Earnings Release – 26 Feb 2014

Verified by Raqueem Khan
Edited by Vani Rao

Home Depot’s Q4 profit down, but tops expectations

The Home Depot Inc. (NYSE:HD) reported fourth-quarter profit of $1.01 billion, or 73 cents a share, compared with $1.02 billion, or 68 cents per share, in the year-ago period. The company recorded a 3% decline in net revenue to $17.7 billion from $18.2 billion in the prior year comparable period. The analysts’ poll at Bloomberg expected earnings and revenue to be around 71 cents a share and $17.9 billion, respectively. The Atlanta-based company’s fourth-quarter FY2014 was a week shorter than in the same quarter a year ago. The company had accounted for $1.2 billion of sales in the additional week of the fourth-quarter FY2012. The home improvement giant’s comparable sales in the US improved 4.9% during the reported quarter. Chairman and CEO Frank Blake is optimistic on FY2014 with 4.8% sales growth and 16.5% diluted EPS growth to $4.38 during the period. The company raised its quarterly dividend by 21% to $0.47 cents a share, payable on March 27, 2014, to shareholders of record on March 13, 2014. Home Depot is authorized to repurchase shares worth $5 billion in FY2014.

 

Merger costs widen Office Depot’s fourth-quarter losses

Office Depot Inc. (NYSE: ODP) reported wider-than-expected fourth-quarter losses, mainly due to weaker margins and post-merger costs with OfficeMax. The Boca Raton, Florida-based company went deeper into the red with losses of $144 million, or 34 cents a share, compared to losses of $17 million, or 6 cents a share in the year-ago quarter. The company recorded a 33% jump in net revenue to $3.49 billion. However, without OfficeMax, sales were down 2.9% during the reported quarter. The office supply retailer reported EPS (excluding one-time items) of three cents, compared to breakeven results in the year-ago quarter. Analysts were expecting positive EPS of 3 cents a share on revenue of $4.03 billion. Roland Smith, Chairman and CEO, is anticipating a challenging FY2014 with total company sales to be lower than in 2013, while expecting adjusted operating income of not less than $140 million. Shares of Office Depot tumbled 13.2% post the earnings release, during the early morning trade and ended the day 8.79% lower at $4.88 on Tuesday, February 25, 2014.

First Solar’s revenue down 28.6%, earnings disappoint market

First Solar Inc. (NASDAQ:FSLR) reported lower-than-expected revenues and net income for the fourth quarter of FY2013. Total revenue fell 28.6% to $768 million from $1.08 billion in the year-ago period. Net income fell to $65.2 million, or $0.64 cents a share, compared with $154.2 million, or $1.74 a share, in the year-ago period. Excluding one-time items, First Solar reported Q4 adjusted earnings of 89 cents a share, underperforming analysts’ expectations of 99 cents a share. The company issued earnings guidance for Q1 FY2014 of $0.50-0.60 a share on net revenue of $800-900 million, below Wall Street earnings and revenue expectations of $0.88 and $905.58 million, respectively. The weak fourth-quarter earnings release and forthcoming quarter guidance directed negative sentiments in the market and shares were down 13.51% during the after-hours trading session on February 25, 2014.

 

R.R. Donnelley posts strong Q4 results, meets earnings expectations

R.R. Donnelley & Sons Company (NASDAQ:RRD) reported a 3.6% year-over-year revenue growth in fourth quarter FY2013 to $2.76 billion, easily surpassing the analysts’ forecasts of $2.68 billion. The company’s fourth quarter 2013 non-GAAP net earnings increased to $89.8 million, or $0.49 per share, from $78.1 million, or $0.43 per share, in the year-ago quarter, bettering analysts’ estimates 38 cents per share. The Q4 performance was driven by strong volume growth across product offerings. The company reported a 2.3% year-over-year organic revenue growth in the reported quarter. Thomas J. Quinlan III, President and CEO, issued a positive FY2014 guidance and expects annual net revenue to be in the range of $11.5-11.7 billion, above Bloomberg consensus estimates of $10.96 billion.

Gains from interest-rate swaps boost Annaly’s fourth-quarter earnings

Annaly Capital Management Inc. (NYSE:NLY), a diversified REIT, banked on gains from interest-rate swaps to report higher-than-expected fourth quarter earnings. The company reported fourth-quarter net interest income of $1.09 billion, well above $700 million in the prior year comparable quarter. Annaly’s core earnings stood at $350 million, or $0.35 a share, outperforming $282.3 million, or $0.28 a share, in the year-ago quarter and Bloomberg consensus estimate of $0.26 a share. The diversified REIT’s core earnings per return on average equity improved from 9.1% at the end of fourth-quarter FY2012 to 11% at the end of reported quarter. Interest rate spread for the year improved 49 basis points to 1.43% from 0.94% a year ago. Chairman and CEO Wellington Denahan stated that he was encouraged by the improved fourth-quarter earnings, representing reduced uncertainty in the fixed income markets after monetary policy tapering.

