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Farmer Brothers (FARM) Q3 2019 Earnings Call Transcript

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Farmer Brothers (NASDAQ: FARM)
Q3 2019 Earnings Call
May. 07, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good afternoon, ladies and gentlemen, and welcome to the Farmer Brothers third-quarter 2019 earnings conference call. [Operator instructions] As a reminder, this call is being recorded. I would now like to turn the call over to your host, T.J. O'Sullivan.

Please go ahead.

Unknown speaker

Thank you. Good afternoon, everyone. Thank you for joining Farmer Brothers third-quarter 2019 earnings conference call. Participating on today's call are Chris Mottern, interim CEO; and David Robson, treasurer and CFO. Earlier today, the company issued its earnings press release, which is available on the Investor Relations section of Farmer Brothers' website at www.farmerbros.com.

The press release is also included as an exhibit to the company's Form 8-K available on the company's website and on the Securities and Exchange Commission's website at www.sec.gov. A replay of this audio-only webcast will be available approximately two hours after the conclusion of this call. A link to the audio replay will also be available on the company's website. Before we begin the call, please note that all of the financial information presented is unaudited and that various remarks made by management during this call about the company's future expectations, plans and prospects may constitute forward-looking statements for purposes of the safe harbor provisions under the federal securities laws and regulations. These forward-looking statements represent the company's views only as of today and should not be relied upon as representing the company's views as of any subsequent date. Results could differ materially from those forward-looking statements.

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Additional information on factors that could cause actual results and other events to differ materially from those forward-looking statements is available in the company's press release and public filings. On today's call, management will also use certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA margin, in assessing the company's operating performance. Reconciliation of these non-GAAP financial measures to their most directly comparable GAAP measures is also included in the company's press release. I will now turn the call over to Chris. Chris, please go ahead.

Chris Mottern -- Interim Chief Executive Officer

Thank you, T.J. Good afternoon, everyone, and thanks for joining us this afternoon. I'm pleased to be speaking with all of you in my new role. While the purpose of our call is to discuss the quarter's financial results and updated guidance for the full year, I also want to take this opportunity to introduce myself and share my perspective about where our company is today and what I believe we need to achieve in the future. I am honored to have been asked by the board of directors to serve in this interim role, while we conduct the search for our permanent CEO. On behalf of the entire board, I also want to convey our thanks to Mike Keown for his commitment to the company's mission and his many contributions to Farmer Brothers during his time.

As we position our company for its next phase of growth, the board and Mike have agreed that now is the right time for a leadership transition at Farmer Brothers, and we all wish him well in his future endeavors. A bit about my background. I've been a Director of Farmer Brothers for six years, serving on the audit, compensation, governance and executive committees. I also bring more than 40 years experience in the food and beverage industry, including having previously served as CEO of Peet's Coffee & Tea, president of Heublein Wines Group and CEO of Capri Sun. As part of the management team, I look forward to leveraging my extensive experience leading companies through periods of great change and transformation.

Given my years on the Farmer Brothers' board, I've stepped into this new role with a true appreciation for Farmer Brothers' strengths, operations and people, as well as an understanding of the challenges in the business that must be overcome and the changes that need to be made in order for our company to fully capitalize on the opportunities ahead. To be clear, the company's performance is not acceptable in terms of what we aim to deliver for our shareholders, and we are actively taking steps to drive improvement in execution and financial results. David will review key factors impacting the quarter in our financial results in detail. I'd like to take a moment to discuss at a high level the issues encountered during the quarter, the steps we were taking to set the company on the right path and the more cautious outlook we are taking for the remainder of the year. During this quarter, the company experienced a significant shortfall in DSD sales related to less productive channel sales, higher-than-expected customer attrition, systems issues and weather. The company also saw higher-than-expected production and installation costs due in part to execution issues and a markdown in inventory that resulted in lower gross margin for the quarter.

