Earnings Release – 27 Feb 2014

Edited by Vani Rao

Target’s Q4 earnings hurt by data theft charges

Target Corp.’s (NYSE:TGT) fourth-quarter earnings fell to $520 million, or 81 cents a share, compared to $961 million, or $1.47 per share, in the year-ago period. The fall in profits is mainly attributed to data theft charges of $61 million, of which $44 million was covered by insurance, resulting in net expenses of $17 million. Moreover, revenue declined to $21.5 billion from $22.7 billion in the comparable period last year. On December 19, Target reported about the data breach of 40 million credit and debit card accounts between November 27 and December 15. CEO Gregg Steinhafel stated that sales during the first half of the Christmas quarter were better than the company’s expectations. Going forward, the Minneapolis-based retail chain forecasts its Q1 2014 EPS to range from 60-75 cents and expects full year EPS of $3.85-4.15. Shares in Target Corp. climbed 7.04% to end the day at $60.49, on Wednesday, 26 February 2014.

Lowe’s posts strong results on higher sales, meets Wall Street’s expectations

Lowe’s Companies Inc.’s (NYSE:LOW) fourth-quarter sales rose 5.6% to $11.7 billion, boosted by same-store sales open at least one year. The company’s EPS increased 6.3% to 29 cents, in line with Wall Street estimates. During the quarter under review, the company bought back $958 million of stock and paid dividends of $189 million. In FY2013, Lowe’s paid total dividends of $733 million. In its outlook for FY2014, the country’s second-largest home improvement and hardware chain expects its total sales to increase 5% and same-store sales to grow 4%, meeting estimates from Thomson Reuters. For FY2014, it expects EPS of $2.60. Post the announcement of strong Q4 results, shares in Lowe’s Companies Inc. surged 5.43% to close at $50.72 on Wednesday, 26 February 2014.

L Brands Inc.’s Q4 profit rises 19%, revenue slips

L Brands Inc.’s (NYSE:LB) Q4 profit rose 19% as a result of lower expenses and the absence of special charges, which eroded company’s profits in the year ago quarter. In Q4, the company reported earnings of $489.6 million, or $1.65 a share, up from $411.4 million, or $1.39 a share, from the year-ago period. L Brands revenue for Q4 declined to $3.82 billion from $3.86 billion. However, the company’s revenue from stores open at least a year improved 1%. For the full year 2013, the company reported earnings of $903 million, or $3.05 per share, on revenue of $10.77 billion. As guidance for FY2014, L Brands expects earnings of $3.00-3.20 for the current year and earnings of 44-49 cents per share for the first quarter 2014. Following its fourth quarter results, shares of the Ohio-based company rose 4.01% to close at $56.57 on 26 February 2014.

Dollar Tree’s Q4 results slightly below expectations

Dollar Tree Inc. (NASDAQ:DLTR) posted fourth-quarter revenue of $2.23 billion, compared with revenue of $2.25 billion in the same quarter last year. The company reported net income of $1.02 per share, missing Thomson Reuters analysts’ estimates by 3 cents. However, Dollar Tree’s comparable-store sales improved 1.2% from the prior year quarter and increased 2.4% from 2012. CEO Bob Sasse maintained that despite severe weather and challenging economic environment, the company delivered record earnings and comparable-store sales growth. In its outlook for FY2014, the discount retail chain estimates sales in range of $8.35 billion to $8.58 billion and diluted EPS of $2.91-3.13. For Q1 2014, the company projects revenue between $1.98 billion and $2.04 billion and diluted earnings of 63-68 cents per share.

TJX Q4 results misses expectations, company raises quarterly dividends

The TJX Companies Inc. (NYSE:TJX) reported Q4 2013 earnings of $582.3 million, or 81 cents per share, compared to earnings of $604.8 million, or 82 cents per share, in the year-ago quarter. Revenue improved 1% to $7.81 billion from $7.72 billion; however, it was below Wall Street’s revenue estimates of $7.86 billion. Like most of the retail store operators, the company’s net sales were hampered by inclement weather and tough retail environment during the holiday season. The company provided Q1 FY2014 EPS guidance between 65 cents and 66 cents per share. For fiscal 2015, TJX expects earnings of $3.05-3.19 per share. The retail store operator is also planning to raise its quarterly dividend to 17.5 cents per share from 14.5 cents per share, representing a hike of 21%. The dividend will be paid in June, subject to its approval from company’s management.

