Tag Archives: ETF
Corning Incorporated (GLW) is a global, technology-based corporation, operating in five segments: Display Technologies, Telecommunications, Environmental Technologies, Specialty Materials and Life Sciences. With better-than-expected earnings and strong buyback, Corning is marching up, lifted by Gorilla Glass.
On April 25, 2013, Corning’s chairman and CEO Wendell P. Weeks told shareholders in the annual meeting that Corning’s performance over past two quarters is a strong indication that the Corning has successfully formed the bottom and is ready to march up. Despite a tough 2012, Corning is ready for growth in 2013. The growth opportunities mainly come from 1) the proliferation of mobile devices, which increases the demand for thin, tough cover glass; 2) increasing demand for bandwidth, creating needs for fiber optic networks; 3) evolution to higher-resolution display devices, requiring more specialty glass to meet rigorous technical requirements; 4) increasing demand for emissions-control products due to tighter environmental regulations; 5) increasing need for more effective drug therapies due to gaining global population. The company is progressing well and is introducing new glass compositions for high-performance displays and launching new products such as ultra-thin Corning Willow Glass.
Abbott Laboratories (ABT) engages in the discovery, development, manufacture, and sale of healthcare products worldwide, operating in four business segments: Established Pharmaceuticals Division (EPD), Medical Devices, Diagnostics and Nutritionals. Despite mixed global economy, ABT continues its growth from emerging market, led by the nutritional segment.
Strong Q1 Profit
For Q1, 2013, sales increased 1.8% to $5.38B, which was slightly below analysts’ expectation of $5.42B. However, without the research-based pharmaceuticals business, which spun out as AbbVie (ABBV) at the beginning of the year, ABT reported earnings of 42 cents a share, beating analysts’ consensus by a penny. Management also confirmed the full-year 2013 ongoing EPS outlook, which is for double-digit growth at the mid-point of the range. Despite a mixed global economy, ABT managed to deliver its current growth expectations and management expects to see some improvement in the second half of 2013.
General Electric Company (GE), with a market cap of $226.16B, is a diversified technology and financial services company and a leader in all markets in which it competes. On April 19, 2013, GE reported in-line operating profit of $3.6B or 35 cents per share. However, GE’s share price dropped more than 4% due to declining revenue from the industrial end.
The Good and Bad for Q1, 2013
For Q1, GE reported the continuing operations revenues of $35B. Industrial sales were down 6% to $22.3B. Power and water dragged the overall results, whereas Europe services remained tough. The industrial segment profits were about $200M below the management’s expectations due to the worsening condition in Europe and some short cycle push outs from March into Q2. The gap was offset by cost control and better than expected GE Capital performance. Further, shipments should improve significantly in the second half.
GE Capital continued to improve and delivered a solid quarter. The ending ENI balance was reduced by $17B, and the earnings had increased to $1.93B as compared to $1.8B in Q4, 2012. The GECC Tier 1 common ratio had increased to 11.1%, as seen from the table below.
Verizon Communications Inc. (VZ), with a market cap of $149.49B, provides communications, information and entertainment products and services. Verizon operates in two main segments, including Wireline and Verizon Wireless. While Verizon owns the majority share of Verizon Wireless, Vodafone Group (VOD) owns 45% stake in Verizon Wireless, which is the largest wireless communications services provider in the United States. On April 18, 2013, VZ reported Q1 earnings with strong profit but light revenue.
Strong Results from Wireless
For Q1, 2013, VZ’ EPS increased 15% to 68 cents per share as compared to the year-earlier period, beating analysts’ expectation of 66 cents per share. However, revenue of $29.42B was below analysts’ estimates of $29.55B. The highlight focuses on Verizon Wireless, which added 677,000 “postpaid” customers with service contracts, and the wireless revenue increased 6.8% to $19.5B. VZ also activated 4 million iPhones in the quarter, where the total smartphone activations were 7.2 million for the period. The earnings call transcript for Q1, 2013 result can be accessed here at Seeking Alpha.
The management does not expect much EBITDA wireline service margin expansion in 2013, but is positioned to improve the margin in 2014. For the wireless end, wireless margin has a target of 49-50 percent. Verizon Wireless was helped by lower costs and the popularity of its data share plans. On the down side, the management noted the cautious behavior from enterprise customers.
Celgene (CELG) is a global biopharmaceutical company engaged in the discovery, development and commercialization of therapies designed to treat cancer and immune-inflammatory related diseases. Celgene’s current main products include Revlimid, Abraxane, Vidaza, and Thalomid. Investors also need to pay attention to Apremilast, which could be the next blockbuster drug.
Products Sales and Development
Celgene continued to develop positively from the product end. Below is the sales breakdown for Celgene’s main products as reported in the last quarter.
|Q4 Sales||Change||Full Year Sales||Change||Highlight|
|Revlimid||$1,002M||+17%||$3,767M||+17%||Driven by strong overall market share and increased duration of therapy.|
|Abraxane||$106M||+3%||$427M||+11%||Affected by the restoration of the full supply of generic paclitaxel, the shortage of which benefited the fourth quarter 2011|
|Vidaza||$216M||+14%||$823M||+17%||Driven by market share increases in most regions|
Overall, Revlimid remains as the main growth driver and contributed over 70% of sales among 4 major products.
In early February, FDA had approved Pomalyst brand therapy (pomalidomide) for patients with multiple myeloma who have received at least two prior therapies including lenalidomide and bortezomib and have demonstrated disease progression on or within 60 days of completion of the last therapy.
Freeport-McMoRan Copper & Gold Inc. (FCX) is a leading international mining company, operating large, long-lived, geographically diverse assets with strong reserves of copper, gold and molybdenum. FCX was upgraded recently by analysts. Recent developments will be updated for FCX. By comparing to another major copper player, Southern Copper Corp (SCCO), and copper price, FCX is shown to be more than a good copper bet.
On March 27, 2013, FCX declared a cash dividend of $0.3125 per share payable on May 1, 2013 to holders of record as of April 15, 2013.
In late March, FCX completed the transaction for 56% interest of a large scale cobalt chemical refinery located in Kokkola, Finland. FCX will be the operating for this new joint venture, named Freeport Cobalt. As reported,
“The acquisition enhances FCXs cobalt marketing position, product portfolio and product development capabilities and provides direct end-market access for the cobalt hydroxide production at Tenke.”
Analysts‘ Calls and Estimates
On April 5, 2013, FBR Capital initiated coverage on FCX with an outperform rating and a price target of $41. The analyst, Mitesh B. Thakkar, said,
“We are launching coverage of copper producers with a cautious near‐term outlook but believe that long‐term fundamentals will continue to support copper prices around $3/lb. In the near term, we believe that copper prices could remain under pressure due to a choppy demand outlook, inventory overhang, and impending supply growth. Longer term, however, we believe that prices will remain supported above the marginal cost and should provide incentives for needed supply growth.”
Analysts currently have a mean target price of $40.00 for FCX. Analysts, on average, are expecting an EPS of $0.82 with revenue of $4.78B for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of $4.38 with revenue of $21.39B, which is 18.80% higher than 2012. FCX is expected to release its Q1, 2013 earnings on April 15, 2013. In the last 4 quarters, FCX had 3 positive earnings surprises and 1 negative surprise.