TheChek News Flow

Reports Q1 (Mar) earnings of $0.70 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.70; revenues fell 16.4% year/year to $4.68 bln vs the $4.79 bln consensus.

Co issues guidance for FY14, reaffirms EPS of $2.72-2.80, excluding non-recurring items, vs. $2.81 Capital IQ Consensus Estimate; raises FY14 revs to $19.4-20.0 bln from $19.2-19.8 bln vs. $19.77 bln Capital IQ Consensus.

• As described in the co's initial guidance, patent expirations are expected to drive a rapid and severe decline in U.S. Cymbalta and U.S. Evista sales. These revenue declines are expected to be partially offset by growth from a portfolio of other products including Humalog, Trajenta, Cialis, Forteo and Alimta, as well as the animal health business. In addition, strong revenue growth is expected in China, while a weaker Japanese yen will dampen revenue growth in Japan. The co now anticipates that gross margin as a percent of revenue will be ~73 percent in 2014.
• "Lilly's first-quarter results reflect the substantial decline in revenue and earnings that we expected to encounter as a result of the recent U.S. patent expirations for Cymbalta and Evista," said John C. Lechleiter, Ph.D., Lilly's chairman, president and chief executive officer. "Beyond our financial performance, the initial months of 2014 have included a series of key regulatory actions, pipeline announcements and business development transactions that solidify the company's future growth prospects, highlighted by the approval of Cyramza in the U.S. and the announced acquisition of Novartis Animal Health."

Reports Q2 (Mar) earnings of $1.59 per share (incl several items -- see below), may not be comparable to the Capital IQ Consensus Estimate of $1.47; revenues rose 6.1% year/year to $889.1 mln vs the $890.93 mln consensus.

Co reported net income of $174.6 million ($1.59 per diluted share) from operating revenues of $893.4 million for the second quarter of fiscal 2014, compared to net income of $151.1 million ($1.39 per diluted share) from operating revenues of $838.3 million during the second fiscal quarter of 2013, and net income of $173.2 million ($1.59 per diluted share) from operating revenues of $889.2 million during the first fiscal quarter of 2014. Included in net income corresponding to this year's second fiscal quarter are approximately $0.02 per diluted share of after-tax gains related to the sale of used drilling equipment and approximately $0.12 per diluted share of after-tax gains on the sale of investment securities.

Included in both this year's first fiscal quarter and last year's second fiscal quarter were approximately $0.03 per diluted share of after-tax gains related to the sale of used drilling equipment. Given today's new build announcements, other previously announced contracts and ongoing conversations with customers regarding new FlexRig deliveries in early fiscal 2015, the Company is increasing its fiscal 2014 capital expenditures estimate from $950 million to $1.1 billion.

Outlook: In the U.S. land segment, the Company expects revenue days (activity) to increase by approximately seven percent during the third fiscal quarter as compared to the second fiscal quarter of 2014. The average rig revenue per day is expected to remain at approximately $28,000 and the average rig expense per day is expected to remain at roughly $13,000 during the third fiscal quarter. As of today, the U.S. land segment has 287 contracted rigs, including 161 under term contracts.

In the offshore segment, the Company expects the average rig margin per day to be approximately $25,000 during the third fiscal quarter and revenue days to increase by approximately one percent as compared to the second fiscal quarter of 2014.

In the international land segment, the Company expects total revenue days during the third fiscal quarter to be relatively flat and the average rig margin per day to decline by approximately five percent as compared to the second fiscal quarter of 2014.

Reports Q1 (Mar) earnings of $0.93 per share, excluding non-recurring items ($0.12 benefit), $0.28 better than the Capital IQ Consensus Estimate of $0.65; revenues fell 2.8% year/year to $709.4 mln vs the $691.79 mln consensus.

• Co reported net income for the first quarter of 2014 of $146 million, or $1.05 per share, compared with net income of $176 million, or $1.27 per share, in the same period a year earlier. Results for the quarter benefited from a $17 million, or $0.12 per share, credit to tax expense related to a settlement of certain disputes with Egyptian tax authorities.
• "I am pleased to begin my tenure at Diamond Offshore with very solid first quarter results...Diamond Offshore has added new capacity and upgraded its fleet while maintaining the highest credit rating and strongest balance sheet amongst its peers. This places us in a strong position to navigate through any downturn, and take advantage of strategic opportunities that may materialize. We remain focused on delivering superior financial performance and providing sector-leading shareholder returns."

Reports Q1 (Mar) earnings of $0.33 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus Estimate of $0.35; revenues rose 6.2% year/year to $171.9 mln vs the $172.28 mln consensus.

• Co reaffirms guidance for FY14, sees EPS of $1.79-1.83, excluding non-recurring items, vs. $1.81 Capital IQ Consensus Estimate; sees FY14 revs of +6-8% to ~$755.83-770.9 mln vs. $767.55 mln Capital IQ Consensus Estimate.
• Dunkin' Donuts U.S. comparable store sales growth of 1.2%; international -2.4%.
• Dunkin' Donuts U.S. revenues of $125.2 million represented an increase of 4.7 percent year-over-year. The increase was primarily a result of increased royalty income and an increase in gains from refranchising transactions, offset by a decline in franchise fees driven by the timing of franchise renewals.
• Dunkin' Donuts International first quarter systemwide sales increased 0.4 percent from the prior year period, driven by sales growth in the Middle East, Germany, and Spain, offset by a decline in South Korea. On a constant currency basis, systemwide sales increased by approximately 3 percent.
• FY14 Outlook Details: The Company expects Dunkin' Donuts U.S. comparable store sales growth of 3 to 4 percent and Baskin-Robbins U.S. comparable store sales growth of 1 to 3 percent. The Company expects that Dunkin' Donuts U.S. will add between 380 and 410 net new restaurants representing greater than 5 percent net restaurant growth and expects Baskin-Robbins U.S. will add between 5 and 10 net new restaurants. Internationally, the Company is targeting opening 300 to 400 net new restaurants across the two brands. Globally, the Company expects to open between 685 and 800 net new units.

Reports Q1 (Mar) earnings of $1.02 per share, $0.06 better than the Capital IQ Consensus Estimate of $0.96; revenues rose 6.6% year/year to $2.64 bln vs the $2.6 bln consensus.
Financial metrics:

• Net sales for the period were $2.6 billion, up 7% versus the prior year, attributable to volume (+4%) and acquisitions (+4%), partially offset by currency (-1%). Price was relatively flat for the quarter.
• The gross margin rate for the quarter was 36.4%.
• Operating margin was 11.8% of sales. Excluding charges, operating margin was 12.1% of sales, up 30 basis points from the 1Q'13 operating margin of 11.8%.

Guidance:
Co issues in-line guidance for FY14, sees EPS of $5.35-5.50, excluding non-recurring items, vs. $5.43 Capital IQ Consensus Estimate and above prior guidance of $5.23-5.38