Cubist released first-quarter results that were in line with expectations. U.S. Cubicin sales,which make up nearly 90% of total company sales, increased 9% to $202 million for the quarter, which is in line with consensus estimates. Cubist maintained its forecast for full-year Cubicin sales of $900-$925 million, and our estimates put sales near the low end of that range. Gross margins increased 110 basis points over the prior year largely owing to Cubicin price increases. As expected, income fell versus the prior year resulting from Cubist’s heightened research and development, or R&D, investments. R&D for the quarter was $114 million…
Author: Daniel Curran
Throughout 2012, Canon CAJ noted that the effects of the European financial crisis were widely felt, affecting global demand. Signs of improvement in the U.S. were more than offset by spreading weakness in demand in Europe and slowdowns in emerging countries such as China and India. This global weakness led to a revenue decline of 2.2% and a decline in operating margins to 9.3% from 10.6%. Demand for most product groups was mixed, but mostly constrained by a weak global economy. Office color multifunction devices showed growth, which was more than offset by demand for laser printers. Global demand for…
Williams-Sonoma posted in-line revenue growth and operating margin gains for its fourth quarter, but investors were particularly encouraged by management’s upbeat 2013 forecast and three-year outlook. The company is well positioned in a large and fragmented industry, led by its multi-channel (and multi-concept) business, which should drive long-term results. Total fourth-quarter revenue rose 11% year over year, to $1.4 billion, as the firm’s lower-price-point value proposition and solid e-commerce platform continue to drive volume gains. Same-store sales were up 4.0% in a solid showing (versus 6.6% in the year-ago period), led by West Elm and Pottery Barn Kids, which were…
Lululemon notified the investing community Monday of manufacturing concerns regarding its signature Luon black pants. Coverage of the fabric is weak, causing sheerness in the pants. The company has removed from its shelves the units that do not meet its stringent technical specifications. While this sounds like a small concern, the press release noted that the affected items were nearly 20% of all women’s bottoms in the retail channel and that there would probably be a shortage of these styles during the first quarter, lowering profitability. Before last weekend, the company was on track for doubledigit comparable-store sales growth and…
Although Aeropostale’s fourth quarter was in line with its previously announced guidance, it left analysts less than enthusiastic about the cadence of the current business, particularly since the fourth-quarter earnings per share forecast had already been cut nearly in half from the initial expectation. The apparel business remains very competitive, yielding Aeropostale no economic moat, and there are other retailers that are in better competitive position at this time. While there is value in this business, management is having some trouble unlocking it, and analysts remain concerned that Aeropostale will get trapped in a cycle of discounting to drive traffic…
After releasing its sales data, Wm Morrison Supermarkets discussed its financial results for fiscal 2012 (ending February 3, 2013) in more detail, supporting the thesis of operating margin declines. The company will most likely have to increase its sales by sacrificing its gross margins or go through a deleverage of expenses from negative like-for-like sales of 2.1% for the year. Wm Morrison faced a strategic decision at the beginning of the year, which involved keeping its profit margin by not matching the prices with competitors, which probably impacted the comps decrease. Nevertheless, the company got to keep flat its administrative…
The recovery in U.S. housing activity continues to support top-line growth, but lower margins leave analysts slightly disappointed by James Hardie’s third-quarter results. Third-quarter sales increased 13% to USD 320.4 million, with revenue for the first nine months up 7% to USD 994.5 million. Having a larger negative impact than expected, were the combination of increased demand for lower-price products and costs associated with increasing capacity. Gross margin fell from 32.8% in the first half to 30% in the third quarter. Underlying earnings before interest and taxes (EBIT) declined 5% to USD 144 million in the first nine months. Current…
Seadrill’s fourth-quarter results were again impacted by blowout-preventer (BOP) issues, which have tripped up one of the industry’s strongest operators in the latter stages of 2012. Quarterly revenue was $1.2 billion compared with $1.1 billion in the prior quarter, and operating income improved sequentially to $441 million from $413 million. Deepwater utilization levels improved to 86% from 82% in the prior quarter, which contributed to the improved sequential performance, but continued BOP issues and a delay in starting the West Hercules contract with Statoil STO kept the utilization numbers below the 95%-plus level Seadrill has historically targeted. The issues will…
As expected, HeidelbergCement posted strong results for 2012. Despite only a 1% increase in total cement sales volume and a 5% drop in aggregates volume, revenue grew 4% on a like-for-like basis and EBITDA improved 3% thanks to price increases in key markets and cost-reduction efforts. Asia Pacific contributed the most to HeidelbergCement’s earnings improvement. There, cement sales volume grew 4% and EBITDA margins improved to 25.5% from 24.0% in the prior year. To capture expected demand growth in the region, HeidelbergCement is working on significant brownfield and greenfield cement capacity expansion projects in Indonesia. North America saw an impressive…
Recent results for Urban Outfitters confirm that the company has continued to connect with its core customer. Stable input costs this year and better inventory positions along with improved merchandising and concise global brand outlook will treat Urban well in 2013. Despite the positive momentum behind the company and the stock, the shares currently trade at approximately 20 times estimated 2013 earnings, which seems in line with expected 22% expected earnings per share growth. Like many other retailers, Urban offered updated revenue results earlier in the year, so earnings were of little surprise. Fourth-quarter revenue rose 17% to $857 million,…
Strength in North American operations was not enough to offset revenue and profitability pressure in the majority of Adecco’s European regions as economic headwinds persisted throughout 2012. Currency effects led to relatively flat revenue growth year over year at EUR 20.5 billion; however, this masked an organic decline of about 4% as France, Italy, and Iberia showed particular weakness throughout the year. Amid a difficult economic backdrop, cost control efforts contributed toward gross margin improvement of 50 basis points to 17.9% for the year. However, North American and European restructuring charges weighed heavily on overall operating margins, which declined 40…
Air France-KLM AF reported a loss for the full year 2012 as a higher fuel bill outweighed strong costcontrol efforts initiated as part of its Transformation 2015 plan, and we are making no changes to our fair value estimate. Air France-KLM’s performance for 2012 was helped by strong load factor and yields in the passenger segment, offset by continued weakness in cargo. Total revenue of EUR 25.6 billion was 5% higher than last year. Operating loss totaled EUR 300 million as its total fuel bill increased by nearly EUR 1 billion from 2011. Excluding fuel, operating expenses were up by…