Peabody Energy (BTU) +12.0%
Peabody Energy announced fourth-quarter profit soared sevenfold on higher prices contracted during coal’s record surge to $137.50 a ton. The largest producer of coal in the U.S. said coal demand for 2009 will be impacted by the global pullback in steel production and moderate softness in global electricity generation, offset by growth from new generation and increased market share for coal. In response to current economic conditions, global coal production cuts have been accelerating.
In U.S. spot markets, coal was up 20 percent from a year earlier in Wyoming’s Powder River Basin, where Peabody holds the largest reserves. Although coal prices have outperformed other commodities like steel, copper and oil, there is a lack of upside catalyst in the near future for the industry. A global economic recovery should spur new demand for electricity and steel, driving coal stocks higher.
First Cash Financial (FCFS) +9.91%
First Cash reported its fiscal 2008 earnings grew 35 percent due to a 13 percent increase in same-store revenue and a 38 percent revenue increase from its Mexico pawn operations.
The company projects full-year 2009 earnings growth of eight to ten percent, as it expects significant growth in customer traffic and transaction volumes in 2009, especially in Mexico. Most of the 2009 earnings and revenue growth are expected to occur in the second half, as the significant number of new stores added between June and December of last year become more accretive to earnings.
Quarterly revenue increased 15 percent and same-store sales for the fourth quarter increased 8 percent. Pawn revenue in Mexico during the fourth quarter increased by 31 percent, reflecting new store expansions and strong same-store revenue growth in existing stores. In the U.S., total pawn revenue grew by 13 percent year-over-year.
First Cash said it plans to open between 55 and 60 news stores in Mexico this year, and a limited number new pawn stores in the U.S.
Amgen (AMGN) -2.43%
Amgen reported fourth quarter earnings and revenues that missed estimates, while issuing 2009 guidance that represents roughly flat performance compared with 2008 numbers.
Competitive pressures are preventing Amgen from any substantial growth ahead of the launch of osteoporosis drug denosumab, which could be approved at the end of 2009. Amgen’s high-profile anemia drug Aranesp is losing market share to Johnson & Johnson’s Procrit and competes with biosimilars in Europe. Biosimilars are also launching in Europe that will compete directly with neutropenia drug Neupogen – one of Amgen’s best-selling drugs.
Amgen will rely on its newer drugs to keep earnings steady in the near term, but the company’s more than $5 billion in annual free cash flow gives them plenty of flexibility for acquisitions and share buybacks to further boost growth. The firm had almost $10 billion in cash and about $10 billion in debt at the end of last year.
During the fourth quarter, Amgen repurchased approximately 13 million shares of its common stock at a total cost of $700 million.
St. Jude Medical (STJ) +11.14%
St. Jude Medical reported net sales increased 11 percent to $1.1 billion, which earnings slightly topped analysts’ estimates. The company was aided by higher sales of implantable cardioverter defibrillators, and it said it achieved strong growth across all of its product platforms in 2008.
Quarterly sales in the company’s Cardiac Rhythm Management – the major driver for the company – rose seven percent compared with the same year-ago period to $680 million.
EMC Corporation (EMC) -2.73%
EMC met expectations with 12 percent revenue growth for 2008. Still, normally robust fourth-quarter sales were up only 4 percent from a year ago.
The storage sector has been seen as a safer place than other areas of IT for riding out the economic storm; however, this sector is showing signs that it will succumb to the slumping global economy.
Given that the company chose not to provide any revenue guidance, it is hard to expect the situation to improve in the short term. However, the slowdown represents deferrals of storage purchase decisions rather than permanent cancellations. Long-term, EMC’s position in the highly demanded unified storage and networked storage markets will keep driving profits.
EMC subsidiary VMware, on the other hand, is losing its technological advantage and the landscape for virtualization technologies – which save companies a significant amount in IT expenses – is getting increasingly competitive.
DuPont (DD) +0.39%
DuPont posted a loss in the fourth quarter and trimmed its outlook for 2009, saying it does not “underestimate the difficulties presented by the current environment.”
Revenues fell 16.7 percent year-over-year to $5.82 billion, short of the $6.17 billion consensus. Look ahead to the first quarter, DuPont expects earnings between $0.50 and $0.70 per share, well shy of the $0.72 consensus. DuPont expects global macroeconomic conditions for the first quarter of 2009 to be similar to the fourth quarter, with very weak demand in most of its key markets, excluding agriculture.
DuPont said it will deliver about $730 million in fixed cost reductions in 2009, but expects to continue an appropriate level of spending for high-growth, high-margin businesses, including seed products and photovoltaics.
Quick Hits
- Pfizer Deal to Buy Wyeth Leaves Doubt (online or print subscription required)
- Pfizer’s Kindler Resorts to a Megadeal as Research Falls Flat
- GE Capital Leads Commercial Paper ‘Test’ as Fed’s Buying Ebbs
Peter Lazaroff, Junior Analyst
No comments:
Post a Comment