Day: January 16, 2021

ACMR – ROSEN, A TOP RANKED LAW FIRM, Reminds ACM Research, Inc. Investors of Important February 19 Deadline in Securities Class Action – ACMR

NEW YORK, Jan. 16, 2021 (GLOBE NEWSWIRE) — Rosen Law Firm, a global investor rights law firm, reminds purchasers of the securities of ACM Research, Inc. (NASDAQ: ACMR) between March 6, 2019 and October 7, 2020, inclusive (the “Class Period”), of the important February 19, 2021 lead plaintiff deadline in the securities class action. The lawsuit seeks to recover damages for ACM investors under the federal securities laws.
To join the ACM class action, go to http://www.rosenlegal.com/cases-register-2013.html or call Phillip Kim, Esq. toll-free at 866-767-3653 or email pkim@rosenlegal.com or cases@rosenlegal.com for information on the class action.According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) ACM’S revenue and profits had been diverted to undisclosed related parties; (2) accordingly, ACM had materially overstated its revenues and profits; and (3) as a result, defendants’ statements about ACM’s business, operations, and prospects lacked a reasonable basis. When the true details entered the market, the lawsuit claims that investors suffered damages.A class action lawsuit has already been filed. If you wish to serve as lead plaintiff, you must move the Court no later than February 19, 2021. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to join the litigation, go to http://www.rosenlegal.com/cases-register-2013.html or to discuss your rights or interests regarding this class action, please contact Phillip Kim, Esq. of Rosen Law Firm toll free at 866-767-3653 or via e-mail at pkim@rosenlegal.com or cases@rosenlegal.com.NO CLASS HAS YET BEEN CERTIFIED IN THE ABOVE ACTION. UNTIL A CLASS IS CERTIFIED, YOU ARE NOT REPRESENTED BY COUNSEL UNLESS YOU RETAIN ONE. YOU MAY RETAIN COUNSEL OF YOUR CHOICE. YOU MAY ALSO REMAIN AN ABSENT CLASS MEMBER AND DO NOTHING AT THIS POINT. AN INVESTOR’S ABILITY TO SHARE IN ANY POTENTIAL FUTURE RECOVERY IS NOT DEPENDENT UPON SERVING AS LEAD PLAINTIFF.Follow us for updates on LinkedIn: https://www.linkedin.com/company/the-rosen-law-firm, on Twitter: https://twitter.com/rosen_firm or on Facebook: https://www.facebook.com/rosenlawfirm/.Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. Rosen Law Firm was Ranked No. 1 by ISS Securities Class Action Services for number of securities class action settlements in 2017. The firm has been ranked in the top 3 each year since 2013. Rosen Law Firm has achieved the largest ever securities class action settlement against a Chinese Company. Rosen Law Firm’s attorneys are ranked and recognized by numerous independent and respected sources. Rosen Law Firm has secured hundreds of millions of dollars for investors. Attorney Advertising. Prior results do not guarantee a similar outcome.——————————-Contact Information:
      Laurence Rosen, Esq.
      Phillip Kim, Esq.
      The Rosen Law Firm, P.A.
      275 Madison Avenue, 40th Floor
      New York, NY 10016
      Tel: (212) 686-1060
      Toll Free: (866) 767-3653
      Fax: (212) 202-3827
      lrosen@rosenlegal.com
      pkim@rosenlegal.com
      cases@rosenlegal.com
      www.rosenlegal.com

PG – Procter & Gamble Earnings: What to Watch

Investors found some new reasons to like Procter & Gamble (NYSE:PG) stock in 2020. The consumer staples giant has been dominating its industry and boosting its dividend for decades. But its growth rate found a new level during the pandemic as consumers turned to home cleaning and maintenance.

That positive growth thesis will be tested again when P&G announces its fiscal second-quarter earnings results on Jan. 20. Let’s take a look at the metrics to watch in that report, which should include a detailed outlook from the management team on the second half of the fiscal year ahead.

A young woman mopping a kitchen floor.

Image source: Getty Images.

Market share growth

Intense consumer demand disruptions added noise to the revenue figures reported by P&G and its peers like Kimberly-Clark (NYSE:KMB) in recent quarters. That’s why market share is a critical trend to watch.

