Earnings Release – 25 Feb 2014

Reviewed By Raqueem Khan

Vanguard acquisition drags down Tenet’s bottom line, net operating revenues rise

Tenet Healthcare Corp.’s (NYSE: THC) fourth quarter net loss stood at $24 million, or 24 cents a share, solely due to financing the acquisition of Vanguard Health Systems. In 2013, Tenet acquired Vanguard Health Systems for about $1.8 billion to expand the business as number of patients would rise due to President Barack Obama’s historic healthcare reform.
The company had reported net income of $49 million, or 45 cents, in the year-ago period. Tenet announced net operating revenues of growth of 66.7% to $3.88 billion, which is above the analysts’ expectations of $3.87 billion. Tenet reported net income from continued operations of $43 million, or 43 cents a share, down from $65 million, or 60 cents a share, in the year-ago period. Analysts were expecting net income from continued operations of 34 cents a share.
The number of hospitals operated by the Dallas-based healthcare company has increased from 49 in FY2012 to 77 in 2013. President and CEO Trevor Fetter is optimistic about FY2014 and expects EBITA in the range of $1.8-1.9 billion. The company shares gained 3.12% during the Monday’s session to close the day at $48.33. Tenet will allocate shares of the Class C capital stock to its shareholders as a dividend on the record date of 27 March 2014.

Digital Realty Trust posts strong Q4 results, outperform earnings expectations

Digital Realty Trust Inc. (NYSE:DLR) reported an 8.9% revenue growth in the fourth quarter FY2013 to $380.93 million, overshadowing the analysts’ forecasts of $376.92 million. The company’s fourth quarter 2013 core FFO (funds from operations) increased to $1.26 from $1.19 per share in the year-ago quarter, beating analysts’ estimates by 13 cents. The fourth-quarter performance was driven by record leasing, strong sales execution, and demand for cloud infrastructure and applications.
Management of the company declared a quarterly cash dividend of 83 cents per share for the first quarter of FY2014, representing a 6% hike from the year-ago dividend of 78 cents per share. The dividend is payable on March 31, 2014 to stockholders of record on March 14, 2014.
Digital Realty Trust expects its 2014 normalized FFO in range of $4.75-4.90 per share, compared to consensus estimate of $4.86 per share.

Vornado’s fourth-quarter earnings in red, but above market consensus

Vornado Realty Trust (NYSE:VNO) reported fourth-quarter FY2013 negative fund from operation (FFO) of $6.8 million, or 4 cents a share, compared to a positive FFO of $55.9 million, or 30 cents a share, in the year-ago period. Analysts at Wall Street were expecting Q4’13 negative FFO of 19 cents a share. The company’s net loss for the quarter stood at $68.9 million, or $0.37 a share from net income of $62.6 million, or $0.33 per diluted share in the prior year comparable quarter.
The company suffered impairment loss from Toys “R” Us of $282.4 million in the reported quarter. The fourth-quarter net income attributable to common shareholders stood at $107.6 million, or 57 cents a share, compared to $77.4 million, or 41 cents a share.
Vornado did not provide any guidance for FY2014 with its earnings release.
The company is scheduled to host a quarterly earnings conference on February 25, 2014 at 10:00 a.m. Eastern Time (ET).

EOG Resources’ revenues rise 20.5%, profit beat expectation

EOG Resources Inc.’s (NYSE:EOG) fourth-quarter revenue rose 20.5% to $3.75 billion from $3.01 billion in the prior-year comparable period. The company reported adjusted non-GAAP net earnings of $548 million, or $2.00 a share, compared with $437 million, or $1.61 per share, in the last quarter of 2012. Analysts were expecting earnings at $1.95 a share on net revenue of $3.53 billion.
The company has been able to pump 53% more crude oil from its oil fields, especially from Eagle Ford, Texas in the reported quarter. Chairman and Chief Executive Officer William R. “Bill” Thomas stated FY2013 as an outstanding year for EOG and is targeting for 29% growth in the total crude oil production FY2014.
The company has also announced two-for-one stock split to be issued on March 31, 2014 to shareholder of record as on March 17, 2014. EOG has raised the post-split quarterly dividend by 33% to $0.125 as share payable on April 30, 2014 to shareholders as of record on April 16, 2014.

Dillard’s reports lackluster Q4 results, hit by markdowns

Dillard’s Inc.’s (NYSE:DDS) fourth quarter earnings fell by 26% to $119.1 million, or $2.71 per share, from $161.4 million, or $3.36 per share, in the prior year period. On an adjusted basis, company’s earnings dropped from $2.87 to $2.69 per share, trailing analysts’ consensus by 30 cents. Moreover, Dillard’s fourth quarter total revenue declined to $2.08 million from $2.15 million, in the prior year quarter, below the industry estimates of $2.07 million.
Dillard’s disappointing Q4 results are attributed to its markdowns during the sluggish holiday season, which failed to spur store sales and eroded the company’s profitability. The department store operator reported that its markdowns designed to combat weak sales caused its retail gross margin to fall to 32.8% from 34.6%. Following Dillard’s lackluster results, its shares fell 6.41% to close the day at $83.60, on Monday, 24 February 2014..

