Two very solid reports this mornings, one from a name in the portfolio, and one we recently sold out of due to a poor chart.
***********Jacobs Engineering (JEC)
posted 45% growth in earnings, up to $0.80 (vs expectation of $0.77) on revenue growth of 27% which was in line with expectations. Backlog, one of my favorite measures in this sector, increased another $5.5 Billion or 51% year over year, to a $16.2 Billion level. This equates to over a year and a half of business. Guidance was increased a bit from $2.95-$3.25 to $3.00-$3.30, compared to analysts $3.16. This is not the cheapest of the infrastructure stocks, but a very reliable company.
***********Millicom International Cellular (MICC) also posted very good results
and the stock is up 7% in premarket. I had sold the last of this position a few weeks ago (Apr 8: Bookkeeping: Closing Million International Cellular
), since like Google, it was acting badly in a recovering market - but like Google the chart was a bad tell. On the bright side it indicates the fundamental work on this name was good, when even stocks we sell off are performing well.
Long Jacobs Engineering in fund and personal account
- Emerging markets telecom firm Millicom International (MICC) posted first-quarter core earnings in line with expectations on Tuesday and added 2.8 million new subscribers in the period, boosting its shares.
- "Millicom recorded the second best quarter in its history in terms of net subscriber additions, adding 2.8 million in the quarter, following the exceptional final quarter of 2007," its Chief Executive Marc Beuls said in a statement.
- The company added 3.4 million subscribers in the fourth quarter of 2007 and the increase in the first three months of the year brought the total number of subscribers to 26.2 million at the end of March, up 59 percent from a year earlier.
- "Subscriber growth is really impressive and sales in Africa have picked up speed," said Bengt Molleryd, analyst at Handelsbanken.
- The biggest growth in subscribers in the first quarter came in Honduras, Ghana and Tanzania, Millicom said.
- The company, which operates in 16 countries in Latin America, Africa and Asia, plans to invest over $1a billion this year.
- Millicom said, however, it would see a gradual decline in average revenues per user (ARPU) as it continues to target customers with lower disposable income. ARPU was $12.7 in the first quarter against $13.9 in the preceding three months.
- "ARPU is a bit worrying, but it is a natural process that it will fall and I think that they can compensate for it as they continue to grow," said Urban Ekelund, analyst at Redeye. Millicom said that although ARPU would fall, higher volumes will bring economies of scale, helping EBITDA margins.