Posts Tagged ‘earnings outlook’
There are still a lot of companies that are reporting quarterly earnings and, in many cases, the numbers are pretty decent. Let’s look at some of the winners.
The iconic jewelry brand Tiffany & Co. (NYSE/TIF) reported outstanding quarterly earnings growth of 50% due to significant sales strength and margin expansion from the Asia-Pacific region. The company’s American stores saw total sales grow four percent to $417 million, with European sales growing a surprising seven percent to $104 million.
Tiffany & Co. boosted its full-year earnings outlook for its fiscal year ending January 31, 2014, and the stock jumped seven points on the news, closing at a new all-time record high.
Much smaller Movado Group, Inc. (NYSE/MOV), which is based in Paramus, New Jersey, reported an 18.4% increase in third-quarter sales to $189.7 million.
The company’s quarter earnings fell comparatively due to a tax provision, but income before taxes grew to $34.0 million from $25.0 million in the same quarter last year.
Movado beat Wall Street consensus and tightened its guidance to the high end of its previous outlook.
Higher-end retailers like Tiffany & Co. aren’t representative of a general trend, but La-Z-Boy Incorporated (NYSE/LZB) recently shot way up on the stock market after reporting that consolidated sales grew 14% to $366 million in its most recent quarter.
Earnings for the quarter more than doubled. The company boosted its quarterly dividend by a whopping 50% and the stock soared on the news.
Even The TJX Companies, Inc. (NYSE/TJX), which consists of “T.J. Maxx,” “Marshalls,” “HomeGoods,” “Sierra Trading Post,” “HomeSense,” and “Winners,” beat its own expectations with a very solid quarter…. Read More
It’s an amazing performance that few people predicted at the beginning of the year—this stock market might just keep on climbing right into the New Year.
Just recently we looked at Automatic Data Processing, Inc. (ADP) as it broke a new all-time record high of $77.00 a share. Now, the position has surpassed $80.00 a share, still boasting a 2.4% dividend yield. It was $60.00 a share in January.
The stock market should have experienced a major correction this year, but it consolidated during the summer and reaccelerated instead.
The huge price movements of so many large and mature enterprises are not unusual in the historical performance of the stock market. In the middle of 1998, ADP was $30.00 a share (split adjusted). Two years later, the position hit a new, all-time record-high around $60.00 before correcting with technology stocks.
ADP and so many other positions illustrate the power that monetary policy has on the stock market’s business cycle. Clearly, equities today are overbought, but institutional investors have to be buyers, because investors don’t pay fees to have money sitting in cash.
While I feel that the stock market can close this year out strongly, generally speaking, I am not enthusiastic about investors buying this market. The fundamentals are slowly coming together to support the case for rising equity prices, but all the good news in terms of balance sheets and earnings outlooks are already priced into this market. Anything can happen going forward, but expectations for investment returns have to be extremely low if one is buying a stock market that’s already gone up.
A profound and prolonged correction … Read More
Transportation stocks are now reporting their third-quarter earnings, and it’s important for investors to pay attention to what these leading market indicators have to say.
J.B. Hunt Transportation Services Inc. (JBHT) is one of the largest trucking firms in North America. The company reported a solid third quarter, but earnings came in just slightly below what Wall Street was looking for.
Third-quarter revenues grew 11% to $1.44 billion, which is solid growth for a mature business. Earnings were $89.5 million, or $0.75 per diluted share, compared to $78.2 million, or $0.65 per diluted share. Wall Street was looking for total sales of $1.45 billion, with $0.78 in earnings per share.
The company’s cash position and accounts receivable grew solidly, and so did shareholder’s equity. All in all, it was a good quarter for this trucking firm. If Wall Street consensus was a little too high, then it was. This was still a solid report, and the company’s financial health improved.
In the railroad industry, companies continue to deal with weakening demand for coal, but earnings are holding up on modest revenue growth and higher prices.
Union Pacific Corporation (UNP) reported third-quarter sales of $5.57 billion, growing four percent over the comparable quarter last year. The company’s earnings were $1.15 billion, or $2.48 per diluted share, compared to $1.04 billion, or $2.19 per diluted share.
Third-quarter revenues measured by total revenue carloads were flat. Most of the company’s gain in total revenues came from price increases. Earnings met consensus, while revenues were just a hair below.
So there is growth out there, but it’s modest and not necessarily the result … Read More
Third-quarter earnings season continues this week; with a number of companies set to report in the next few days, the stock market’s attention should finally be on corporate earnings. And while earnings expectations are being reduced, the positive disposition to the Dow Jones Transportation Average remains.
The index has trended higher compared to many blue chips, which have been in consolidation for some time now. Many component companies of the index are trading at or near their 52-week highs.
With this trend, there is still some resilience to this stock market, even with a backdrop of reduced earnings outlooks.
What is noteworthy in this regard is the NASDAQ Composite Index, which remains right at its 52-week high and is creeping closer to its all-time record high set in 2000. Countless technology and biotechnology stocks continue to push to new highs. It’s a near-term bullish stock market indicator in an environment of declining expectations.
And declining expectations are why the action in the NASDAQ is so worrisome. The stock market’s been stretched for some time now, with previous leadership from blue chips and small-cap companies. The recent outperformance in the NASDAQ Composite—the component companies of which are far more risky than blue chips—is itself a telling indicator.
But while the stock market has been due for a correction for months now, the action in the Dow Jones transportation stocks, as well as the technology sector, is evidence of the continued resilience in equities.
Recognizing that there are very few instances of optimal buying opportunities in this stock market, I’m still very reticent to be a buyer in a market … Read More
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