Dell: Profit-Taking Time

The time has come to take profits in Dell.

The PC maker, which through yesterday’s close had rallied more than 24% year to date, is taking a beating this morning following disappointing results for the fiscal fourth quarter ended in January. For the quarter, the company posted revenue of $16 billion and non-GAAP profits of 51 cents a share; Street consensus had been for $16 billion and 52 cents. Gross margin was 21.7%, up 20 basis points from a year ago, but down from 23.1% in FY Q3.

The company also warned that FY Q1 revenues would be down about 7% sequentially, a little worse that the Street had expected.

“That’s all folks,” Needham analyst Richard Kugele wrote in a research note this morning in which he downgraded the stock to Hold from Buy. “It’s been an impressive run YTD for Dell, rising over 24% and surpassing our $17 target as the fundamental improvements in its business mix were gradually recognized by investors. However, we see the stock limited to the $16-20 range near term as headwinds from the HDD shortage, lingering weakness in federal/state local/US consumer spending, and continued pruning of the revenue mix combine to limit top-line growth and bottom-line leverage over the forecast period.”

Citigroup analyst Richard Gardner likewise reduced his rating on the stock to Neutral from Buy, cutting his target to $20, from $19.

Sterne Agee analyst Shaw Wu repeated his Underperform rating and $15 target on the shares. “Dell reported a mixed January quarter with in-line revenue and a 1 cent miss on EPS,” he writes in a research onte. “The reason why this was disappointing was due to heightened consensus expectations looking for a sizable beat. We continue to believe investors underestimate the competitive impact from Apple, Acer, Lenovo, and a rejuvenated Hewlett-Packard.”

Jefferies analyst Peter Misek maintains a Hold rating on the shares, while lifting his target to $17, from $15. Misek thinks the company is hunting on for software acquisitions. “We believe Dell is on the prowl for an acquisition in the software space, specifically systems software,” he writes. “But based on Dell’s comments on their earnings call, we now think that the likely range is $100 million to $1 billion vs. our prior expectation of $1 billion to $3 billion. We believe they want to stay far away from any perception that they would mimic HP’s Autonomy deal.”

Dell this morning is down $1.07, or 5.9%, to $17.14.

 

Article source: http://www.forbes.com/sites/ericsavitz/2012/02/22/dell-profit-taking-time/

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Chico’s 4Q profit rises 21 pct on sales jump

(AP)  FORT Myers, Fla. — Women’s clothing retailer Chico’s FAS Inc. said Wednesday its fiscal fourth-quarter profit jumped 21 percent because of higher sales and a recent acquisition.

The results beat Wall Street predictions and the company issued a rosy 2012 sales guidance. Shares of Chico’s jumped 15 percent in midday trading.

For the quarter ended Jan. 28, Chico’s earned $25.1 million, or 15 cents per share, up from $20.7 million, or 12 cents per share, in the same period the year before. Analysts, on average, expected a profit of 11 cents per share, according to a FactSet poll.

Revenue rose 20 percent to $569.2 million from $475 million, while analysts polled by FactSet expected $547.2 million in revenue.

Revenue at stores open at least a year, a key retail metric, rose 8.7 percent as the number of sales and customers’ average amount spent both increased. The measure excludes the effect of new stores, which often have a steep ramp-up in sales.

The revenue measure rose 5.5 percent at Chico’s and Soma Intimates stores, and gained 15.4 percent at the company’s White House Black Market stores, which targets younger shoppers than Chico’s.

Stores aimed at women in their 30s, 40s and older had a more difficult time recovering from the recession than other retail sectors.

The company said that it was able to sell more clothes at full price at White House Black Market and Soma.

Women’s clothing chain Boston Proper, which Chico’s bought in September, added $28.5 million in sales during the quarter.

The company said it expects revenue in the year ending in January 2013 of about $2.5 billion, benefiting from a 53rd week in its fiscal year and more store space. The company also expects revenue at stores open at least a year to grow by a mid-single-digit percentage.

Analysts were expecting revenue of $2.43 billion.

In 2011, revenue rose 15 percent to $2.2 billion from $1.9 billion in 2010. Annual net income rose to $140.9 million, or 82 cents per share, from $115.4 million, or 64 cents per share.

