Today - Wednesday, November 25, 2015
- China's Bona Film Group (NASDAQ:BONA) is up 1% after hours in the wake of a largely in-line Q3 report, though revenue fell and profits declined by nearly half.
- Non-GAAP net income fell to $5.1M from a year-ago $9.3M. EBITDA of $9.9M beat an expected $8.2M.
- Revenue breakout: Film distribution, $47.8M; Film investment and production, $12.6M; Movie theaters, $33.8M; Talent agency, $0.1M. Intersegment eliminations were $15.4M.
- The company distributed and/or invested in five films, with top performers being Bride Wars (domestic receipts of 173.3M yuan, about $27.1M) and The Dead End (receipts of 304.5M yuan, about $47.7M).
- Cash and equivalents came to $150.9M as of Sept. 30, as cash used in operating activities jumped to $164.9M.
- Conference call to come at 8 p.m. ET.
- Press Release
- Qunar (QUNR +4.1%) is back above $40 after beating Q3 estimates with the help of a 381% Y/Y increase in mobile revenue to $153.5M (now 73.6% of total revenue). Q4 guidance is for 105%-125% Y/Y sales growth (largely below a 124.6% consensus) and 85%-105% gross profit growth.
- Top-line performance: Adjusting for a bookings model shift, hotel reservation revenue rose 188.6% Y/Y to $50.7M, and flight revenue 91.2% to $93.9M. Hotel and flight volume respectively rose 119.8% and 49.4% to 22M rooms and 33.9M tickets.
- Financials: Spending remained heavy: Sales/marketing spend +188.6% Y/Y to $120.9M, R&D +78.1% to $64.3M, product sourcing 87.5% to $29.4M, G&A +15.6% to $19.4M. Due to certain hotel reservations being recognized on a gross basis, gross margin fell to 62.4% from 72% in Q2 and 72.4% in Q3 2014. The Ctrip deal has been expected to eventually yield lower spending growth.
- On the earnings call (transcript), China's second-biggest online travel firm suggested it expects to reach EBITDA breakeven in Q3 2016. The company also said it remains on track to pare its aggressive offline marketing spend (aims to grow Qunar's customer base) in 1H16.
- Q3 results, PR
- Seadrill (NYSE:SDRL) is off 1.2% today, a reversal from yesterday's 2.4% gain even after the stock missed earnings expectations in Q3 and swung to a loss.
- Evercore saw "slightly positive implications" in the firm's report, but Credit Suisse is reiterating an Underperform rating.
- Analyst Gregory Lewis reduced EPS estimates for 2015 to $1.20 from $1.40, and for 2016 to $2.15 from $2.30 "to account for updated downtime and utilization assumptions."
- Though Seadrill pointed to "challenging" market conditions through 2016, it sees some recovery the year after. But Lewis thinks customer rig spending would need to increase 30% from 2016 estimates just to get back to 2015 levels.
- Lewis has a $5 price target on Seadrill; shares closed yesterday at $6.48 and are trading currently at $6.40.
- What used to be HP's PC/printing unit (NYSE:HPQ) has plunged below $13 after missing FQ4 sales estimates on the back of 14% Y/Y sales drops for both its PC and printing segments, and cutting its FY16 EPS guidance below consensus.
- With printing op. income (-18% in FQ4 to $862M) well above PC segment op. income (-17% to $294M), printing headwinds are getting a lot of attention. On the earnings call (transcript), CEO Dion Weisler stated weak market demand and price pressure both weighed on printing. "We do not expect the landscape to improve in the near future and we will constantly assess how the market evolves."
- He added forex is affecting pricing, and that lower printer price points are "attracting buyers that might have different usage patterns then we originally targeted." Printing supplies revenue stabilization now isn't expected until the end of 2017. The growth of online/mobile document and photo sharing has been a major printing headwind for some time.
- Needham's David Rold has downgraded to Hold just three weeks after upgrading to Buy on account of a low valuation and 3%-4% dividend yield. "[A]s some of the valuation argument has played out, we believe further upside will require real improvement in the underlying business. The sharp turn of the Printing market (and delay in improvement that results) in just 2-3 months since last speaking with the Street warrants caution..."
- Likewise, Goldman's Simona Jankowski (Neutral) is worried about soft supplies demand (sales -10% in FQ4). "While the company intends to reduce its cost base to partially offset market headwinds, we would need to see evidence of supplies stabilization before becoming meaningfully more positive on HP Inc.’s trajectory."
- Deutsche's Sherri Scribner (Buy) remains bullish. "While we do not expect HPQ to be immune to [market] trends, we believe the company can outgrow its peers and end markets, driven by market share gains and a focus on profitable growth opportunities. A recovery in supplies is a key driver of free cash flow strength longer term, and while we were disappointed by the push out of this recovery to later in FY-17, we believe [management] has the right tools in place to stabilize this business."
- Yingli (NYSE:YGE) expects to report Q3 revenue of $340M-$350M, a range declared to be "in-line with management's previous estimation," but which is below a $355.2M consensus.
- Module shipments are expected to total 450MW-460MW, below prior guidance of 550MW-580MW - Yingli blames "lower-than-expected utilization of production facilities for in-house PV [modules]." Gross margin is expected to rise to 8%-9% from Q2's 6.3% thanks to higher ASPs and lower unit costs.
- A $581.3M non-cash impairment charge will be recorded, primarily "due to the lower-than-expected utilization of certain production facilities" in 2015.
- Q3 results are due on the morning of Dec. 2. Shares haven't yet moved premarket. They closed yesterday at $0.70, having plunged this year due to solvency fears.
- Update (9:49AM ET): Yingli is down 4.3%.
- Adjusted net earnings of $45.4M, or $0.34 per diluted share vs. $55.9M or $0.40 per diluted share in the same quarter a year ago.
- Net sales declined 9.8% to $538M from $596.5M in the same period of fiscal 2015. Gross margin of 33.1% vs. 35%.
- Repurchased 2.07M shares at an average price of $32.85 for a total of $68M.
- Fiscal 2016 outlook: Adjusted EPS of $1.49 -$1.69 (prior guidance of $1.57-$1.77). Sales between $2.2B-$2.3B.
- China Nepstar Chain Drugstore (NYSE:NPD) reports comparable-store sales rose 13.2% in Q3 primarily due to in-store marketing initiatives and improved product mix.
- Private label products sales represents ~13.6% of the total revenue & 20.5% of the gross profit.
- Revenue contribution by products: Prescription drugs 23.4%; OTC 43.1%; Nutritional supplements 11.5%; Herbal products 4.4%; Convenience and other products 17.6%.
- Gross margin rate improved 50 bps to 40.9% mainly due to improved product mix and increased store productivity.
- Inventory -3.2% Y/Y to $93.45M.
- Store count -83 Y/Y to 1,965.
- Net income of $351.2M, or $1.08 per share vs. $649.2M, or $1.83 per share, for the same period of 2014.
- Net sales decreased 25% Y/Y to $6.7B from $9B in the same quarter a year ago. Segment Sales: Agriculture & Turf. -25%; Construction & Forestry -32%.
- Guidance: Company equipment sales are projected to decrease about 7% for fiscal 2016 and to be down about 11% for the first quarter compared with year-ago periods. Fiscal 2016 earnings are expected to be approximately $1.4B.
- "Sales and earnings for the year were the sixth-highest in company history," said CEO Samuel Allen. "Although our forecast calls for lower results in the year ahead, the outlook represents a level of performance that is better than Deere has experienced in previous downturns."
- FQ4 results
- DE +5.1% premarket
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