Near term debt maturities and high interest cost may force Cenveo for debt restructuring to avoid bankruptcy.

Cenveo Inc. (NYSE: CVO) is a Stamford, US based diversified manufacturer of print related products like envelope converting, commercial printing, and labels.  As of 31 December 2015, the company operated three reportable segments: envelope, print and label.

Total debt stood at USD 1.21bn at the end of 2015, out of which USD 427m matures in the next 12 to18 months. Thus in order to reduce rising debt burden, on 19 January 2016 the company sold its sole profit making Packaging Business to ‘WestRock Converting’ for USD 105m. The Net proceeds received from the sale were used to repay debt, as a result pro-forma total debt decreased to USD 1.1bn. Furthermore company’s total liquidity amounted to USD 132.1m, including USD 7.79m cash and USD 124.3m availability under its revolver, which is not enough to meet its near term debt (bond and ABL revolver) maturities. As of 2015, Company was in compliance with minimum fixed charge coverage ratio of 1.0x in relations to its covenants of its credit agreement. Given the above situation, on February 2016 Moody’s investors service downgrade Cenveo’s corporate family rating and probability default rating to caa2 from caa1 and caa2-PD from caa1-PD, respectively.

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In regards to its ABL Facility, the company may elect to extend the maturity date of the ABL Facility to April 2018 if prior to 14 January 2017, the company has  purchased, redeemed, defeased or otherwise refinanced the 11.5% Notes, such that no more than USD 10m remaining outstanding.

graphFor FY15, Cenveo’s revenue decreased by USD 19.5m (1.1% down on YoY) to USD 1.74bn in 2015 due to lower sales from its envelope and label segment. The company has guided 2016 sales close to USD 1.7bn.  However adj. EBITDA improved 13.3% YoY to USD 158m in FY15 driven by cost reduction initiatives. Going forward for FY16 the company anticipates adj. EBITDA in the range of USD 155m to USD 160m, which would imply an adj. EBITDA margin of approximately 9.4%. On the basis of this guidance, net leverage could be in the range of 6.5x to 7.0x for 2016.

segment

The above improvement in adj. EBITDA coupled with reduction in CAPEX spend and lower interest expense reduced FCF cash burn to negative USD 95m in FY15 from negative USD 115m in FY14. For 2015 aforementioned CAPEX and Interest expenses reduced 19.8% YoY and 6% YoY respectively. Moreover interest expense reduced on account of prior mentioned debt repayment.

NYSE compliance:

  • On 19 January 2016, a notice received from NYSE required Cenveo to maintain a average closing price of its common stock to be at least USD 1.00 per share for 30 consecutive days. The company had 180 days from the date of the notice to regain compliance.
  • Following this on 11 February 2016, Cenveo received a follow-on notice from NYSE, as the company had failed to maintain a minimum market capitalization of USD 50m for 30 consecutive trading days. The company had 180 days from the date of the notice to regain compliance.

Going forward, in absence of any further asset disposal, comings months look challenging as high interest payments are likely to run quickly through the company’s razor thin liquidity position.

finsumm

 

Slump in global oil price forced Denbury to amend its credit agreement prior to the annual scheduled redetermination.

Denbury Resources Inc (DNR: NYSE) is Texas, US Based independent oil and natural gas company with 288.6 MMBOE of proved oil and natural gas reserves, with operations in the Rocky Mountain and Gulf Coast regions of North America.

Covenant Summary – On 17 February 2016, DNR entered into second amendment to its credit agreement before its annual scheduled redetermination, which was to take place on May 2016.Under the amendment, lenders agreed to increase senior secured leverage covenant to 3.0 x from 2.5x, previously and decrease minimum interest coverage to 1.25x from 2.25x, till 2017, which gives the company a bit of room to be in compliance with the covenants.  On the other hand, total commitments under the revolver reduced to USD 1.5bn from USD 1.6bn. Additionally, applicable margins increased by 75bps which now ranges from 2% to 3%. As of 23 February 2016, the company had USD 3.3bn outstanding debt against USD 1.3bn total liquidity comprising USD 2.8m cash and USD 1.3bn available under its revolver. Consequently, on 3 February 2016, Moody’s Investors Service downgraded Denbury’s corporate family rating to ‘Caa2’ from ‘Ba3’ and senior subordinated notes to Caa3 from B1 with outlook negative.