Chico’s shares rose $1.97 to $14.78. They’re up 10 percent over the past three months.

Article source: http://www.cbsnews.com/8301-505245_162-57382725/chicos-4q-profit-rises-21-pct-on-sales-jump/

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Chesapeake Profit Rises as Shift From Gas to Oil Pays Off

(Adds comparison to estimates in second paragraph, analyst’s comment in fourth paragraph.)

Feb. 21 (Bloomberg) — Chesapeake Energy Corp., the second- biggest U.S. natural-gas producer, said fourth-quarter profit more than doubled as the company boosted oil output amid record crude prices.

Net income was $429 million, or 63 cents per share, compared with $180 million, or 28 cents, a year earlier, the Oklahoma City-based company said today in a statement. Excluding one-time gains and losses, per-share profit was one cent lower than the average of 10 analysts’ estimates compiled by Bloomberg.

Chief Executive Officer Aubrey McClendon is seeking $12 billion from sales of oil fields, drilling rigs and pipelines this year to close a funding gap caused by tumbling gas prices. So far, Chesapeake isn’t making the transition away from gas production toward more crude as quickly as expected, said Mike Kelly, an analyst at Global Hunter Securities in Houston.

“Investors want reassurances that they still are set to hit their production targets,” Kelly, who has a “buy” rating on the shares, said today in a telephone interview. “Any color they can provide to delineate how they intend to make that transition will be well received.”

Focus on Oil

McClendon has been shifting his focus to oil as new, intensive drilling techniques that opened previously impenetrable rock formations created a glut of North American gas, depressing prices for the furnace and factory fuel. During the fourth quarter, output of crude and gas liquids such as propane rose 13 percent compared with the prior three-month period, less than the 20 percent increase Kelly expected.

The statement was released after the close of regular U.S. stock trading. Chesapeake fell 9 cents to $24.62 at the close in New York. The stock has 17 buy ratings from analysts, 16 holds and four sells.

Without this year’s planned asset sales, Chesapeake faces a $4 billion shortfall between cash flow and exploration costs, RBC Capital Markets said in a Feb. 13 note to clients. The company’s capital spending exceeded cash from operations in every quarter since October 2003, according to data compiled by Bloomberg.

Chesapeake is also saddled with a net debt load that is twice the size of Exxon Mobil Corp.’s, a company with a market value 27 times larger. During the third quarter of 2011, as U.S. gas futures were dropping 16 percent, Chesapeake swelled its net debt by 18 percent to $11.678 billion.

Asset Sales

Chesapeake raised $16.3 billion from asset sales since July 2008, equivalent to almost half the company’s total revenue during that period, according to data compiled by Bloomberg.

Chesapeake said today that it has curtailed about 1 billion cubic feet of daily gas production in response to the expanding supply glut and depressed prices. The cuts occurred primarily in the U.S. shale regions known as the Haynesville and Barnett, the company said.

Chesapeake plans to reduce the number of rigs drilling for dry gas by 68 percent to 24 by the end of next month, according to the statement. The company is slashing its dry-gas drilling budget by 70 percent this year to about $900 million, the lowest since 2005.

The number of rigs searching for crude and gas liquids will jump to 133 this year from 92 in 2011, the company said. Chesapeake plans to escalate liquids output to 150,000 barrels a day this year and more than 200,000 barrels a day in 2013, according to the statement.

Liquids Content

Oil and gas liquids accounted for 18 percent of Chesapeake’s overall production during the October-to-December period, up from 12 percent a year earlier, according to today’s statement.

Chesapeake is sensitive to falling gas prices, with every 25-cent decline reducing the company’s cash flow by 5.4 percent, Brian Gibbons, a credit analyst at CreditSights, said in a Feb. 7 note to clients.

Gas declined to a 10-year low of $2.231 per million British thermal units on Jan. 23, after plunging 41 percent in 2011. Crude averaged $94.06 a barrel during the final three months of last year, a record for any fourth quarter.

Exxon, based in Irving, Texas, is the largest U.S. gas producer, according to the Natural Gas Supply Association, a Washington-based industry group whose members produce about one- third of the nation’s gas.

