Earnings Release – 23 Jan 2014

With the collaboration of Junior Analysts

Edited by Vani Rao

McDonald’s lacklustre performance

McDonald’s (NYSE:MCD) reported a 2% increase in sales to end the fourth quarter at $7.09 billion as compared to the year-ago period. Moreover, its sales in the European countries increased by 1% during the quarter. Overall, the company failed to meet analysts’ expectations for the fourth-quarter results. On a positive note, net income rose by 4% to $5.6 billion, translating into earnings per share of $5.55. Revenue declined 1.4% in the US, much more than the analysts’ expectations, and by 2.4% in Asia-Pacific/Middle East/Africa (APMEA) countries. This resulted in an 8% decrease in operating income for the quarter.

Microsoft profit up on strong commercial sales, CEO search continues

Microsoft’s (NASDAQ:MSFT) second-quarter profit rose 3%, as strong sales of its Office software to businesses offset another weak quarter for its flagship Windows operating system, which is suffering as consumers increasingly favor tablets over personal computers. The company reported a profit of $6.56 billion, or 78 cents per share, compared with $6.38 billion, or 76 cents per share, in the year-ago quarter, easily beating Wall Street’s average estimate of 68 cents. Sales rose 14% to $24.5 billion, helped by higher sales of Office, its Xbox game console and new Surface tablets, also beating Wall Street’s forecast of $23.7 billion.

Starbucks’ growth cools in the US

Starbucks (NASDAQ:SBUX) reported that sales at established stores in its Americas region slowed down more than expected in its latest quarter as consumers spent more time holiday shopping online than at physical stores. For the fiscal first quarter ended 29 December 2013, net earnings increased 25% to $540.7 million, and revenues rose by 12% year over year to a record $4.2 billion. The company also reported earnings per share of $0.71, which represented an increase of 25% over the $0.57 in the first quarter of its 2013 fiscal year. Global sales at Starbucks cafes that have been open for the last 13 months were up 5%, versus analysts’ average estimates of a 5.9% rise, according to Consensus Metrix.

Fidelity reports dip in net income

Fidelity Southern Corporation (NASDAQ:LION) reported dip in net income to $3.9 million in the fourth quarter compared to $1.5 million in the year-ago period. For the year, the company reported net income of $26.7 million, an increase of $2.3 million compared to $25.3 million in the previous year. Commercial loan growth was 3.5% for the quarter and 4.2% for the year. The closed mortgage loan funding increased by 10% to $2.5 billion, beating analysts’ expectations. However, non-interest income decreased by $8.4 million to end the quarter at $17.8 million. There was a reduction in the non-performing assets ratio by 3.93%. Further, Fidelity also announced a cash dividend $0.04 per share to shareholders.

Lockheed sees increase in defence spending

Lockheed Martin (NYSE:LMT) forecast higher earnings in 2014 after charges linked to US defense budget cuts and workforce reductions depressed earnings in the fourth quarter. CEO Marillyn Hewson told reporters that Lockheed remained focused on becoming a “stronger, leaner, healthier company,” by cutting costs, improving operational efficiencies, investing in innovations, and boosting international orders. Fourth-quarter net earnings from continuing operations fell 14.2% to $488 million, or $1.50 per share, from $569 million, or $1.73 per share, in the year-ago period. Revenues dropped to $11.5 billion from $12.1 billion. Full-year earnings from continuing operations rose to $3.0 billion, or $9.04 per share.

Juniper’s profit soars on higher telecom carrier spending

Network gear maker Juniper Networks Inc. (NYSE:JNPR) posted a better-than-expected 59% rise in quarterly profit, helped by higher spending by US telecom carriers. Net income rose to $151.8 million, or 30 cents per share, in the fourth quarter ended 31 December 2013 from $95.7 million, or 19 cents per share, in the year-ago period. Revenue rose 12% to $1.27 billion. Excluding items, the company earned 43 cents per share. Analysts on an average were expecting a profit of 37 cents per share on revenue of $1.22 billion. Juniper forecast first-quarter adjusted profit of 27-30 cents on revenue of $1.12-1.16 billion. Analysts were expecting a profit of 29 cents per share and revenue of $1.14 billion.

THE DAY AHEAD For January 24, 2014

Coming up in the next 24 hours

Diversified manufacturer Honeywell International Inc. (NYSE:HON) is expected to post higher fourth-quarter profit, driven by its equipment for airplanes and automation and control products, including climate control and alarm systems. The company’s reaction to Google’s (NASDAQ:GOOG) $3.2-million acquisition of Nest, a maker of smart thermostats and smoke alarms and a rival to Honeywell, would be noted.

Xerox Corp. (NYSE:XRX) would also be posting its quarterly results. The company previously warned that operating margins in its biggest business, outsourcing services, would remain low in the fourth quarter due to the loss of a high-margin Federal contract to handle student loans.

Bristol-Myers Squibb (NYSE:BMY) is expected to post lower quarterly profit compared to the year-ago period, when a $411-million tax benefit bolstered results. However, investors may well be more focused on prospects for the company’s experimental drugs, especially its promising immuno-oncology drugs and treatments for hepatitis C.

Other notable earnings for the day include results from Procter & Gamble (NYSE:P&G), Kansas City Southern (NYSE:KSY), Federated Investors (NYSE:FII), and State Street (NYSE:STT).

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