Cap structure

Top Line- Over the recent past oil and exploration industry has witnessed significant downturn due to declining oil prices and high inventory level. In 4Q14 oil prices further declined dramatically below USD 27 per Bbl in January 2016 from USD 94per Bbl 2014, the lowest recorded over last 10 year. As a result Denbury’s average realized oil price, excluding derivative contracts was down to USD 47.30 per Bbl in 2015 from USD 90.74 per Bbl in 2014. Following this, DNR’s total revenue plunged 48% year-over-year (YoY) to USD 1.26bn in 2015 as compared to USD 2.43bn in FY14.

Production Overview- in FY15Denbury’s average production was down 2% YoY to 72,861 BOE/d (including tertiary production of 41,602 Bbls/d and non-tertiary production of 31,259 BOE/d), mainly due to decline in production of mature tertiary properties in the Gulf Coast region. Additionally, in late 2015, DNR decided to shut incremental production of 1000 BOE/d due to economic reasons. DNR anticipates 2016 production to be in the range of 64,000 BOE/d- 68,000 BOE/d, down 7% from 2015 levels. Further,the company entered into additional hedges to save itself from current slump in oil pricing, which covers a total of 36,000 Bbl/d for 1Q16, 34,000 Bbl/d for 2Q16, 24,000 Bbl/s for 3Q16, 30,000 Bbl/s for 4Q16 and 3,000 Bbl/s for 1Q17.

EBITDAX– DNR successfully lowered lease operating expenses and General and administrative expenses by 26% and 10% YoY, respectively, due to 11% involuntary workforce reduction initiated in 2H15. However despite this EBITDAX declined 30.5% YoY to USD 964m from USD 1.39bn on the back of aforementioned decline in revenue.

FCF- During the year, operating cash flow dipped 41% YoY to USD 864m due to abovementioned decline in EBITDAX, while free cash flow turned positive to USD 171m from negative USD 27m in 2014, owing to reduction in capex to USD 534m in 2015 from USD 1.07bn in 2014. For 2016, DNR has guided USD 200m capital expenditure.

Going forward, as per EIA’s (U.S Energy Information Agency) oil prices are likely to hover around USD 37 per barrel in 2016, as a result the earnings in the coming quarter could be negatively impacted.

FINSUMMARY

 

EQUITY UPDATE: 28 JULY 2012

ASIA

China is considering shutting down operations of co.’s which are nearing bankruptcies in an attempt to increase competitiveness and transform the automotive sector. The industry is faced by overcapacity and the government plans to overhaul the industry. (China Daily)

PetroChina – Co. concluded an agreement with Qatar Petroleum to acquire 40 percent exploration and production rights from GDF Suez Exploration Qatar B.V. (China Daily)

INDIA

FII’s made gross purchases of INR 2,812.53cr, gross sales of INR 2,248.81cr. DII’s made gross purchases of INR 881.56cr vs. previous INR 1,136cr. (Business Standard)

According to business and knowledge provider Dun and Bradstreet, India’s GDP to cross USD 5 trillion mark by 2020 despite the slowdown in economy. The report further said that the slowdown in economy to continue till FY15, after which the economy is expected to move into a high growth phase. Share of investment to GDP is expected to increase 40.7 per cent of GDP in FY20 versus 36.6 per cent in FY10. (Economic Times)

The Government of India is expected to decide on the issue of multi-brand retail investments in India. Commerce Minister Anand Sharma stated that it would seek a consensus of all farmers, stakeholders and SME’s before arriving at a conclusion. (Business Standard)

SBI – Banking firm SBI’s Chairman Pratip Chaudhuri stated that the quality of its assets would be improving on a y/y basis as it prepares to file its results on 8th August. The assurance came in the wake of rising NPA’s of PSU banks which prompted investors to sell shares of the co. in today’s trade. (Business Standard)

