Friday, August 5, 2016

Earnings - CHD, CTSH, UVV

Church & Dwight(CHD) reported Q2 results with EPS coming in at $0.85 on revenues of $877 million.  The company also announced a 2-1 stock split effective Sept 2nd, in addition to it's 462nd consecutive dividend. The company noted nice gains in it's laundry detergent sales, and noted lower commodity costs are helping margins. The shares have moved up since the announcement, which is nice but I would have liked them to fall so I could buy more! The company guided Q3 EPS at $0.92.  Here is the CEO statement.

Matthew T. Farrell, President and Chief Executive Officer, commented, “We are extremely pleased with our sales and earnings growth as our strong momentum has continued. Our first half gross margin expansion gives us flexibility with respect to our second half marketing and promotional investments. We continue to believe that innovation is the key to increasing our market share and have launched new products in many of our major categories including BATISTE, the #1 global dry shampoo, and ARM & HAMMER bi-layer and dual chamber unit dose laundry detergent.”

Cognizant Technology Solutions(CTSH) reported Q2 EPS of $0.41 on revenues of $3.37 billion.  EPS was impacted $0.31 by a one time remittance of cash from India to the US and other locales(and people wonder why no one brings their cash back home).  I'm pleased with Cognizant's revenue growth, and their focus on providing value to other business'. The company expanded it's share repurchase program by $1 billion and until December 2018. Overall very nice results from the company. The shares initially took a hit, but have since recovered and are now up 1.5% as I write this. Here is their statement regarding the cash repatriation, and CEO comments.

In May 2016, our principal operating subsidiary in India repurchased shares from its shareholders, which are non-Indian Cognizant entities, resulting in a one-time remittance of $2.8 billion of cash from India. $1.2 billion, or $1.0 billion net of taxes, was transferred to the U.S. with the other $1.6 billion remaining overseas. As a result of this transaction, we will incur an incremental 2016 income tax expense of $237.5 million, of which $190.0 million was recognized in the quarter ended June 30, 2016 and approximately $23.7 million will be recognized in each of the quarters ending September 30, 2016 and December 31, 2016.

"Our second quarter performance, as anticipated, represented broad-based revenue growth across service lines, geographies and industries, including healthcare and financial services," said Francisco D'Souza, Chief Executive Officer. "While our revised guidance reflects the impact of near-term macroeconomic headwinds, our longer term outlook and underlying business fundamentals remain strong. We continue to see an expanding market opportunity ahead and are well positioned to capitalize on the digital transformations taking place among enterprises around the world."

"The shift to digital continues to intensify and accelerate," said Gordon Coburn, President. "Our strong second quarter revenue growth, adding incremental quarterly revenue of nearly $170 million, is the result of clients turning to Cognizant to help them define strategy and infuse new technologies to address key challenges and implement new business models. Our robust strategy and implementation capabilities have made us a key partner to clients as they fundamentally transform their businesses and navigate the shift to the digital economy."

"During the second quarter, we were pleased to execute a one-time remittance of $2.8 billion from India, which increased our cash in the U.S. by $1.0 billion, net of taxes, and in other international markets by $1.6 billion," said Karen McLoughlin, Chief Financial Officer. "This provides additional financial flexibility in funding our strategic investments to drive long term growth for Cognizant."

Universal Corp(UVV) reported fiscal year 2017 Q1 results with EPS coming in at -$0.40, on revenues of $295 million. This is a quiet quarter for the company as it falls in their seasonal quiet time. The next quarter after harvest begins will be more exciting. The company is operating as normal, and given the reaction in price today the market likes it as the shares are up over 5%. Here is the CEO statement.

Mr. Freeman stated, "Our seasonally weak first quarter results were in line with our expectations, as we anticipate that fiscal year 2017 will develop similarly to the past several fiscal years, with volumes weighted to the second half of the fiscal year. Results for our North America segment improved on increased volumes, largely due to carryover shipments from changes in the business model there. However, higher currency remeasurement and exchange losses, primarily in our Other Regions segment, negatively impacted our results. Lower crop levels in Brazil from El Nino weather patterns, coupled with our decision to reduce our buying program there due to escalating and unsustainable green leaf prices, reduced our Brazilian purchasing and processing volumes in the first fiscal quarter. We expect decreased volumes from that origin to continue to affect our results throughout the fiscal year. Our global leaf production estimates indicate a return to historical crop levels in Brazil's 2017 growing season, for which plantings are currently underway

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