Adobe Systems’ second-quarter results were mostly within analyst’s range of expectations. Revenue declined 10.1% from the year-ago period, 3.7% below our model’s projection, as the business continues its transition from perpetual license to subscription model. In its digital media business segment, which includes the flagship Creative Cloud and Creative Suite products, revenue declined 18.1% to $670 million, 5.9% below our model as adoption of Creative Cloud was slightly ahead of guidance. In its digital marketing business unit, revenue increased 13.8% to $285 million, 0.7% ahead of our estimate driven by strong results from the Adobe Marketing Cloud product line. Revenue…
Author: Jessica Swanson
Mornginstar Research is maintaining their $21 fair value estimate for CBRE Group following the commercial real estate services firm’s acquisition of SOGESMAINT-CBRE in Belgium. Terms were not disclosed, but we don’t think the deal is large enough to move the needle on our analysis; SOGESMAINTCBRE manages less than 15 million square feet of space, relative to CBRE’s roughly 3 billion-square-foot global portfolio. The acquisition follows prior deals to expand CBRE’s capabilities in this area in Europe, including IMPACTCORTI, Euro Mall Center Management, and SCM, and we like the property management business in general. Analysts like the stability of the largely…
Teva Pharmaceuticals announced a settlement with Pfizer PFE for its at-risk launch of Protonix in 2008. The $1.6 billion settlement is not surprising, considering Teva’s launch of its generic version before Protonix’s patent expiration in 2011. Analysts consider this Teva’s largest and most controversial at-risk launch, so they don’t expect other settlements of this magnitude. Since it reserved a $670 million charge in 2012, Teva will recognize the remaining $930 million charge during its second-quarter earnings results. Cash payments will be equally split between 2013 and 2014, and management still contends insurance proceeds may cover a large portion of the…
MSCI Inc. reported first-quarter results that showed that the demand environment for its subscription-based businesses continues to remain stable. However, the company’s performance was pulled down by its asset-based fee business, which reported weak growth owing to the loss of Vanguard ETFs. The firm also reported decline in its nonrecurring revenue. MSCI’s first-quarter revenue totaled $251.9 million, representing a year-over-year increase of 10%. Organically, the company’s revenue grew 5.8%. During the quarter, MSCI’s subscription-based businesses witnessed 11.8% (6.9% organic growth) jump in revenue to $208.6 million. Within the subscription business, the demand for the company’s Index- and ESG-based products remained…
Navigant Consulting NCI began 2013 on a steady note, with first-quarter revenue up by a modest 1% to $187 million. Benefiting from its recent cost-realignment initiatives, the company reported a 150-basis-point improvement in operating margin to 13.1%. The company’s top- and bottom-line results were in line with our expectations and we are maintaining our $14 fair value estimate and narrow moat rating for the company. Except for its Dispute, Investigations, and Economics segment (a 15.6% year-over-year decline), Navigant reported double-digit revenue growth across its other three segments. As widely expected, the Health Care and Energy segments led from the front…
Rayonier reported second-quarter, pro forma operating income of $94 million, unchanged from the prior year’s figure. Flat consolidated operating income obscured a year over-year improvement in the U.S. timberland business, which continues to enjoy better end-market conditions, both at home and abroad. Persistent log price strength contrasts with recent sharp weakness in prices for manufactured wood products (i.e., lumber and panels), which were back at 2012 levels by quarter-end. Higher input costs in performance fibers and an increase in corporate expenses kept better timberland results from making it to the bottom line. Better price realizations led to a $10 million…
Nokia released preliminary fourth-quarter results that were slightly above analysts previous expectations. However, the results are not indicating a blowout quarter, nor will these results signal massive Windows Lumia growth in the near term. Device and services revenue was EUR 3.9 billion, EUR 2.5 billion of which came from the sale of 79.6 million basic and feature phones. Smart device revenue of EUR 1.2 billion was relatively in line with expectations, albeit with a different mix. On the bright side, Windows Phones represented 4.4 million smartphone units sold, a little better than expected, while legacy Symbian phone sales were 2.2…
Texas Instruments reported solid first-quarter earnings and gave investors a second-quarter outlook that were in line with expectations. TI’s revenue in the March quarter was $2.89 billion, at the high end of the firm’s revised forecast revenue range of $2.80 billion to $2.91 billion discussed in early March. Revenue was down 3% sequentially and down 8% from the year-ago quarter. Sales from TI’s core analog chip business were down 1% sequentially due to weakness in highvolume analog chips sold into PCs and consumer products. However, embedded chip sales were up 3% sequentially, thanks to healthy microcontroller demand from a host…
Quest Diagnostics continues to implement its turnaround, but few tangible results were evident in its first quarter performance. While Quest enjoys a narrow moat thanks to its position in a duopoly that dominates the independent reference lab market, there is plenty the firm could do more efficiently, from many analyst’s perspective. Since CEO Stephen Rusckowski joined the company, he has pinpointed a number of elements that could stand improvement, including shrinking the layers of management; standardizing systems, processes, and procurement; and increasing automation. If Rusckowski can put these new initiatives into place, Quest can solidify its narrow moat. Having said…
Bendigo and Adelaide Bank’s (Bendigo) BEN continues to chug along, with loan growth ahead of system growth and household deposit growth slowing moderately. The Australian Prudential Regulation Authority (APRA) Banking Statistics for the 12 months to end February 2013 print a positive picture for Bendigo, with home loans growing 6%, compared with 5% for system, and business loans increasing an impressive 14% from a low base for the year, compared with no change for the sector. Household deposits grew close to 7%, falling behind the 9% growth across the banking system. On the surface, the underperformance in deposit growth is…
At the company’s annual meeting on April 16, Enersis ENI announced plans to invest $9 billion in South American projects during 2013 to 2017. This is a 30%-plus increase over the previous five-year plan to spend $6.8 billion through 2016. The announcement is not that surprising following the recently completed $6 billion capital increase that provided the company with more than $2 billion of cash. We are maintaining our $18 per ADR share fair value estimate and narrow moat. Enersis indicated approximately $3.3 billion of the total planned investment would be in Chile, where the company is based, and the…
On Friday, Deutsche Bank announced that it has updated its previously announced results for 2012 to include an additional EUR 0.6 billion provision for litigation related to the bank’s ongoing US mortgage-related litigation and unrelated regulatory investigations. Doing so decreased the bank’s net income by EUR 0.4 billion after taxes to EUR 0.3 billion for 2012. The new provisions also nudge downward the bank’s pro forma, fully loaded Basel III ratio to 7.8% from 8.0%. An increase in revenue in Corporate Banking & Securities led the group’s results, as the bank benefited from recent Central Bank quantitative easing. Pretax income…