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Southern Copper Corporation 03-02 02:04 GMT  
(Report with Analyst's Data Sheet) 
The price of copper has shot to its highest price of the last ten years, due to supply constraints and a strong demand coming from China...
New Highs by Cedric Rimaud, CFA
Lowe's 03-02 01:57 GMT  
(Report with Analyst's Data Sheet) 
Lowe's has a new strategy called the Total Home, but perhaps it should have been called the Total Universe, as consumers use their home as an office, a school, a gym,...
The Total Home by Carol Levenson, CFA
Telefonica 03-02 01:51 GMT  
(Report with Analyst's Data Sheet) 
Revenue continued to deteriorate at Telefonica in the fourth quarter, although not to the same extent as in previous periods. Organic revenue fell 2%, bringing...
Debt Down; But So Is EBITDA by Dave Novosel, CFA
Transocean 03-02 01:44 GMT  
(Report with Analyst's Data Sheet) 
Transocean (RIG) expects global floater counts to continue declining through the first half of 2021. But the company is optimistic day rates will improve by the...
Optimism Or Head Fake by Evan Mann, CFA
National Rural Utilities Coop Fin Corp 03-01 02:52 GMT  
(Report with Analyst's Data Sheet) 
Last week, National Rural Utilities Cooperative Finance Corp. (NRUC) tapped the corporate bond market, pricing $600...
Electric Lender by Kathleen Shanley, CFA
EVRAZ plc 03-01 02:44 GMT  
(Report with Analyst's Data Sheet) 
Evraz plc (EVRAZ) reported some good 2H20 results, which came in line with market expectations. The company managed to improve further its credit measures and the...
On The Right Track by Alexandre Dray
HP Inc. 02-26 18:29 GMT
(Comment)
It was a banner fiscal first quarter (ended January 31st) for HP Inc., with revenue up 7% and operating...
Earnings by Dave Novosel, CFA
It was a banner fiscal first quarter (ended January 31st) for HP Inc., with revenue up 7% and operating margins 350 basis points higher. Printing revenue rose almost 7% and it has been a very long time since growth of this nature was achieved organically. Hardware unit shipments soared 16%. Printing margins were up 380 basis points, attributable mostly to favorable pricing, particularly in consumer hardware. Personal Systems revenue increased 7.2%, driven by a 15% rise in shipments, including a 33% surge in notebooks. Operating margins rose 40 basis points, reflecting better pricing (including fewer promotions) and lower commodity costs. Management cautioned that growth over the remaining quarters is likely to slow from Q1 as the market environment returns to more normal levels. In addition, the company remains supply constrained. HPQ generated $641 million of free cash flow in Q1. Roughly $40 million was used to reduce debt. The company also made share repurchases of nearly $1.4 billion. The outlay was funded with remaining FCF and cash on the balance sheet. Nevertheless, HPQ still has $4.2 billion of cash. Leverage was 1.5x at the beginning of the year, but it likely to move lower on the better EBITDA we are anticipating. HPQ could easily fund the expected share repurchases of $1 billion per quarter with FCF and cash on hand. However, should it opt to add more debt for the buybacks, leverage could end up flat at 1.5x. We view either possibility favorably.
Dell Technologies Inc. 02-26 16:45 GMT
(Comment)
Dell Technologies capped off the year with a 9% increase in revenue for the fourth...
Earnings by Dave Novosel, CFA
Dell Technologies capped off the year with a 9% increase in revenue for the fourth quarter, bringing the gain for fiscal 2021 (ended January 29th) to 2.2%. Revenue soared 17% in the Client Solutions Group, with strength in both commercial and consumer and record shipments overall. Revenue in the Infrastructure Solutions Group was up just slightly, as storge fell 2% while servers and networking rose 3%. VMWare revenue rose only 6%, which is the smallest increase we have seen in this unit. Operating margins soared more than 500 basis points to 8.3%, a level we have not witnessed previously. The increase was marked by a huge improvement in Client Solutions, a nice gain in Infrastructure Solutions and a modest decline at VMWare. Margins were aided by record shipments, favorable component costs, and operating expense controls. Furthermore, amortization expenses dropped dramatically, while transaction-related costs and purchase accounting charges were down. Dell generated $9.3 billion of free cash flow in 2021 and used $4.5 billion to slash debt. Consequently, total leverage has fallen to 4.5x, while core leverage is 2.7x. Meanwhile, the company has more than $15 billion of cash. Management is confident that demand will continue to improve, citing IDC and Gartner forecasts for mid-single digit growth in IT spending in 2021. However, margins are likely to be lower this year because of higher costs for LCDs and ICs and operating costs that will return such as 401k matches and merit raises. The shift in mix toward Client Solutions and increased investments at VMWare will also constrain margins. The Q4 results confirmed our positive view of the operations. What has concerned us is the potential for a tax-free spin-off of the VMWare unit and related financial engineering. Management did not take questions regarding this matter on the conference call.
