Its 30-year tailwind is turning into a headwind and it is the most exposed of all of the waste companies.
With Chipotle's CMG same-store sales up an astonishing 13.5% during some of the worst winter months in recent or even distant memory: Think twice when you see any company from this point on in this earnings cycle blame the weather.Remember: If there were to ever be an earnings cycle retailers and restaurant operators use to blame the weather, it's this one. Even Chipotle, in the risk factors in the fine print of its earnings release, says that "the potential effects of inclement weather" could impact results.Reality: If the weather's not hurting Chipotle, then why is everybody else likely to gripe about it? Because this quarter it's a free pass. And for some companies, like truckers, railroads and airlines, it's real.But truth be told, consumers and even businesses often defer, and don't cancel, their purchases.
The analysts finally appear to have lost their patience with IBM. As my pal @firstadopter on Twitter was first to point out: "MULTIPLE questions from $IBM analysts 'I'm confused' 'I don't understand' 'Sorry to re-visit' FCF/Net income/EPS guidance MAKES NO SENSE." At first I thought he was exaggerating, but the transcript doesn't lie. Let's start with confused. Barclays analyst Ben Reitzes gives us a twofer, given that he said both "confused" and "I don't understand": "I think investors are focused on this, so I'm going to just try to clarify it on the free cash flow side. What I'm really confused about is that the charge was about $100 million lower than I thought, then we have the tax rate impact and the accelerated buyback, which is probably more than I think you guys probably modeled in January. With all that, you could have almost $1 billion taken out of the net income the Street had and still guide to $18. And I wanted to know on cash flow, you said in your 10-K that you would grow cash flow by $1 billion year over year, and we just took out almost $1 billion of the net income versus where we were in January. I actually don't understand how we get to the free cash flow numbers previously guided in that -- taking it in that light. If you could just explain it that way, that would be really great. Thanks a lot."
The saga continues: No stranger to readers of this blog or my Reality Check newsletter, where it has long been red-flagged, Ulta Salon's stock is one of the most confounding among retail stories.Its shares have remained remarkably resilient, even in the recent rout, as CEO Mary Dillon made the rounds with New York analysts this week to discuss the company's makeover. It's not that the company, in the midst of a strategic review, is broadcasting that it is making widespread changes.But in his report earlier this week reiterating his "outperform" on Ulta, after hosting investor meetings with Dillon, analyst Gary Balter said he was impressed with her plans to "reinvest in infrastructure, brand positioning, marketing and customer relationships..."In other words, a costly makeover that even Balter concedes "is on improving results over the next five years, not on the quarter."
I am keeping an eye on Michael Kors Holdings Limited and Neustar.
The company's growth story appears to be showing signs of cracks.
I've read and watched and listened to countless market pundits (me included) pontificate about what this market decline is all about and how it will end.I have no idea how it will end. Bulletin: Neither does anybody else. But as we watch momentum-in-reverse, as I like to call it, there's something else at work here: There don't appear to be natural buyers for many of these stocks. In fact, if I look at my screen (which I included in this tweet) some of those that have been squeezed up the most are among those hitting hardest.Topping the list: Education Management, off 67%.
Capitol Forum is saying that Telcordia could win the entire phone-number portability contract.
With earnings "season" officially under way, so is "blame the weather."In many cases, including retail, restaurants and construction, it's justified. The Northeast got blasted and that, on occasion, kept people from getting where they were going.One of the most legitimate weather-related claims was Alcoa, whose CEO Klaus Kleinfeld said:"Let me also address one other thing that has been discussed quite a bit. And we also saw it in our order intake in the first quarter here in the US, where it slowed down. It slowed down -- the order intake there slowed down -- and this has pretty much single-handedly been driven by the extremely cold weather.So what do we see now? We're seeing on those sites now, as the sites got delayed, the concrete couldn't get poured, people are now trying to catch up, and trying to make the dates that they had projected for their projects. So, we continue to be optimistic in the recovery of that market and don't believe that there's any substantial change in this. It was really weather that hit there."Of course, that merely means deferred or delayed revenue, not cancelled revenue.Which brings us to Intuitive Surgical.
For now the red flag remains.