P&G has been winning on this front, most recently with organic sales gains accelerating to 9% in its fiscal first quarter compared to 6% in the prior quarter. Kimberly-Clark, whose Huggies diaper brand competes with P&G’s Pampers franchise, notched weaker overall growth especially in the key U.S. market. Kimberly-Clark’s report comes out a few days after P&G’s, but P&G will still give market share updates in areas like baby care, skin care, and fabric care as part of its Q2 announcement.

Financial wins

Many factors are combining to push P&G’s earnings outlook higher. Besides the rising sales volumes, prices are ticking up and consumers are tilting spending toward more innovative, branded products. Combine those wins with the fact that expenses are falling, and you have a recipe for market-thumping profit growth. Core earnings per share soared 22% last quarter.

To judge whether P&G is losing a step here, or (more likely) extending its lead, watch for more operating margin growth. That success flows right into the company’s stellar efficiency to generate lots of cash that management can direct toward growth initiatives like marketing and research and development, or toward that ballooning dividend payment.

What’s the future look like?

CFO Jon Moeller ticked off a long list of risks to the short-term outlook back in late October. In addition to further COVID-19 outbreaks, P&G’s business could be hurt by recessions impacting some or all of its key selling markets. Yet executives said they were holding themselves to “an expectation of meaningful growth” in that environment even as the company approaches the anniversary of surging sales volumes at the start of the pandemic.

We’ll learn on Jan. 20 whether management still believes P&G will grow sales by between 3% and 4% in fiscal 2021 to mark just a modest slowdown from last year’s 6% spike. And if the company is on a firmer financial footing, then this report might also include an update to P&G’s aggressive cash return plans that envision sending as much as $17 billion to investors this year.

P&G raised both of these targets back October, and any changes to the forecast in late January will say a lot about what investors can expect from the consumer staples giant in fiscal 2021.

SWI – ROSEN, LEADING AND LONGSTANDING INVESTOR COUNSEL, Reminds SolarWinds Corporation Investors of Important March 5 Deadline in First Filed Securities Class Action Commenced by the Firm; Encourages Investors with Losses in Excess of $100K to Contact Firm – SW

NEW YORK, Jan. 16, 2021 (GLOBE NEWSWIRE) — Rosen Law Firm, a global investor rights law firm, reminds purchasers of the securities of SolarWinds Corporation (NYSE: SWI) between February 24, 2020 and December 15, 2020, inclusive (the “Class Period”), of the important March 5, 2021 lead plaintiff deadline in the securities class action commenced by the firm. The lawsuit seeks to recover damages for SolarWinds investors under the federal securities laws.
To join the SolarWinds class action, go http://www.rosenlegal.com/cases-register-2012.html or call Phillip Kim, Esq. toll-free at 866-767-3653 or email pkim@rosenlegal.com or cases@rosenlegal.com for information on the class action.According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) since mid-2020, SolarWinds Orion monitoring products had a vulnerability that allowed hackers to compromise the server upon which the products ran; (2) SolarWinds’ update server had an easily accessible password of “solarwinds123”; (3) consequently, SolarWinds’ customers, including, among others, the Federal Government, Microsoft, Cisco, and Nvidia, would be vulnerable to hacks; (4) as a result, SolarWinds would suffer significant reputational harm; and (5) as a result, defendants’ statements about the Company’s business, operations and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.A class action lawsuit has already been filed. If you wish to serve as lead plaintiff, you must move the Court no later than March 5, 2021. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to join the litigation, go to http://www.rosenlegal.com/cases-register-2012.html or to discuss your rights or interests regarding this class action, please contact Phillip Kim, Esq. of Rosen Law Firm toll free at 866-767-3653 or via e-mail at pkim@rosenlegal.com or cases@rosenlegal.com.NO CLASS HAS YET BEEN CERTIFIED IN THE ABOVE ACTION. UNTIL A CLASS IS CERTIFIED, YOU ARE NOT REPRESENTED BY COUNSEL UNLESS YOU RETAIN ONE. YOU MAY RETAIN COUNSEL OF YOUR CHOICE. YOU MAY ALSO REMAIN AN ABSENT CLASS MEMBER AND DO NOTHING AT THIS POINT. AN INVESTOR’S ABILITY TO SHARE IN ANY POTENTIAL FUTURE RECOVERY IS NOT DEPENDENT UPON SERVING AS LEAD PLAINTIFF.Follow us for updates on LinkedIn: https://www.linkedin.com/company/the-rosen-law-firm or on Twitter: https://twitter.com/rosen_firm or on Facebook: https://www.facebook.com/rosenlawfirm.Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation. Rosen Law Firm was Ranked No. 1 by ISS Securities Class Action Services for number of securities class action settlements in 2017. The firm has been ranked in the top 3 each year since 2013. Rosen Law Firm has achieved the largest ever securities class action settlement against a Chinese Company. Rosen Law Firm’s attorneys are ranked and recognized by numerous independent and respected sources. Rosen Law Firm has secured hundreds of millions of dollars for investors. Attorney Advertising. Prior results do not guarantee a similar outcome.Contact Information:Laurence Rosen, Esq.
Phillip Kim, Esq.
The Rosen Law Firm, P.A.
275 Madison Avenue, 40th Floor
New York, NY 10016
Tel: (212) 686-1060
Toll Free: (866) 767-3653
Fax: (212) 202-3827
lrosen@rosenlegal.com
pkim@rosenlegal.com
cases@rosenlegal.com
www.rosenlegal.com

