PG: Financial Gauge Analysis for the September 2010 Quarter

Procter & Gamble (NYSE: PG) earned $1.02 per diluted share on a GAAP basis in the September-ending first quarter of fiscal 2011, down 4.2 percent from $1.06 in the same three months of last year.

Core earnings, a non-GAAP measure that excludes certain items and discontinued operations, rose from $0.97 to $1.02 per share.

A previous article examined in some detail P&G's Income Statement for the September quarter.  Reported earnings were $0.06 more than our $0.96 EPS estimate.

We have now updated the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.  This post reports on the metrics for P&G and the associated financial gauge scores.  The metrics were calculated using data from P&G's current and historical financial statements, including those in the latest 10-Q report.


Before getting into the details, we will take a step back to introduce the subject of today's analysis.

Procter & Gamble creates and markets many well-known Household and Personal products to customers around the world.  The company, based in Cincinnati, traces its roots back to 1837.

P&G reported Net Income of $12.7 billion ($10.9 billion from continuing operations) on Net Sales of $78.9 billion in fiscal 2010, which ended in June.

The company's market value is currently about $190 billion on a fully diluted basis, which makes P&G one of the ten most-valuable U.S. corporations.

Having raised its dividend for 54 consecutive years, P&G has certainly earned its place on the list of S&P 500 Dividend Aristocrats.  P&G is also number 6 on Fortune Magazine's 2010 list of the World's Most Admired Companies.

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MSFT: Financial Gauge Analysis for the September 2010 Quarter

Microsoft (NASDAQ: MSFT) earned $0.62 per diluted share on a GAAP basis in the September-ending first quarter of fiscal 2011, up 56 percent from $0.40 in the same three months of last year. 

A previous article examined in some detail Microsoft's Income Statement for the September quarter.  Reported earnings were $0.06 more than our $0.56 EPS estimate.

We have now updated the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.  This post reports on the metrics for Microsoft and the associated financial gauge scores.  The metrics were calculated using data from Microsoft's current and historical financial statements, including those in the company's latest 10-Q report.

Before getting into the details, we will take a step back to introduce the subject of today's analysis.

Microsoft develops and sells the operating system software that runs on more than 90 percent of personal computers.  It also has dominant application software and server software franchises.  In addition, the company provides various online services, such as the Bing search engine and online advertising.  Microsoft also sells video game consoles, entertainment devices, and computer peripherals.

Net Income in fiscal 2010 was $18.8 billion, up nearly 30 percent from the prior year.  Revenue increased 7 percent, from $58.4 billion in 2008 to $62.5 billion. 

The company's market value is presently near $220 billion.

Microsoft is organized into five operating segments: Windows and Windows Live, Server and Tools, Online Services, Microsoft Business, and Entertainment and Devices.  The Business Division contributed the most Revenue ($18.9 billion) in 2010, but the Windows Division produced slightly more Operating Income ($12.1 billion).  Online Services lost $2.4 billion.  Server and Tools did well with Operating Income of $5.0 billion.

A significant proportion of the Windows segment's Revenue is due to the sale of new personal computers on which the equipment manufacturer has installed a version of the company's software.  It is, therefore, dependent on the number of personal computers shipped.

With Office 2010 and other products, Microsoft is taking initial steps towards cloud computing to counter competitive threats from Google and others.

Additional background information about Microsoft and the business environment in which it is currently operating can be found in the look-ahead.

In summary, Microsoft's latest quarterly results produced the following changes to the gauge scores:

• Cash Management: 20 of 25 (unchanged from June)
• Growth: 14 of 25 (up from 13)
• Profitability: 20 of 25 (up from 19)
• Value: 17 of 25 (up from 16)

• Overall: 72 of 100 (up from 69)

The current and historical values for the financial metrics that determine the gauge scores are listed below, with some brief commentary.  Readers are encouraged to verify these figures and calculate others as they see fit using the filings available at the SEC's web site and elsewhere.

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NOK: Financial Gauge Analysis for the September 2010 Quarter

Nokia Corp. (NYSE: NOK and HEL:NOK1V) earned €0.14 per diluted share on an IFRS basis in the September-ending third quarter of 2010, up from a loss of €0.15 per share in the same quarter of 2009. 

The loss in the year-earlier quarter was primarily the result of Nokia writing off €900 million of intangible assets.

A previous article examined in some detail Nokia's Income Statement for the September quarter.  Reported earnings doubled the €0.07 per share we had forecast.

We have now updated the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.  This post reports on the metrics for Nokia and the associated financial gauge scores.  The metrics were calculated using data from Nokia's current and historical financial statements.

Before getting into the details, we will take one step back to introduce the subject of today's analysis.

A Finnish company with a rich history, Nokia Corporation has been the leading global producer of mobile phones since 1998.  The company also sells the network infrastructure that supports these phones. 

