Aetna Board of Directors Authorizes Additional Share Repurchases
HARTFORD, Conn.--(BUSINESS WIRE)--Feb. 27, 2009-- Aetna Inc. (NYSE: AET) today announced that its Board of Directors has authorized the company to repurchase from time to time up to $750 million of its common stock.
The company intends to continue buying shares in the open market from time to time. At December 31, 2008, Aetna had approximately 456 million shares outstanding.
Friday, February 27, 2009
How The Government Spends Your Money
U.S. Department of Labor announces nearly $524,000 grant to assist workers in Idaho affected by natural resource industry layoffs
U.S. Department of Labor announces $500,000 grant to assist workers in Louisiana affected by paper industry layoffs
U.S. Department of Labor announces grant exceeding $880,000 to assist gaming industry workers in Connecticut affected by layoffs
U.S. Department of Labor announces grant exceeding $2 million to assist auto industry workers in Missouri
U.S. Department of Labor announces $22 million grant to assist Tri-State (NY, Conn, NJ) rank-and-file workers affected by financial industry layoffs
U.S. Department of Labor pays $100 million in benefits to Florida residents under Energy Employees Occupational Illness Compensation Program Act
U.S. Department of Labor announces $500,000 grant to assist workers in Louisiana affected by paper industry layoffs
U.S. Department of Labor announces grant exceeding $880,000 to assist gaming industry workers in Connecticut affected by layoffs
U.S. Department of Labor announces grant exceeding $2 million to assist auto industry workers in Missouri
U.S. Department of Labor announces $22 million grant to assist Tri-State (NY, Conn, NJ) rank-and-file workers affected by financial industry layoffs
U.S. Department of Labor pays $100 million in benefits to Florida residents under Energy Employees Occupational Illness Compensation Program Act
Thursday, February 26, 2009
Hanesbrands Inc. to Review Its Long-Term Growth Strategies
Hanesbrands is continuing to execute its core sell-more, spend-less and generate-cash strategies to manage through the economic recession and drive competitiveness.
Sell More Strategy. The company has major initiatives under way, including launching new programs, in core categories with its strongest and largest brands, including Hanes, Champion, Playtex and Bali. The company is using its brands to advance strategic partnerships with key retailers.
Spend Less Strategy. Hanesbrands is ahead of schedule in realigning its global supply chain in lower-cost countries, consolidating its organization and distribution network, and leveraging the collective size of its strategic purchasing organization.
Generate Cash. The company has consistent cash flow and is focused on reducing its debt leverage by using free cash flow to prepay debt over the next 12 to 24 months.
Capital Structure
Hanesbrands had $2.18 billion of long-term debt at the end of 2008. Since the time of its spinoff in September 2006, the company has paid down $423 million of long-term debt, including $139 million in 2008.
Hanesbrands ended the year with a covenant leverage ratio of 3.3 times debt to adjusted EBITDA, compared with the required limit of 3.75 times.
“We are in compliance with all debt covenants,” Hanesbrands Executive Vice President and Chief Financial Officer E. Lee Wyatt said. “Although we ended 2008 with a reasonable level of debt-covenant cushion, the uncertainty in the consumer and financial markets creates risk. Our projections indicate that we should remain compliant, but we have decided that amending our first lien credit agreement is the prudent course of action. We launched the amendment process yesterday, and we should be in a position to know the results of the amendment process in about two weeks.”
Sell More Strategy. The company has major initiatives under way, including launching new programs, in core categories with its strongest and largest brands, including Hanes, Champion, Playtex and Bali. The company is using its brands to advance strategic partnerships with key retailers.
Spend Less Strategy. Hanesbrands is ahead of schedule in realigning its global supply chain in lower-cost countries, consolidating its organization and distribution network, and leveraging the collective size of its strategic purchasing organization.
Generate Cash. The company has consistent cash flow and is focused on reducing its debt leverage by using free cash flow to prepay debt over the next 12 to 24 months.