AAPL – The Only Tech Stock You Need to Buy in 2021

The NASDAQ-100 Technology Sector index comfortably outpaced the broader stock market’s returns in 2020. Apple (NASDAQ:AAPL) was a big beneficiary of that surge, as the stock gained more than 80% despite a slump in smartphone sales.

AAPL Chart

Apple stock performance, data by YCharts.

Apple’s other product lines and its booming services business helped it grow revenue 5.5% year over year in fiscal 2020, despite a 3.2% decline in iPhone revenue. In 2021, Apple could turn on the heat and deliver much better results than last year.

The company is set to take advantage of one of the biggest tech trends — 5G wireless technology — in a big way. But Apple also has other tricks up its sleeve. In fact, a slew of favorable technology trends could make Apple one of the top tech plays of 2021. Let’s take a look.

Buy stock button on a keyboard.

Image source: Getty Images

The 5G smartphone trend will be Apple’s biggest growth driver

Key Apple supplier Murata Manufacturing estimates that at least 500 million 5G smartphones may be shipped this year, up from an estimated 300 million units in 2020.

Apple is likely to corner a nice chunk of this growing market in 2021. TrendForce expects the iPhone to account for 35% of 5G smartphone sales in 2021. It also estimates that Apple’s total smartphone shipments could jump to 229 million units from an estimated 199 million units last year, a potential increase of 15%.

This bodes well for Apple, as the iPhone accounted for 50% of its revenue in fiscal 2020, which ended in September last year. Analysts expect Apple’s top line to increase 15% in fiscal 2021. The arrival of 5G smartphones will be an important catalyst driving this growth, but there are other tailwinds as well.

Tablet and PC sales will be another catalyst

Apple’s Mac and iPad sales increased in fiscal 2020. These two products produced 19% of Apple’s total sales. Their combined revenue was up 11.3% year-over-year, and Apple can be expected to sustain this momentum in 2021.

Manufacturers struggled to meet end-market demand in 2020 due to a shortage of components. So, don’t be surprised to see an increase in shipments of these devices this year. IDC estimates that desktop and notebook PC shipments could increase 1.4% in 2021. Tablet sales may remain nearly even with last year’s levels, as per another estimate.

Apple is the biggest player in the tablet market, with an estimated share of more than 56% at the end of 2020. It is looking to capture more customers in 2021 with a new, more affordable iPad, according to supply chain sources. Apple is expected to price the new tablet at $299, which could help it take more share from lower-priced Android rivals.

Meanwhile, sales of Apple’s new MacBooks, powered by the M1 chip, should switch into a higher gear this year. TrendForce estimates that the M1-powered MacBooks could increase their share of the laptop market to 7% by this summer, compared to 0.8% currently.

All of this indicates that hardware products driving around 70% of Apple’s sales — iPhone, iPad, and Mac — will continue enjoying favorable demand trends in 2021.

The services business has an ace up its sleeve

Apple’s services business was in fine form last fiscal year, recording 16% growth over the prior year. It produced nearly 20% of Apple’s total revenue. 

This year, the services business can benefit from the introduction of Apple One: a smart move made by the iPhone maker to bundle various services under one umbrella. For $15 a month, Apple One subscribers get access to Apple Music, Apple TV+, Apple Arcade, and 50 GB of iCloud storage. Subscribing to these services separately would cost a subscriber $21 a month. Apple One also gives subscribers the option to add Apple News+ and Apple Fitness+ to the bundle, along with 2 TB of iCloud storage, for a monthly price of $30.

