Brown-Forman beats by $0.03, reports revs in-line (56.04)
- Reports Q3 (Jan) earnings of $0.44 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.41; revenues rose 8.7% year/year to $878 mln vs the $870.06 mln Capital IQ Consensus.
- Reaffirming underlying outlook for net sales growth of 6-7% and operating income of 8-9%, and adjusting our EPS range to account for tax reform and related items.Co issues guidance for FY18, sees EPS of $1.43-1.48 (Prior $1.52-1.58), may not be comparable to $1.61 Capital IQ Consensus Estimate. The prior EPS is split -adjusted.
BF.B by International Markets
- Year-to-date underlying net sales grew 5% (+7% reported) in the United States.
- Sales in the company's developed markets outside of the United States remained robust, delivering year-to-date underlying net sales growth of +6% (+9% reported).
- The United Kingdom and Germany grew underlying net sales by +6% (+10% reported) and +11% (+16% reported), respectively.
- Australia's underlying net sales jumped 10% (+10% reported).
- Japan was the only one of our top ten markets that declined, due primarily to volume declines in Early Times.
- France's underlying net sales increased +5% (+10% reported).
- Canada grew +2% (+4% reported).
- Spain saw double-digit year-to-date underlying net sales growth.
- The company's two largest emerging markets, Mexico and Poland, both grew underlying net sales by 10% (+13% and +25% reported, respectively),
- Russia, Turkey, Brazil, Thailand, China and Ukraine grew underlying net sales well into the double-digits.
Gapping up
In reaction to strong earnings/guidance:
In reaction to strong earnings/guidance:
- MED +11.1%, ADSK +9.9%, TRVN +7.9%, BOJA +7.6%, MOMO +6.8%, ANF +5.4%,ZFGN +5.2%, (also announces positive interim data from ongoing ZGN-1061 Phase 2 proof-of-concept trial in patients with Type 2 Diabetes ), PFMT +4.8%, HRB +4.8%,TTPH +4.7%, PTCT +4.3%, HCI +4.1%, BXG +4%, NCS +2.5%, KFY +2.1%, GWRE+0.9%, SHIP +0.9%
Select metals/mining stocks trading higher:
- X +1.7%, AKS +1.4%, NUE +1.2%, CENX +0.8%, STLD +0.5%
Other news:
- APTO +16% (announces exclusive global license agreement with OHM Oncology)
- FORM +6.3% (will replace Calgon Carbon in the S&P SmallCap 600)
- CLSD +5.8% (also announced plans for $75 mln common stock offering)
Analyst comments:
- VOD +0.5% (upgraded to Outperform from Neutral at Exane BNP Paribas)
Gapping down
In reaction to disappointing earnings/guidance:
In reaction to disappointing earnings/guidance:
- CVNA -15.1%, CYRX -11.5%, DLTR -10.3%, AVAV -9.6%, (also announces that a major country in the Middle East has awarded the company a contract valued at $44.5 mln for Puma II AE small UAS featuring the new Mantis i45 sensor), TRXC-8.5%, SPPI -8%, TTOO -7.1%, (also discusses market clearance of the T2Bacteria Panel), ABM -6.8%, ROST -5.9%, (also increases stock buyback authorization to $1.075 bln; increases dividend by 41%), RIGL -4.9%, RAVN -4.9%, RUN -3.9%, EDIT-3.7%, URBN -2.2%, KDMN -1.6%, PRMW -1.1%, NOAH -0.6%, PLUG -0.5%
Other news:
- ANTH -6.7% (files for $100 mln mixed securities shelf offering )
- MERC -6% (announces NAFTA claim decision; majority of the tribunal ruled that it lacked jurisdiction to decide certain of the Company's claims under NAFTA)
- WTW -4% (Oprah Winfrey exercises portion of options, sells portion of holdings in the company; will not sell additional shares this year)
- MDLZ -3.9% (attributed to block trade pricing)
- BRS -2.7% (attributed to block trade pricing)
- TLND -2.6% (commences an underwritten public offering of 3,916,474 American Depositary Shares by selling shareholders)