ITC – Co. plans to invest a total of INR 25,000 cr in the coming 5 years. It looks at a total of 40 projects covering research and development, consumer product marketing and export related services. (Business Standard)

Suzlon Energy Ltd – Co. redeemed its USD 360m of foreign currency convertible bonds, with the help of new loans of USD 300m and the balance was met through internal controls and sale of wind farm assets. (Reuters/Yahoo)

MRPL – Co. stated that it does not plan to decrease its oil imports from Iran inspite of the sanctions imposed on the country. The co. said that it faced problems while receiving shipments and obtaining insurance on cargo due to the sanctions. (Economic Times)

Deccan Chronicle Holdings – Co.’s promoters have pledged 54 per cent stake in co. to Future Capital, at closing price of INR 22.9 the transaction is believed to be worth INR 258.43cr. (Financial Express)

Pipavav Defence – Neelanchal Mercantile Pvt Ltd bought 3,500,000 shares in co, at a price of INR 62.41on NSE. (MoneyControl)

INDIAN EARNINGS

Dena Bank – Co. reported 1Q12-13 net profit at INR 239cr vs. previous INR 168cr. Net interest income at INR 612cr vs. previous INR 447cr. (The Hindu Business Line)

IRB Infrastructure – Co. reported 1Q12-13 net profit at INR 141.84cr vs. previous INR 134.18cr. Revenue at INR 1,012cr vs. previous INR 830cr in 1Q11-12. (Business Standard/PTI)

Nestle India – Co. reported 2Q12 net profit at INR 245.97cr vs. previous INR 213.83cr. Total income at INR 1,997.87cr vs. previous INR 1,771.03cr. (Business Standard/PTI)

Thomas Cook – Co. reported 2Q12 net profit at INR 31.01cr vs. previous 2Q11 net profit INR 21.46cr. Consolidated total income at INR 133.46cr vs. previous INR 104.81cr. (MoneyControl)

Trent Ltd – Co. reported 1Q12-13 net profit at INR 13cr vs. previous 1Q11-12 at INR 10cr. Net sales at INT 218cr vs. previous INR 178cr. (The Hindu Business Line)

TVS Motors – Co. reported 1Q12-13 PAT at INR 51cr vs. previous INR 59cr. Revenue at INR 1,820cr vs. INR 1,746cr. (The Hindu Business Line)

Zydus Wellness – Co. reported 1Q12-13 consolidated net profit at INR 13.49cr vs. previous 1Q11-12 net profit at INR 8.45cr. Consolidated total income at INR 94.56cr vs. previous INR 90.96cr. (Business Standard/PTI)

TajGVK – Co. reported 1Q12-13 net profit at INR 5.74cr vs. previous INR 12.59cr. Income from operations at INR 62.46cr vs. previous INR 58.96cr. (The Hindu Business Line)

EUROPE

According to a Reuters report, Spain might need a bailout of around EUR 300b from the IMF and European Union combined, if its borrowing costs remained unsustainably high. The bailout issue was discussed between Spanish finance minister Luis de Guindos and German finance minister Wolfgang Schaeuble. However the German finance minister Wolfgang Schaeuble was unwilling to consider a rescue before the permanent bailout fund was setup. (FoxBusiness/ Dow Jones Newswire)

The French afternoon daily Le Monde reported that , Euro Zone governments and European Central Banks are preparing to jointly intervene on the financial markets to bring down Spanish and Italian borrowing costs. According to a source, ECB was willing to participate if European governments agreed to tap in the bailout funds, i.e. European Stability Facility and the European Stability Mechanism. The intervention would involve activating EFSF to purchase Spanish and Italian debt on  the primary market and ECB at the same time purchase Spanish and Italian debt on the secondary market. The plan was days or possibly weeks away from being finalised. (Fox Business/Reuters)

IMF’s James Daniel warned that the Spanish government could lose market access if it fails to rein in its budget deficit and capital outflows. (Fox Business/Dow Jones Newswire)

Barclays Plc – Co. stands to face two new charges of pertaining to its 2008 Mid-East capital raising issue and wrongful selling of hedging products to small business operators. The Mid-East ops pertain to the lack of adequate disclosure of fees it paid to the Qatar Investment Authority in 2008 when the institution acquired a stake in the bank. These involve a GBP 4.5 b capital infusion in June followed by a GBP 7.3 b funding in October. (Financial Times)

