We went 3-for-3 in terms of our earnings predictions last week, which led to gain of 6% despite terrible market conditions last week. This brought our year-to-date return for this newsletter in 2013 up to 300%.
We extolled the greatness of Factset Research Systems (FDS), stating that it has the best analytical applications for investment professionals. Our opinion is based on using the products for over 20 years. We said FDS would beat the $1.15 per share estimate by a penny or two. The company beat estimates by five cents. Revenues increased 6% YoY to $215 million, and operating inc ome hit $71.6 million, for an OPM of 33.3%. Net income increased 11% to $53.4 million, or $1.20 per share. Free cash flow reached an all-time high of $92 million. The company increased its dividend by 13% and expanded its share repurchase program by $200 million. Despite all this good news, the stock lost 2%, but that was mainly due to terrible market conditions last week.
We said Adobe Systems (ADBE), one of our Top 10 mid-cap companies, would beat estimates by at least two cents. Revenue declined 10% YoY to $1.01 billion, which was within management’s targeted range of $975 million to $1.025 billion. Operating income was $247.3 million and net income was $182.9 million on a non-GAAP basis. Net earnings of $0.36 per share beat estimates by two cents. The stock rose 6% on a day the markets collapsed based on Ben Bernanke’s (the Fed chairman) comments that the Fed would reduce its stimulus program.
We called Red Hat (RHT) the ‘anti-Microsoft’ which was a compliment since we think Microsoft sells the worst operating system on the market. With $1.32 billion in cash, we think RHT has the resources and the open source software to finally get Microsoft out of our lives. We said RHT would beat estimates for $0.31 per share and we were right. Total revenue for the quarter increased 15% YoY to $363 million, and non-GAAP operating income increased 7% to $87 million for an OPM of 23.9%. Net income also increased 7% to $62 million, or $0.32 per share, which beat estimates by a penny. Operating cash flow was $142 million for the 1Q, up from $124 million a year ago. RHT repurchased $179 million worth of stock in the quarter. The stock gained 2% on a day the market was down 2%.
For next week, we discuss three companies in SONC, MON, and PRGS. The latter will miss estimates.
Get the full research report:
- Author: Thomas Byrne, Analyst
- Pages: 8
- Purchase Price: $25.00
- Featured Companies In This Coming Week’s Earnings Forecast Report:
SONIC CORP. (SONC)
PROGRESS SOFTWARE (PRGS)
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