And while direct ship results were in line with expectations, we believe there is opportunity to expand the business. While we have already begun taking corrective action to address many of these factors, we are taking a cautious approach in our outlook given the execution issues during the quarter. As noted in our press release, we have revised the guidance to adjusted EBITDA for the fiscal year to a range of $34 million to $36 million. We continue to believe in the underlying long-term earnings power of the Farmer Brothers business. Today's coffee industry represents the significant opportunity, and I'm confident our company has the talent and capabilities to be a true leader in the market. In recent years, we have made key investments to drive greater innovation and improve our product development, customization and packaging.

In order to achieve our ambitious goals, we must refocus on both excellence and execution and new business generation. We will be working together to determine the steps our company needs to take in order to enhance our performance. We are committed to getting this right for our customers, our shareholders, our stakeholders. I look forward to partnering with the rest of the board and management as we take the actions needed to realize our company's full potential. With that, I'll now turn the call over to David for a more detailed review of our financials and operations. 

David Robson -- Treasurer and Chief Financial Officer

Thanks, Chris. I'll now review our third quarter results in detail. Beginning with coffee volumes. Green coffee processed and sold in the quarter increased by 0.5% to 27.9 million pounds compared to the third quarter of fiscal 2018.

The mix of coffee volumes processed and sold during the quarter was approximately 9.2 million pounds or 33.2% of the total volume through our DSD network, while direct ship customers represented approximately 17.9 million pounds of green coffee processed and sold or 64.1% of total volume. 0.8 million pounds or 2.7% of the total volume was through distributors. The slight increase in coffee volume was driven largely by improvement in volume from one of our top customers and the ramping of our new large global convenience store retailer we began shipping last quarter offset by the impact of two brands that we serviced in the prior year that were brought in-house by the owner of those brands. We experienced softer-than-expected volume through our DSD network, which I'll discuss in more detail in a moment. Net sales for the quarter were $146.7 million, a decrease of $11.2 million or 7.1% from $157.9 million reported in the same period of the prior year.

The decrease was driven primarily by a decline in sales sold through our DSD network impacted by higher customer attrition related to the Boyd's integration and route optimization, less productive channel sales and short-term system issues and weather impact. Net sales were also primarily impacted by lower green coffee prices for our cost plus customers. I'll provide some additional context on a few of those items. First, regarding attrition associated with route optimization. Over the past several quarters, we have been reducing routes within our DSD network to deliver long-term efficiencies and cost savings.

Part of these savings from optimizations have been achieved by adjusting service frequencies to customers based on purchase volumes and transitioning lower volume customers to our roastery direct program. While these efforts have successfully realized efficiencies in our network, we have also seen some short-term higher customer attrition in some markets. That said, while the company has not yet seen new business generation at targeted levels to fully offset this attrition, we are beginning to see some benefits of the investments made to increase street sales resources. Second, the company's channel sales team did well in building out an additional pipeline of larger DSD accounts that have the potential to provide more consistent revenue. However, what we have seen is that as the team began to focus on installations and servicing of these larger accounts, there have not been additions to the channel sales pipeline at the rate the team had targeted.

Most of the larger installations are now completed, and we are reinforcing our focus on further building out the pipeline. Additionally, as part of our efforts to improve future DSD sales productivity and further refine the balance between our channel and street account-based businesses, we will be deploying additional resources in both channel and street sales teams in an expanded range of markets. Finally, system issues and weather also disrupted the business temporarily in the quarter, and these issues are now behind us. We believe the lost sales associated with those issues were temporary. Direct ship coffee pounds in the quarter were up modestly year over year, in line with expectations, given the production for two of those brands previously serviced by Farmer Brothers being brought in-house and continued softer volume from one of the company's top customers. Finally, the large global convenience store customer we recently won has continued to ramp up in the quarter. Gross profit in the third quarter was $39.9 million, a decrease of $12.4 million or 23.7% from the prior-year period, and gross margin rate decreased to 27.2% from 33.1%. The decrease in gross margin rate was primarily due to higher markdowns of slower moving inventories of 2.6%, higher coffee brewing equipment and labor costs associated with increased installation activity during the quarter of 1.3%, higher manufacturing costs of 0.9%, and the balance was due to unfavorable customer mix.