Allied Irish Bank – Co. reported 1HY12 loss of EUR 1.1 b vs prv loss of EUR 3 b y/y on faulty loans and issued a warning that the weak economy could cause defaults to rise. The co. plans to cut 2500 jobs in an attempt to cut costs. Variable mortgage rates were hiked in Ireland to 3.5 percent vs 3.0 percent previously, to boost lending. Provisions for bad loans declined 70 percent y/y to EUR 900 m. (Financial Times)

Bosch Ltd – Auto component manufacturer plans to temporarily suspend its operations at its plants in Bangalore and Nasik to avoid inventory pileup. The Bangalore plant stands to be closed for 3 days beginning today while the Nasik plant would be shut for 2 days this week. (Economic Times)

Heineken – Dutch brewer is to give its acquisition target Fraser & Neave an additional week to consider its USD 4.1 b takeover offer of its subsidiary Asia Pacific Breweries. (Straits Times)

NORTH AMERICA

Ford Motor – Co. recalled over 480,000 sports utility vehicles Escape as they developed problems related to vehicle acceleration. (Straits Times)

NORTH AMERICAN EARNINGS

Chevron Corp – Co. reported 2Q12 net profit at USD 7.21b vs. previous 2Q11 profit at INR 7.73b. EPS at USD 3.66 per share vs. estimated USD 3.24 per share vs. previous USD 3.85 per share. Revenue at USD 62.61b vs. estimated USD 68.56b vs. previous USD 68.6b. (CNBC/Fox Business)

Merck – Co. reported 2Q12 profit at USD 1.82b vs. previous USD 2.05b in 2Q11. EPS at USD 58 cents vs. previous USD 65 cents. Excluding one-time items co. earned USD 1.05 per share vs. estimated USD 1.01 per share vs. previous USD 95 cents. Revenue at USD 12.31b vs. estimated USD 12.15b. Co. affirmed its full year non-GAAP EPS at USD 3.75 to USD 3.82 per share vs. estimated USD 3.82. Co. expects six major filings over the next 18 months. (Fox Business)

Amazon .com – Co. reported 2Q12 net income at USD 7m vs. previous USD 191m. Revenue at USD 12.83b vs. estimated USD 12.88b vs. previous USD 9.91b. For 3Q12 co. expects an operating loss between USD 50m to USD 350m and revenue at USD 12.9b to USD 14.3b vs. estimated USD 14.1b. (CNBC)

Facebook Inc. – Shares of the co. declined 40 percent in trade to lows of USD 22.28 a share on lower earnings and declining growth. The co.’s business is faced with stiff competition from mobile based devices which has hurt the co’s operations. EPS came in at 12 cents a share on revenues of USD 1.18 b, in line with expectations. Ad revenues also fell 36 percent to USD 992 m in its first earnings report as a publicly filing co. (Financial Times)

Anglo American – Co. saw its 1HY12 profits decline 55 percent to USD 2.9 b as the mining industry faced a no. of problems; co. suffering a iron ore project delay and falling prices of commodities. Revenues declined 10 percent to USD 16.4 b. The co. plans on a capex of USD 5.5 b vs USD 7 b pledged previously. EPS declined to 98 cents vs USD 3.30 a share. An interim dividend of 32 cents vs 28 cents prv, was declared. (Financial Times)

 

EQUITY UPDATE: 27 JULY 2012

ASIA

Nomura Holdings Inc – Co. named Koji Nagai as their new CEO after the insider trading charges faced by the co. saw former CEO Kenichi Watanabe’s resignation today. His lieutenant Takumi Shibata also resigned as part of the shake-up. (Reuters)

INDIA

According to a Reuters poll, the Reserve Bank of India is expected to hold its policy rates steady at its upcoming quarterly review. The poll showed 19 out of 20 economists expected repo rates to remain unchanged at 8 per cent. (Reuters)

The Indian government could ask Coal India to import coal in order to meet rising domestic demand especially for power companies. (Economic Times)