 

American Tower Q4 EPS falls due to currency exchange rates

American Tower Corp. (NYSE: AMT) reported fourth-quarter diluted EPS of 25 cents on revenue of $941.97 million, compared with EPS of 34 cents on revenue of $768.37 million in the year-ago period. Analysts at Thomson Reuters had forecasted EPS of $0.47 and $920.07 million in revenue. The decline in net income in the reported quarter was attributed to a non-cash loss of $60 million due to the negative impact of currency exchange rates. However, American Tower’s adjusted funds from operations (AFFO) grew 28.1% year over year to $378.2 million or 95 cents per share. As guidance for FY2014, American Tower estimates net income of $765-805 million and capital expenditure in the $850-950 million range. Following the announcement of results, the company’s shares finished the day 3.40% lower at $80.16, on Tuesday, 25 February 2014.

Expeditors International of Washington’s revenue rises 6%, but misses EPS estimates

Expeditors International of Washington Inc.’s (NASDAQ:EXPD) fourth-quarter net earnings edged down to $83.50 million, compared to $84.21 million in the prior-year quarter, while EPS grew to 41 cents from last year’s 40 cents. Analysts polled by Thomson Reuters expected the company to report earnings of $0.47 per share. Total revenues grew 6% to $1.63 billion from $1.54 billion in the same quarter last year, outperforming the Wall Street analysts’ consensus estimate of $1.58 billion. Moreover, the company’s net revenues increased 4% to $478.07 million from $461.51 million in the prior-year quarter. Peter J. Rose, Chairman and CEO, attributed the steady growth to airfreight and ocean freight services, both in terms of revenue and volumes. Airfreight volumes rose 5%, while ocean freight volumes were up nearly 16%, compared with Q4 2012.

 

Macy’s Q4 profit rises 11%, but revenue edges lower

Macy’s Inc. (NYSE:M) reported fourth quarter earnings of $811 million, or $2.16 per share, compared with $730 million, or $1.83 per share, a year earlier. Excluding items and other cost-reduction strategies, the company earned $2.31 per share in the reported quarter. The department-store chain reported an 11% increase in fourth-quarter profit, but suffered a sales shortfall due to stores shutdown caused by winter storms in January. Revenue for the Cincinnati-based operator dipped 1.6% to $9.2 billion. Revenue at stores open at least a year increased 1.4%, but below Wall Street analysts’ forecast of 2.5%. Macy’s has been a standout among its peers, benefitting from its moves to tailor merchandise to local markets. Last month, the company had announced that it was cutting 2,500 jobs as part of a reorganization to sustain profitability. Looking forward, Macy’s reaffirmed that revenue at stores opened at least a year for the current year is expected to grow 2.5-3%. The department-store chain is also optimistic about achieving its earnings forecast of $4.40-4.50 per share for FY2014.

FirstEnergy Corp. reports superior revenue in Q4, reaffirms outlook for FY2014

FirstEnergy Corp.’s (NYSE:FE) fourth-quarter revenue rose to $3.64 billion, up 4.34% from the year-ago quarter. However, operating earnings fell by 6.2% to 75 cents per share from 80 cents a share. The year-over-year decline in operating earnings is attributed to higher operating and maintenance expenses as well as an increase in purchase power expenses. Including one-time charges and gains of 41 cents per share, GAAP earnings per share were 34 cents compared to loss of 35 cents in the prior-year quarter. Anthony Alexander, President and CEO, maintained that results for the fourth quarter and FY2013 are in line with the company’s upper limit forecasts. The Ohio-based utility had recently made a decision to slash its dividend by 19 cents to $0.36 for Q1 2014. As guidance for FY2014, FirstEnergy expects operating EPS of $2.45-2.85 per share, slightly lower than the levels achieved in 2013 and forecasts Q1 2014 operating earnings of $0.35-0.45 per share.