–With assistance from Jim Polson in New York. Editors: Charles Siler, Jasmina Kelemen

Article source: http://news.businessweek.com/article.asp?documentKey=1376-LZHWRK6JTSE801-7LO1VGV99POB6F5PNA9BAIVDOP

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Wilmar Shares Plunge as Profit Misses Estimates: Singapore Mover

Feb. 22 (Bloomberg) — Wilmar International Ltd., the world’s biggest palm-oil processing company, fell the most in Singapore trading in more than three years after reporting quarterly profit that missed analysts’ estimates.

The shares slumped 11 percent to S$5.22, their largest decline since Oct. 6, 2008, compared with a 1 percent drop in the benchmark Straits Times Index. Wilmar reported net income of $500 million in the three months ended Dec. 31, compared with the $519.8 million average estimate of six analysts in a survey compiled by Bloomberg.

Wilmar’s palm and laurics business posted a 32 percent drop in pre-tax profit as demand from China, India and Europe weakened and margins contracted because of “unfavorable market conditions” in Asia’s two fastest-growing major economies, the company said in its earnings statement today. Returns from crushing oilseeds and grains in China remained “challenging.”

“We had expected some improvement from the China business, but it apparently did not,” said Ben Santoso, an analyst with DBS Vickers Securities in Singapore. “The crushing margin in China is probably not going to improve markedly this quarter.”

Wilmar sold 8 percent less palm and laurics products in the fourth quarter from a year earlier even as revenue rose 6 percent, according to the statement. Margins were higher in Indonesia because of a change in the country’s export duty structure, the company said.

The maximum export tax for refined, bleached and deodorized palm oil was reduced to 10 percent from 23 percent and the rate for RBD palm olein, the processed product used as cooking oil, was cut to 13 percent from 25 percent, effective Oct. 1.

Plantations, Mills

Net income gained 57 percent from $318.6 million in the fourth quarter of 2010, according to the statement. Profit increased 21 percent last year to $1.6 billion.

Wilmar’s plantation and palm oil mills business reported a 1 percent drop in pre-tax profit in the fourth quarter from a year earlier because of lower crude palm oil prices. Unit production costs also rose as the company spent more on labor, fertilizer, fuel and repairs and maintenance.

Excluding a $262.7 million gain in a revaluation of Wilmar’s palm oil plantations, the segment’s profit before tax was $113.4 million, down 12.5 percent, the according to the statement.

“Last quarter, anyone who made money should be happy,” Chief Executive Officer Kuok Khoon Hong said at a briefing in Singapore today.

Oilseeds, Grains, Sugar

Wilmar’s oilseeds and grains business rebounded from a loss in the fourth quarter of 2010 as sales volumes grew 30 percent. While margins in China continued to be a challenge, the quarter was “a sharp recovery” from a year earlier because of increased demand from the livestock industry and higher sales of flour and rice, the company said.

“I don’t see a big improvement this year, but we have big efficient plants,” in China, Kuok said. “Long term, we should have an edge over our competitors.”

Earnings from sugar were dragged down by lower quality sugar cane from the last season, resulting in a low extraction rate, Wilmar said.

Prices of sugar also declined in the fourth quarter, which eroded earnings, DBS’s Santoso said. Wilmar, which buys raw sugar and processes it, “just has to manage in a way to minimize the losses if prices were to decline again,” he said.

The Singapore-based company completed the A$1.8 billion ($1.9 billion) purchase of Sucrogen Ltd., Australia’s largest sugar producer, in December 2010 to help meet demand in Indonesia and India and rely less on China’s cooking oil market. Wilmar’s sugar business contributed 7.6 percent to sales in the fourth quarter.

Archer Daniels Midland

Olam International Ltd., a rival to Wilmar, said sugar production may be in surplus again next season, which may depress prices further. Raw sugar traded in New York slumped 27 percent last year, the most in a decade. “Trading conditions would probably be a little more volatile” in the second half, Olam’s CEO Sunny Verghese said Feb. 15.

Wilmar said today it signed a memorandum of understanding with Archer Daniels Midland Co., the world’s largest grain processor, to cooperate in fertilizer distribution, freight operations and tropical oil refining in Europe. “On shipping, Wilmar and ADM can share information and cargoes” to drive efficiency, Kuok said.

