93, up from 2023’s $12.36.
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Public Service Enterprise (PEG) 24Q1 Update
Public Service Enterprise Group (PEG) reported 24Q1 operating revenues of $2.76 billion, down 26.5% from $3.76 billion in 23Q1. PSE&G’s operating revenues rose 1.7% to $2.33 billion. PSEG Power & Other’s net revenues, excluding sales to affiliates, decreased 70.8% $0.43 billion, due mostly to a decline in mark-to-market gains on derivative contracts. 24Q1 diluted GAAP EPS was $1.06 vs. $2.57 last year. Non-GAAP operating EPS was $1.31 vs. $1.39. 24Q1 Non-GAAP EPS was below my estimate of $1.34.
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Mistras Group (MG) 24Q1 Update
Mistras Group reported 24Q1 EPS of $0.03 vs. 23Q1’s loss of $0.17 and my estimate of $0.00. Revenues of $184.4 million were up 9.8%, due mostly to strong maintenance turnaround activity in the Oil & Gas sector. Gross profit rose 10.9% to $51.1 million, with gross margin rising 30 bp to 27.7%. SG&A costs declined $1.6 million to $41.2 million, but less than the $3 million or so anticipated benefit from Project Phoenix. Reorganization costs were $1.6 million, down from $2.1 million. Excluding those and other exceptional items, Mistras’s non-GAAP EPS was $0.07, compared with ($0.12) a year ago and my estimate of $0.01. Adjusted EBITDA was $16.2 million, up 55% over 23Q1, above my estimate of $13.6 million.
Continue readingRecent Trends in the Economy and Financial Markets
Stocks advanced again in May, but the rally may be running out of steam. The S&P Composite 1500 rose 3.0%.
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Campbell Soup (CPB) 24Q3 Update
Campbell Soup Company (CPB) reported 24Q3 diluted GAAP EPS of $0.44, below last year’s $0.53. Non-GAAP EPS was $0.76, above last year’s $0.68, and in line with my estimate of $0.75. Net sales were $2.37 billion, 6.3% above 23Q3. The company completed the $2.6 billion acquisition of Sovos Brands on March 12.
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Citius Pharmaceuticals (CTXR) 24Q2 Update
Citius Pharmaceuticals (CTXR) posted a 24Q2 loss of $8.5 million or $0.05 per share, $0.02 below my estimate, mostly because of an unexpected $2.3 million gain on the sale of NOLs. R&D expense declined by about $1.1 million vs. the prior year and administrative expenses by $0.5 million, as the company focuses on the upcoming launch of LYMPHIR.
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American Water Works (24Q1) Update
AWK reported 24Q1 EPS of $0.95, up from $0.91 in 23Q1. Consensus was $0.97. This quarter’s results included a $0.02 benefit from an increase in interest income on the Home Services Group seller note. Operating revenues rose 7.8% to $1.01 billion. Billed water service volumes were flat. Operating and maintenance expenses increased 5.9%, mostly due to higher purchased water usage and fuel, power and chemicals costs. Operating income rose 10.5% to $326 million. Other expense, including interest expense, rose, while the effective tax rate increased 300 bp to 23.6%. Net income increased 8.8% and EPS rose 3.8%, due to a higher share count from last year’s equity offering.
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Merck & Co (MRK) 24Q1 Update
24Q1 sales increased 8.9% to $15.8 billion. Excluding currency, sales rose 12%. The sales gain came from an increase of $1.15 billion in Keytruda and $277 million in Gardasil. GAAP diluted EPS was $1.87 per share vs. last year’s $1.11, and non-GAAP diluted EPS was $2.07 vs. last year’s $1.40. GAAP gross margin improved by 470 bp to 77.6%, largely due to the expiration of certain royalty payments on Keytruda and Gardasil. SG&A expense was flat in dollars but declined by 130 bp as a percent of sales to 15.7%. R&D costs declined by $300 million to $4.0 billion and by 420 bp as a percent of sales to 25.3%. All of the decline in R&D was due to lower charges for business development transactions, partially offset by higher compensation costs and increased clinical development spending and investments.
