April 24, 2013
BofA Doesn’t Think Yum! Brands is Too Tasty Ahead of Earnings Beat
 Yum Brands, Inc. (YUM) was hit with an analyst downgrades on Tuesday morning, only hours ahead of it releasing its financial report for the first quarter after the closing bell. The report stated that sales in China were impacted substantially “by adverse publicity from the poultry supply situation in late December 2012,” however earnings from the quarter handily topped Wall Street expectations. For the quarter, Yum Brands, who operates about 5,300 restaurants (primarily Kentucky Fried Chicken locations) in China, reported revenue of $2.54 billion, down from $2.74 billion in the first quarter of 2012. Net income fell to $337 million, or 72 cents per share, compared to $458 million, or 96 cents per share in last year’s quarter. Excluding special items, Yum’s earnings were 70 cents per share, versus 76 cents per share in the year prior quarter. Analysts were (more)…
April 19, 2013
DOJ Gives Anheuser-Busch InBev the Go Ahead with Grupo Modelo Acquisition
 The second largest merger in the history of beer has finally garnered government approval, as most thought it eventually would. Anheuser-Busch InBev (BUD) said Friday that it, Grupo Modelo, Constellation Brands, Inc. (STZ) and Crown Imports, LLC have reached a final agreement with the U.S. Department of Justice on Anheuser-Busch InBev’s acquisition of the remaining portion of Mexican brewer Grupo Modelo that it doesn’t already own. Last year, Anheuser-Busch InBev offered $20.1 billion to buy the remaining shares of Grupo Modelo. On January 31, the Justice Department filed a suit to stop the acquisition on antitrust objections that the deal would give A-B inBev too much control over the American beer industry, meaning it could raise prices and cut selections. To avoid that situation, the deal was struck to have Constellation Brands buy Anheuser-Busch’s 50 percent stake in Crown Imports. (more)…
April 18, 2013
Philip Morris International Slips on Global Decline in Sales and Stronger Dollar
 New York-based cigarette manufacturer Philip Morris International (PM), the second-largest cigarette company in the world, reported on Thursday that a stronger dollar as well as economic turmoil in the European Union has led to a 6.5 percent lag in the company’s global shipments, and a decline in profits. On $18.5 billion in revenue in the first quarter, the company earned $2.13 billion, or $1.28 per share, down from the prior year period during which the company earned $2.16 billion or $1.25 per share. The earnings figures for Q1 also came in short of analyst estimates of $1.34 per share. The company’s shipments to the European Union were down by 10 percent as a result of the sovereign debt crisis which continues to leave much of the continent in some stage of a deep recession. Over one third of the company’s (more)…
Pepsi Pops on Strong Earnings and Sales Growth Led By Snack Foods, Emerging Markets
 PepsiCo’s (PEP) earnings report indicated that worldwide sales for snack foods was up 4 percent, while sales for beverages were up 3 percent, with over one third of the company’s revenue coming from emerging markets. Shares for Pepsi were up 3.68 percent to $81.75 after the company reported that during the first quarter of 2013, it earned $1.08 billion, or $0.69 cents per share, on $12.58 billion in revenue. While net income was down from the prior-year period, when the company made $1.13 billion, or $0.71 cents per share, revenues beat analyst predictions of $12.54 billion. Profits increase dramatically, however, when excluding Venuela’s currency devaluation along with other items such as the company’s having to refranchise its business in China. Excluding those one-time events, the company actually earned $0.77 cents per share, well above the $0.70 cents per share previously (more)…
April 12, 2013
Trends & Ideas: More M&A Seen for Household Nondurables
 S&P Capital IQ Equity Ian Gordon joins Brian Egli, S&P Capital IQ Editorial, to discuss the outlook for merger and acquisition deals in the household nondurables industry. To read this and all Trends & Ideas content, please visit www.marketscope.com
April 11, 2013
Yum! Brands to Lose Sales to Bird Flu Outbreak