FII’s made gross purchases of INR 2,831.49cr and sales of total INR 4,012.19cr. DII’s made gross purchases of INR 1,634.25cr and sales of INR 1,211.55cr. (Business Standard)

Maruti Suzuki – Co.’s problems arising from the strikes is set to extend further, affecting its sales and affect its profits. Shutdown of its Manesar factory costs the co about USD 15 m a day as forecasted by analysts hampering its sales in October, a key period. Co. is slated to report its 1Q12 earnings this Saturday and is expected to report a fourth consecutive loss on weaker demand and rupee depreciation. (Economic Times)

Tata Steel – The rating agency Standard and Poor’s cut co.’s and its European subsidary’s outlook to ‘negative’ from ‘Stable’ due to weak financial position of the firm. The rating agency affirmed co.’s long terms credit rating at ‘BB’. (Yahoo/IANS)

Suzlon – Co. has successfully completed the sale of its wind farms assets. Co. was expected to raise approximately USD 40m from the sale. (The Hind Business Line)

MTNL/BEML/Orchid/Sintex Industries/IRB Infrastructure/Shree Renuka – Macquire sold 2.54 lacs shares in BEML for INR 8.28cr; 17.28 lacs shares in MTNL for INR 5.13cr and 4.18 lacs shares in Orchid chemicals for INR 4.58cr. Additionally the co. sold 35.96 lacs in Sintex Industries for INR 20.83cr; 18.83 lacs shares in IRB Infrastructure for INR 22cr and sold 44.89 lacs shares in Shree Renuka Sugar for INR 14cr. (MoneyControl)

SKS Microfinance – Deutsche Securities Mauritius picked up 9.15 per cent stake in co. for estimated value of INR 78cr. (Business Standard)

INDIAN EARNINGS

Sterlite Indistries – Co, reported 1Q12-13 net profit at INR 1,202cr vs. previous INR 1,640cr. Net Sales at INR 10,591cr vs. previous INR 9,863cr. (Financial Express)

ACC Cement – Co. reported 2Q12 net profit of INR 415cr vs. previous INR 328cr. Total consolidated turnover at INR 2,918.98cr vs. previous INR 2,539.41cr. (The Hindu Business Line)

Ambuja Cement – Co. reported 2Q12 net profit at INR 468cr vs. previous INR 348cr. Net sales at INR 2,566cr vs. previous INR 2,176cr. (Business Standard/PTI)

Bajaj Electricals – Co, reported 1Q12-13 net profit at INR 11.98cr vs. previous INR 11.06cr. Net income at INR 666.19cr vs. previous INR 544.36cr. (Financial Express)

Alstom India – Co. reported 1Q12-13 net profit at INR 12.88cr vs. previous INR 6.30cr. Total income at INR 441.36cr vs. previous INR 281.11cr. (Business Standard/PTI)

Excel Crop – Co. reported 1Q12-13 net profit at INR 10.96cr vs. previous 1Q11-12 at INR 6.27cr. Sales turnover at INR 213.58cr vs. previous INR 164.05cr. (MoneyControl)

Forbes Gokak – Co. reported 1Q12-13 net profit at INR 52.62cr vs. previous INR 3.39cr in 1Q11-12. Sales turnover at INR 63.92cr vs. previous INR 68.42cr. (MoneyControl)

Uflex – Co. reported 1Q12-13 net profit at INR 41.15cr vs. previous 1Q11-12 at INR 33.10cr. Sales at INR 865.11cr vs. previous INR 789.82cr. (MoneyControl)

Zensar Tech – Co. reported 1Q12-13 net profit at INR 40.86cr vs. previous INR 20.39cr. Sales at INR 213.06cr vs. previous INR 196.39cr. (MoneyControl)

Gandhi Special Tubes – Co. reported 1Q12-13 net profit at INR 6.78cr vs. previous 1Q11-12 net profit at INR 7.73cr. Sales turnover at INR 26.33cr vs. previous INR 26.68cr. (MoneyControl)

EUROPE

According to the ECB, deposits in Greek banks fell to six year lows as investors doubted the bank’s stability. Deposits declined to EUR 156.2 b for period ended June vs EUR 163.1 b a month ago. Private sector deposits declined 5 percent on m/m basis. (Reuters)

