Sonova Holding reported its first-half results for fiscal 2013 on Wednesday. For the first time in a while, currency positively affected the performance, with revenue growing 14.3% in Swiss francs and 7.9% in local currencies. Growth was broad-based, with the United States, Europe, Asia Pacific, and Americas all growing in high single digits (in local currencies). Across product segments, hearing instruments fared well with 2% organic growth, but the main driver of growth was the cochlear implant business, which grew 71% in local currencies. The rebound in this segment wasn’t a complete surprise given competitor struggles and the return of…
Author: Stefan Levy
On Tuesday, a settlement agreement was filed in the regional efficiency standards lawsuit. Essentially, HVAC distributors in the South and Southwest will have 18 months (July 1, 2016) to sell any inventory of 13-SEER equipment that was manufactured before January 1, 2015. The Department of Energy (DOE) had first mandated that as of January 1, 2015, all replacement and new construction HVAC equipment installed in the South had to be SEER 14 or higher. Under the original rule, Watsco would have enjoyed 2%-3% of price/mix in 2015. About 30% of sales are split-systems and roughly 70% of sales are in…
Monroe Capital’s net investment income of $0.31 exceeded our $0.28 forecast, primarily due a large prepayment fee, which more than offset our forecasts for a slightly smaller investment portfolio, higher interest expense, and higher operating expenses. Portfolio growth was strong, up 23% from the prior quarter, to $208 million, but shy of our $220 million estimate. The yield on assets was 13.6%, above our 11.1% estimate, primarily due to fees associated with a prepayment. As the portfolio seasons, we anticipate the frequency of prepayments—though lumpy by quarter—to increase slightly, driving upward pressure on the total asset yield. Leverage remains low…
Telefonica reported year-end results that were slightly better than analysts’ projections. The firm’s revenue declined 0.8% for the year versus our projection of a fall of 1.4%. While Telefonica’s revenue success in Latin America wasn’t quite sufficient to offset its revenue declines in Europe, it was slightly better than we anticipated. Revenue in Latin America increased 5.5% year over year, driven by solid subscriber growth. The firm’s wireless subscriber base grew 6% to 176.6 million, while its broadband and television bases each gained 7%, to 8.4 million and 2.4 million, respectively. Even its fixed-line business improved 1% to 24.2 million.…
Mattress Firm (MFRM) reached a record high Friday after the company reported an improved quarter of revenue and same-store sales. It also issued mixed guidance for fiscal 2014. Shares are up 5.71% at $46.99, with an all-time high of $47.64. The specialty retailer of mattresses reported late Thursday Q4 adjusted income of $10.4 million or $0.30 per share, ex one-time items, compared with the prior-year period’s $9.99 million or $0.30 per share. Revenue was $312.1 million, up 20.8% from the same quarter last year. Comparable-store sales growth was 6.5%. Analysts polled by Capital IQ were expecting EPS of $0.29 on…
Diversified Restaurant Holdings (BAGR) reported in-line 4Q earnings, with same store sales growth of 10.3%, sending shares up 17%. Diversified, operator of Bagger Dave’s Burger Tavern restaurants and one of the largest franchisees of Buffalo Wild Wings, said it broke even for the quarter with 4Q EPS of $0.00 per share vs. a loss of $0.03 per share in the year-ago period. The results were in-line with Capital IQ EPS estimates of $0.00 per share. The company reported 4Q revenues of $28.5 million vs. $18.9 million in the year-ago period. In afternoon trade, BAGR was up 17.42% to $5.19.
Unlike recent history, MoneyGram International revenues were slightly below our estimate, which were offset by a lower-than-expected tax rate. Total revenue growth decelerated 200 basis points quarter-to-quarter, rising a still-healthy 9% year-over-year, to $386 million (versus our estimate of $392 million), while adjusted EBITDA rose 7% year-over-year, to $76.4 million (versus our estimate of $78.3 million). Margins fell 40 basis points year-over-year to 19.8% as MoneyGram incurred higher compliance-related costs and higher commission expense related to Wal-Mart (WMT $74.80; Market Perform), the latter of which MoneyGram will lap in April 2014. The deceleration in the quarter was broad based, but…
Illinois Tool Works encountered slower-than-expected revenue growth in North America during the second quarter, but Europe and China were surprisingly strong, especially in its automotive original-equipment manufacturing segment. While revenue and earnings per share slightly missed consensus expectations, the company is well positioned to meet its full-year EPS guidance given ramping enterprise initiative benefits and a bottoming in Europe. Second-quarter results helped to confirm that weak firstquarter results reflected the trough in top-line performance. Second-quarter organic revenue was flat year over year and below internal expectations of up 1%, but was an improvement from 2.7% revenue contraction last quarter. North…
Avnet reported moderate fourth-quarter results last week that met consensus estimates. Avnet generated $6.6 billion of total sales, in line with seasonality and analysts’ expectations, and up 20 basis points from the year-ago quarter on a pro forma basis. Investors are pleased to hear that Avnet generated better than expected growth from European markets during the fourth quarter, which jumped 12% from the year-ago quarter. Full-year sales to Europe still ended 2% lower relative to the previous year, but we are optimistic that the eurozone growth could continue into fiscal 2014. Outside of Europe, sales to the Americas were down…
Lower prices for key metals copper, gold, and nickel predictably weighed on First Quantum’s second-quarter profitability. Excluding the acquisition of Inmet, which closed toward the end of the first quarter of this year, gross profit declined 30% to $193 million. The acquired assets added $71 million to that figure before one-time accounting adjustments associated with the deal. Operationally, it was a solid quarter and management affirmed prior volume and unit cost guidance. Production was up at legacy operations. Copper cash costs excluding the recently acquired Inmet assets declined to $1.47 per pound after byproduct credits from $1.53. Including the Inmet…
H&M’s financials continue to be affected by operating in a market where the home currency remains strong, with the Swedish krona persistently rising against most other global currencies. But this was a particularly difficult quarter for the business, as the colder-than-usual weather in Northern Europe and the Scandinavian region (where around half of its locations operate) also weighed on results, and H&M realized lower sales volume than it had anticipated. Both of these factors are largely out of management’s control, and our long-term outlook regarding the favorable growth potential of the business is intact. In the second quarter, H&M recorded…
Infosys announced over the weekend that N.R. Narayana Murthy, one of its founders, is back with the company as its executive chairman. This is Murthy’s second stint with Infosys, having served as its CEO from its inception in 1981 until 2002 and as its chairman from 1981 until 2011. Given Infosys’ string of poor results under CEO S.D. Shibulal, questions were frequently raised about his continuance in the role. However, the odds of Shibulal stepping down or being replaced were considered slim as it is widely perceived that the company wanted to give all of its founders an equal chance…