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Kinder Morgan 10-25 02:22 GMT  
(Report with Analyst's Data Sheet) 
Kinder Morgan has kept the spending on capital projects and dividends well contained such that the company has not needed to access outside funding. Rather...
Demand Exceeding Supply by Dave Novosel, CFA
Johnson & Johnson 10-25 02:17 GMT  
(Report with Analyst's Data Sheet) 
JNJ had a busy week, gaining regulatory approval for its COVID-19 vaccine booster, reporting strong third quarter results, and announcing an unusual...
Texas Two-Step by Carol Levenson, CFA
Suzano Papel e Celulose, Klabin 10-25 02:11 GMT  
(Report with Analyst's Data Sheet) 
Suzano SA (SUZANO) and Klabin S.A. (KLAB) will release their 3Q21 results this week. We update our call on the two names after the...
Mind The Spending Cap by Alexandre Dray
Penn National Gaming 10-25 02:03 GMT  
(Report with Analyst's Data Sheet) 
Penn National Gaming (PENN) not long ago announced the aca quisition of Score Media and Gaming, a "best in class sports media" company in Canada. ...
Good Score by Kim Noland
Interpublic Group 10-22 17:28 GMT
(Comment)
Interpublic Group posted a rather impressive 15% increase in organic revenue for the third...
Earnings by Dave Novosel, CFA
Interpublic Group posted a rather impressive 15% increase in organic revenue for the third quarter, following the 20% hike in the second quarter. U.S. organic growth was 14.7%, while international organic growth was 15.5%. Management raised its guidance for full year organic growth to 11%, suggesting 7% growth in the fourth quarter. Q3 reported revenue rose almost 20%. Operating margins expanded by 200 basis points, reflecting lower salaries, benefits, and payroll taxes expenses relative to sales. In addition, occupancy costs were lower, stemming from real estate restructuring actions taken last year. The substantially higher EBITDA has pushed leverage down to 2.2x versus 4.0x at the end of last year. Moreover, accounting for the $500 million note that was repaid after the close of Q3, leverage is now down to 1.9x.
Evergrande Real Estate Group Ltd 10-22 08:09 GMT
(Comment)
Evergrande has been reported to have transferred enough funds to pay...
Bankruptcy by Cedric Rimaud, CFA
Evergrande has been reported to have transferred enough funds to pay the $83.5 million USD coupon, whose grace period was to expire on Saturday, thus avoiding a default on the bonds and giving more time to the embattled real estate developer to finalize some assets sales that will help pay the other debt that will be coming due over the next few months. It is unclear how the company got this last minute lifeline, given that previous talks of a $2.6 billion asset sales have collapsed this week. This could be a sign that the Chinese authorities are finally giving in to avoid more messy defaults in the sector. The next few weeks will be important to understand how the sector could avoid more problems, as home sales are continuing to plunge, as we reported in our last report on KWG Property. Given the uncertainty, we remain cautious on the sector.
Steel Dynamics 10-22 02:03 GMT  
(Report with Analyst's Data Sheet) 
Steel Dynamics (STLD) posted triple digit third quarter year over year growth in sales and adjusted EBITDA (double digit gains sequentially) on higher...
Good Times Roll by Evan Mann, CFA
The Travelers Companies 10-22 01:22 GMT  
(Report with Analyst's Data Sheet) 
Catastrophe losses increased for the insurance sector in the third quarter, largely reflecting the impact of Hurricane Ida. The Travelers...
Back On The Road Again by Kathleen Shanley, CFA
KWG Property Holding Ltd 10-22 01:09 GMT  
(Report with Analyst's Data Sheet) 
Home sales in China continue to be affected by the demise of several large developers, as well as the recent tightening of regulations to...
A New Crisis by Cedric Rimaud, CFA
IBM 10-21 16:27 GMT
(Comment)
The good news at IBM is that the company has now produced three consecutive quarters of revenue growth. The...