Spain has stated that it would not immediately seek assistance from the EU until the troika of institutions takes stock of its condition. (Reuters)

According to Greece’s finance ministry, Greece had identified EUR 11.6b in spending cuts over the next two years. (Economuc Times/AFP)

EUROPEAN EARNINGS

BG Group – Co. took a USD 1.3 b in writedown on its US natgas assets to report lower profits.  2Q12 revenues rose to USD 5.6 b vs USD 5.1 b previously. Operating profits excl charges declined marginally to USD 1.9 b vs USD 2 b a year ago. Otherwise, net profits came in significantly lower at USD 609 m vs USD 2.2 b. The co. raised its interim dividend by 10 percent to USD 11.88 a share. (Financial Times)

Banco Santander – Co. saw its 1HY12 profit decline to EUR 100 m (USD 122 m) vs EUR 1.39 b a year ago. The 93 percent decline was on rise in bad loans in the property market. Asset quality in its Brazilian and UK units suffered severe deterioration, which contributed to writedowns. The bank set aside EUR 2.78 b to mitigate the losses. (Bloomberg)

Roche – Pharma co. saw its 1HY12 profits decline 17 percent y/y as it was hit by a one-off restructuring charge of Swiss Franc (SFr) 1.68 b. Its attempts at job cuts cost the co. SFr 858 m and the overhaul of its diabetes and applied sciences amounted to SFr 289 m and other charges amounted to SFr 530 m. The impact drove down profits to SFr 4.4 b vs SFr 5.3 b a year ago. Diluted EPS came in lower from 6.04 to 4.99 a share. Revenues rose 3 percent y/y to SFr 21.7 b on higher demand for its cancer, hepatitis and rheumatoid arthritis medicines. The co. however maintained its sales target for FY2012 inspite of the market conditions. (Financial Times)

NORTH AMERICA

Index measuring resale of  homes in the U.S declined 1.4 percent to 99.3 in June vs a revised gain of 5.4 percent in May. Forecasts came in at a gain of 0.3 percent. Purchases decreased by 5.4 percent to 4.37 m units on an annual rate. (Bloomberg)

US durable goods orders rose more than expected for June on rising demand for aircraft and military hardware. Dat showed a 1.6 percent rise vs expectations of a 0.3 percent gain. Orders excl transport declined 1.1 percent. Business investments declined but were offset by other factors.

NORTH AMERICAN EARNINGS

Dow Chemical Co. – Co. reported 2Q12 net profits at USD 734 m vs USD 1.07 b a year ago. EPS came in at 55 cents vs 84 cents a year ago vs expectations of 64 cents. Revenues declined to USD 14.5 b vs expectations of USD 15.6 b vs prv USD 16 b. Co. saw the prices of plastic decline in the quarter and its plans to spend a total of USD 24 b on two projects, one in Saudi Arabia and one in Texas. (Bloomberg)

3M Co. – Co. saw its earnings come at USD 1.17 b vs USD 1.16 b a year ago as its healthcare, industrial and transportation businesses registered double digit growth. EPS came in at 1.66 a share vs 1.60 a share, beating expectations of 1.65 a share. Sales declined 2 percent y/y to USD 7.53 b vs expectations of USD 7.28 b. (Reuters)

Sprint Nextel Corp – Co. reported a 2Q12 loss of USD 1.37 b vs prv USD 847 m. EPS came in at loss of 46 cents vs 28 cents a share, previously. The co. took a one time depreciation charge of USD 782 m on network decommissioning and impairment charge related to Clearwire Corp as the co. tries to divest its operations with Nextel’s older networks, the co. saw a loss of 246,000 in customer base vs expectation of a loss of 203,000 customers. Operating revenue came in at USD 8.8 b vs USD 8.3 b previously vs expectations of USD 8.727 b. Co. raised its target for FY12’s adjusted operating income to range between USD 4.5 – USD 4.6 b from its previous forecast of USD 3.7 – USD 3.9 b. (Reuters)