About 7 percent of Wilmar’s debt is from European banks, Chief Financial Officer Ho Kiam Kong said at the briefing. “The cost of funding has stabilized this year after going up in the fourth quarter.”

Wilmar cancelled its plan to list its China unit in Hong Kong in 2010 after its financial adviser told the company the shares will fetch a lower price-to-earnings ratio than planned.

“If Wilmar were to list our Chinese unit, we’d do it in China for better valuations,” CEO Kuok said today.

–With assistance from Chanyaporn Chanjaroen in Singapore. Editors: Ryan Woo, Baldave Singh.

Article source: http://news.businessweek.com/article.asp?documentKey=1376-LZROJ91A74E901-6PVBJQOUJKN7G0HQQMHPV267EQ

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KL Kepong Profit Rises 12% on Higher Palm Oil, Rubber Prices

February 22, 2012, 5:35 AM EST

By Ranjeetha Pakiam

(Updates with company comment in third paragraph.)

Feb. 22 (Bloomberg) — Kuala Lumpur Kepong Bhd., Malaysia’s third-biggest listed palm oil producer, said first-quarter profit rose 12 percent after it got more for its edible oil and rubber, as well as better contributions from its refineries.

Net income climbed to 341 million ringgit ($113 million), or 32 sen a share, in the three months ended Dec. 31, from 304.2 million ringgit, or 29 sen, a year earlier, the company said in a filing to the Kuala Lumpur stock exchange today. Revenue advanced 21 percent to 2.92 billion ringgit.

“With our crude palm products prices reasonably hedged by forward sales and the expectation of higher fresh-fruit-bunches production, the group anticipates good plantations profit for the current financial year,” the Perak-based company said in the statement. “Despite the uncertain economic environment, the prevailing palm oil price has held on reasonably well, supported by strong fundamentals and the drought situation in South America, India and China.”

Hot and dry weather in major soybean-producing countries Argentina and Brazil have damaged crops, reducing global vegetable oil supplies. Dorab Mistry, director of Godrej International Ltd., has forecast a bull market in palm oil this year as demand growth outstrips the projected increase in production. The price may reach 4,000 ringgit by June, Mistry forecast in December.

KL Kepong got an average 2,753 ringgit per metric ton for its palm oil in the quarter, compared with 2,678 ringgit in the same period a year earlier. Palm oil gained 9.3 percent in the quarter ended Dec. 31. Profit from the company’s core plantations business rose 24.5 percent to 391.7 million ringgit on better selling prices for palm oil and rubber, and higher fresh fruit bunch production, it said. Earnings were also boosted by its refinery operations.

The group posted a lower profit of 3.9 million ringgit in its oleochemical division from 23.1 million ringgit a year earlier, it said.

Link to Statement:NSN LZSEW73TT9TS GO

–Editor: Mike Anderson.

To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Article source: http://www.businessweek.com/news/2012-02-22/kl-kepong-profit-rises-12-on-higher-palm-oil-rubber-prices.html

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Cinemark 4Q profit tumbles 52 percent

PLANO, Texas (AP) — Movie theater chain Cinemark Holdings Inc.’s profit dropped 52 percent in the fourth quarter, as a loss on marketable securities and higher costs offset higher revenue at the concession stand.

Its earnings were below Wall Street expectations, while revenue topped estimates. Its shares fell more than 3 percent in early premarket trading Wednesday.

Texas-based Cinemark reported net income of $18.3 million, or 16 cents per share, for the three months ended Dec. 31. That’s down from a year earlier, when it earned $38 million, or 33 cents per share.

This missed the 19 cents per share that analysts surveyed by FactSet predicted.

The current quarter included a loss on marketable securities that reduced earnings by about 7 cents per share. The prior-year period also benefited from a $12.3 million gain on an asset sale.

Total cost of operations climbed to $474.4 million from $457.3 million.

Revenue increased 2 percent to $535.9 million from $524.9 million partly because it made more money from concessions like popcorn and soda. Admissions revenue dipped 1.4 percent to $336.9 million even as attendance rose 2.3 percent.

Analysts expected lower revenue of $533 million.

Cinemark’s stock declined 73 cents, or 3.4 percent, to $20.63 in premarket trading.

