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BUZ INVESTORSS Early movers Insight Which companies are making headlines before the bell
High cat losses ding Travelers quarter
Q1 core income of $614M or $2.16 per share vs. $698M and $2.33 a year ago. What used to be called “operating income” is now called “core income.” This year’s result was impacted by $318M in pretax catastrophe losses.
The combined ratio of 96% deteriorated from 92.3% a year ago; underlying combined ratio of 91.7% vs. 90% a year ago.
Early movers Insight
Net investment income up 9% Y/Y.
Net written premiums up 5%; in personal insurance up 12% – which include the impact of auto rate increases.
Adjusted book value per share of $81.56 up 1% during quarter. 2.4M shares bought back during quarter for $286M.
Dividend is boosted to $0.72 per quarter, and anther $5B of repurchases is authorized.
Verizon misses by $0.01, misses on revenue
Verizon (NYSE:VZ): Q1 EPS of $0.95 misses by $0.01.
Revenue of $29.8B (-7.4% Y/Y) misses by $690M.
Shares +1.6% PM.
- Consolidated: 84 cents in earnings per share (EPS) and adjusted EPS (non-GAAP) of 95 cents, excluding non-operational items, compared with EPS of $1.06 in 1Q 2016.
- Wireless: Retail postpaid churn of 1.15 percent, with strong customer loyalty demonstrated by retail postpaid phone churn of less than 0.90 percent for the eighth consecutive quarter; intra-quarter improvement in net additions following the launch of Verizon Unlimited.
- Wireline: Fios total revenue growth of 4.7 percent.
D.R. Horton up 0.9% after earnings beat, raised guidance
FQ2 net income of $229.2M or $0.60 per share vs. $195.1M and $0.52 one year ago.
Homes closed up 15% to 10,685 homes; up 18% in value to $3.2B.
Net sales orders up 14% to 13,991 homes; up 17% in value to $4.2B.
Backlog up 7% to 14,618 homes; up 9% in value to $4.4B.
Full-year fiscal 17 guidance is boosted: Revenues seen at $13.6B-$14B from $13.4B-$13.8B; homes closed to 44.5K-46K from 43.5K-45.5K. Guidance for pretax profit margin remains at 11.2-11.5%; home sales gross margin stays at around 20%, and cash flow from operations still at $300M-$500M.
Quest Diagnostics beats by $0.15, beats on revenue
Quest Diagnostics (NYSE:DGX): Q1 EPS of $1.33 beats by $0.15.
Revenue of $1.9B (+2.2% Y/Y) beats by $30M.
– First quarter diluted EPS of $1.16 on a reported basis, up 63.4% from 2016; and $1.33 on an adjusted basis excluding amortization, up 17.7% from 2016. Excess tax benefit associated with stock-based compensation increased diluted earnings per share by $0.11 in the quarter.
– Raises outlook for full year 2017 diluted EPS. Reported diluted EPS now expected to be between $4.73 and $4.88; and adjusted diluted EPS excluding amortization expense now expected to be between $5.45 and $5.60
Blackstone beats by $0.14, beats on revenue
Blackstone (NYSE:BX) today reported its first quarter 2017 results.
Stephen A. Schwarzman, Chairman and Chief Executive Officer, said, “Blackstone reported outstanding results in the first quarter, marked by
strong returns across our major fund strategies as well as our best quarter for realizations on record. The result was a more than doubling of
revenue and earnings versus the prior-year period, and our second best quarterly distribution ever, at $0.87 per common unit. In total, we will have
distributed nearly $14 per common unit of value since the IPO, including $2.50 per year on average over the past three years(a), making Blackstone
consistently one of the highest yielding large-capitalization companies in the world.”
Blackstone issued a full detailed presentation of its first quarter 2017 results, which can be viewed at www.blackstone.com.
Blackstone has declared a quarterly distribution of $0.87 per common unit to record holders of common units at the close of business on May 1,
2017. This distribution will be paid on May 8, 2017.
KeyCorp beats by $0.04, beats on revenue
Noninterest expense, excluding merger-related charges, down 8% from 4Q16, resulting in a cash efficiency ratio of 60.4% in 1Q17
Significant progress on merger synergies; expect to achieve $450 million in acquisition cost savings by early 2018
Return on average tangible common equity, excluding merger-related charges, of 12.9% for 1Q17
AmEx +2.3% after earnings; analysts weigh in
A middle-of-the-roader on the stock, Morgan Stanley’s Betsy Graseck acknowledges improving revenue growth, but says American Express (NYSE:AXP) will likely need to continue paying for that growth with another boost in promotional offerings next year. She lifts her price target to $85 from $83.
Nomura’s Bill Carcache reiterates his Reduce rating and $63 price target. The stock should do well today, but he figures at least some of the beat was driven by non-recurring items like record Q4 investment spending, and unsustainable cuts in marketing and promotion.
Another bear on the name, RBC’s Jason Arnold says not to forget the boost to Q1 provided by a lower tax rate. Heated competition means marketing/rewards expense pressure isn’t going anywhere. He lifts his PT to $63 from $60.
A bull on AmEx, Bernstein’s Kevin St. Pierre says robust adjusted revenue growth bolsters his case, with 12%-plus EPS growth doable beyond this year. He lifts his PT to a Street-high $95.
Shares +2.3% premarket to $77.29.
GM ceases Venezuelan operations
General Motors (NYSE:GM) is ceasing its Venezuelan operations after its assets in the country were seized by public authorities.
“In addition, other assets of the company, such as vehicles, have been illegally taken from its facilities,” General Motors Venezolana said in a statement.
The action will cause “irreparable damage” to the unit, its 2,678 workers, 79 dealers and suppliers.
Stifel Nicolaus positive on Starbucks
Stifel Nicolaus upgrades Starbucks (NASDAQ:SBUX) to a Buy rating from Hold on a positive view for the chain’s comparable sales track.
The firm sees U.S. comparable sales growth of at least 5% to 6% for the next four quarters beginning in FQ3 after coffee giant turns in around a 3% gain for the current quarter. Global comparable sales are seen rising at a mid-single-digit pace this fiscal year.