The higher operating expenses were partially offset by lower green coffee costs. Now let's discuss those items that negatively impacted gross margin this quarter and our plans to resolve them. To start, we experienced higher-than-expected markdowns in inventory. There were aspects of the Boyd's integration that did not proceed as smoothly as we initially thought. During the quarter, there were increased levels of inventory write-offs of excess finished goods and raw materials primarily associated with the transition of the Boyd's coffee production to Farmer Brothers plants.

This was driven by integration of the Boyd's business. And looking at the integration of the Boyd's business, however, there are many things that proceeded smoothly and largely in line with the company's plans. The team successfully completed the substantial production qualification process with Boyd's large national accounts while retaining all of those customers in the direct-ship business. And the team transferred the Boyd's coffee production to Farmer Brothers plants, a significant undertaking given the volume accounts for 10% to 15% of the company's total annual volume. On the DSD side, we did not efficiently execute the high level of coffee brewing equipment installation activity in Q3. As a result, we incurred higher labor and equipment costs during the quarter.

This is an area, among other things, where we are increasing controls, and we expect cost to return to historical levels in fiscal 2020. The decline in gross profit from softer revenues and higher costs were the primary drivers of our lower-than-expected adjusted EBITDA in the third quarter and a revision to guidance. Many of these costs were largely due to onetime or short-term challenges, and we expect to see gross margin improve in the fourth quarter and in the fiscal year 2020. Our operating expenses for the quarter decreased $9.1 million to $46 million from $55.1 million and as a percentage of net sales, declined to 31.4%, compared to 34.9% of net sales in the prior-year period. The reduction was primarily due to the absence of $3.8 million in impairment losses on intangible assets that we have reported in the third quarter of fiscal 2018, a $3.3 million decrease in selling expenses and a $2.9 million decrease in general and administrative expenses.

The decrease in selling expenses was primarily due to synergies achieved through the Boyd's acquisition and headcount reductions and other efficiencies from DSD route optimization offset by higher insurance and employee benefit costs. The decrease in general and administrative expenses was also primarily associated with synergies achieved through the Boyd's acquisition, as well as lower acquisition and integration costs in the quarter. Net interest expense increased $0.5 million to $3 million in the quarter, compared to $2.5 million for the third quarter of last year principally due to higher borrowings associated with the Boyd's acquisition. Other income decreased by $1.3 million to $0.5 million in the quarter, compared to $1.8 million for the third quarter of last year primarily due to increased mark-to-market losses on coffee-related derivative instruments not designated as accounting hedges. Year-to-date, we have realized $2.9 million in mark-to-market losses on coffee-related derivative instruments not designated as accounting hedges associated with the continued decline in coffee prices.

Compared to a year ago, coffee prices on average have declined 18% during the quarter, and the C market price during the quarter averaged $1 per pound. Given these derivative losses relate to coffee hedges we entered into for the benefit of our customer base, the markdowns in inventory values taken in the quarter will result in future lower cost of sales and associated higher gross margin rates once we sell through the associated inventory, which is carrying a discounted inventory value from our hedged cost. Turning now to income taxes. We recorded an income tax expense of $43.2 million in the quarter, compared to an income tax benefit of $1.3 million in the prior-year period. The higher tax expense in the current quarter is primarily due to reassessment of the company's deferred tax valuation allowance based on prevailing accounting guidance related to historical and anticipated income.

The valuation reduction of $44.6 million in deferred tax assets recorded during the current quarter does not limit the company's ability to use the underlying deferred tax asset against future profits. Net loss available to common stockholders for the quarter was $51.9 million or a loss of $3.05 per diluted share, compared to a net loss available to common stockholders of $2.3 million or a loss of $0.14 per diluted share in the prior-year period. The effect on net loss available to common stockholders exclusively related to the reassessment of the company's deferred tax valuation allowance was $2.62 per diluted share. Adjusted EBITDA for the quarter declined 57.4% to $4.5 million, compared to $10.6 million in the prior-year period, while adjusted EBITDA margin declined to 3.1% for the quarter, compared to 6.7% for the same period last year. At the end of the quarter, we had $12.2 million in cash and we had $123 million borrowed on a revolving credit facility or $110.8 million in debt net of cash. This compares to debt net of cash at December 31, 2018, of $116.7 million, a decline of $5.9 million.