For the year, Cinemark’s earnings dropped 11 percent to $130.6 million, or $1.14 per share, from $146.1 million, or $1.29 per share, in the prior year. Annual revenue rose 7 percent to $2.28 billion from $2.14 billion.

Cinemark said that it expects to open 11 new theaters and 117 screens this year. The Plano, Texas company ran 456 theatres with 5,152 screens in 39 U.S. states, Brazil, Mexico and 11 other Latin American countries at the quarter’s end.

Article source: http://www.canadianbusiness.com/article/72135--cinemark-4q-profit-tumbles-52-percent

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Dell profit drops 18% as home PCs continue to take hits

Dell touts record enterprise but masks PC trouble

Dell on Tuesday reported results that it touted as producing records but which signaled continued problems in its mainstay home PC business. Although its revenue was up two percent from winter a year ago to just over $16 billion, its profit was down 18 percent to $764 million. The largest drag was in the consumer group, where its revenue dipped two percent to $3.2 billion and it saw an extremely sharp 43 percent drop in operating income to $39 million.

It came in spite of record growth in enterprise and healthy performance in small business.

The Texas PC builder declined to explain the cause for the home division’s drop, although it may have given away a continued iPad effect. Most of the loss was concentrated in the US, where the iPad and Apple as a whole are strongest. Revenue from everywhere else grew 10 percent, Dell said.

Dell shouldn’t be suffering from an overdependence on netbooks, having almost completely quit the category aside from niche models, but its emphasis on low-end notebooks has still left it stalled in PC share where Apple has been gaining. Most of its hopes for 2012 are focused on both enterprise as well as a partial shift towards the higher end through PCs like the XPS 14z and XPS 13.

By Electronista Staff

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Article source: http://www.macnn.com/articles/12/02/21/dell.touts.record.enterprise.but.masks.pc.trouble/

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RadioShack reports sharply lower fourth-quarter profit

By Scott Nishimura

snishimura@star-telegram.com

Wilmar Profit Misses Estimates, Shares Slump: Singapore Mover

February 22, 2012, 12:07 AM EST

By Michelle Yun

Feb. 22 (Bloomberg) — Wilmar International Ltd., the world’s biggest palm-oil processing company, fell the most in more than four months in Singapore trading after reporting fourth-quarter profit that missed analysts’ estimates.

The shares slumped as much as 9.4 percent to S$5.31, the largest decline since Oct. 5, after the earnings announcement. The stock was at S$5.37 as of 12:08 p.m. local time, down 8.4 percent, compared with the 0.4 percent drop in the benchmark Straits Times Index.

Wilmar reported net income of $500 million in the three months ended Dec. 31, compared with the $519.8 million average estimate of six analysts surveyed by Bloomberg. Margins in palm and laurics products contracted partly on “unfavorable market conditions” in China, while returns from crushing oilseeds and grains in the country continued to be “challenging,” the company said.

“We had expected some improvement from the China business, but it apparently did not,” said Ben Santoso, an analyst with DBS Vickers Securities in Singapore. “The crushing margin in China is probably not going to improve markedly this quarter.”

Net income rose 57 percent from $318.6 million in the fourth quarter of 2010. Excluding non-operating items and biological asset gains, profit was $264.5 million, up from $83.5 million a year earlier.

Wilmar sold 8 percent less palm and lauric products in the fourth quarter because of weaker demand from Europe and India, according to its income statement. While volumes fell 8 percent to 5.3 million metric tons, earnings were helped by sales in Indonesia, where the maximum tax on crude palm oil exports was cut last year and lower duties were imposed on products.

“Margins were higher in Indonesia as the operations there benefited from the change in Indonesian export duty structure,” said Wilmar, the biggest palm oil refiner in the country.

Oilseeds, Grains, Sugar

Wilmar’s oilseeds and grains business rebounded from a loss in the fourth quarter of 2010 as sales volumes grew 30 percent. While margins in China remain a challenge, the quarter was “a sharp recovery” from a year earlier because of increased demand from the livestock industry and higher sales of flour and rice, the company said.

Earnings from sugar were dragged down by lower quality sugar cane from the last season, resulting in a low extraction rate, Wilmar said.