Continue readingHewlett Packard Enterprise (HPE) 24Q2 Update
HPE reported 24Q2 GAAP diluted EPS of $0.24, below 23Q4’s $0.32. Non-GAAP EPS was $0.42 vs. $0.52 last year. Net revenue of $7.20 billion rose 3.3%. Results beat the consensus estimates of $6.83 billion for revenue and $0.39 for EPS. Both came in above the high end of management’s guidance.
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Organon (OGN) 24Q1 Update
24Q1 revenues were $1.622 billion, up 5.5% year-over-year, but up 7% at constant currency. GAAP diluted EPS was $0.78, above 23Q1’s $0.69 and my estimate of $0.77. Non-GAAP EPS of $1.22 was above last year’s $1.08 and also above my estimate of $1.14. The consensus estimate was $0.93.
Continue readingPfizer (PFE) 24Q1 Update
Pfizer (PFE) reported 24Q1 revenues of $14.9 billion, down 19% from 23Q1, but 7% above my estimate. Its GAAP EPS was $0.55 and non-GAAP EPS $0.82, down from $0.97 and $1.23 last year, but well ahead of my estimates of $0.22 and $0.49, respectively. The consensus non-GAAP estimate was $0.51.
Continue readingGE Healthcare (GEHC) 24Q1 Update
GEHC reported 24Q1 revenues of $4.65 billion, down 1.2% YOY and 4.1% below my estimate. Excluding currency, revenue was flat. Revenues declined in Imaging, Ultrasound and PCS, but PDx revenue increased 7.3%. Sales in China fell 11%. The company faced a tough prior year comparison, as 23Q1 revenues had gained from improved supply chain fulfillment and China’s regional stimulus program.
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Posted in GEHC, Health Care
Tagged GE Healthcare, GE Healthcare Technologies
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Bristol-Myers Squibb (BMY) 24Q1 Update
Bristol-Myers Squibb (BMY) reported 24Q1 revenues of $11.9 billion, up 5% from 23Q1. Its GAAP loss per share was $5.89 and non-GAAP loss $4.40, reversing last years earnings of $1.07 GAAP and $2.05 non-GAAP. 24Q1’s revenues were $330 million or 3.6% above the consensus estimate and non-GAAP loss was two cents better than the consensus estimate.
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Posted in BMY, Health Care
Tagged Bristol-Myers Squibb
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Recent Trends in the Economy and Fixed Income Markets
The Economy. On balance, the economic data over the past few weeks point to slower growth ahead. According to the latest GDP Now report from FRB Atlanta, 24Q2 real GDP is expected to rise 3.3%. That’s down from nearly 4.0% two weeks ago. FRB New York’s Fed Now tracker pegs 24Q2 real GDP growth at 2.2% as of May 3, down from 2.7% as of April 26. The consensus of Blue Chip forecasters (via the Atlanta Fed) projects 24Q2 GDP growth of 1.4% to 2.9%.
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Stocks Recover Quickly From April Lows
Stocks reversed course in April, with the S&P Composite 1500 declining 4.3%. Among its components, the S&P 500 lost 4.1%; the Mid-Cap 400 fell 6.1% and the SmallCap 600 dropped 5.7%.
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Posted in Market Commentary, Uncategorized
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AT&T (T) 24Q1 Update
AT&T reported 24Q1 GAAP EPS of $0.47, compared with last year’s loss of $0.57. My estimate was $0.47. Non-GAAP EPS was $0.55, below last year’s $0.50, but above my estimate of $0.53. Free cash flow was $3.1 billion in the quarter, above 23Q1’s $1.0 billion and my estimate of $1.8 billion.
Continue readingBaker Hughes (BKR) 24Q1 Update
BKR reported 23Q4 GAAP diluted EPS of $0.45 vs. 23Q1’s $0.57 and my estimate of $0.34. Non-GAAP EPS was $0.43 compared with $0.28 last year and my estimate of $0.35. Revenues of $6.42 billion rose 12.3% vs. 23Q1, and matched my projections. Orders of $6.5 billion fell 14.3% YOY, due to declines across all segments. Adjusted EBITDA was $943 million, up from $782 million in 23Q1. Adjusted EBITDA margin improved by 100 bp to 14.7%. Free cash flow was $498 million vs. $177 million in 23Q1.