As of April 30, 2019, our debt outstanding was $121 million and our bank availability under our credit facility was $27 million, compared to $130 million in debt and $18 million in bank availability as of December 31, 2018. Regarding our investments in working capital. Since December 31, 2018, our inventory levels declined by 13.1% or $15.2 million as we reduced higher inventories we were carrying associated with the Boyd's acquisition. We also saw our accounts receivable balances decline during the quarter by $13.7 million or 17.2% from December 31, 2018, roughly in line with our expectations. As a reminder, the higher accounts receivable balance we were carrying at the end of last quarter were primarily driven by a short-term interruption of collection activities of certain distribution customers acquired with the Boyd's acquisition. Since December 31, accounts payable balances have also decreased from $78.1 million to $62.8 million, a reduction of $15.3 million or 19.6%.

We expect working capital to continue to improve in the fourth quarter as we improve inventory turnover and reduce accounts receivable balances more in line with our historical run rates. Capital expenditures and cash for the third quarter were $7.3 million with $4.4 million related to maintenance and $2.8 million to add further capabilities to our Northlake, Texas facility. We currently expect our total capital expenditures for the year to range between $34 million and $37 million. Depreciation and amortization expense was $7.6 million in the third quarter versus $7.4 million in the same period of the prior year. We expect depreciation and amortization expense to run at approximately $7.5 million to $8 million per quarter for the next several quarters. In the final quarter of the fiscal year, we expect year-over-year coffee pound volumes to increase, although revenues will decline due to softer sales through our DSD network.

In addition, we expect revenues to be negatively impacted due to the lower year-over-year green coffee prices charged to our cost plus customers. We expect to see increased coffee pounds sold through our direct ship channel in the fourth quarter as volume continues to ramp for the new large global convenience store retailer on-boarded in the last quarter and improved business from one of our large customers. We also expect our gross profit to improve compared to the third quarter but anticipate it will be lower than the fourth quarter of fiscal 2018 on lower revenues and some carryover of the elevated cost we saw in the third quarter. Finally, we expect our SG&A cost in Q4 to be relatively consistent with run rates we experienced in Q3, an improvement as compared to Q4 of last year as we continue to realize year-over-year cost savings resulting from our route and branch optimization efforts and synergies from the Boyd's acquisition. Taking all of that into consideration, as Chris noted, we are reducing our guidance for adjusted EBITDA for the full year to $34 million to $36 million from $49 million to $52 million. And with that, we'd like to open the call up for questions.

Operator?

Questions & Answers:


Operator

Thank you. [Operator instructions] And our first question comes from Marc Wiesenberger with B. Riley. Your line is open.

Marc Wiesenberger -- B. Riley FBR, Inc. -- Analyst

Thank you. Can you talk about the higher customer attrition related to the Boyd's business? And specifically kind of what changed from the customer perspective in the quarter relative to kind of your actions?

David Robson -- Treasurer and Chief Financial Officer

First, what I would say -- this is David -- which is we've integrated the Boyd's customers with our customers through the DSD network. So as part of the route optimization, we've seen higher attrition, both in our legacy DSD network, as well as Boyd's, and at this point, you can't really differentiate them. But I would say we're seeing cost savings come through and are committed from a long-term perspective that that efficiency is the right thing to do.

Marc Wiesenberger -- B. Riley FBR, Inc. -- Analyst

OK. And then I guess kind of following on that. The cadence of the efficiencies that you had expected kind of in the back half of fiscal '19 and then going into fiscal year '20, does that remain on track? Or do you have an updated kind of time line for those synergies to materialize?

