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Need to Know
![This overlooked stock in an increasingly hot sector is ready to bust out]()
Chipotle shares surge more than 10% as profit sweeps past estimates
Shares of Chipotle Mexican Grill Inc. soared more than 10% late Wednesday after the fast-casual restaurant chain posted a first-quarter profit above Wall Street expectations, and said its same-store sales rose 2.2%. Chipotle said it had net income of $59.4 million, or $2.13 a share, in the quarter, up from $46.1 million, or $1.60 a share, in the year-earlier period. Sales rose 7% to $1.1 billion, thanks to new-restaurant openings and to a lesser extent to the increase in comparable-restaurant sales, the company said. Chipotle pinned the same-restaurant sales increase to an increase in its average check, including a 4.9% benefit from menu price increases that have been taken hold in almost all of its restaurants in the past year. Food costs were 32.4% of revenue, a decrease of 140 basis points as compared with the first quarter of 2017, the company said. The FactSet consensus was for EPS of $1.57 and sales of $1.1 billion. For 2018, the company is now expecting same-restaurant sales in the low single-digits, and plans 130 to 150 new store openings. Shares have fallen 28% in the last 12 months, while the S&P 500 has gained 11%.
EBay's stock sinks after in line profit, and slight miss on revenue
Shares of eBay Inc. sank 2.9% in after-hours trade Wednesday, after the online marketplace reported and in-line profit and revenue that came up a bit shy, and provided a somewhat downbeat outlook. Net income fell to $407 million, or 40 cents a share, from $1.04 billion, or 94 cents a share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share came to 53 cents, matching the FactSet consensus. Revenue rose to $2.58 billion from $2.30 billion, but missed the FactSet consensus of $2.59 billion, as marketplace revenue growth of 11% to $1.79 billion was shy of the FactSet consensus of $1.82 billion but the StubHub revenue rise of 12% to $231 million topped expectations of $227 million. Gross merchandise volume increased 13% to $23.6 billion, above the FactSet consensus of $23.1 billion. Looking ahead, the company expects second-quarter adjusted EPS of 52 cents, compared with expectations of 52 cents, and revenue of $2.64 billion to $2.68 billion, compared with expectations of $2.68 billion. EBay affirmed its full-year profit and revenue outlook. The stock has climbed 8.6% year to date through Wednesday's regular session close, while the S&P 500 has slipped 1.3%.
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Personal finance
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Fewer single mothers in U.S. as number of unmarried couples soars
New data from the Pew Research Center says the nuclear family has seen some dramatic changes.
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A brush with death leads to a new career
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Inside MarketWatch
American Airlines shares slide 4% after revenue falls slightly short of estimates
American Airlines Group Inc. shares slid 4% in premarket trade Thursday, after the company's first-quarter revenue fell slightly short of estimates. The air carrier said it had net income of $186 million, or 39 cents a share, in the quarter, down from $340 million, or 67 cents a share, in the year-earlier period. Adjusted per-share earnings came to 75 cents, ahead of the FactSet consensus of 73 cents. Revenue rose to $10.401 billion from 49.820 billion, just below the FactSet consensus of $10.409 billion. Passenger revenue per available seat mile (PRASM) grew in all geographic regions, with notable strength in Latin America, the company said in a statement. Operating costs rose 9.8% to $10 billion, driven by a 25.7% rise in fuel costs. The company is now expecting second-quarter total revenue per available seat mile to rise 1.5% to 3.5%. It expects 2018 adjusted EPS of $5.00 to $6.00, compared with a current FactSet consensus of $5.76. Shares are down 2.5% in the last 12 months, while the S&P 500 has gained 11%.
AbbVie shares rise 3% on Q1 profit, revenue beats and $7.5 billion share buyback
AbbVie Inc. shares rose nearly 3% in premarket trade Thursday after the company reported first-quarter profit and revenue beats and announced plans to buy back up to $7.5 billion in shares. Earnings for the latest quarter rose to $2.78 billion, or $1.74 per share, from $1.71 billion, or $1.06 per share in the year-earlier period. Adjusted earnings-per-share were $1.87, compared with the FactSet consensus of $1.79. Revenue rose to $7.93 billion from $6.54 billion, compared with the FactSet consensus of $7.60 billion. Humira, Imbruvica, Lupron, Creon, Synagis, AndroGel, Duodopa and Sevoflurane sales came in above consensus, while Synthroid and Kaletra sales missed the FactSet consensus. AbbVie also raised its adjusted EPS forecast for 2018 from $7.33 to $7.43 to $7.66 to $7.76. The company also plans to buy back up to $7.5 billion in shares, part of a previously-announced $10 billion share buyback program announced earlier this year, and which it expects to begin as early as May 1. AbbVie shares have plummeted 25% over the last three months, compared with an 8% drop in the S&P 500 and a 9.5% drop in the Dow Jones Industrial Average .
Time Warner earnings beat expectations, but Warner Bros. revenue slips
Time Warner Inc. reported first-quarter net income of $1.64 billion, or $2.07 per share, up from $1.42 billion, or $1.80, for the same period last year. Adjusted EPS was $2.28. Revenue was $8.0 billion, up from $7.7 billion year-over-year. The FactSet consensus was for EPS of $1.74 and revenue of $7.92 billion. Revenue rose at the Turner and Home Box Office (HBO) divisions, but slipped in the Warner Bros. division. The company attributed the Warner Bros. decline to lower television and theatrical revenue. "Theatrical revenues decreased due to the mix and timing of releases, as the prior year quarter included the releases of 'Kong: Skull Island' and 'The LEGO Batman Movie' compared to the late quarter release of 'Ready Player One' in the current year, the release said. TNT's "The Alienist" was the top new cable drama, according to a statement by Chief Executive Jeff Bewkes, TBS' "The Last O.G." was the top cable comedy, and "Ready Player One" was the studio's highest-grossing film ever in China. Time Warner shares are down 1% in Thursday premarket trading, but are up 5.3% for the year to date. The S&P 500 index is down 1.3% for 2018 so far.
Altria earnings beat even as cigarette sales decline further
Altria Group Inc. on Thursday reported earnings that beat analyst expectations. Net income of $1.9 billion was up from $1.4 billion a year ago. Per-share earnings were $1.00, versus 72 cents a year ago. The FactSet consensus was for EPS of 95 cents. Revenues in the quarter came to $6.11 billion, versus $6.08 billion a year ago. The company, which is the parent of Philip Morris and other brands, said domestic cigarette shipment volumes declined 4.2%. Shares have lost 22% for the year to date, while the S&P 500 [S: spx] has lost 1.5%.
PepsiCo's stock gains as profit and sales beat expectations
PepsiCo Inc. reported Thursday first-quarter net income that rose to $1.34 billion, or 94 cents a share, from $1.32 billion, or 91 cents a share, in the same period a year ago. Excluding non-recurring items, the beverage and snack giant said core earnings per share came to 96 cents, above the FactSet consensus of 93 cents. The stock edged up 0.8% in premarket trade. Revenue rose 4% to $12.56 billion, above expectations of $12.38 billion, according to FactSet, as Frito-Lay North America sales growth of 3% to $3.62 billion missed expectations of $3.64 billion but the North America beverages sales decline of 1% to $4.42 billion beat expectations of $4.36 billion. The company said its Frito-Lay, beverages and Quaker Foods business were negatively impacted by cost inflation and higher material costs. Looking ahead, PepsiCo said it expects core EPS growth of 9% to $5.70, compared with the FactSet consensus of $5.71. The stock has tumbled 15.7% year to date through Wednesday, while the S&P 500 has slipped 1.3%.