Apple is targeting several fast-growing areas with its bundle offering. For instance, the mobile gaming market is likely to sustain the terrific growth that it clocked last year in 2021 and beyond. Apple One gives users access to more than 100 games, which subscribers can enjoy ad-free and without needing to spend money on in-app purchases.

The personal cloud storage market is poised to expand at a compound annual growth rate (CAGR) of 24.6% through 2027, according to Allied Market Research. Apple Music, meanwhile, is expected to become the pillar of Apple’s services business.

All in all, Apple has bundled rapidly growing verticals into the Apple One subscription plan. That could play a key role in attracting more subscribers, giving the services business a shot in the arm in 2021.

Why you should be buying

Apple is on track to gain from both the hardware and the software sides of its business in 2021. Analysts predict 20%-plus earnings growth this year. Apple may even exceed the market’s expectations, thanks to overwhelming demand for the iPhone 12.

In short, Apple looks like a well-rounded tech stock that is set to benefit from diverse trends, ranging from 5G to the cloud to mobile gaming, giving investors a one-stop-shop to buy into the rapid growth of these markets.

XOM – S.E.C. Probe Of Exxon Renews Focus On Company's Resistance To Write-downs

Exxon Mobil Oil Refinery Baton Rouge

An Exxon refinery in Baton Rouge, Louisiana.

In Pictures via Getty Images

The U.S. Securities and Exchange Commission opened an investigation into Exxon XOM Mobil for possibly overvaluing one of its key oil and gas properties in the Permian Basin, the highest-producing oil field in the U.S., after an employee filed a whistleblower complaint last fall, according to a report in the Wall Street Journal on Friday that sent the oil major’s market value down 5%. 

In 2019 several people complained during an internal assessment that employees were being forced to use unrealistic assumptions about how quickly the company could drill wells in the Permian to achieve a higher value, reported the Journal, which reviewed a copy of the complaint. 

Citing unnamed sources, the article reported that the SEC had begun investigating the allegations after it received the complaint. The SEC declined to comment for the story. 

The oil and gas property in question, in the Delaware Basin of the Permian, forms a key part of Exxon’s plan to ramp up shale production. In 2017 it paid $6 billion for 275,000 acres of land that at the time produced just 18,800 barrels per day, though Exxon insisted that there were 60 billion barrels of oil beneath the ground.  

Even before the Covid-19 pandemic, which turned 2020 into a catastrophically bad year for Exxon and big other oil companies, Exxon’s ambitions to boost its oil production were coming under pressure. Investors were already beginning to sour on shale oil and gas as other big energy companies flirted with green energy. 

This isn’t the first time Exxon has been accused by critics of overvaluing assets. In late June one of the same two Wall Street Journal reporters with Friday’s scoop reported that a former senior Exxon accounting analyst, Franklin Bennett, had filed a complaint under the S.E.C.’s whistleblower program claiming that Exxon had deceived investors by not writing down the value of XTO Energy, a natural gas drilling company it bought a decade ago for more than $30 billion. That article said other complaints had been filed but it didn’t identify who filed them. 

Exxon has gained a reputation for refusing to write down the value of its oil and gas holdings even as peer oil companies take large write downs in response to falling oil prices. Even in response to 2020’s oil market destruction, Exxon didn’t say it would write down assets until late November, reassessing the value of its holdings down by $17 billion to $20 billion, its biggest impairment ever, long after most other majors had lopped off large chunks of value from their holdings. 

Exxon says that it values its assets over the very long run, ignoring market fluctuations that may temporarily cause the outlook for oil to sour. Born from John D. Rockefeller’s Standard Oil monopoly, it has been around for more than 130 years. Today its well-worn refrain to doubters is that the developing world is consuming more and more oil and gas and Exxon stands ready to provide, no matter the vicissitudes of Covid-driven routs and other big price jumps. (Last year, oil futures prices briefly turned negative for the first time ever.)

But this time could be different. The Covid-induced economic crisis is looking more and more like a watershed event in the world’s evolution toward green energy sources like wind and solar and toward electric transport. It has already convinced BP, which takes a similarly long view of energy markets, to begin overhauling its operations and to permanently lower its global oil consumption projections. 