Capital Structure
Hanesbrands had $2.18 billion of long-term debt at the end of 2008. Since the time of its spinoff in September 2006, the company has paid down $423 million of long-term debt, including $139 million in 2008.
Hanesbrands ended the year with a covenant leverage ratio of 3.3 times debt to adjusted EBITDA, compared with the required limit of 3.75 times.
“We are in compliance with all debt covenants,” Hanesbrands Executive Vice President and Chief Financial Officer E. Lee Wyatt said. “Although we ended 2008 with a reasonable level of debt-covenant cushion, the uncertainty in the consumer and financial markets creates risk. Our projections indicate that we should remain compliant, but we have decided that amending our first lien credit agreement is the prudent course of action. We launched the amendment process yesterday, and we should be in a position to know the results of the amendment process in about two weeks.”
Target 4th Quarter Earnings
MINNEAPOLIS--(BUSINESS WIRE)--Feb. 24, 2009-- Target Corporation (NYSE:TGT) today reported net earnings of $609 million for the fourth quarter ended January 31, 2009, compared with $1,028 million in the fourth quarter ended February 2, 2008. Earnings per share in the fourth quarter decreased 34.4 percent to 81 cents from $1.23 in the same period a year ago. All earnings per share figures refer to diluted earnings per share.
“Our financial results for both the fourth quarter and 2008 fiscal year reflect the impact of unprecedented economic conditions on both of our business segments,” said Gregg Steinhafel, chairman, president and chief executive officer. “In 2009, we are focused on continuing to grow our market share profitably - offering even more compelling prices on quality products in combination with a superior shopping experience. At the same time, we will continue to be thoughtful in our deployment of capital, ensuring that we preserve liquidity and make prudent investment decisions to create long-term shareholder value. We believe this will position Target to emerge as an even stronger retail leader when the consumer environment improves.”
Retail Segment Results
Sales declined 1.6 percent in the fourth quarter 2008 to $19.0 billion from $19.3 billion in 2007, due to a 5.9 percent decline in comparable store sales, partially offset by the contribution from new stores. Retail segment earnings before interest expense and income taxes (EBIT) were $1,251 million in the fourth quarter of 2008, down 22.9 percent from $1,622 million in 2007.
Fourth quarter gross margin rate decreased 1.4 percentage points, driven by increases in markdowns combined with the mix impact of faster sales growth in non-discretionary, lower margin-rate categories. The company reduced its fourth quarter selling, general and administrative (SG&A) expense by $27 million from fourth quarter 2007, even in light of the previously announced impact of the January 2009 workforce reduction, and the cost of operating 91 more stores by year-end 2008 compared with a year ago. The company's success in controlling expenses has been driven by continued productivity gains in stores combined with disciplined and thoughtful control across the company.
For fiscal 2008, sales increased 2.3 percent to $62.9 billion from $61.5 billion in 2007, due to the contribution from new stores, partially offset by a 2.9 percent decline in comparable store sales. Full year retail segment EBIT declined 6.0 percent to $4.1 billion in 2008 from $4.3 billion in 2007.
Gross margin rate for fiscal 2008 decreased 0.4 percentage points, as the impact of sales mix was partially offset by rate improvements within categories. Selling, general and administrative (SG&A) expense rate for the fiscal year was flat to 2007, reflecting strong expense control throughout the year in the face of very soft sales trends.
Credit Card Segment Results
Average receivables in the fourth quarter increased 9.6 percent to $9.1 billion in 2008 from $8.3 billion in 2007. Average receivables directly funded by Target declined 36.2 percent in the fourth quarter to $3.6 billion from $5.6 billion in 2007, reflecting JPMorgan Chase's investment in the receivables portfolio.
The credit card segment incurred a $135 million pre-tax loss in the quarter, compared with a $189 million profit in fourth quarter 2007. This loss was the result of a $245 million addition to the allowance for doubtful accounts in the quarter. Segment pre-tax return on invested capital was negative 15.0 percent in the fourth quarter 2008, compared with 13.4 percent in 2007.