David Robson -- Treasurer and Chief Financial Officer

No, no change in those. If you saw in the current quarter, we saw some of the leverage of our SG&A cost come in more favorable, and we're on that time line that we committed to when we rolled this out.

Marc Wiesenberger -- B. Riley FBR, Inc. -- Analyst

OK. Great. And then last quarter, you had an elevated level of installations. I think it was 1,500-plus. Why didn't that translate into some better results in the DSD business? And what can you do going forward to kind of make sure -- or hopefully put you in a better position that those installations will translate to better performance in a shorter period of time?

David Robson -- Treasurer and Chief Financial Officer

Yes. I'd start off by saying some of these installations that we did last quarter and in the first quarter were some pretty large, significant wins for us. And so for a long-term perspective, we think those are valuable customers to have and they're going to ramp over time. But predicting the quarter that they start to ramp is hard to do, but we're pretty happy with the customers we've won.

I would say that the attrition is higher than we'd like. So you did see that we're not getting a net growth in customers, and that's really where our focus is to drive new incremental wins.

Marc Wiesenberger -- B. Riley FBR, Inc. -- Analyst

Understood. And last one for me. Where do we stand with some of the large direct ship customers that were in the pipeline? And I know you talked about they're getting qualified. And any updated timetable on when they will be on-boarded and -- in the system?

David Robson -- Treasurer and Chief Financial Officer

Well, you can see that we talked about in our remarks that the one large customer is up and running, and so we saw some growth modest but some growth in the current quarter, and we expect that to increase in the fourth quarter. The second large customer we've been talking about for a while, we're continuing to work through the on-boarding and qualification process. That said, in the guidance we gave, we're taking a conservative approach, so we're not contemplating the addition of that customer in our fiscal '19 numbers.

Marc Wiesenberger -- B. Riley FBR, Inc. -- Analyst

Great. Thank you very much.

Operator

[Operator instructions] And our next question comes from Gerry Sweeney with Roth Capital. Your line is open.

Gerry Sweeney -- ROTH Capital Partners -- Analyst

Hey, gentlemen, thanks for taking my call. Not sure if this is too early to ask, but I mean you talked about becoming proactive on the DSD issues. Is there anything you can discuss that you started to implement, some major or lower hanging fruit that you think can be corrected sooner rather than later? Just a little bit of detail around -- on that front if possible.

David Robson -- Treasurer and Chief Financial Officer

Well, Gerry, it's an ongoing process, but I would say is we're committed to the strategy that we have and we're adding on incremental resources both between the channel and the street sales organization and trying to get the optimal balance. And so I think as you look forward in the future quarters, we're going to get that right.

Gerry Sweeney -- ROTH Capital Partners -- Analyst

On that front, again, I would hate to ask this question but I think it needs to be done. But on the DSD side, obviously, you think you have the right plan in place. Is there any changes that you made in leadership within that segment down a couple layers that maybe someone wasn't executing? Or is something that needs to be changed, etc.? Any commentary on that front?

David Robson -- Treasurer and Chief Financial Officer

I don't want to comment on lower-level leadership changes in the organization, but I would say we are rebalancing where the team is focused both from individual performers, whether they're channel sales or street sales or large national accounts to drive more productivity because we were not happy with the attrition rate we've seen in our DSD network and taking actions to change that.

Gerry Sweeney -- ROTH Capital Partners -- Analyst

And then also just final question on the DSD side. It sounded like you're obviously happy with the big installs. You had some, I think, colleges, hotels, etc., large amount of installs, but it sounded like there was a disconnect between they won the business, they were installing it, but they weren't necessarily able to backfill with additional business. So a little bit of disconnect between sort of I guess doing both selling and installing at the same time.

Is this -- is that sort of what I heard on the commentary?

David Robson -- Treasurer and Chief Financial Officer

Yes, I think there's a pretty significant on-boarding process for some of these very major channel customers we won. But I would say is most of those larger installations are now complete, so now we're reinforcing our focus on further building out the pipeline. But it clearly was a lot of work both on our equipment installation team, as well as our sales team to get it right.