Nor do most shale oil executives see an oil rebound in the works in the near term. A recent survey of shale oil executives by Kpler, a research outfit, found that the average WTI price used to plan for capital expenditures in 2021 was $44 per barrel. The closing price of WTI on Friday was roughly $52 per barrel.

UBER – Report: Uber Technologies to Spin Off Postmates Robot Delivery Unit

Would you invest in a company that focused exclusively on robot food delivery?

Uber Technologies (NYSE:UBER) might be betting that the answer is “yes.” On Friday, TechCrunch reported that Postmates X, the automated division of the food delivery service Uber bought last July for $2.65 billion, is in search of investors in a play at becoming a separate company.

The top half of a Serve robot.

The top half of a Serve robot. Image source: Postmates (Uber).

According to “several sources familiar with the matter” interviewed for the story, the spinoff would become known as Serve Robotics, after the Serve delivery robot developed by the unit. Current top managers would still hold the reins, and Uber would hold an ownership stake of around 25%. Uber and Serve Robotics would also maintain a collaboration agreement in the robo-delivery sphere.

The article noted that a web domain, serverobotics.com, was registered on Jan. 6.

Assuming the story is accurate, the Postmates X/Serve Robotics spinoff fits in well with Uber’s current strategy. In order to lift the habitually loss-making company toward profitability, CEO Dara Khosrowshahi has been shedding business units that are cost centers.

Already struggling before the coronavirus pandemic, Uber’s difficulties were exacerbated by notable declines in ridership as people curtailed their travel activities.

Last month, for example, it sold Uber Elevate, essentially a skunkworks concentrating on aerial technologies such as delivery drones and air taxis. It also divested its Uber ATG autonomous vehicle division, and its urban mobility unit Jump. As with the speculation about Postmates X, Uber maintained stakes in the businesses it sold through somewhat complicated arrangements with the buyers.

Uber has not yet commented on the TechCrunch story.

AIR – AAR (AIR) Up 10.3% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for AAR (AIR Free Report) . Shares have added about 10.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is AAR due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

AAR Corp. Q2 Earnings Beat Estimates, Sales Fall Y/Y

AAR Corp. reported second-quarter fiscal 2021 adjusted earnings of 31 cents per share that surpassed the Zacks Consensus Estimate of 17 cents by 82.4%. However, the figure reflected a year-over-year decline of 51.6% from earnings of 64 cents registered in the year-ago quarter.

Excluding one-time items, the company reported earnings of 41 cents per share from continuing operations compared to the earnings of 57 cents in second-quarter fiscal 2020.

Total Sales

In the quarter under review, net sales totaled $403.6 million. The reported figure came almost in line with Zacks Consensus Estimate of $404 million but plunged 28% from $560.9 million recorded in the year-ago quarter.

The year-over-year decline in sales was due to the continued impact of COVID-19 outbreak.

Segment Details

In the fiscal second quarter, sales at the Aviation Services segment totaled $385 million, down 27.6% year over year.

Expeditionary Services garnered sales of $18.6 million, down 35.6% from $28.9 million in the year-ago quarter.

Highlights of the Release

AAR Corp’s cost of sales in the reported quarter fell 29.7% year over year to $334.1 million.

Selling, general and administrative expenses declined 24% to $43.4 million.

The company incurred interest expenses of $1.3 million compared with $1.8 million in second-quarter fiscal 2020.

Financial Condition

As of Nov 30, 2020, AAR Corp’s cash and cash equivalents amounted to $110 million compared with $404.7 million as of May 31, 2020.

As of Nov 30, 2020, net property, plant and equipment totaled $125 million compared with $135.7 million as of May 31, 2020.

As of Nov 30, 2020, long-term debt decreased to $220.3 million from $600 million as of May 31, 2020.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 36.21% due to these changes.

VGM Scores

At this time, AAR has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren’t focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, AAR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

FDX – FedEx (FDX) Down 13.6% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for FedEx (FDX Free Report) . Shares have lost about 13.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is FedEx due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

FedEx Beats on Earnings in Q2

The company’s earnings (excluding 28 cents from non-recurring items) of $4.83 per share handsomely surpassed the Zacks Consensus Estimate of $2.59. Moreover, the bottom line surged approximately 60% year over year, driven by increased volumes at FedEx International Priority and U.S. domestic residential-package services, as well as yield improvement at FedEx Ground and FedEx Freight. Moreover, benefits from an additional operating day contributed approximately $130 million to first-quarter fiscal 2021 performance.

