Friday, April 22, 2016

Earnings - SAM & V

Yesterday we received earnings from Boston Beer Co and Visa.  Neither stock is getting much love today.

SAM reported earnings of $0.53/share and gave downside guidance for the remainder of the year. The new guidance came in at $6.50-$7.30, which is down from $7.60-$8.00.  That's not good news since their original guidance was just given last quarter. Here is what CEO Jim Koch had to say.

"Our total company depletion trends declined in the first quarter, even as the better beer and craft categories appear healthy. We believe Samuel Adams has lost share due to the increased competition and continued growth of drinker interest in variety and innovation. During the quarter, we rolled out new beers, including Samuel Adams Nitro White Ale, Samuel Adams Nitro IPA, Samuel Adams Nitro Coffee Stout and Samuel Adams Rebel Grapefruit IPA. These beers have started slowly, but their momentum continues to build. We believe that we are well positioned to meet the longer term challenges of this competitive environment, through the quality of our beers, our innovation capability and our sales execution strength, coupled with our strong financial position that enables us to invest in growing our brands."

Not exactly upbeat. The competition is strong within the craft category.  A few weeks ago I would have loved the idea of adding below $160. Right now not so much. I'm going to keep my eye on this one though as the company still has a strong balance sheet. If the stock dips to $140 I might make one last add. Oddly this would be a good price for one of the larger brewers looking to diversify into craft brands to pick up the company.

Visa also isn't getting any love. The company reported earnings of $0.71/share. Also the company is getting much closer to finishing the Visa Europe acquisition. Here is what CEO Charlie Scharf had to say.

“Visa reported solid financial results in the fiscal second quarter. The continued headwinds of the strong U.S. dollar, lower oil prices, and an uneven global economy are driving continued weak cross-border spend, but domestic spend continues at reasonably strong levels consistent with last quarter. In fact, most of our growth metrics look very similar to what we saw last quarter. The U.S. consumer remains strong, but we see weakness in China, Brazil, and oil based economies. Since we are not seeing any material improvements in economic trends, we are cautious as we head into the second half of fiscal 2016. The continued headwinds we see do not take away from the underlying growth in our business and our continued conviction in the great opportunities to grow global penetration of electronic payments for years to come,”

FYI the weekly market review will be out tomorrow. 

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