Earnings by Dave Novosel, CFA
The good news at IBM is that the company has now produced three consecutive quarters of revenue growth. The bad news is that revenue only increased 0.3% in the third quarter. Adjusting for the divested businesses and the currency impact, revenue dropped 0.2%. The even worse news is that operating margins declined 190 basis points in Q3. Management attributed the margin weakness to increased investments in skills, innovation, and its ecosystem. Revenue gains in the Global Business Services (+11.7%) and Cloud & Cognitive Software (+2.5%) segments were offset by declines in the Systems (-11.9%) and Technology Services (-4.8%) segments. Margins were down in every major segment except Technology Services, where they were flat. IBM generated roughly $600 million of free cash flow in Q3 and used almost $300 million to reduce debt. IBM has reduced debt by more than $6 billion in 2021 as it works off the debt incurred in the Red Hat acquisition. Total leverage is 3.7x, while core leverage is just over 2x. The separation of Kyndryl, which encompasses most of the Technology Services unit, is set for early November. Excluding the Kyndryl operations, revenue would have increased 2% in Q3 versus up 1% in Q2, and down 1% in Q1. Management noted that some customers paused spending in advance of the Kyndryl separation, and that has continued into the fourth quarter. IBM is hoping for mid-single digit growth following the separation, but we think that may be aggressive.
AT&T 10-21 14:43 GMT
(Comment)
AT&T reported a 5.7% decline in revenue for the third quarter, reflecting primarily the divestment of its...
Earnings by Dave Novosel, CFA
AT&T reported a 5.7% decline in revenue for the third quarter, reflecting primarily the divestment of its video business early in the quarter. Adjusting for the disposition, revenue was up 4.7%. The core of the company once Warner Media is spun-off will be the Mobility segment, and that unit performed well in Q3. AT&T added 1.2 million postpaid subs, including 928K postpaid phone net subs and 249K prepaid subs. Revenue rose 7%, including a 15% jump in equipment revenue and a 4.6% rise in service revenue. However, operating margins dropped 70 basis points because of higher equipment costs, costs associated with the shutdown of the 3G network, and higher costs relating to the new iPhone launch. Business wireline revenue fell 5.2%, attributable to lower service revenue and lower demand for legacy voice and data services. Operating margins plunged 230 basis points. Consumer wireline revenue was up 3.4% due mostly to gains in broadband. However, margins declined 40 bps because of higher technology and depreciation expenses. Overall, Communications division revenue rose 3.8%, but margins deteriorated by 80 bps. Warner Media, which will be gone soon, had a good quarter, with revenue up by 14% and margins higher by 20 bps. Thankfully, the video business is gone and the Vrio operations will be gone soon. Leverage is high at 3.8x now but should improve with the elimination of a huge amount of debt when Warner Media is divested. AT&T has posted some impressive numbers in the wireless sector of late, but it has come at a cost as margins in that business have been eroding, reflecting its highly promotional stance and steeper equipment costs. The margin erosion has occurred despite the fact that the company has achieved $3 billion in cost savings as part of its initiative to save $6 billion.
Verizon Communications 10-21 13:14 GMT
(Comment)
Verizon posted a 4.3% increase in revenue for the third quarter, not quite as...
Earnings by Dave Novosel, CFA
Verizon posted a 4.3% increase in revenue for the third quarter, not quite as impressive as the 11% increase in the second quarter, but better than the 4.0% rise in the first quarter. Furthermore, EBITDA margins rose 150 basis points to more than 39%, a level we have not seen for a few years. But the segment results were not as pretty. Business segment revenue fell 0.8%, marked by huge declines in Wholesale (-15%) and Public Sector (-6%). EBITDA margins declined 40 basis points. Consumer segment revenue was up 7.3%, highlighted by a 33% increase in wireless equipment. However, EBITDA margins plunged 240 basis points. VZ added 98K FiOS internet customers, while losing 68K FiOS video subs. VZ also added 55K fixed wireless broadband customers, a sector promoted as one of its growth vectors. Revenue in the Media segment was down more than 17%, reflecting the sale of those operations roughly two-thirds through the period. A massive decrease in corporate expenses allowed overall company margins to improve. In terms of wireless, revenue rose 4% as VZ added nearly 700K retail postpaid net subs, its best Q3 performance in several years, including 429K phone adds. The company is on track to generate free cash flow of between $9 and $10 billion this year. $200 million of that cash was used to repay debt in Q3. Nevertheless, the huge increase in debt to fund the C-band spectrum purchase earlier this year has left leverage at 3.1x. Finally, management continues to boast that VZ has the best network, a claim upheld by RootMetrics reports. Many other third-party reports have acknowledged T-Mobile as the leader, particularly with respect to 5G.
FirstEnergy 10-12 
An Independent Viewpoint
Rigorous Analysis
Coverage of Key Securities
Every report is one page, and concludes with an actionable investment recommendation.
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