Quarterly revenues of $19,321 million outperformed the Zacks Consensus Estimate of $17,459.4 million and increased 13.3% year over year, primarily owing to increased demand for e-commerce as coronavirus restricts people to their homes. Operating income (on an adjusted basis) soared 56.2% year over year to $1.64 billion in the reported quarter due to international export and U.S. domestic-package volume growth at FedEx Express, higher residential volumes at  FedEx Ground andyield improvement at FedEx Ground and FedEx Freight. Operating margin (adjusted) also improved to 8.5% from 6.1% in the year-ago period.

Segmental Performance

Quarterly revenues at FedEx Express (including TNT Express) ascended 8% to $9,647 million due to international export and U.S. domestic-package volume growth. Segmental operating income (adjusted) increased to $747 million from $342 million in the year-ago period.  Also, segmental operating margin (on an adjusted basis) improved to 7.7% from 3.8% in first-quarter fiscal 2020.

FedEx Ground revenues surged 36% year over year to $7,040 million in the period under consideration owing to residential-delivery volume growth. Operating income came in at $834 million, augmenting 30% year over year. However, segmental operating margin dipped to 11.8% from 12.4% in the prior-year quarter.

FedEx Freight revenues declined 4% year over year to $1,826 million due to fall in average daily shipments. However, the segment’s operating income soared 41% to $274 million, thanks to focus on revenue qualitative initiatives and cost-reduction measures. Moreover, operating margin increased to 15% from 10.2% in the year-ago quarter.

Outlook

FedEx anticipates capital expenditures of $5.1 billion in fiscal 2021, compared with $4.9 billion expected previously. The anticipated increase in capital spending is due to initiatives to increase capacity in response to growing volumes.

The company is expected to incur TNT Express-integration expenses of approximately $1.7 billion through fiscal 2022.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 14.06% due to these changes.

VGM Scores

Currently, FedEx has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren’t focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise FedEx has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

GIS – General Mills (GIS) Down 5.8% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for General Mills (GIS Free Report) . Shares have lost about 5.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is General Mills due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

General Mills Q2 Earnings & Sales Top Estimates, Up Y/Y

General Mills released robust second-quarter fiscal 2021 results, with the top and the bottom lineincreasing year over year. Moreover, earnings and sales surpassed theZacks Consensus Estimate.

Q2 Highlights

The company’s adjusted earnings per share of $1.06 increased 9% year over year on a cc basis. Moreover, the bottom line beat the Zacks Consensus Estimate of 97 cents. The uptick can be attributed to improved adjusted operating profit, higher after-tax earnings from joint ventures and reduced net interest expenses.

Net sales of $4,719.4 million advanced 7% year over year and surpassed the Zacks Consensus Estimate of $4,671.4 million. Also, organic sales increased 7% on the back of broad-based market share gains amid increased at-home food demand.

Adjusted gross margin expanded 20 basis points (bps) to 35.5% owing to favorable net price realization and mix. These were somewhat offset by higher input costs. Adjusted operating profit at cc improved 6% driven by increased adjusted gross profit dollars. These were somewhat offset by higher SG&A expenses, which include greater media investment. Adjusted operating profit margin contracted 10 bps to 18.3%.

Segmental Performance

North America Retail: Revenues in the segment came in at $2,921.5 million, up 9% year over year. The upside was driven by favorable competitive performance amid coronavirus-induced increased demand for food at home. Organic sales also rose 9%.

Convenience Stores & Foodservice: Revenues dropped 14% to $440.5 million due to lower demand for away-from-home food amid the coronavirus outbreak. Reduced consumer traffic and other pandemic-induced restrictions adversely impacted the segment’s major away-from-home channels like restaurants, schools, lodging and convenience stores.

Europe & Australia: The segment’s revenues rose 8% to $467.4 million, including favorable currency impacts of 6 points. Also, sales were backed by favorable net price realization. Further, sales increased 3% year over year on an organic basis.

Asia & Latin America: Revenues rose 5% from the year-ago quarter’s figure to $430 million on higher volumes and favorable net price realizations and mix, partly countered by currency woes. Organic net sales increased 10%.

Pet Segment: Revenues came in at $460 million, up 18% year over year on the back of solid volume growth and favorable net price realization and mix.

