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  • Procter & Gamble 2012 1Q Financial Analysis

    Procter & Gamble 2012 1Q results are slightly negative. Quarter earning are just the same as pas years 20,2 bn.$ wile earning before deprecation even deceased from 3,6 bn.$ to 3,4 bn.$ which is a decrease of -5%. This is due to 2% increase of cost of revenue and 3% increase in operating expenses. This has lead to earning margin decrease from 18% to 17%. If this will continue company will start losing its quit good positions.

    (click to enlarge)

    Revenue segments did not changed a lot. Fabric Care and Home Care which has the largest companies share 32% has decreased. In general companies results are slightly negative.

    At balance sheet you see a little bit of improvement at Q1. Equity level has increased up to 49% and is around comfortable 1/2 zone, but return on equity has notably dropped. At Q1 it was 14,6% while at 2011 1Q it was 17,1%. But the weakest companies spot remains liquidity ratio, which has increased up to 0,86 but still remains below 1, which is not very dangerous, but could be a real trouble in hard time.

    (click to enlarge)

    Inventory and account receivable turnover is around 30 days, while account payable is 54 days. Negative liquidity ratio is driven by quit large other shot term parables which rose to 23 bn.$ out of which 11 bn.$ is a long term debt yearly repayment schedule and this is defiantly a not good thing as company generates 14 bn.$/year and most of it goes out of the company by dividends and share repurchases 0,8 bn.$ at Q1 alone and 2,3 bn.$ in last 9 months. Compared to 2011 1Q equity has decreased from 67,4 bn.$ to 65,9 bn.$ which means that company is spending more on share repurchase and dividends then its earning, which is a dangerous and risky path to chose. Cash flow from financial activity (borrowing) was negative few quarters in a row and was -5,7 bn.$ in las 9 months. On the other hand this improves companies equity and other ratios, but company could balance its shot/long term liabilities more. In general companies balance structure is risky.

    Share value:

     

    Common Stocks68,1 bn.$2,754 bn.24,7 $
    + Retained earnings-2,2 bn.$- 0,8$23,9 $
    + 1 year Net income before Depreciation12,8 bn.$(14,3 bn.$)+ 4,7 $(+5,2 $)28,6 $(29,1$)

    Companies share basic value is ~24$ (Δ+4%/23$ compared with Q4). Current market price is ~64$ (Δ-4%/67$). which shows that market is paying ~40$ more or 8,5 years of Net income before Depreciation earnings, which shows that companies shares are a bit over evaluated. If taking into account 1,5 bn.$ goodwill write-off at Q4 due to one time divestment yearly earnings should be around 14,3 bn.$/year or 5,2$/share which makes it ~8 year, never the less indicator is quit high taking into account risky balance sheet and decreasing earnings. Share profitability (Share market price/Net income before Depreciation) if not calculating goodwill write-off is8,1% which is average.

    Company pays 0,56$/share/quarter dividend or ~3,5% dividend yield which is good.

    Analysis source: Procter & Gamble 2012 1Q financial results

    Previous analysis: Procter & Gamble 2011 4Q financial analysis

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: PG
    May 29 2:41 PM | Link | Comment!
  • Apple 2012 1Q Financial Analysis

    Apple 2012 1Q results continues to impress. Revenue has jumped from 24,7 bn.$ to 39,2 bn.$ or by 59% compared to 2011 Q1. High revenue increase lead to even more rapid Net Income before depreciation increase. Which has risen from 6,4 bn.$ to 12,4 bn.$ or almost dubbed. This was lead by slower revenue cost (+43%) and operating cost increase (+36%) then revenue.

    (click to enlarge)

    Companies sales by geography is good. 1/3 of sales are from US and 1/3 is from Asia which are the regions with highest estimated growth. Europe takes 22% of sales. Asia sales has dubbed compared to last year so this market has grown the most. Most of companies revenue is generated by iPhone 58% which sales has increased by +85%. Most rise was in iPad where revenue has increased by +132% and now contains 17% of companies income, this is a defiantly income growth segment while Mac and special y iPod (-25%) are the products of the past.

    (click to enlarge)

    According to http://www.netmarketshare.com Apple share in mobile and tabled marked has increased from 48% to 60% and is better then its main competitors Google Android, which share has increased from 15% to 19%. But never the less big battle is projected in the future at this marked between Google and Apple. In general companies results are positive.