Nokia's annual profit fell from €4.0 billion in 2008 to €891 million in 2009.  Net Sales dropped from €50.7 billion in 2008 to €41.0 billion in 2009. 

Global economic weakness certainly had a negative effect.  However, Nokia's most visible problem has been its inability to stem the success of Apple's (NASDAQ: AAPL) iPhone, which was first introduced in 2007.  The Blackberry product line sold by Research in Motion (NASDAQ: RIMM) and, more recently, smartphones based on the Android architecture promoted by Google (NASDAQ: GOOG) have also become popular at Nokia's expense. 

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INTC: Financial Gauge Analysis for the September 2010 Quarter

Intel (NASDAQ: INTC) earned $0.52 per diluted share on a GAAP basis in the 25 September-ending third quarter of fiscal 2010, up 57 percent from $0.33 in the same three months of last year.

A previous article examined in some detail Intel's Income Statement for the September quarter.  Reported earnings were $0.02 more than our $0.50 EPS estimate.

We have now updated the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.  This post reports on the metrics for Intel and the associated financial gauge scores.  The metrics were calculated using data from Intel's current and historical financial statements, including those in the 10-Q filed on 2 November 2010.


Before getting into the details, we will take one step back to introduce the subject of today's analysis.

Intel Corporation is the foremost manufacturer of integrated circuits for computers.  In fiscal 2009, Intel had Net Income of $4.37 billion ($0.77 per share), down 17 percent from $5.29 billion ($0.92 per share) in the previous year.  Revenue slipped 6.5 percent, from $37.6 billion to $35.1 billion.

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HD: Income Statement Analysis for the October 2010 Quarter

The Home Depot, Inc. (NYSE: HD) earned $0.51 per diluted share on a GAAP basis in the October-ending third quarter of fiscal 2010, up 24.5 percent from $0.41 in the same three months of last year. 

This post examines Home Depot's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates.  Reported earnings were $0.04 better than the $0.47 per share we had forecast.

The principal sources for this income statement analysis were the earnings announcement and the ensuing conference call (transcript available from Seeking Alpha).

In a second article, we will report Home Depot's scores as measured by the GCFR financial gauges.  The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.


Before getting into the details, we will take a step back to introduce the subject of today's analysis.

The Home Depot, Inc. (NYSE: HD) is the largest retailer of do-it-yourself merchandise, which includes building materials, home improvement supplies, and lawn and garden products.  The company has 2,244 retail stores, of which 88 percent are in U.S. states or territories.  Home Depot also operates in Canada, China, and Mexico.

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WMT: Income Statement Analysis for the October 2010 Quarter

Wal-Mart Stores (NYSE: WMT) earned $0.95 per diluted share on a GAAP basis in the October-ending third quarter of fiscal 2011, up 16 percent from $0.81 in the same three months of last year. 

A special tax benefit of $0.05 per share lifted reported earnings.  With this benefit excluded, earnings were close to $0.90 per share and were consistent with Walmart's guidance, issued last August, to expect diluted EPS from continuing operations between $0.87 to $0.91.

This post examines Walmart's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates.  Adjusted earnings nearly matched the $0.90 per share we had forecast. 

The principal sources for this income statement analysis were the earnings announcement and the transcript [pdf] of management's pre-recorded review of the quarter.

In a second article, we will report Walmart's scores as measured by the GCFR financial gauges.  The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.

Before getting into the details, we will take a step back to introduce the subject of today's analysis.

Retailing behemoth Wal-Mart Stores, Inc., earned over $14 billion on net sales of $405 billion in fiscal 2010, which concluded last January.  The Revenue figure, along with a drop in energy prices, enabled Walmart to regain from Exxon Mobil (NYSE: XOM) the top position on the Fortune 500 list of America's largest corporations. 

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PRGN: Income Statement Analysis for the September 2010 Quarter

Paragon Shipping, Inc., (NYSE: PRGN) earned $0.08 per diluted share on a GAAP basis in the September-ending third quarter of 2010, down almost 80 percent from $0.40 in the same three months of last year.

Adjusted earnings per share, a non-GAAP measure that excludes various non-cash items, sank from $0.33 to $0.17.

This post reviews Paragon's Income Statement for the quarter.  We did not issue any estimates in advance of the actual results being released.  The principal sources for the analysis were the earnings announcement and management's published discussion and analysis.

In a second article, we will provide updated figures for the financial metrics we use to analyze Cash Management, Growth, Profitability and Value.


Before getting into the details, we will take a step back to introduce the subject of today's analysis.

Paragon Shipping owns and charters ships that carry dry bulk cargoes and, now, containers.  The company is headquartered in Greece and has been operating since December 2006.  Paragon generally seeks to secure one-to-five year, fixed-rate charters for its vessels; this strategy dampens the effect of industry volatility on the company.  Paragon has already secured charters for 98 percent of its fleet capacity in 2011.