- TSM -2.4% (GlobalFoundries has asked Chinese regulators to investigate TSM for alleged anti-trust violations, according to the Nikkei Asian Review)
- TJX -1.1% (following ROST results), DUK -1% (priced an offering of 18.5 million shares of its common stock at $75.00/share)
- BIIB -0.9% (EMA recommends immediate suspension and recall of multiple sclerosis medicine Zinbryta)
- T -0.6% (files registration statement for a potential IPO of a minority interest in the Class A common stock of Vrio Corp., a holding company for DIRECTV Latin America)
Analyst comments:
- BGS -4.9% (downgraded to Underperform from Neutral at Credit Suisse)
- CHK -2.6% (initiated with Sell ratings at UBS)
- NFLX -1.9% (downgraded to Hold from Buy at Stifel)
- IP -1.8% (downgraded to Market Perform from Outperform at Wells Fargo)
- GOGO -1.2% (downgraded to Neutral from Buy at Guggenheim)
Dollar Tree misses by $0.01, reports revs in-line; guides Q1 EPS below consensus, revs in-line; guides FY19 EPS below consensus, revs in-line; Q4 Enterprise same-store sales increased 2.4% on a constant currency basis (104.36)
- Reports Q4 (Jan) earnings of $1.89 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus of $1.90; revenues rose 12.9% year/year to $6.36 bln vs the $6.39 bln Capital IQ Consensus.
- Co issues guidance for Q1, sees EPS of $1.18-1.25, excluding non-recurring items, vs. $1.29 Capital IQ Consensus Estimate; sees Q1 revs of $5.53-5.63 bln vs. $5.6 bln Capital IQ Consensus Estimate. Guidance Details: Q1 guidance is based on single-digit increase in same-store sales for the combined enterprise.
- Co issues guidance for FY19, sees EPS of $5.25-5.60, excluding non-recurring items, vs. $5.72 Capital IQ Consensus Estimate; sees FY19 revs of $22.7-23.12 bln vs. $23.1 bln Capital IQ Consensus Estimate. FY18 guidance is based on a low single-digit increase in same-store sales and 3.7% square footage growth.
- Enterprise same-store sales increased 2.4% on a constant currency basis.Adjusted to include the impact of Canadian currency fluctuations, the enterprise same-store sales increase was 2.5%. The same-store sales growth was driven by increases in average ticket and comparable transaction count.
- Same-store sales for the Dollar Tree banner increased 3.8% on a constant currency basis (or 3.9% when adjusted to include the impact of Canadian currency fluctuations). Same-store sales for the Family Dollar banner increased 1.0%. Gross profit increased 16.3% to $2.10 billion compared to $1.81 billion in the prior year's fourth quarter.
- As a percentage of sales, gross margin increased to 33.0% compared to 32.1% in the prior year. As noted previously, the Company benefited in the fourth quarter and fiscal 2017 with respect to the TCJA. The Company expects to continue to benefit going forward and currently estimates the benefit to be approximately $250 million for fiscal 2018.
Early premarket gappersGapping up:
- MED +11.6%, ADSK +8.5%, BOJA +7.6%, MOMO +6.9%, FORM +6.3%, ZFGN +5.2%, PFMT +4.8%, HRB +4.8%, TTPH +4.7%, PTCT +4.3%, HCI +4.1%, BXG +4%, NCS +2.5%, CLSD +2.2%, KFY +2.1%, CENX +1.6%, X +1.3%, GWRE +0.9%, AKS +0.7%, CASA +0.7%
Gapping down:
- CVNA -14.3%, CYRX -11.5%, AVAV -9.6%, SPPI -8%, EDIT -7.8%, TTOO -7.1%, ABM -6.8%, ROST -5.6%, RIGL -4.9%, RAVN -4.9%, TRXC -4.8%, URBN -4.8%, MDLZ -3.8%, RUN -3.6%, ANTH -3.4%, BRS -2.7%, TLND -2.6%, ANF -2.1%, DUK -1.8%, KDMN -1.6%, ATH -1.4%, PRMW -1.1%
UK house price growth chills to five-year low — Halifax
UK house prices are rising at the slowest rate since 2013, according to data released on Wednesday that underscore the bite from falling consumer purchasing power and uncertainty over Brexit.