Average receivables for fiscal 2008 increased 19.5 percent to $8.7 billion from $7.3 billion in 2007, as the company annualized the impact of strong receivables growth that occurred in the third quarter of 2007. Average receivables directly funded by Target in 2008 declined 14.2 percent to $4.2 billion from $4.9 billion in 2007.
Full year 2008 segment profit declined 80.5 percent to $155 million from $797 million in 2007. The company added $440 million to the allowance for doubtful accounts in 2008. Full year pre-tax return on the capital invested by Target in this segment was 3.7 percent in 2008, down from 16.3 percent in 2007.
“Our financial results for both the fourth quarter and 2008 fiscal year reflect the impact of unprecedented economic conditions on both of our business segments,” said Gregg Steinhafel, chairman, president and chief executive officer. “In 2009, we are focused on continuing to grow our market share profitably - offering even more compelling prices on quality products in combination with a superior shopping experience. At the same time, we will continue to be thoughtful in our deployment of capital, ensuring that we preserve liquidity and make prudent investment decisions to create long-term shareholder value. We believe this will position Target to emerge as an even stronger retail leader when the consumer environment improves.”
Retail Segment Results
Sales declined 1.6 percent in the fourth quarter 2008 to $19.0 billion from $19.3 billion in 2007, due to a 5.9 percent decline in comparable store sales, partially offset by the contribution from new stores. Retail segment earnings before interest expense and income taxes (EBIT) were $1,251 million in the fourth quarter of 2008, down 22.9 percent from $1,622 million in 2007.
Fourth quarter gross margin rate decreased 1.4 percentage points, driven by increases in markdowns combined with the mix impact of faster sales growth in non-discretionary, lower margin-rate categories. The company reduced its fourth quarter selling, general and administrative (SG&A) expense by $27 million from fourth quarter 2007, even in light of the previously announced impact of the January 2009 workforce reduction, and the cost of operating 91 more stores by year-end 2008 compared with a year ago. The company's success in controlling expenses has been driven by continued productivity gains in stores combined with disciplined and thoughtful control across the company.
For fiscal 2008, sales increased 2.3 percent to $62.9 billion from $61.5 billion in 2007, due to the contribution from new stores, partially offset by a 2.9 percent decline in comparable store sales. Full year retail segment EBIT declined 6.0 percent to $4.1 billion in 2008 from $4.3 billion in 2007.
Gross margin rate for fiscal 2008 decreased 0.4 percentage points, as the impact of sales mix was partially offset by rate improvements within categories. Selling, general and administrative (SG&A) expense rate for the fiscal year was flat to 2007, reflecting strong expense control throughout the year in the face of very soft sales trends.
Credit Card Segment Results
Average receivables in the fourth quarter increased 9.6 percent to $9.1 billion in 2008 from $8.3 billion in 2007. Average receivables directly funded by Target declined 36.2 percent in the fourth quarter to $3.6 billion from $5.6 billion in 2007, reflecting JPMorgan Chase's investment in the receivables portfolio.
The credit card segment incurred a $135 million pre-tax loss in the quarter, compared with a $189 million profit in fourth quarter 2007. This loss was the result of a $245 million addition to the allowance for doubtful accounts in the quarter. Segment pre-tax return on invested capital was negative 15.0 percent in the fourth quarter 2008, compared with 13.4 percent in 2007.
Average receivables for fiscal 2008 increased 19.5 percent to $8.7 billion from $7.3 billion in 2007, as the company annualized the impact of strong receivables growth that occurred in the third quarter of 2007. Average receivables directly funded by Target in 2008 declined 14.2 percent to $4.2 billion from $4.9 billion in 2007.
Full year 2008 segment profit declined 80.5 percent to $155 million from $797 million in 2007. The company added $440 million to the allowance for doubtful accounts in 2008. Full year pre-tax return on the capital invested by Target in this segment was 3.7 percent in 2008, down from 16.3 percent in 2007.
