Hansen Natural Corp. (HANS) +7.32%
Hansen reported impressive earnings that came in ahead of expectations and, even more importantly, the Monster energy drink brand continued to take market share from competitors.
Despite weaker consumer spending trends, the company increased revenues more than 3 percent year over year, primarily as a result of higher prices. Gross margin expanded more than 3 percentage points, as greater volume of the firm’s new energy shooter drinks provided a more favorable product mix.
Hansen has performed very well in this economic climate because energy drink consumers don’t have good substitutes – most people drink these products because they don’t like coffee. Sales have also been helped by the fact consumers can not make comparable energy drinks at home the way that a coffee drinker could easily make their own cup. Also helping Hansen is their younger consumer base, which is less adverse to the economic climate and likely to spend more discretionary income.
Dell (DELL) +3.90%
Dell had a positive earnings report in which cost discipline saved an otherwise difficult quarter.
PC revenues declined 22 percent on a 12 percent decline in units. Gross margin performance was likely the most important factor for investors this quarter. Cost and pricing discipline allowed Dell to post gross margins of 18.1%, which should be viewed positively in this environment.
Dell’s unit declines coupled with Hewlett-Packard’s poor numbers last week, supports the fear that demand conditions continue to deteriorate in the PC and enterprise segments. The next several quarters should be remarkably challenging for Dell, but there is growing sentiment that the shares can’t fall much lower without a significant deterioration of market share.
General Electric (GE) -6.48%
GE is finally cutting its annual dividend in a move to preserve cash and protect the company’s top credit rating. GE’s stock price has reflected the assumption that the company would have to cut its dividend for quite some time. Now yielding 4.5 percent, GE shares may offer even more upside potential than before since the company will have an extra $9 billion annually to invest in future growth of their business.
Quick Hits
- Debtors’ Prison: Companies Made a Fashionable Mistake
- Citi Gets Third Rescue as U.S. Plans to Raise Stake
- February was another record month for corporate bond offerings
- Golden Parachute
Peter Lazaroff, Junior Analyst
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