Thursday, May 4, 2017

Earnings - AB Inbev, Church & Dwight, Global Payments

We had a trifecta of earnings reports this AM. I say trifecta because all three stocks are up, and as I write this each one is up over 4%.

AB Inbev(BUD) reported Q1 results with EPS of $0.71 on revenues of 12.9 billion. Despite flat overall volumes and a small 3.7% revenue increase, revenue growth in their 3 big brands(Stella, Budweiser, & Corona) grew by 12.1% as consumers continue to stick with big brands they love. The stock is so far up 5.5%. Here is part of managements comments.

...Our global brands continued to show solid growth, with the combined portfolio growing revenue by over 12%. Budweiser continued to perform well, supported by a powerful Chinese New Year campaign, as well as Super Bowl activations introduced for the first time in international markets such as the UK and Brazil. Stella Artois grew revenues by more than 20%, with good volume-led performances coming from the US and Argentina. This quarter was especially exciting for the brand, as its Buy a Lady a Drink partnership with, which is aimed at ending the global water crisis, was scaled out to 7 markets

Church & Dwight(CHD) reported Q1 results with EPS of $0.51 on revenues of $877 million. The company saw big growth in it's international markets with sales up 12.3% to $143 million. Also on May 1 the company acquired  Agro Biosciences for $75 million plus a contingent payment of $25 million. Shares are up 4% to $50.75. Here is managements comments.

Matthew Farrell, Chief Executive Officer, commented, “We have delivered strong results as momentum from 2016 has continued into early 2017 including organic net sales growth of 2.3%, adjusted gross margin expansion of 110 basis points and adjusted earnings growth of 20.9%. The International business grew organic sales 11.8% as our investment strategy continues to pay off. We are pleased that 6 out of 10 power brands gained share.”

“Innovation continues to be a big driver of our success. In support of our long term strategy to drive revenue and earnings growth, we have launched new products in several categories. We launched ARM & HAMMER SLIDE cat litter, a revolutionary new litter that doesn’t stick to the litter box, and ARM & HAMMER PLUS OXICLEAN unit dose 3-in-1 POWER PAKS laundry detergent. We are restaging OXICLEAN liquid laundry detergent with improved efficacy, claims and packaging. VITAFUSION is launching a new energy gummy vitamin that supports everyday energy needs and alertness. TROJAN launched a new XOXO upscale condom targeting both men and women with a soft touch, aloe lubricated latex in a unique portable carrying case. We are expanding offerings and distribution of the BATISTE brand, leveraging its #1 U.S. share position in the dry shampoo category.”

Global Payments(GPN) reported Q1 results with EPS of $0.32 on revenues of $919 million. The company has reached it's 1 year anniversay since it partnered with Heartland Payment's. I probably don't talk about this company enough, but they run a boring business. They simply process transactions, and make money.  The stock is up 4% so far today, and up a big 22% for the year. Here is what management had to say.

"As a result of our strong first quarter performance and progress with Heartland integration efforts, we are increasing our outlook for 2017," stated Cameron Bready, Senior Executive Vice President and Chief Financial Officer. "We now expect adjusted net revenue to range from $3.38 billion to $3.46 billion, or growth of 19% to 22% over 2016 and adjusted operating margin to expand by as much as 110 basis points. Adjusted earnings per share are now expected to be in a range of $3.78 to $3.95, reflecting growth of 19% to 24% over 2016, which includes the impact of our recent refinancing."

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