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Posted in BKR, Energy
Tagged Baker Hughes, Baker Hughes Company
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Citius Pharma Raises $15M in Registered Direct Equity Offering
Earlier today, Citius Pharmaceuticals Inc. (CTXR) announced that it had entered into definitive agreements for the issuance of 21.4 million shares of its common stock and accompanying warrants to purchase up to the same number of common shares at a purchase price of $0.70 per unit (consisting of one share of common stock and one warrant). The warrants have an exercise price of $0.75 per share, exercisable six months from the date of issuance, and expire in five years (presumably from the date of issuance). Closing of the offering is expected to occur on or about April 30, 2024.
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Posted in CTXR, Health Care
Tagged Citius Pharmaceuticals, TenX Keane Acquisition
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Initiating Coverage of Pfizer (PFE)
Buy Rating. Price Target of $30.
As the COVID-19 pandemic receded, Pfizer’s sales and profits fell sharply. Combined sales and alliance revenues of COMIRNATY, the COVID vaccine, and PAXLOVID, the COVID oral antiviral, fell 78% to $12.5 billion in 2023. Some of the declines were due to one-time inventory management issues associated with the transition from governmental emergency use authorization to commercial use. Nevertheless, the sales drop had a big impact on Pfizer’s bottom line. 2023 GAAP diluted EPS was $0.37, down from $5.47 in 2022 and adjusted (non-GAAP) diluted EPS was $1.84, down from $6.58.
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Posted in Health Care, PFE
Tagged Pfizer, Pfizer Inc.
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AT&T (T) 23Q4 Update
AT&T reported 23Q4 GAAP EPS of $0.30, compared with last year’s loss of $3.20. My estimate was $0.55. The shortfall vs. my estimate was due to a $589 million impairment charge, lower gross margin, higher SG&A expense and a $1.7 billion actuarial loss on pensions. These negative factors were partially offset by a lower than anticipated tax rate. Non-GAAP EPS was $0.54, below last year’s and my estimate of $0.61. Free cash flow was $6.4 billion in the quarter, topping my estimate of $6.2 billion.
Continue readingNotes and Analysis from EEI’s 2024 Wall Street Briefing
The Edison Electric Institute’s 2024 Wall Street Briefing was held on February 20, 2024. The meeting came after the electric utility sector’s disappointing performance in 2023. The EEI Index, a composite total return measure for all 39 EEI member companies, declined 8.7% in 2023, much worse than the total returns of 26.3% for the S&P 500 and 16.4% for the S&P Mid-Cap 400. Utilities was the best performing S&P 500 sector in 2022 (even though it posted a low-single digit loss); but it was the worst performing by far in 2023.
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Tagged Edison Electric Institute, Electric utilities
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Baker Hughes (BKR) 23Q4 Update
BKR reported 23Q4 GAAP diluted EPS of $0.43 vs. 22Q4’s $0.18 and my estimate of $0.43. Non-GAAP EPS was $0.51 compared with $0.18 last year and my estimate of $0.47. Revenues of $6.84 billion rose 15.7% vs. 22Q4, in line with my projections. Orders of $6.9 billion fell 13.8% YOY, due to a 47% drop in Gas Technology Equipment (GTE) orders. Free cash flow was $633 million vs. $657 million in 22Q4.
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Citius Pharmaceuticals 23Q4 Update
Citius Pharmaceuticals (CTXR) posted a 23Q4 loss of $11.1 million or $0.07 per share, $0.01 more than my estimate, mostly because of higher than expected stock-based compensation and $1.15 million for a deemed dividend associated with the one-year extension of the exercise period for certain outstanding warrants. Both are non-cash charges. R&D expense declined by about $1 million sequentially and YOY, but administrative expenses increased. With the completion of the Mino-Lok Phase 3 trial, Citius’s expenses are shifting more to activities associated with the launches the LYMPHIR and Mino-Lok.
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Tagged Citius Pharmaceuticals
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