Anheuser-Busch Inbev 02-26 13:33 GMT
(Comment)
Anheuser-Busch InBev reported a 4.5% increase in organic net sales for the fourth...
Earnings by Dave Novosel, CFA
Anheuser-Busch InBev reported a 4.5% increase in organic net sales for the fourth quarter, following a 4.0% increase in Q3. Total volumes rose 1.6%. South America led the way with a gain of 17%, while organic net sales rose 4.5% in the Middle Americas and 2.4% in North America. Market share declined again in the U.S., but only 5 basis points, which is a victory of sorts. These gains easily offset the 6.6% decrease in EMEA and the 2.9% decrease in Asia Pacific. Reported net sales drooped 4.2%, attributable to the foreign currency impact. EBITDA margins fell 70 basis points mainly due to supply chain adjustments made to meet the evolving demand and investments in line with greater volumes. Margins were down in every segment except South America. In addition, North America was buffeted by increased sales and marketing expenses, higher can costs, and increased over-the-road expenses. The company produced free cash flow of $5.4 billion, the best we have seen in many a year, boosting cash holdings to more than $15 billion. BUD used the proceeds from the sale of its Australian operations to reduce debt by $8.3 billion in 2020. However, the huge drop in EBITDA pushed leverage to 5.6x versus 5.2x at the beginning of the year. So, investors are facing a long wait before leverage reaches management's goal of 2.0x on a net basis. Management indicated that sales should increase significantly in 2021. However, margins will be hampered by an adverse channel and packaging mix, as well as commodity cost increases and foreign exchange headwinds, particularly in Brazil. Free cash flow will be constrained by higher capital expenditures in support of investments in innovation and other consumer-centric initiatives.
The Williams Companies, Inc. 02-24 13:45 GMT
(Comment)
The Williams Companies reported a 4% increase in adjusted EBITDA for the...
Earnings by Dave Novosel, CFA
The Williams Companies reported a 4% increase in adjusted EBITDA for the fourth quarter, following slight declines in Q3 and Q2. So, in a year in which the coronavirus ravaged the economy, oil prices plunged, and hurricanes disrupted activity, Williams, which primarily transports natural gas, posted a gain of almost 2% in adjusted EBITDA. The Northeast G&P segment led the way in Q4 with an 8% increase, reflecting lower operating and administrative costs and higher contributions from equity-method investments. The latter was aided by a 7% increase in gathering volumes and a 9% rise in processing volumes. Adjusted EBITDA rose 5% in the West due to higher service revenue associated with certain MVCs and higher rates. The Transmission & Gulf of Mexico segment was relatively flat. Distributable cash flow rose nearly 12%, due mainly to a $42 million alternative minimum tax refund received this year. The dividend coverage ratio increased to 1.9x versus 1.8x in Q4 last ear. Leverage dropped to 4.38x at year-end. Management is guiding to similar growth in adjusted EBITDA in 2021. Assuming that goal is reached, leverage would fall to 4.25x, thereby approaching management's target of 4.2x. Management also provided an estimate for growth capital spending of $1 to $1.2 billion in 2021, with about 50% of the expenditures in the Transmission & Gulf of Mexico segment. Given our outlook for modestly higher DCF, we estimate WMB will have sufficient capacity to reduce debt. In any case, the company will not need to access more funding.
Lowe's 03-01 
Transocean 03-01 
First Quantum 02-25 
Teck 02-23 
Charter 02-23 
General Motors Financial 02-11 
Ally Financial 02-09 
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