Aetna Adds Four New Adventist Health System Hospitals
Aetna Adds Four New Adventist Health System Hospitals
ORLANDO, Fla.--(BUSINESS WIRE)--Feb. 26, 2009-- Aetna (NYSE: AET) and Adventist Health System announced today that they have reached agreement on a new contract that adds four new Adventist hospitals to Aetna’s provider networks in the Central Florida and Tampa Bay/West Central Florida areas. The new contract took effect last month.
Under the agreement, the following facilities will be joining Aetna’s provider network: Florida Hospital Waterman; Heartland Medical Center; Florida Hospital Lake Placid and Florida Hospital Wauchula.
“We are pleased to be a participating provider for Aetna members at all 18 Florida Hospital locations,” said John Brownlow, senior vice president of managed care at Adventist.
Members of Aetna’s network-based plans will be able to receive covered in-patient and out-patient services, at in-network rates, from all four facilities. The contract also applies to the system’s affiliated physicians.
“Aetna is delighted to announce the addition of these four new hospitals,” said Jim McCunney, Aetna’s network vice president for the Central Florida area. “We strive to provide our members with broad access to high-quality hospitals and physicians, and we’re pleased to expand that access in the Central and West Central Florida areas.”
Aetna provides and administers health benefits to more than 625,000 members in Central and West Central Florida. Those members have access to a contracted network of more than 95 hospitals, and more than 13,000 primary care physicians and specialists.
About Florida Hospital
Opened in 1908, Florida Hospital is one of the largest not-for-profit hospitals in the country, caring for more than 1 million patient visits per year – that’s more than any other hospital in the country, according to the American Hospital Association. The more-than-2,000-bed system, comprised of eight hospitals and 18 Centra Care locations, has been recognized by U.S. News & World Report as one of the best hospitals in the country for the past 10 years.
ORLANDO, Fla.--(BUSINESS WIRE)--Feb. 26, 2009-- Aetna (NYSE: AET) and Adventist Health System announced today that they have reached agreement on a new contract that adds four new Adventist hospitals to Aetna’s provider networks in the Central Florida and Tampa Bay/West Central Florida areas. The new contract took effect last month.
Under the agreement, the following facilities will be joining Aetna’s provider network: Florida Hospital Waterman; Heartland Medical Center; Florida Hospital Lake Placid and Florida Hospital Wauchula.
“We are pleased to be a participating provider for Aetna members at all 18 Florida Hospital locations,” said John Brownlow, senior vice president of managed care at Adventist.
Members of Aetna’s network-based plans will be able to receive covered in-patient and out-patient services, at in-network rates, from all four facilities. The contract also applies to the system’s affiliated physicians.
“Aetna is delighted to announce the addition of these four new hospitals,” said Jim McCunney, Aetna’s network vice president for the Central Florida area. “We strive to provide our members with broad access to high-quality hospitals and physicians, and we’re pleased to expand that access in the Central and West Central Florida areas.”
Aetna provides and administers health benefits to more than 625,000 members in Central and West Central Florida. Those members have access to a contracted network of more than 95 hospitals, and more than 13,000 primary care physicians and specialists.
About Florida Hospital
Opened in 1908, Florida Hospital is one of the largest not-for-profit hospitals in the country, caring for more than 1 million patient visits per year – that’s more than any other hospital in the country, according to the American Hospital Association. The more-than-2,000-bed system, comprised of eight hospitals and 18 Centra Care locations, has been recognized by U.S. News & World Report as one of the best hospitals in the country for the past 10 years.
Monday, February 23, 2009
HP Shares To Pop?
From Barrons
Last week, Hewlett-Packard (ticker: HPQ) missed its own quarterly profit projections for the first time since Chief Executive Mark Hurd took the reins in 2005. The company reported earnings of 75 cents a share, significantly below its forecast range of 80 cents to 82 cents.