Abercrombie’s Q4 profit declines, EPS outperforms estimates

Abercrombie & Fitch Co.’s (NYSE:ANF) fourth-quarter profit slumped 58% to $66.1 million, or 85 cents a share, compared to a profit of $157.2 million, or $1.95 per share, in the year-ago period. Excluding special items company’s EPS stood at $1.34 a share, easily surpassing Bloomberg analysts’ EPS consensus of $1.04. The company’s fourth-quarterly revenue slipped 12% to $1.3 billion from $1.47 billion. Wall Street had expected the company to report revenues of $1.35 billion. Abercrombie’s decline in profits is attributed to lacklustre sales in the US and abroad. Looking forward, the Ohio-based apparel store giant expects EPS of $2.15-2.35 for FY2014. However, Abercrombie is anticipating a high-single digit decline in sales at stores open at least a year. The company’s management has also decided to buy back $150 million worth of shares in Q1 2014.

J. C. Penney comes back into the black in Q4

J. C. Penney Company Inc. (NYSE:JCP) reported net earnings of $35 million, or 11 cents per share, compared with losses of $552 million, or $2.51 per share, in the last quarter of 2012. On an adjusted basis, Penney reported a loss of 68 cents per share, compared with Wall Street’s estimates for a loss of 82 cents per share. In the reported quarter, the company’s sales grew 2%, its first comparable sales growth in almost two years. The company’s growth in sales is attributed to a surge in online retail sales, which grew 26% to $381 million. Looking forward, J. C. Penney is anticipating its sales to grow up to 5% in Q1 2014 and it expects significant improvement in its gross profit margin. Post the announcement of results, the company’s shares surged 5.86% to close the day at $5.96, on Wednesday, 26 February 2014.

Chesapeake Energy Q4 results misses on EPS and revenue

Chesapeake Energy Corporation’s (NYSE:CHK) reported diluted adjusted EPS of 27 cents per share on revenues of $4.54 billion, compared to EPS of 26 cents per share on revenues of $3.54 billion in the prior-year period. The company’s quarterly results have underperformed the Thomson Reuters consensus estimate for EPS of 41 cents and $4.86 billion in revenues. Chesapeake’s daily production in the fourth quarter averaged approximately 665,100 barrel of oil equivalent (Boe), representing an increase of 2% from Q4 2012. As guidance for FY2014, the company expects its liquids production to increase 14-18% year over year. On the other hand, it is anticipating a decline in its natural gas production in 2014. Chesapeake forecasts capital expenditure in the range of $5,200-5,600 million in 2014

Upcoming Earnings Releases

Best Buy Company Inc. (NYSE:BBY) is slated to post its fourth-quarter and full-year 2013 earnings results before the market close on Thursday, 27 February 2014. In January, the Minnesota-based electronics chain reported a drop of 0.8% in its comparable store sales for the first nine weeks of the quarter. Analysts have narrowed their earnings estimates from $1.62 per share to $1.01 per share, as per data compiled by Thomson Reuters.

The Gap Inc. (NYSE:GPS) is expected to announce its fourth-quarter and full-year 2013 earnings on Thursday, 27 February 2014. In its third-quarter results, the global specialty retailer reported robust growth in its top- and bottom-line. The company has witnessed sales growth in last five quarters.

Linn Energy LLC (NASDAQ:LINE) will release its fourth-quarter earnings report on 27 February 2014. This will be the company’s first quarterly report since its merger with Berry Petroleum (NYSE:BRY) in December. Linn Energy has beaten EPS estimates in one out of last four quarters.

Breitburn Energy Partners L.P. (NASDAQ:BBEP) will announce its fourth-quarter earnings data before the market hours on Thursday. Over the last few quarters, the company has successfully executed its oil-rich capital plan and acquisition strategy. Wall Street is expecting an EPS of 28 cents per share in Q4.

The Wendy’s Company (NASDAQ:WEN) is scheduled to share its fourth-quarter and full-year results on Thursday. The company had forecasted full-year growth of 2.5-3.5% for company-owned stores and EPS of $0.34-$0.36. In its preliminary results last month, Wendy’s reported a 3.1% growth at company-owned stores and a 2.8% increase at its North American franchise stores.

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