Prices rose 1.8 per cent in the three months to February compared with the same period a year earlier, according Halifax, the mortgage lender. The pace was below the 2.2 per cent recorded in the three months to January but above the 1.6 per cent forecast by economists in a FactSet poll.
The slowdown highlights how the “the fundamentals for housebuyers are likely to remain challenging,” according to Howard Archer, chief economic adviser at the EY Item Club. He added:
Consumers have faced an extended squeeze on purchasing power, and it is likely to ease only gradually as the year progresses. Additionally, housing market activity is likely to be hampered by fragile consumer confidence and limited willingness to engage in major transactions.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that a rise in mortgage rates, sparked by the Bank of England’s November 2017 rate increase, had also played a role in the weakness.
“The slowdown in the three month average of year-over-year growth in house prices to the lowest rate since March 2013 demonstrates that even the modest rise in mortgage rates over the last few months has hit the market hard.,” he said.
Russell Galley, managing director at Halifax, struck a more optimistic tone, saying that “mortgage rates continue to stay low by historical standards.”
“While we expect price growth to remain low, the low mortgage rate environment, combined with an ongoing shortage of properties for sale, should continue to support house prices over the coming months,” he added.
Brexit’s Open Skies dilemma divides airlines
One of the most vexed issues for many British-based airlines is their ownership structure
Brexit’s impact on the airline industry is of more than just a business interest. Of the innumerable consequences of a “no deal” Brexit, the prospect of grounded planes and mass airport disruption rank as some of the most apocalyptic.
But with just 12 months until the UK’s planned EU exit date, the airline sector’s response and preparedness isn’t as uniform as you might expect.
Five bosses from Europe’s biggest airlines gathered for a debate in Brussels on Tuesday, and when quizzed about what Brexit meant for their industry, came up with at least three different answers.
One of the most vexed issues for many British-based airlines is their ownership structure. Under EU rules, carriers in Europe have to be effectively controlled by European nationals, with at least 50 per cent of shares held by the bloc’s citizens.
These foreign ownership requirements are a standard feature of most international and bilateral aviation deals and will also apply to British airlines running routes to the US when the UK falls out of the EU-US Open Skies agreement. Earlier this week, the FT reported the White House was gearing up to give the Brits a worse deal than they’ve enjoyed inside the EU.
IAG — owner of British Airways and Aer Lingus — is among the biggest carriers facing a possible crunch under the ownership rules. Its current shareholder structure means it could struggle to hit the 50.1 per cent ownership threshold to allow it to keep flying in Europe when UK nationals become third-country nationals.
But speaking at an event hosted by an airline lobby group on Tuesday, IAG boss Willie Walsh (pic below) was having none of it and even took a dig at the FT for reporting “fake” news.
“I am completely relaxed” he said, insisting the UK government’s determination to strike a deal with the EU and US would mean no flight disruption and no shareholder problems for IAG. “There will be a comprehensive Open Skies agreement. Anybody who doesn’t believe that is living in cloud-cuckoo land.”
Mr Walsh’s fellow CEOs weren't as sanguine. Michael O’Leary, chief executive of Ryanair, whose current ownership structure would also see it classified as a non-EU controlled airline after Brexit, is predicting “a real crisis” in April 2019. “There will be disruption, partly because it is in the interests of the Germans and the French to push the ownership agenda”.
What do the Germans think? Carsten Spohr, boss of Lufthansa, made a pointedly political intervention. Flight disruption, he said, was one of the ways the airline industry could show the Brits the full consequences of the Leave vote and “that might be a good thing”.
“It’s only when you get to that stage [disruption], where you’re going to persuade the average British voter they were lied to in the entire Brexit debate”, he said.
On the ownership headache, when pressed on how IAG was planning to convince regulators British Airways was both UK and EU controlled after Brexit, Walsh retorted: “magic”.