Earnings News: Whole Foods, Qualcomm, and More
Mark is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Here is a review of some earnings announcements made over the past few weeks.
Bio-Reference Laboratories (NASDAQ: BRLI): The Elmwood Park, NJ based medical testing laboratory is the fourth largest in the country. It has a broad customer base of physician's offices, clinics, hospitals, private companies and some government entities, and there is plenty of room to expand.
For the quarter ending Oct. 31, Bio-Reference reported a 16% increase in revenue to a record $176 million and earnings per share of $0.46, a gain of 24% over last year. For the full year, EPS was $1.51 or 17% higher than the 2011 actuals. All numbers were much better than what analysts expected.
Results would have been even more outstanding, according to company officials, if not for the effects of Hurricane Sandy. Estimates were that the storm, which hit right before the end of the quarter, reduced revenue by $5 million and EPS by $0.06 per share.
The stock price jumped 5% in the two days after the results were released. BRLI shares have gained 74% YTD.
Other than possible lingering effects of Sandy in the current quarter and beyond, there is no underlying reason to expect anything less than continued strong performance in the future. A projected EPS growth rate in the mid-20% range, trailing P/E of 19 (less than its historic average), low debt and lots of cash make the stock a good buy in my opinion.
Another solid report came from Virtus Investment Partners (NASDAQ: VRTS). The asset management company, headquartered in Hartford, CT, grew revenue by 30% to $72 million in their fiscal third quarter ending on Oct. 31. EPS increased to $1.43, which was higher than the consensus estimate of $1.29.
Virtus is poised to continue its upward trajectory. In early October the company completed the acquisition of Rampart Investment Management, a high net worth advisory firm. And it added capability to its international equity affiliate, Euclid Advisors, as two highly regarded industry veterans were added to the staff there.
With no debt, plenty of cash, competent management, a value-orientated P/E of 6, and projections of EPS growth well into the 20% range, the stock should continue to perform well in the future. So far this year it is up by nearly 50%.
Whole Foods Market (NASDAQ: WFM) also was impacted by Sandy and had to take a charge related to uninsured damages from the storm, but the favorite grocer of the health-conscious set reported a 14% increase in revenue and EPS growth of 33% for the fiscal foruth quarter.
Results didn't satisfy investors, as the stock has been bid down by over 5% since the announcement. It might be due to concerns that the valuation is a bit too high and growth too slow. The trailing P/E of 36 is higher than its 5-year average and the rest of the industry. There might be better value elsewhere in the grocery space or in other areas.
The company also made headlines recently by joining the ever increasing number of businesses offering a special dividend as a way of dealing with a potential tax rate increase next year. It will pay $2 a share on December 21. Whole Foods will pay its regular divided of $0.20 on January 29, 2013.
Qualcomm (NASDAQ: QCOM) reported results about a month ago. Revenue increased 18% and EPS, exceeding expectations, increased by 11% over a year ago.
The San Diego based communications chip-maker is a major supplier to the smartphone industry and, as a result of explosive anticipated growth there, should continue to perform well in the future.
Revenue and EPS will probably continue to increase over the next few years. With a P/E below its long-term average, it is not overvalued right now either. It has lots of cash, almost zero debt and solid margins. The company even pays a dividend.
As the end of the 2012 earnings announcement season is upon us, I'm looking forward to more positive reports to come in early 2013.
Mathman6577 owns shares of Bio-Reference Laboratories and Virtus Investment Partners. The Motley Fool owns shares of Bio-Reference Laboratories, Qualcomm, and Whole Foods Market. Motley Fool newsletter services recommend Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!