 

DreamWorks Q4 revenue falls due to failure of animated film “Turbo”

DreamWorks Animation SKG Inc.’s (NASDAQ:DWA) fourth-quarter revenue declined by 22.8% to $204.3 million. Excluding special items, the company earned 33 cents a share. Analysts on an average had expected earnings of 32 cents per share, on revenue of $223.2 million, according to the data compiled by Thomson Reuters. The company’s slump in revenue is attributed to the persisted poor performance of its animated film “Turbo”. However, DreamWorks reported net income of $17.3 million, or 20 cents per share in the fourth quarter, compared a loss of $82.7 million, or loss of 98 cents per share, in the prior year period. Moving forward to fiscal 2014, the movie production house is counting on its movies “Mr. Peabody & Sherman” and “How to Train Your Dragon 2”, scheduled for release in March and July 2014, respectively.

Upcoming Releases

Target Corp. (NYSE:TGT) reports its fourth-quarter results before the opening bell on 26 February 2014. The company is likely to report weak earnings amidst reports of data security breach during the holiday season and frigid US climatic conditions. The Minneapolis-based company had missed three of the last four quarters’ earnings estimates. According to Bloomberg consensus estimate, Target is likely to report earnings of $1.24 per share.

Lowe’s Companies Inc. (NYSE:LOW) will release its fourth-quarter earnings on Wednesday, 26 February 2014, before the market hours. The home improvement retailer has provided strong third-quarter earnings with improved sales and gross margins. The decline in existing and new house sales in the late fourth-quarter and unfavorable winter condition may impact earnings in the reporting quarter. After better earnings from The Home Depot Inc. (NYSE:HD), the market is expecting better results from the company.

Discount retailer Dollar Tree (NASDAQ: DLTR) is scheduled to share its fourth-quarter and full-year results on Wednesday morning, before the opening bell. The company has missed earnings estimates in the previous two quarters. Analysts at Bloomberg are expecting adjusted earnings of $1.05 a share, above the reported adjusted earnings of $1.01 a share in Q4 FY2012.

Autodesk Inc. (NASDAQ:ADSK) is expected to announce its fourth-quarter and full-year 2013 earnings release before the opening bell on Wednesday, 26 February 2014. The company had reported a 2 cents positive surprise by reporting adjusted earnings at 41 cents. Autodesk had provided fourth-quarter earnings guidance of $0.29-0.36 a share on net revenue of $560-580 million.

Continental Resources Inc. (NYSE:CLR) is slated to post its fourth-quarter and full-year 2013 earnings results after the market close on Wednesday, 26 February 2014. The company is expected to provide strong quarterly results as the company is riding the US shale gas boom. The company’s production and proven reserves have increased 39% and 38% year-over-year in the last year, respectively. According to Bloomberg consensus estimates, the company is expected to earn $1.31 a share with net revenues of $945 million.

Abercrombie & Fitch Co. (NYSE:ANF) is scheduled to report fourth-quarter earnings before the market open on Wednesday, February 26, 2014. The company had reported third quarter EPS of 52 cents on revenue of $1.03 billion, against estimates of 45 cents and $1.06 billion, respectively. During the third quarter, the company raised its fiscal 2013 adjusted EPS outlook to $1.55-1.65 from $1.40-1.50.

Chesapeake Energy Corporation (NYSE:CHK) will release its fourth-quarter earnings report on 26 February 2014. In the previous quarter, Chesapeake boosted its revenue by 64%, with a $0.24 per share profit, reversing a year-ago loss with the help of rising prices for both oil and natural gas. Chesapeake Energy has beaten EPS estimates in three out of last four quarters.

L Brands Inc. (NYSE:LB) will announce its fourth-quarter earnings data after the market hours on Wednesday. L Brands is the only retailer forecasted to report double-digit earnings gain for the quarter. The Ohio-based apparel store operator is expected to report a 13% increase in Q4 earnings to $1.61 a share, as per data compiled by Thomson Reuters.

J. C. Penney Company Inc. (NYSE:JCP) is slated to report its fourth-quarter earnings on Wednesday, February 26. The struggling retail giant reported a net loss of $552 million and negative EPS of $1.95. Analysts are expecting the company’s EPS to improve in the fourth quarter. On a brighter note, J.C. Penney had announced in its third quarter earnings report that its comparable store sales and gross margins are likely to improve over the next few quarters.

The TJX Companies Inc. (NYSE:TJX) will report fourth-quarter earnings before the market bell on Wednesday, February 26. TJX has been posting modest top- and bottom-line results for the past few quarters driven by higher consumer traffic, improved margins, and solid comparable-store sales growth. Like most of the retail store operators, TJX is also expected to report lower sales owing to inclement weather that gripped US during the fourth quarter.

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