    (click to enlarge)

    Balance sheet continue to be very strong. Equity level has increased to 68%. That did not effect high return on Equity level which is 45% at Q1. Since company announced dividend payments and share repurchases companies Equity should not increase in the future. Liquidity ratio is 1,6 which is good. Company has cash surplus of 110 bn.$ which has increased from 97 bn.$ from Q4. Companies inventory and Account receivables are minimal so as liabilities.

    (click to enlarge)

    No other major changes at the balance sheet. In general companies balance structure is strong.

    Share value:

     

    Common Stocks14,9 bn.$0,935 bn.15,9 $
    + Retained earnings87,1 bn.$+ 93,2 $109,1 $
    + 1 year Net income before Depreciation41,1 bn.$

    (52 bn.$)

    + 44,0 $

    (+55,6 $)

    153,1 $

    Companies share basic value is ~109$ (Δ+13,5%/96$ compared with Q4). Current market price is ~610$ (Δ+12,1%/544$). which shows that market is paying ~500$ more or 11,4 years of Net income before Depreciation earnings, which shows that companies shares are a bit over evaluated. If calculating Net income before Depreciation according to last quarter yearly earnings should be around 52 bn.$/year (13 bn./quarter) or 55,6$/share which makes it ~9 year, never the less indicator is quit high. Share profitability (Share market price/Net income before Depreciation) if calculating projected income (52 bn.$/year) is 9,1% which is a bit over average.

    Company announced that it will pay 2,65$/share/quarter dividend or ~1,7% dividend yield which is a bit low due to high share price.

    Analysis source: Apple 2012 1Q financial results

    Previous analysis: Apple 2011 4Q financial analysis

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: AAPL
    May 29 2:39 PM | Link | Comment!
  • IBM 2012 1Q Financial Analysis

    IBM 2012 1Q results dis not show any visible growth. Revenue were basically the same as last year 24,7 bn.$ (24,6 bn.$) while generated Net Income before depreciation increased from 4,1 bn.$ to 4,3 bn.$. (Δ+4%).

    (click to enlarge)

    Companies main market remain US which has around 43% and increased by +1%. Europe 32% and is down by +2%. Asia is up by +4% but has the smallest part 25%. Europe sales could decrease further while US and Asia increase during Y2012. Technology segment is up by +2% while Business is down by -2%. The most profitable are of Software is up by 6% mainly due to that profit has increased more then revenue. In general companies results are average.

    (click to enlarge)

    Balance sheet remain very risky as Equity level don't seems to improve but just decrease from ~20% year ago to ~18% at 2012 1Q. Equity amount has decreased from ~23 bn.$ at 2011 1Q to ~20 bn.$ 2012 1Q. Due to low equity Return on Equity is something around 60%. Companies dividend and share buyback policy is very aggressive. Dividends and Share repurchases only at Q1 alone took over 3,8 bn.$ which is almost 90% out of 4,3 bn.$ earned Net Income before depreciation and compared to 3 bn.$ Net Income is even over 127% (!)

    (click to enlarge)

    Financial receivables are only 25 bn.$ from total 115 bn.$ or 22% so low equity is not due to companies financing activity. If excludes ~23 bn.$ of financial debts due to financing services (stating average financing equity is 10%) and 2 bn.$ from equity, Equity level would only improve to 20% (18 bn.$/90 bn.$) which is unacceptable. Liquidity ratio is ~1,3 and has improved a little bit. In general companies balance structure is aggressive and unacceptable.

     

    Common Stocks48,8 bn.$1,159 bn.42,1 $
    + Retained earnings-28,1 bn.$-24,2 $17,9 $
    + 1 year Net income before Depreciation20,9 bn.$+18,0 $35,9 $

    Companies share basic value is ~18$ (Δ+5%/17$ compared with Q4). Current market price is ~197$ (unchanged). which shows that market is paying 179$ more or 10 years (10,1 years) of Net income before Depreciation earnings, which is a lot taking into consideration that companies balance structure is very aggressive. Share profitability (Share market price/Net income before Depreciation) is 9,1% (Δ+0,1%/9%) which is a bit better then average and has increased a little bit due to reduced share number.

    Company at the moment pays 3$/share annual dividends (0,75$/quarter) before tax or 1,5% investment yield, which is low. Since no growth is predicted dividend level should stay the same.

    Analysis source: IBM First Quarter 2012 Financial Results

    Previous analysis: IBM 2011 4Q financial analysis

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: IBM
    May 29 2:38 PM | Link | Comment!
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    Jun 3, 2012
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