Frontier Communications Q4 profit rises, exceeds estimates

Frontier Communications Corporation’s (NASDAQ:FTR) fourth-quarter profit more than doubled to $67.8 million, or 7 cents a share, compared with a profit of $24.9 million, or four cents a share, in the year ago quarter. However, the company’s revenue fell by 4.2% to $1.18 billion. Analysts from Thomson Reuters estimated earnings of 2 cents per share on revenues of $1.18 billion.
Maggie Wilderotter, Chairman and CEO Frontier Communications expressed her satisfaction over the company’s results and attributed customer retention, increase in average revenue per customer and broadband market share for achievements in 2013. Ms. Wilderotter further pointed the broadband subscriber net additions, which stood at 112,250, during the full year 2013. Moving forward, the company expects capital expenditures of $575-625 million and free cash flow for Frontier business operations of $725-$775 million, for the FY2014.

ONEOK reports lower EPS in Q4, underperforms expectations

ONEOK Inc. (NYSE:OKE) reported a profit of $90.7 million, or 43 cents a share, down from $111.5 million, or 53 cents a share, from year ago period. The company’s fourth-quarter earnings fell 19% due to expenses related to the wind down of its energy business and the recent spinoff of its natural-gas distribution business. However, the company’s revenue increased 13% to $4.14 billion. Analysts polled by Thomson Reuters had expected revenues of $4.01 billion on EPS of 58 cents.
Looking forward, ONEOK Inc. affirmed its 2014 financial guidance, with cash flow available for dividends expected to be in the range of $560 million to $640 million. The company’s FY2014 guidance also includes a projected 53% increase in its 2014 dividend declared to $2.33 per share. On a dividend paid basis, the 2014 dividend is expected to be $2.125 per share. The Oklahoma-based company also announced its plans to increase subsequent dividends by 1.5 cents per share per quarter in 2014.

Earning Releases in the next 24 hours

American Tower Corporation (NYSE:AMT) will release its fourth quarter results before the market bell on Tuesday, 25 February 2014. The company had outperformed the EPS estimates in Q3 FY2013, but missed out on revenue expectations. Analysts are inconclusive about the company beating the earnings estimates in the fourth quarter.

DreamWorks Animation SKG Inc. (NASDAQ:DWA) is scheduled to report its Q4 results after the market hours on 25 February 2014. However, the company is expected to swing to profits in the fourth quarter after booking an almost $1-per-share loss in the year-ago period.

Expeditors International of Washington Inc. (NASDAQ:EXPD) will release its fourth quarter results on Tuesday, 25 February 2014. In the previous results, company’s EPS of 45 cents missed the analyst consensus by 3 cents. Analysts are cautious about weak consumer and business demand as well as delay in manufacturing, which might hurt the company’s revenues in the fourth quarter.

Diversified energy company FirstEnergy Corp. (NYSE:FE) is expected to announce its fourth quarter and full-year 2013 earnings before markets open on Tuesday, February 25. The company has recently made an announcement to invest $140 million in 2014 on service reliability infrastructure upgrades in its Metropolitan Edison Company. In the third quarter, FirstEnergy Corp.’s net income shrank to $218 million, or 52 cents per share, from $425 million or $1.01 per share, from the year ago period.

Macy’s Inc. (NYSE:M) is slated to report its Q4 earnings on Tuesday, February 25. The Ohio-based retail store giant has beaten EPS estimates in 10 out of the last 13 reported earnings. Industry experts are optimistic about the company beating earnings forecast in the fourth quarter.

Annaly Capital Management Inc. (NYSE:NLY) will release its fourth-quarter earnings data on Tuesday, after the market closes. The company had disappointed the market with its third-quarter earnings. The market would be keen to see Annaly Capital’s FY2014 guidance, after Fed tapering its monetary stimulus in January 2014.

R.R. Donnelley & Sons Company (NASDAQ:RRD) will release its fourth-quarter results on Tuesday, February 25, 2014. The company posted better-than-expected bottom line results in the recent quarters. According to Bloomberg, analysts are expecting an EPS of 36 cents, below the actual EPS of 43 cents reported in Q4’12.

First Solar Inc. (NASDAQ:FSLR) will report its fourth-quarter and full year FY2013 results after the closing bell on 25 February 2014. The global provider of comprehensive photovoltaic solar systems had announced better-than-expected earnings release in the last quarter. According to Bloomberg consensus, analysts are expecting positive fourth-quarter results and expecting EPS of $1.02 a share.

The Home Depot Inc. (NYSE:HD) announces its fourth-quarter results before the opening bell on February 25, 2014. The world’s largest home improvement specialty retailer had posted positive earnings in the last four quarters. The company will report its quarterly earnings after a weak US housing data releases.

Office Depot Inc. (NYSE:ODP), global supplier of office products and services, reports four quarter earnings before the market opens on Tuesday, February 25, 2014. The company had reported a positive GAAP EPS for the first time in the last six quarters and is expected to continue the positive momentum.

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