 Yum! Brands Inc (YUM), the parent company of Kentucky Fried Chicken, Pizza Hut, and Taco Bell fast food chains announced on Wednesday that it expected to take a sizeable hit as a result of China’s recent bird flu scare. This most recent outbreak of bird-flu, or H7N9 avian influenza, has killed at least ten people in China over the past two months alone, and left many others sick. This most recent outbreak of avian flu is not believed to spread from person to person, but is rather carried in infected poultry. Either way, it cannot be acquired from properly cooked chicken, but this has not prevented Yum!, who have approximately 5,300 locations in world’s most populous country, from reporting on Wednesday that same-store sales at Chinese KFC outlets were down 16 percent in March, as a result of the scare. (more)…
Rite Aid Surprises with Net Profit in Q4, First Profitable Year Since 2007
 Continuing its turnaround story, Rite Aid Corporation (RAD) on Thursday delivered its financial report from the fourth quarter and fiscal 2013 ended March 2, showing the company notched a profit for a full year for the first time in the past six years. For the fourth quarter, the Camp Hill, Pennsylvania-based drug store operator reported revenue of $6.46 billion, down 7.5 percent from $7.15 billion in the year prior quarter. The latest quarter only had 13 weeks, as opposed to 14 weeks in last year’s. Less expensive generic prescriptions also impacted sales totals. Net income for the quarter was $123.1 million, or 13 cents per share, versus a net loss of $161.3 million, or 18 cents per share, in the year earlier quarter. Wall Street was expecting zero profits (with some analysts calling for a small net loss) on revenue (more)…
April 10, 2013
Stocks Under $10: A Look at 15 Consumer-Oriented Companies
 At www.ValuEngine.com we show that the Consumer Staples sector is 14.6 percent overvalued. All 15 stocks in today’s table have complete ValuEngine data and have enough price data to have most value levels, risky levels and pivots. Feihe International, Inc. (ADY) – was a $43 stock in July 2009 and has been below $10 since the week of June 4, 2011. A. H. Belo Corp. (AHC) – has been below $10 since the week of May 10, 2008. Chiquita Brands International Inc. (CQB) – was a $25 stock in June 2008 and has been below $10 since the week of March 10, 2012. The Dolan Company (DM) – was a $31 stock in December 2007 and has been below $10 since the week of March 3, 2012. The Female Health Co. (FHCO) – has been below $8.50 for at least five years. Journal Communications, Inc. (more)…
April 2, 2013
McCormick & Co. Tops Analysts in First Quarter, Backs 2013 Guidance
 Spice maker McCormick & Co. (MKC) nipped past analyst expectations on Tuesday with its first quarter fiscal 2013 financial report as consumer business sales grew 7 percent and sales in emerging markets blossomed, while the company’s industrial segment started the year slowly. For the first quarter ended February 28, the Sparks, Maryland-based company reported total sales of $934.4 million, compared to $906.7 million in the year prior quarter. Net income for the quarter was $76.0 million, or 57 cents per share, up from $74.5 million, or 56 cents per share, in the first quarter of fiscal 2012. Both figures topped Wall Street expectations of EPS of 56 cents on revenue of $922.7 million. Growth in emerging markets of 14 percent and greater marketing efforts help buoy sales while the industrial arm of operations experienced a 2 percent decline compared the (more)…
March 29, 2013
Wal-Mart and Google Get Creative with Product Delivery
 Bloomberg reported on Thursday that Google Inc. (GOOG), in tandem with an array of partners such as Target (TGT), Walgreens (WAG), Staples (SPLS) and American Eagle Outfitters Inc. (AEO), will be initiating an online/same-day delivery shopping service in San Francisco. The pilot program will also include some of that city’s excellent local businesses such as Blue Bottle Coffee and Nob Hill Foods. In the past few months, Google has made two acquisitions in order to help it with this new endeavor: BufferBox Inc., a service involved in the delivery of items purchased online to physical drop off locations, as well as Channel Intelligence Inc., a web service used by retailers to increase internet sales. The move is seen as yet another front in Google’s multi-layered competition with online retail monolith Amazon.com (AMZN). But Google is not the only company that (more)…
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