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NVDA: Income Statement Analysis for the October 2010 Quarter

NVIDIA (NASDAQ: NVDA) earned $0.15 per diluted share on a GAAP basis in the October-ending third quarter of fiscal 2011, down 22 percent from $0.19 in the same three months of last year. 

The earlier period benefited from a $24 million insurance settlement.  Excluding this special item, earnings per share in the October 2009 quarter were $0.13 per share.  In other words, earnings per share on a non-GAAP basis increased from $0.13 last year to $0.15 in the most recent quarter.

This post examines NVIDIA's Income Statement for the latest quarter and compares the entries on each line to the "look-ahead" estimates.  Reported GAAP earnings were $0.01 better than the $0.14 per share we had forecast. 

The principal sources for the income statement analysis were the earnings announcement, the Chief Financial Officer's commentary [pdf], and the conference call transcript (available from Seeking Alpha).

In a second article, we will report NVIDIA's scores as measured by the GCFR financial gauges.  The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.


Before getting into the details, we will take a step back to introduce the subject of today's analysis.

NVIDIA sells powerful Graphics Processing Units that rapidly perform the huge numbers of calculations required to produce hyper-realistic images for computers and video games.

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CSCO: Income Statement Analysis for the October 2010 Quarter

Cisco Systems (NASDAQ: CSCO) earned $0.34 per diluted share on a GAAP basis in the October-ending first quarter of fiscal 2011, up 12 percent from $0.30 in the same three months of last year. 

Non-GAAP earnings rose 17 percent, from $0.36 to $0.42 per share.  The non-GAAP results exclude items such as share-based compensation, amortization of acquisition-related intangible assets, and other acquisition-related expenses.  In the latest quarter, these non-GAAP items totaled $666 million pretax, $481 million ($0.08 per share) after-tax.

This post examines Cisco's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates.  Reported GAAP earnings were $0.02 less than the $0.36 per share we had forecast. 

The principal sources for the income statement analysis were the earnings announcement and the ensuing conference call presentation [pdf] (transcript made available by Seeking Alpha).

In a second article, we will report Cisco Systems' scores as measured by the GCFR financial gauges.  The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.


Before getting into the details, we will take a step back to introduce the subject of today's analysis.

Cisco Systems, Inc., the proud plumber of the Internet, has a dominant role in markets for enterprise networking products and services. 

Cisco's earnings rose 27 percent in fiscal 2010, which ended in July, from $6.13 billion to $7.77 billion.  Revenue increased 11 percent, from $36.1 billion to $40.0 billion.  Fiscal 2010 included a 53rd week.

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KG: Income Statement Analysis for the September 2010 Quarter

King Pharmaceuticals (NYSE: KG) earned $0.16 per diluted share on a GAAP basis in the September-ending third quarter of 2010, down 8.6 percent from $0.19 in the same three months of last year. 

After the quarter ended, King agreed to be acquired by Pfizer (NYSE: PFE).

This post examines King's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates.  Reported GAAP earnings were $0.05 more than the $0.11 per share we had forecast.

The principal source for this income statement analysis was the 10-Q report filed by King on 5 November 2010.

King Pharmaceuticals, headquartered in Bristol, TN, manufactures and sells various brand-name prescription pharmaceuticals and other products.  Background information about King can be found in the look-ahead.

Because of the acquisition, we won't bother to calculate King's scores as measured by the GCFR financial gauges. 

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BR: Income Statement Analysis for the September 2010 Quarter

Broadridge Financial (NYSE: BR) earned $0.10 per diluted share on a GAAP basis in the September-ending first quarter of fiscal 2011, down 45 percent from $0.19 in the same three months of last year. 

The earlier results benefited from non-recurring activities, which make the latest quarter appear especially weak.

This post examines Broadridge's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates.  Reported earnings were $0.08 per share lower than the $0.18 we had forecast.

The principal sources for this income statement analysis were the earnings announcement, the conference call presentation, the call transcript (available from Seeking Alpha), and the formal 10-Q report.

In a second article, we will report Broadridge's scores as measured by the GCFR financial gauges.  The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.


Before getting into the details, we will take a step back to introduce the subject of today's analysis.

Broadridge Financial Solutions, Inc., (NYSE: BR) provides brokerage and other services to financial companies.

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WPI: Income Statement Analysis for the September 2010 Quarter

Watson Pharmaceuticals, Inc. (NYSE: WPI) earned $0.21 per diluted share on a GAAP basis in the September-ending third quarter of 2010, down approximately 60 percent from $0.54 in the same three months of last year. 

The most recent quarter included a nearly $90 million charge related to a legal settlement involving drug pricing.  Excluding certain non-cash items in both periods, adjusted earnings per share rose 9 percent, from $0.78 to $0.85.

