3 Earnings Reports That Caught My Attention Last Week
As first-quarter earnings creep to a close, I can't help but point out that the majority of earnings reports we've covered over the past year have been better than expected. With so many companies reporting during the weeks that comprise earnings season, it's easy for some earnings reports to fall through the cracks.
Each week for the past year, I've taken a look at three companies that could be worth further research after either beating or missing their profit expectations. Today, we'll take a gander at three more companies that reported earnings last week. They may have slid under your radar, but they deserve a look.
Great Panther Silver
Once is an aberration; twice an eyebrow raiser... But, six times in a row now for Carnival ships to have had some sort of mechanical issue dating back to January of last year without a reported problem from any of its peers is downright scary and enough reason to keep your investment money and vacation plans as far away from Carnival as possible.
In just the last month, the Carnival Triumph was powerless and adrift at sea for five days, the Elation had a malfunction in its steering system, the Dream's generator malfunctioned while at port, and, on Friday, the Legend announced it had sailing speed control issues. Carnival's fleet is slowly being denigrated into a late-night TV show joke.
You wouldn't know that by its latest quarter, however, as Carnival reported much better-than-expected earnings despite a 2.3% net revenue reduction. Lower fuel costs definitely helped, as well as the fact that it repurchased 2.3 million shares of its common stock.
Ultimately, Carnival is a mess. It lowered its fiscal 2013 EPS outlook down to a range of $1.80-$2.10 to take into account the repairs needed to the Triumph, but may need to lower its estimates even further as its fleet slowly unravels before consumers' eyes.
If you are going to venture into the cruise ship sector, may I suggest ditching Carnival for good and buying conglomerate Disney . Disney's brand name and safety record have allowed it to stay ahead of the cruise ship backlash curve and remained booked well in advance of the crucial summer months. Plus, you get the added bonus of media and theme park diversification -- as well as a handsome dividend.
Great Panther Silver
Silver prices may have dipped from the previous year, but mining companies that are becoming more efficient, finding higher grade ore, and boosting production are bound to succeed. That's why, even with a $0.02 miss on the books for Great Panther Silver, you should really give this small-cap silver and gold miner another look.
For the full year, Great Panther reported a 6% increase in revenue despite a double-digit decline in silver prices thanks to significantly higher ore grades at Guanajuato (2.02 g/t versus 1.52 g/t in 2011). Overall silver production rose 4% and gold production leapt 36%, allowing for Great Panthers' record results.
Looking ahead, Great Panther anticipates that production levels will grow only modestly in 2013, perhaps by as much as 4%. Where it plans to grow its bottom line is through cash cost reductions. The company's forecast calls for a 10% to 18% reduction in cash costs per ounce as higher gold yields and improved operating efficiency should yield EPS improvements.
As I've been saying for months, silver prices shouldn't have much further to fall with China's demand likely to buoy prices. As long as technology sector demand for silver remains stable, silver prices should head higher over the long run which will spell good news for Great Panther shareholders when coupled with its falling mining costs.
Dole certainly didn't give investors any reasons to go bananas last week when it reported a significantly wider-than-expected fourth-quarter loss. To its credit, Dole sold its packaged fruit and fresh produce division in Asia to Itochu during the quarter which removed revenue and profitability that the Street may not have accounted for. There are other reasons, as well, why Dole might be an attractive investment here.
For starters, ridding itself of its Asia produce segment gives the company renewed focus on its remaining operations without spreading itself too thin. Secondly, keep in mind the numerous points made by Barron's last month of why the Itochu deal could make Dole worth double where it is now. The $1.69 billion buyout price will practically eliminate all of Dole's long-term debts which may ultimately allow it to focus on shareholder-driven share repurchases and a possible dividend. Barron's other key point relates to Dole's roughly $500 million in land assets which it feels investors haven't truly accounted for.
Personally, I can't fathom the banana market growing any more challenging than it already is for Dole. Combined with its cash payment from Itochu, I feel Dole has all the tools needed to surprise Wall Street in a positive way in the second half of 2013.
Sometimes an earnings beat or miss isn't as cut-and-dried as it appears. I've given my two cents on what's next for each of these companies -- now it's your turn to sound off. Share your thoughts in the comments section below and consider adding these stocks to your free and personalized watchlist.
- Add Carnival to My Watchlist.
- Add Great Panther Silver to My Watchlist.
- Add Dole Food to My Watchlist.
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The article 3 Earnings Reports That Caught My Attention Last Week originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of, and recommends, Walt Disney. 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.
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