Colgate-Palmolive – Toothpaste maker saw a 2 percent y/y rise in sales to USD 4.3 b, beating expectations, but was affected by exchange rate fluctuations. Diluted EPS came in at USD 1.33 a share, in line with expectations. Profits came 0.8 percent higher at USD 627 m. Co. stated that the impact of forex rates, in continuity, could see it report EPS data lower by 6-7 percent. Market share of the co. came in at 45 percent, its highest. (Financial Times)

Zynga – Co.’s saw its earnings decline, share price fall by 40 percent and slash its outlook for FY12. Net loss for 2Q12 came in at USD 22.8 m vs net profit of USD 1.4 m. Revenues came in 19 percent higher at USD 332.5 m, missing expectations of USD 344.8 m. The share price tanked 40 percent to USD 3.03 a share, as it stated that Facebook Inc. used a different software for its gaming network from Zynga’s competitors. Hence the co. slashed its FY12 EPS guidance to 4 – 9 cents from forecasts of 26 cents. (Financial Times)

United Airline – co. reported 2Q12 net income at USD 339m vs. previous 2Q11 net income at INR 538m. EPS at USD 1.41 per share vs. estimated USD 1.70 per share. Revenue at USD 9.9b vs. estimated USD 10b. (Economic Times/AFP)

NORTH AMERICAN EARNINGS

NORTH AMERICAN EARNINGS

ConocoPhillips – Co. reported 2Q12 profit at USD 2.27b vs. previous USD 3.4b. EPS at USD 1.80 per share vs. previous USD 2.41. Revenue at USD 15.7b vs. estimated USD 9.06b. EPS excluding items at USD 1.22 vs. previous USD 1.20 per share. (Boston.com/AP)

PepsiCo. – Co. reported 2Q12 earnings in which profits declined 21 percent on a y/y basis to USD 1.49 b. Revenues came in at USD 16.4 b, exhibiting a decline of 2 percent. Even though the results exceeded forecasts by a slight margin, co. was affected by rising US Dollar and restructuring costs. Co. stated that its FY12 profits would meet their targets despite the slowdown in the economy. Advertisement spending rose 40 percent in the US. Beverage revenues from the US declined 5 percent y/y and operating profit declined 15 percent. (Financial Times)

Apple – Co. reported 3Q12 net income of USD 8.7b vs. previous USD 7.3b. EPS excluding items at USD 9.32 per shares vs. estimated USD 10.37 per share vs. previous USD 7.79 per share. Revenue at USD 35b vs. estimated USD 37.22b vs. previous USD 28.57b. Co.’s in its 4Q12 guidance forecasted EPS at USD 7.65 per share vs. estimated USD 10.22 a share. Revenue at USD 34b vs. expected USD 38b.  (CNBC)

Boeing Co. – Airline maker posted better than expected 2Q12 results which prompted it to raise its FY12 guidance.  Revenues rose 21 percent to USD 20 b y/y and operating earnings came in 1 percent higher at USD 1.5 b. Profits rose 3 percent to USD 967 m. Co. received 150 passenger plane orders vs 118 in June 2011. Earnings guidance was raised from USD 4.15 – 4.35 to USD 4.40 – 4.60 a share. Commercial airplanes saw a 27 percent rise with other segments also making higher revenue contributions. (Financial Times)

Caterpillar – Co. reported 2Q12 net profit at USD 1.67b vs. previous USD 1.02b. EPS at USD 2.54 per share vs. estimated USD 2.28 per share vs. previous USD 1.52 per share. Revenue at USD 17.37b vs. estimated USD 17.11b. For FY 12 co. expects to earn an EPS at USD 9.60 per share in 2012 vs. estimated USD 9.54 vs. previous USD 9.50 per share. (CNBC)

Eli Lilly – Co. reported 2Q12 net profit at USD 923.6m vs. previous USD1.2b. EPS at USD 0.83 cents vs. estimates USD 0.77 cents vs. previous USD 1.07 per share. Revenue at USD 5.6b vs. estimated USD 5.6b. Co. expects FY12 adjusted EPS in the range of USD 3.30 to USD 3.40 per share vs. previous forecast of USD 3.15 to USD 3.30 per share. Revenue forecast between USD 21.8b to USD 22.8b. (CNBC)