Prices of sugar also declined in the fourth quarter, which affected earnings, DBS’s Santoso said. Wilmar, which buys raw sugar and processes it, “just has to manage in a way to minimize the losses if prices were to decline again,” he said.

The Singapore-based company completed the A$1.8 billion ($1.9 billion) purchase of Sucrogen Ltd., Australia’s largest sugar producer, in December 2010 to help meet demand in Indonesia and India and rely less on China’s cooking oil market. Wilmar’s sugar business contributed 7.6 percent to sales in the fourth quarter.

Sucrogen last year agreed to buy Proserpine Co-operative Sugar Milling Association Ltd. as Wilmar seeks to build its business of this sweetener.

–Editors: Ryan Woo, Andrew Hobbs.

To contact the reporter on this story: Michelle Yun in Hong Kong at myun11@bloomberg.net

To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net.

Article source: http://www.businessweek.com/news/2012-02-22/wilmar-profit-misses-estimates-shares-slump-singapore-mover.html

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Ten tanks after profit downgrade

Investor spotlights will now focus on Ten. Photo: Louise Kennerley

Ten Network shares plunged to their lowest levels in almost three years after the company revealed a profit downgrade and warned its half-year earnings would be 40 per cent lower than a year ago because of tough trading conditions.

• Hard work has just begun for Seven

Shares of Ten – which are part-owned by billionaires Gina Rinehart and James Packer, and Lachlan Murdoch – dived 9.3 per cent, or 8 cents, to end the day at 78 cents.

The media company unveiled the surprise downgrade in late-afternoon trading, sparking a rush by investors to dump the stock. Within minutes, the value of the company’s stock had been slashed by $83 million.

The bad news included plans by the company to axe its interim dividend when Ten announces results for the six months to the end of February on April 12.

New chief executive James Warburton said the company’s earnings before interest, tax, depreciation and amortisation were now expected to come in at $64 million, down from $106 million posted a year earlier.

Television revenue is now tipped to fall 12 per cent.

“The first-half results reflect tough trading conditions and a difficult final quarter to calender 2011 as the company re-set its cost base and focused on creating a more sustainable business,” Mr Warburton said in a statement to the market.

An interim dividend was dropped “due to difficult market conditions”, the statement said.

According to Bloomberg data, Ms Rinehart holds 10 per cent of Ten, with Mr Packer and Mr Murdoch owning a stake of 8.9 per cent each.

‘Limited visibility’

Ten said television revenue was forecast to decline by 12 per cent, while revenue at its outdoor advertising business was tipped to be 7 per cent lower.

“The metropolitan advertising market remains short, with limited visibility,” Ten said, implying the network has weak forward bookings.

Ten said it expected to realise $30 million of savings from its television business in the full 2012 fiscal year.

Fat Prophets senior analyst Greg Fraser said the guidance highlighted the current tough advertising market and the network’s specific struggles to rein-in costs and lift its share of advertising revenue.

‘‘They are trying to turn around a broken business model in a depressed advertising market,’’ he said.

‘‘The task ahead of James Warburton is an unenviable one.’’

Figures from FreeTV Australia showed Ten captured 27.03 per cent of the capital city television advertising market in the six months to December 31, 2011, well behind Seven’s 38.1 per cent and 34.87 per cent at Nine.

Also, the result was down from the 28.85 per cent Ten achieved in the six months to June 30, 2011 and some distance from Ten chairman Lachlan Murdoch’s ambition of reaching 30 per cent.

Mr Murdoch is the son of billionaire US-based media mogul Rupert Murdoch.

RBS Morgans estimated the free-to-air metropolitan television advertising market contracted 4.0 per cent in the second half of calendar 2011.

Moreover, it forecast growth of only 1.5 per cent in the six months to June 30, 2012 and 3.0 per cent for the full 2012 calendar year.

‘‘Advertising was extremely weak in 2011,’’ RBS Morgans analysts Fraser McLeish and Alan Stuart said in a research note dated January 20.

‘‘Unfortunately, there are no signs that conditions are improving, although it is difficult to get an accurate read on the market at this time of year.’’

ksimpson@theage.com.au, with AAP

Article source: http://www.smh.com.au/business/media-and-marketing/ten-tanks-after-profit-downgrade-20120222-1tni7.html

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