While most of earnings season had passed us by already, a number of big names did report earnings last week. Some went great, others not so much. Now that we've had some time to digest the numbers, let's take a look at how these names fared and what the trade is going forward.
Priceline (PCLN): Priceline reported a very good quarter. Year over year bookings were up 56%, well above the company's guidance of 47-52%. Domestic bookings at 13.1% growth were at the high end of the 8-13% range. International bookings of nearly 73% were amazing compared to the guidance of 62-67%. Reported revenues of $1.5 billion were up 45%, beating their guidance of a 37-42% increase. Non-GAAP net income of $9.95 was well above the $9.10 to $9.30 range, and GAAP net income of $9.17 was well above the $8.37 to $8.57 range.
Guidance for the next quarter was a little light. Revenue growth of 27-32% was a bit below the nearly 35% expected, and non-GAAP earnings of $4.90 to $5.00 was a bit below the $5.14 expected. However, as we saw in the most recent quarter, their guidance is known for being light, so I would expect them to beat at next report.
Shares jumped about 8%, or $44 on Tuesday after the news. However, they sold off the next two days and have half of their post-earnings gains. At $533, the forward P/E is 18, which is a bit higher than some of its competitors. I like the company, they are firing on all cylinders right now, and they have a good deal of growth ahead. I think, however, that you can get a better deal on these shares so look for a better entry.
Sodastream (SODA): Sodastream reported a record quarter which beat on all levels. Revenues of 58.3 million euros topped expectations of 54.5 million, and earnings per share of 0.42 euros beat estimates for 0.25. Margins declined a little due to more sales of starter kits, which the company attributed to an aggressive marketing campaign. The company also had some issues in the Nordic region, but they were expected to be resolved in the next quarter.
Guidance was mixed. 4th quarter revenue growth of 24% handily beat current expectations for 19%, but net income guidance of 4.3 million euros was a little light, as the company plans to spend more on advertising for the holiday season. For the full year, revenue guidance was a 36% increase, above the 32% estimate. Guidance of slightly under 1.00 euros was a little light, but due to a 4 million euro share based payment expense. Excluding the one time item, guidance was above current expectations.
Shares were very volatile on Wednesday after the report. They were down 2% at one point and up almost 16% at another point. They closed up nearly $2, despite the huge market losses overall. However, shares fell almost 10% the rest of the week, losing all of their gains and then some. Most of that may be do to the next stock I will mention, so we'll see how shares trade in the next few days. I'm hesitant to recommend the stock as a buy given its recent performance, so all I'll say is that the earnings report was decent.
Green Mountain Coffee Roasters (GMCR): Oh, another great battleground stock gets destroyed. Green Mountain had a huge revenue miss and apparently that is all everyone cared about. Revenues for the quarter came in at $711.9 million, well below the $760 million expected. Despite the huge miss, EPS of $0.47 only missed by one penny. The big revenue miss caused full year numbers of $2.65 billion to miss the $2.7 billion expected. Again though, EPS only missed by a penny. But the revenue number put some serious growth concerns in front of everything else in the report.
So what about guidance? For their fiscal first quarter, revenue guidance of 85-90% was ahead of the 81.5% currently expected. EPS guidance of $0.35 to $0.40 was also above the $0.35 expected. For the full year in 2012 (ending in September), revenue growth of 60-65% was fair compared to the 61.4% currently expected. EPS guidance of $2.55 to $2.65 was in line to slightly below the $2.62 expected. The problem for GMCR is they plan to invest $630-700 million in capex over the next year, but they only have $13 million of cash on the balance sheet and no positive cash flow. Thus, they are going to need to either borrow heavily or have a secondary offering. Neither is very appealing to shareholders currently.
Shares fell 39% on Thursday and rebounded a little on Friday. They are now down about 55% since hedge fund manager David Einhorn gave a presentation on why he was short. At a forward P/E of 16, the stock seems relatively inexpensive. But the growth concerns are out there, and the revenue miss lit a spark to that fire. I think the name can recover, but I see it going lower first.
Blue Nile (NILE): I don't follow Blue Nile as much as I used to, but it is worth mentioning so I'll rely on this Forbes article for most of my facts. The company beat on revenues but EPS missed by a wide margin. Guidance for next quarter was also a bit below current expectations. If that wasn't bad enough, the current CEO announced her departure immediately. It's never a good thing to miss earnings, have bad guidance, or have your CEO leave, but it's extremely bad to do all three at once.
Shares fell $16, or almost 33% on Wednesday on the news. Shares fell another 3.75% on Thursday, but recovered those losses on Friday. Three months of gains have been wiped out in two days, so right now I would stay away. This could easily go below $30 in the near future.
Cisco (CSCO): The last few names have been rather disappointing, so let's insert a positive one in right now. Cisco reported revenues of $11.3 billion, nicely ahead of the $11.03 billion expected, and non-GAAP earnings of 43 cents per share beat by four cents.
Guidance was fairly decent. Revenues of $11.14 to $11.24 billion were slightly ahead of the $11.13 billion expected, and 42 to 44 cents a share was in line to ahead of the 42 cent estimate.
Cisco shares were up $1 on Thursday, equaling a 5.68% gain, and rose above $19 on Friday. 8% in two days is a nice move. The stock is near multi-month highs, and is up about $5 in the past 3 months. It was a great report, and I like the name, but wait for a pullback. It will come.
PriceSmart (PSMT): The Latin American version of Costco was surely a roller coaster stock after earnings. 4th quarter revenues of $436 million were a bit below the $444 million expected by the street, and EPS of $0.42 was well below the $0.54 consensus.
The stock, which closed Tuesday at $77.71, fell under $60 at one point on Wednesday but rallied throughout the day, closing down less than $2, at just under $76 a share. Anyone who got in early Wednesday made some terrific gains. PriceSmart did trade lower by about 10% the next two days. The stock has had a huge run this year so far, so a pullback was inevitable. The bad report helped that cause. I'm a buyer around $55-$60, which is slightly below Wednesday's low. That seems to be an area of support for this name.
Molycorp (MCP): After the bell on Thursday, rare earth processor Molycorp reported their third quarter earnings. Revenues were a big miss, coming in at $138.1 million, while the street expected $161 million. However, this company only did $8.4 million in last year's quarter, so it is still quite a jump. Non-GAAP earnings came in at $0.67, below expectations of $0.70. GAAP earnings were $0.52.
Shares were down over 13.5% on Friday. Everyone was expecting a lot more, but you're still talking about monumental year over year growth. Unfortunately, Molycorp is falling into the growth concern camp that GMCR is now in, and that SODA was in last quarter. I expected shares to drop on this report, and $30 is not out of the question in the next few days. I've been saying for months that this stock is a trade and not an investment. If you look at this chart, you'll see that there are plenty of 10% moves in short time periods. I won't be buying tomorrow, but if we drop into the $20s I will certainly take another look.