Other Financial Aspects

The company ended the quarter with cash and cash equivalents of $2,582.8 million, long-term debt of $10,952.5 million and total shareholders’ equity of $8,550 million. General Mills generated $1,426.8 million as net cash from operating activities in six months ended Nov 29, 2020.

Other Developments & Outlook

Constant-currency sales from joint ventures of Cereal Partners Worldwide increased 7% in the quarter. In Haagen-Dazs Japan, sales improved 12% at cc from the prior-year quarter’s figure.

The company anticipates consumer demand for food at home to remain elevated when compared with per-pandemic levels for the rest of fiscal 2021. General Mills envisions continued solid top-andbottom-line growth in the third quarter of fiscal 2021. The company expects third-quarter organic net sales growth to be inline with second-quarter levels. Moreover, management anticipates adjusted operating profit margin to be in line with the year-ago period. The outlook is based on the assumption that third-quarter demand trends are anticipated to be generally consistent with recent months thanks to the ongoing coronavirus-induced concerns in many markets globally.

Impressed with its first-half adjusted operating profit margin performance, General Mills now projects its fiscal 2021 adjusted operating profit margin to be in line with or better than prior-year levels. Before this, management anticipated the metric to be nearly in line with fiscal 2020 levels. Further, owing to uncertainties related to the pandemic the company refrained from providing fiscal 2021 growth outlook for organic net sales, adjusted operating profit, and adjusted earnings per share.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

Currently, General Mills has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren’t focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, General Mills has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

JBL – Jabil (JBL) Up 1.2% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Jabil (JBL Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Jabil due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Jabil Q1 Earnings Beat, Revenues Rise Y/Y

Jabil reported first-quarter fiscal 2021 earnings of $1.60 per share, which beat the Zacks Consensus Estimate by 53.8% and increased 52.4% year over year.

Revenues increased 4.4% year over year to $7.83 billion backed by contract wins in healthcare, automotive, cloud and 5G. The figure beat the Zacks Consensus Estimate by 11.9%.

Quarter Details

Electronics Manufacturing Services (EMS) revenues contributed 46% to total revenues and declined 4% year over year to $3.6 billion.

Diversified Manufacturing Services (DMS) revenues contributed 54% to total revenues and improved 13% year over year to $4.23 billion. The upside can be attributed to growth in its $5-billion healthcare and packaging business, which serves many of the most critical healthcare, medical device and consumer packaged goods companies in the world.

Gross margin, on a GAAP basis, expanded 70 basis points (bps) year over year to 8.1%.

Core EBITDA margin expanded 100 bps on a year-over-year basis to 7.1%.

Operating expenses, on a GAAP basis, contracted 130 bps on a year-over-year basis to 4.1%. As a percentage of revenues, while selling, general and administrative (SG&A) expenses contracted 50 bps year over year to 3.9%, research & development (R&D) expenses remained unchanged on a year-over-year basis.

Non-GAAP core operating margin expanded 100 bps on a year-over-year basis to 4.7%.

Balance Sheet & Cash Flow

As of Nov 30, 2020, cash and cash equivalents were $1.1 billion compared with $1.39 billion as of Aug 31, 2020. The company ended first-quarter fiscal 2021 with committed capacity under the global credit facilities of $3.8 billion.

In first-quarter fiscal 2021, Jabil repurchased approximately 1.5 million shares for $50 million, bringing total year-to-date repurchases to $216.5 million, as part of a two-year $600-million authorization announced in September 2019.

Guidance

For second-quarter fiscal 2021, Jabil expects total revenues between $6.2 billion and $6.8 billion.

DMS revenues are forecast to be $3.5 billion, which suggests an increase of 22% year over year. EMS revenues are forecast to be $3 billion, which indicates a decline of nearly 8% year over year.

Core non-GAAP operating income is estimated to be $210-$260 million. The company’s core earnings are expected between 83 cents and $1.03 per share on a non-GAAP basis.

For fiscal 2021, revenues are expected to be around $27.5 billion with expected core margin of 4.1%.

DMS segment revenues are expected to be $15 billion with expected core margin of 4.5% for fiscal 2021.

Further, EMS segment revenues are expected to be $12.5 billion with core margin projected to be 3.6%.

The company’s core earnings are expected to be $4.6 per share on a non-GAAP basis.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 17.16% due to these changes.

VGM Scores

Currently, Jabil has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren’t focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Jabil has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.