Ford Motor – Co. reported its 2Q12 profits at USD 1 b vs USD 2.4 b a year ago. Profits halved on a severe slowdown in Europe affecting its sales. EPS came in at 26 cents a share vs 59 cents a year ago. Revenues declined to USD 33.3 b, a 6.2 percent decline on a y/y basis. Operating earnings excl. items came in at 30 cents a share, higher than 29 cents estimated by analysts. Europe’s dismal performance contributed to the decline as the co. was made to lower its FY12 pre-tax operating profit to lower than USD 8.8 b, which it forecasted earlier. (Financial Times)

T Rowe Price – Co. reported 2Q12 net profit at USD 206.8m vs. previous 2Q11 profit at USD 204.7m. EPS at USD 0.79 cents vs. estimated USD 0.81 cents vs. previous USD 0.76 cents. Net Revenue at USD 736m vs. estimated USD 759m. (Fox Business)

US EARNINGS: UPS

NORTH AMERICAN EARNINGS

UPS – Freight and packaging delivery firm lowered its FY2012 profit forecast on slowing US economy as it posted lower than expected 2Q12 results. Co. lowered its EPS for FY12 to USD 4.5 – 4.7 a share, down from USD 4.75 – 5.00 a share. Profits rose 2.2 percent to USD 1.12 b vs USD 1.09 b a year ago. Revenues inched marginally higher to USD 13.35 b vs USD 13.19 b a year ago but came below expectations of USD 13.70 b. EPS came in at USD 1.15 vs USD 1.09 a share, below forecasts of USD 1.17 a share. (Financial Times)

AT&T 2Q12 PROFITS EXCEED FORECASTS

AT&T – Co. reported better than expected profits but saw its revenues fall short of estimates. EPS excl items came in at 66 cents vs 60 cents a year ago. Expectations came in at 63 cents a share.

Revenues came in at USD 31.6 b vs USD 31.45 b a year ago vs expectations of USD 31.73 b.

The co. also witnessed 3.7 m iPhone activations in the quarter. (CNBC)

DuPONT 2Q12 PROFIT AT USD 1.18 b vs prv USD 1.22 b

DuPont – Co. reported its 2Q12 profits came in at USD 1.18 b vs USD 1.22 b on a y/y basis. Revenues increased 7 percent to USD 11 b vs expectations of USD 11.27 b. Earnings on a per share basis came in at USD 1.48 a share excl items vs USD 1.37 a share a year ago. Expectations came in at USD 1.46 a share.

Forecasts for FY12 came in that the lower end of the range provided between USD 4.20 – 4.40 a share. Economic uncertainty would affect the outcome of its hybrid seeds used in paints and bulletproof fiber. (CNBC)

NORTH AMERICAN EQUITY EARNINGS – 23 JULY 2012

NORTH AMERICAN EARNINGS

McDonalds Corp – Co. reported 2Q12 earnings which came below expectations which saw shares decline 2 percent to USD 89.25 a share. Profit came in 4.5 percent lower at USD 1.35 b vs USD 1.41 b a year ago. EPS came in at USD 1.32 a share vs prv USD 1.35 a share vs expectations of USD 1.38 per share. Same store sales, sales in stores in operation for the year, rose at its slowest pace in 1 year of 3.5 percent. (Bloomberg)

Halliburton Co. – Co reported its 1Q12 results at USD 737 m vs USD 739 m a year ago. Earnings came in at 79 cents vs 80 cents in the earlier period. Revenues rose 22 percent to USD 7.2 b vs expectations of USD 6.96 b. North America remained its main market as three-quarter of its revenues came in from this region. Co. plans to target USD 3.6 – USD 3.8 in capital expenditures. (Reuters)

Eaton Corp – Co. reported its 1Q12 profits at USD 382 m vs USD 336 m a year ago. Earnings came in at USD 1.12 a share vs exp USD 1.07 a share, exceeding expectations on cost cutting measures which offset slowdown in emerging markets. Sales declined to USD 4.07 b vs USD 4.09 b on a y.y basis. (Financial Times)