Tuesday, August 9, 2016

Earnings - WWAV & HCP

This morning WhiteWave Foods(WWAV) reported Q2 results with EPS of $0.29 on revenues of $1.05 billion up 14%. Excluding acquisitions sales were up 7%.  That's a strong quarter, and of course during this time they announced their acquisition by Danone.  I find it funny that Dean Foods which is a full blown dairy company spun-off WhiteWave to unlock value.
Then 4 years later the company is acquired by another dairy company which is struggling with lower dairy sales. While I'm OK with the price I think WhiteWave would have been worth much more in a few years as a pure play healthy/organic food company. When the acquisition is completed I'll have to deploy the cash to other opportunities. Here is what I consider an ironic CEO statement.

"We are pleased with the double-digit topline growth, continued strong margin expansion and robust earnings growth we generated in the second quarter and for the first half of 2016,” said Gregg Engles, chairman and chief executive officer. “In early July, we entered into a definitive merger agreement to be acquired by Danone. This transaction represents an exciting next chapter of growth for WhiteWave as we bring together two companies with a shared mission of changing the way the world eats for the better.”

HCP Inc(HCP) reported Q2 results with EPS and FFO of $0.64 and $0.71, respectively. FAD was reported at $0.72. Revenues for the quarter were $662 million. This quarter included a lot of adjustments for the upcoming ManorCare spinoff.  Either way at quick glance it was a decent quarter.  The shares have traded up over 1% to $39.  I was actually hoping the market would get disappointed and shares would fall. What can I say I love a good bargain.  The eventual spinoff will allow the company to focus on higher yielding opportunities. I can already see that focus starting to payoff in some recent deals with great long term prospects. In lieu of a CEO statement I've included the guidance outlook.

Our guidance estimates do not reflect the impact of the anticipated spin transaction or unannounced future transactions, but does reflect the impact of $1.25 billion of dispositions expected in 2016 inclusive of the RIDEA II transaction. For full year 2016, we expect: EPS to range between $1.83 and $1.89; FFO per share to range between $2.72 and $2.78; FFO as adjusted per share to range between $2.83 and $2.89; and FAD per share to range between $2.68 and $2.74. In addition, we expect 2016 SPP Cash NOI to increase between 1.5% and 2.5%. Excluding QCP, we expect 2016 SPP Cash NOI to increase between 2.3% and 3.3%. Refer to the "Projected Future Operations" and "Projected SPP Cash NOI" sections of this release for additional information regarding these estimates.

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