PerkinElmer’s second-quarter results showed sequential improvement from a rough start to 2013, as the company saw signs of life in its industrial business and adjusted its cost structure to better navigate challenging macro environment. Organic revenue bounced back to 3% growth year over year after declining in the first quarter. Some of the earlier headwinds dissipated in the quarter: in vivo imaging was up 20% in the quarter (helped by order delays experienced in the first quarter), Japan was up sequentially due to government stimulus, and industrial end markets bounced back nicely (although we anticipate this end market to remain…
Author: Erik Witlen
Komatsu reported in-line quarterly results on Monday, meeting analyst’s expectations. As seen at competitors such as Caterpillar and Joy Global in recent quarters, Komatsu’s mining business suffered in the period, with sales falling 16.5% from a year ago. Although the firm’s construction equipment revenue grew 4.6%, Komatsu’s combined mining and construction equipment segment (92% of quarterly sales) saw revenue fall roughly 3% year over year, as mining was roughly 31% of the segment’s sales. Still, operating margin was roughly flat compared with last year, as favorable exchange rates, positive selling prices, and cost cuts helped to maintain profitability. In all,…
Rate increases and a large gain from limited partnership investments drove earnings higher in CNA Financials’ second quarter. Operating income increased to $0.75 per share, a 34% increase over last year’s second quarter. Net written premiums were up 7% in property-casualty operations year over year as the firm increased rates 7% in the specialty segment and 9% in the commercial segment. The combined ratio was essentially flat with last year’s quarter, which had much higher favorable reserve development than this year. CNA was able to keep the combined ratio steady largely because of a 1.2 point drop in underwriting expense.…
Chorus provided a tour of its Auckland fibre lab last month. The tour included a demonstration of fibre equipment at the exchange, a mock-up of ducts and fibre connection from the exchange to the premise, and technologies at the premise. However, the regulatory uncertainty will remain a barrier for the share price to converge towards our fair value estimate in the short term. Chorus’ narrow economic moat is based on efficient scale and cost advantage. Its nationwide assets are essentially monopolies, and difficult to replicate. Post fibre rollout, the company’s fibre assets will cover 75% of New Zealand’s population. With…
Schnitzer Steel Industries SCHN reported fourth-quarter earnings per share of $0.03, a steep decline from $0.32 per share last quarter and $0.40 per share during the same period a year ago. Although all three business units (metal recycling, auto parts, and steel manufacturing) generated increased sequential sales volume, the global capacity overhang facing the steel industry proved difficult to navigate. As global steel production outpaced demand, Schnitzer was subject to declining scrap prices and export volumes. In total, 73% of ferrous sales volume was accounted for by export customers, with China, Turkey, and Malaysia serving as the leading end-market destinations.…
Management proposes modestly reducing DUET’s complexity and opacity via a restructure aimed at reducing the number of stapled entities in the group from six to four. DUET originally comprised four stapled entities, but the internalisation process in late 2012 required the number to increase to six. At the same time, the group will create a corporate arm to control equity in the operating businesses and a funding arm to hold debt investments in those businesses. Currently, no single DUET entity controls the operating businesses and each has a different board of directors. The restructure will establish clearer lines of authority,…
FTI Consulting reported first-quarter results that were in line with expectations. The company’s first-quarter revenue increased 3% year over year to $407 million. The company reported generally weak numbers across the board, except for its Economic Consulting practice. Given its mix of procyclical and countercyclical businesses, FTI used to report steady midto high single-digit growth in the past. However, with the economy just chugging along, the company is seeing muted demand across most of its businesses. Economic Consulting remains the lone bright spot for FTI. Driven by increased antitrust and merger and acquisition activities, Economic Consulting reported 15.1% growth in…
Recent events in Brazil and a distressed rig sale have provided some interesting insights into the current market environment for offshore drillers. During the past year in Brazil, there have been shipyard and customs strikes as well as regulatory delays in obtaining the needed approvals to start work. These issues are separate from the well publicized issues with Chevron CVX and Transocean RIG and their involvement in the Frade field oil spill. Furthermore, we’ve recently seen the sale of an ultra-deep-water rig by a struggling new industry player at a modest discount to newbuild rates of around $625 million to…
Air Canada posted strong operating profits of CAD 174 million in the second quarter versus CAD 63 million in the year-ago period. Sales grew 2.3% to CAD 3.1 billion, driven by traffic growth of 1.6% and 1.5% higher yields. Fuel expenses were down 6.4% from the prior year, and cost per available seat mile excluding fuel was down 1.4%, exceeding our expectation. The load factor remained robust at 83%. These were strong results for Air Canada, especially as competitor WestJet posted a softer load factor. Still, the differences are striking. WestJet has posted positive operating profits for 33 straight quarters,…
Tesco reported that Christmas and New Year like-for-like domestic sales increased 1.8%, excluding petrol and a value-added tax. The same-store sales increase is an acceleration from the third-quarter 0.6% LFL sales decline and ahead of figures reported by rivals J. Sainsbury and Wm Morrison, albeit off an easy year-ago comparison. Still, the domestic LFL sales improvement was the strongest in the three years and probably signals that the GBX 1 billion price investments initiated by Tesco are starting to yield some results, which has shares trading about 2% higher. The company derives a majority of its sales and profits from…
Automakers reported new U.S. light-vehicle sales on May 1 that continued to show a recovery, but the seasonally adjusted annualized selling rate, or SAAR, declined from March. The SAAR according to Automotive News was 14.9 million compared with 14.1 million in April 2012 and 15.25 million in March 2013. Full-size pickups continue to far outperform the industry, and we expect that to continue throughout the year. Ford Motor Company’s F F-Series truck grew sales 24% in April year over year, is up 19% for the year, and had its best April since 2006. General Motors’ GM large pickups rose 23%…
Harvey Norman’s March quarter comparable sales increased by 1.5%. With the larger listed retailers reporting a strong bounce in activity for the quarter we are not impressed and it confirms our view of the competitive headwinds and structural challenges facing the company. Both Woolworths and Wesfarmers continue to report strong sales growth as they capture a growing share of the consumer dollar by using their purchasing power to deliver the best in everyday value for customers across a broad range of product categories. Many of these categories, such as white goods, now overlap directly with Harvey Norman’s product range. Convergence…