Gerry Sweeney -- ROTH Capital Partners -- Analyst

OK. And then last one, I promise the last one. Do they have a similar sort of -- on the direct ship, you win the business. You get qualified, and then the customer runs down their inventory.

Then at some point, they start bringing your inventory on. Is that the same sort of process on the DSD side but maybe in a smaller sort of footprint or smaller type of volume?

David Robson -- Treasurer and Chief Financial Officer

Well, I would say that's true, and I would say the other level of complexity that takes time is we install equipment over multiple locations and multiple territories. And so that's sequence based on what the customer's time frame is. And so it takes -- like national accounts, there's a reason that takes a period of time for that to ramp up because you don't install that equipment overnight.

Gerry Sweeney -- ROTH Capital Partners -- Analyst

Got it. That makes sense. I appreciate it, David. Thank you.

David Robson -- Treasurer and Chief Financial Officer

Thanks, Gerry.

Operator

Thank you. And I'm showing no further questions. I would like to turn the call back to Mr. Chris Mottern for any closing remarks.

Chris Mottern -- Interim Chief Executive Officer

Thank you. I just want to close the call by restating that my feeling is that Farmer Brothers has a strong platform for growth, and our long-term view of the industry and prospects for company -- for our company remains positive. However, we have invested a lot in resources and people, and we haven't achieved what we wanted to achieve today. So as we move forward, our entire team will be operating with a sense of urgency to address the issues experienced in the quarter and drive improved results.

So thank you for joining us today and for your continued interest and support of Farmer Brothers.

Operator

[Operator signoff]

Duration: 32 minutes

Call participants:

Unknown speaker

Chris Mottern -- Interim Chief Executive Officer

David Robson -- Treasurer and Chief Financial Officer

Marc Wiesenberger -- B. Riley FBR, Inc. -- Analyst

Gerry Sweeney -- ROTH Capital Partners -- Analyst


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    Boeing on Wednesday reported a surprise loss in the fourth quarter, as the company struggled to contain the fallout from the grounding of its flagship 737 MAX plane, which shows no signs of taking to the skies again anytime soon. The grounded 737 MAX plane — which has idled on runways for nearly a year in the wake of two fatal crashes — bled over $1 billion from the company's bottom line in Q4, and gave Boeing its first annual loss in over 20 years. The controversy forced Boeing to oust Dennis Muilenburg as its CEO last month, and the company still has no concrete timetable for when the plane can fly again.

  • ‘He owed a lot of back taxes.’ My ex-husband forgot to sign paperwork to split a sizable investment account — then he died suddenly. Can his estate claim that money?
    Business
    MarketWatch

    ‘He owed a lot of back taxes.’ My ex-husband forgot to sign paperwork to split a sizable investment account — then he died suddenly. Can his estate claim that money?

    Dear Moneyist, I divorced a little over a year ago, and my ex-husband died suddenly. One of our investment accounts was ordered to be split $30,000/$60,000, as per our divorce agreement. I signed my paperwork, but he never got around to it.

  • Witnesses describe Bryant helicopter crash
    News
    Associated Press Videos

    Witnesses describe Bryant helicopter crash

    A witness says the helicopter crash that killed nine people including former NBA star Kobe Bryant in Calabasas, California on Sunday sounded like 'a big thud. Jan.

  • Business
    MarketWatch

    Chesapeake Energy's stock bounces sharply off 26-year low after production update

    Shares of Chesapeake Energy Corp. (chk) soared 8.3% in premarket trading Wednesday, to bounce off the previous session's 26-year low, after the oil and gas company provided a preliminary fourth-quarter production update. The company said its average estimated equivalent production of 476,000 to 478,000 barrels of oil equivalent (boe) per day, up from average daily production of 464,000 boe, but below the FactSet consensus of 484,300 boe. The average estimated oil production range is 125,000 to 126,000 barrels of oil per day.