This post examines Watson's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates.  Reported earnings were far less than the $0.59 per share we had forecast.  Adjusted cash earnings beat our $0.83 estimate by $0.02 per share.

The principal sources for this income statement analysis were the earnings announcement and the ensuing conference call (transcript available from Seeking Alpha).  Please note that products obtained when Watson acquired Arrow Group in December 2009 boosted the 2010 results but are not reflected in the 2009 figures.

In a second article, we will report Watson's scores as measured by the GCFR financial gauges.  The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.


Before getting into the details, we will take a step back to introduce the subject of today's analysis.

Watson Pharmaceuticals, Inc., produces and distributes generic and, to a lesser extent, branded pharmaceuticals.  Watson earned $222 million in 2009, down from $238 million in 2009.  Revenue increased from $2.5 billion to $2.8 billion.

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TDW: Income Statement Analysis for the September 2010 Quarter

Tidewater (NYSE: TDW) earned $0.38 per diluted share on a GAAP basis in the September-ending second quarter of fiscal 2011, down 80 percent from $1.90 in the same three months of last year.

The earnings decline was approximately 70 percent if last year's $34.4 million ($0.66 per share) favorable resolution to tax litigation is excluded.

The latest results were consistent with Tidewater's pre-announcement on 25 October 2010 that earnings would be between $0.35 and $0.40 per share, which was well below consensus estimates at the time.

This post examines Tidewater's Income Statement for the latest quarter and compares the entries on each line to our "look-ahead" estimates.  Reported earnings, for reasons explained below, were $0.19 less than our $0.57 EPS estimate.

The principal sources for this review were the earnings announcement, the conference call, and the formal 10-Q report.

In a second article, we will report Tidewater's scores as measured by the GCFR financial gauges.  The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.


Before getting into the details, we will take a step back to introduce the subject of today's analysis.

Tidewater owns the world's largest fleet of vessels serving the global offshore energy industry in exploration, field development, and production.  Headquartered in New Orleans for more than 50 years, Tidewater first serviced drillers in the Gulf of Mexico. 

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BP: Income Statement Analysis for the September 2010 Quarter

BP (NYSE: BP) earned $0.56 per diluted ADS in the September-ending third quarter of 2010, down 67 percent from $1.69 in the same three months of last year.

In the most recent quarter, BP recorded a charge of $7.656 billion ($5.052 billion after taxes) for expenses related to the tragic explosion and oil spill in the Gulf of Mexico on 20 April 2010.  Excluding the charge, BP earned about $2.16 per ADS in the September 2010 quarter, 27 percent more than last year.

This post examines BP's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates.  Because the special charge was far greater than we anticipated, reported earnings were $0.93 less than our $1.49 EPS estimate.

The principal sources for the income statement analysis were the earnings announcement and ensuing the conference call transcript [pdf] and presentation [pdf].

In a second article, we will report BP's scores as measured by the GCFR financial gauges.  The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value. 


Before getting into the details, we will take a step back to introduce the subject of today's analysis.

BP p.l.c. is a major Integrated Oil and Gas firm.  Formerly known as British Petroleum, BP became a behemoth by merging with Amoco in 1998 and acquiring Arco soon thereafter.

Headquartered in London, BP has worldwide interests.  The company operates Alaskan oil fields and pipelines, and it had become the "largest producer in the Gulf of Mexico."  BP also owns 50 percent of the TNK-BP joint venture with Russian partners.

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EIX: Income Statement Analysis for the September 2010 Quarter

Edison International (NYSE: EIX) earned $1.56 per diluted share on a GAAP basis in the September-ending third quarter of 2010, up 27 percent from $1.22 in the same three months of last year. 

When compared to the other quarters of the year, Edison's earnings are nearly always highest in September.

An $0.11 per share benefit related to a tax settlement gave an added boost to reported earnings in the most recent quarter.  "Core" earnings, a non-GAAP measure that excludes special items, were strong without the extra lift, rising from $1.09 to $1.46 per share.

This post examines Edison's Income Statement for the quarter and compares the entries on each line to our "look-ahead" estimates.  Reported and core earnings both surpassed our $1.22 EPS estimate.

The principal sources for this income statement analysis were the earnings announcement, the formal 10-Q, the conference call presentation, and the call transcript.  The latter is made available by Seeking Alpha.

In a second article, we will report Edison's scores as measured by the GCFR financial gauges.  The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management, Growth, Profitability and Value.


Before getting into the details, we will take a step back to introduce the subject of today's analysis.

Edison International is the parent of Southern California Edison and Edison Mission Group.  SCE, which traces its roots back to 1886, operates a regulated electric utility serving commercial and residential consumers in central, coastal and southern California.  SCE contributed more than 80 percent of Edison's revenue in 2009.  

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