Thursday, January 26, 2017

Earnings - PX, PYPL, DEO

Today we received earnings from 3 picks. Praxair(PX), PayPal(PYPL), & Diageo Plc(DEO).

Praxair(PX) reported Q4 and 2016 FYE results with quarterly EPS of $1.41 on sales of $2.6 billion.  FYE results saw sales of $10.5 billion and EPS of $5.21. The company had record free cash flow of $1.3 billion of which 65% of that was returned to shareholders through dividends. The company guided 2017 EPS at $5.45-$5.80. At the mid-point of that range it looks like EPS will increase 8% for 2017. Shares traded flat for the day. Here is managements remarks:

“Expanding our presence in more resilient end-markets including food, beverage, healthcare and aerospace is a key component of our strategy. We completed our carbon dioxide acquisition in Europe which will strengthen our food and beverage growth platform and began the PST joint venture with GE on aircraft coatings which we expect will triple the size of that business in a few years. Another important element of our strategy is to execute our backlog and capitalize on the additional project opportunities driven by the low-cost feedstock advantage in the U.S. Gulf Coast. We won seven new large on-site projects during the year that brought our backlog to just over $1.5 billion, with 70% of that value supporting our extensive network in the U.S. Gulf Coast.

“The year culminated in a non-binding agreement in principal to merge with Linde. We view this as a compelling opportunity to create substantial value for stakeholders. This announcement is the first step in a process that will take some time to complete. While we pursue this opportunity, rest assured our employees will remain laser focused on operational excellence and executing our core strategy.”

Diageo Plc(DEO) reported interim 2017 6 month results with EPS of 60.3 pence on sales of 6.42 billion(GBP).  This represents a 14.5% increase in sales from results last year which is quite good. The company saw broad improvement across all it's brands. The company is expecting favorable currency impact of 1.4 billion pounds for the year. The reason being is the company gets 34% of sales from the US, and 24% from Europe. That's opposite of what we are seeing from most US based companies which are having the opposite impact from a strengthening dollar. In DEO's case the stronger dollar is translating into higher sales when converted back to pounds. Shares ended up the day 3.2% higher. Here is managements remarks: 

"We have delivered a strong set of results with broad based improvement in both organic volume and top line growth and this positive momentum  demonstrates continued  effective execution of our strategy" 

PayPal(PYPL) reported Q4 and FYE results with quarterly EPS of $0.32(up 7%) on revenues of $2.98 billion(up 17%). Full year EPS came in at $1.15(up 15%) on revenues of $10.84 billion(up 17%). Additionally the company saw active users up 10% to 197 million accounts, and TPV is up  26% to $354 billion. That's some impressive numbers. Guidance for 2017 was given which included revenues up 15-17% and EPS of $1.26-$1.31. The EPS growth is not what you'd like to see as management is expecting at the low end only 9.5% growth for the year. That's one major reason why the stock is trading down 3% after hours. Here is managements remarks: 

"I'm pleased to report that PayPal ended 2016 with another strong quarter of financial results. We extended our industry leadership by generating 18 million active customer accounts, with greater engagement than ever before. We innovated across our merchant and consumer value propositions and extended our lead in mobile payments," said Dan Schulman, President and CEO of PayPal. "In the past year, we transformed our market opportunity with a series of strategic partnerships with networks, financial institutions, technology companies, and mobile carriers. We accomplished all of this by putting our customers first, in everything we do. At the end of a landmark year for PayPal, we feel well positioned to deliver sustainable and profitable growth in 2017 and beyond.

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