  • Army won't wait for Sikorsky, Boeing to catch up with Bell for big contract, official says
    Business
    American City Business Journals

    Army won't wait for Sikorsky, Boeing to catch up with Bell for big contract, official says

    The U.S. Army made it clear it won't wait for Sikorsky and Boeing to catch up to Bell as the companies jostle for a lucrative contract. Fort Worth-based Bell with its V-280 Valor tiltrotor aircraft is going up against the SB 1 DEFIANT helicopter made by Sikorsky, part of Lockheed Martin Corp. NYSE: LMT), and Boeing Co. (NYSE: BA).

  • Boeing Reports Stunning Q4 Loss As 737 Max Costs Double; Stock Jumps
    Business
    Investor's Business Daily

    Boeing Reports Stunning Q4 Loss As 737 Max Costs Double; Stock Jumps

    Estimates: Analysts see Boeing's earnings falling 68.4% to $1.73 per share with revenue down 23.5% to $21.67 billion. Earlier this month, Boeing announced it delivered just 79 commercial aircraft in Q4, down 67% from a year ago. Results: Core operating losses of $2.33 per share on revenue of $17.91 billion.

  • Business
    Barrons.com

    Boeing Just Reported a Massive Loss. Why Its Stock Is Gaining.

    Results are still dominated by the financial pain from the grounding of the 737 MAX last March following two deadly crashes inside of five months. Boeing stock, in fact, is up in premarket trading. Last year, before the MAX was grounded, Boeing earned $5.48 a share from $28.3 billion in fourth-quarter sales.

  • Business
    Barrons.com

    AT&T’s Earnings Hit the Stock. Focus on the 3-Year Plan.

    Before the market opened, AT&T reported 89 cents in adjusted earnings per share for the fourth quarter, a penny ahead of analyst expectations and up from 86 cents a year earlier. Revenue came in at $46.8 billion, about equal to analysts' forecast and down from $48.0 billion in the year-earlier quarter. AT&T's adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda, fell to $14.4 billion, from $15 billion last year.

  • Typical Retirement Savings By Age Groups: Are Yours Bigger?
    Business
    Investor's Business Daily

    Typical Retirement Savings By Age Groups: Are Yours Bigger?

    Active savers — in this case, Americans who own an IRA and-or a 401(k) account in the custody of Fidelity Investments — had savings for retirement of $215,400 as of Sept. according to new data IBD has obtained from Fidelity. In contrast, the average for all working-age families is shockingly low.

  • Business
    Barrons.com

    GE Stock Beat Earnings. But This Is Why It’s Really Gaining.

    But fourth-quarter industrial free cash flow was $3.9 billion, way better than company guidance which implied about $2.5 billion in quarterly cash flow. For the full year, industrial free cash flow was $2.3 billion, higher than the upper end of management's guidance. It looks as if cash flow is trumping earnings.

  • Business
    Barrons.com

    Mastercard Beats Earnings Again. Here’s Why the Stock Is Falling.

    For 2020, Mastercard expects percentage growth in revenue in the low teens, while operating expenses will climb by the “high end of high single digits” percentage points. Those both match Wall Streets' prior forecasts. We closed out 2019 on a strong note, with broad-based growth driven by solid execution of our strategy and leveraging our differentiated services offerings,” Mastercard CEO Ajay Banga said in the earnings release.

  • Microsoft's Q2 2020 earnings are all about the cloud, and a bit of controversy
    Business
    Yahoo Finance

    Microsoft's Q2 2020 earnings are all about the cloud, and a bit of controversy

    Microsoft is set to report its Q2 2020 earnings on Wednesday, and investors are expecting big things from the company's cloud business. This will also be the first report since Microsoft (MSFT) won the Department of Defense's controversial $10 billion Project JEDI contract, and it's sure to be a topic of discussion when CEO Satya Nadella addresses investors during the company's earnings call. Here are the big numbers analysts are expecting from the quarter, as compiled by Bloomberg, as well as how they compare to Microsoft's performance during the same quarter last year.