The company did manage to meet the Street's expectations for earnings minus one-time charges -- 93 cents a share. But the market isn't seeing anything half-full these days.
It was a painful quarter, plain and simple, thanks to an abysmal economy that continues to worsen. Shares were trading Friday afternoon at $31.20, down 13% for the week. HP's stumble helped take much of the tech sector down with it (see Tech Trader). And news on Apple (AAPL) added fuel to the fire -- with outside reports of its first monthly decline in three years for computer unit sales at U.S. retail outlets.
HP's miss was significant because there was hope that Hurd might keep his meet-and-raise earnings streak alive, even as customers sit on their wallets.
In a feature story late last year ("Picture of Health," Dec. 29), I called HP a solid defensive play because of the company's recurring revenue streams, generated by printer ink, as well as outsourcing contracts gained through the acquisition of Electronic Data Systems. Although the stock has dropped from about $35 then, I still believe my argument will be borne out over time. The bet is based on Hurd's operations acumen and proven ability to deliver strong profit margins in the face of adversity, which admittedly got dinged a little last week.
In addition to missing its target for the quarter, HP projected earnings for fiscal 2009 in the range of $3.76 to $3.88, well below expectations as high as $4.03 set by the company back in the fall, says Bernstein Research hardware analyst Toni Sacconaghi. Revenues loom as an obvious concern: For the first quarter, they missed analyst forecasts handily, with sales suffering in nearly all business areas -- from personal computers to enterprise servers and even to ink, perhaps the biggest surprise of all.
But the investment thesis is still intact. Hurd's message, even back in December, was revenues be damned. He urged investors to focus on things he can control, such as grabbing market share and increasing profit margins through tighter cost controls of items including his own paycheck. The company plans to slash Hurd's base pay of $1.45 million by 20%, while reducing other executive-level salaries by as much as 15%. Paychecks for other employees could be cut by up to 5%.
Hurd, in a conference call, pointed out that HP gained market share in many key businesses. Another bright spot was services, which now earns recurring profits of $1 billion a quarter. "In many ways, I will tell you [that the first quarter] from an execution perspective was among the strongest we have delivered," he said.
Sacconaghi, for one, is advising his clients to buy HP on this dip. He argues convincingly that the shares are attractively valued, trading at nearly a 30% discount to the S&P 500, based on his firm's fiscal 2009 estimates. His target is 47.
Last week, Hewlett-Packard (ticker: HPQ) missed its own quarterly profit projections for the first time since Chief Executive Mark Hurd took the reins in 2005. The company reported earnings of 75 cents a share, significantly below its forecast range of 80 cents to 82 cents.
The company did manage to meet the Street's expectations for earnings minus one-time charges -- 93 cents a share. But the market isn't seeing anything half-full these days.
It was a painful quarter, plain and simple, thanks to an abysmal economy that continues to worsen. Shares were trading Friday afternoon at $31.20, down 13% for the week. HP's stumble helped take much of the tech sector down with it (see Tech Trader). And news on Apple (AAPL) added fuel to the fire -- with outside reports of its first monthly decline in three years for computer unit sales at U.S. retail outlets.
HP's miss was significant because there was hope that Hurd might keep his meet-and-raise earnings streak alive, even as customers sit on their wallets.
In a feature story late last year ("Picture of Health," Dec. 29), I called HP a solid defensive play because of the company's recurring revenue streams, generated by printer ink, as well as outsourcing contracts gained through the acquisition of Electronic Data Systems. Although the stock has dropped from about $35 then, I still believe my argument will be borne out over time. The bet is based on Hurd's operations acumen and proven ability to deliver strong profit margins in the face of adversity, which admittedly got dinged a little last week.
In addition to missing its target for the quarter, HP projected earnings for fiscal 2009 in the range of $3.76 to $3.88, well below expectations as high as $4.03 set by the company back in the fall, says Bernstein Research hardware analyst Toni Sacconaghi. Revenues loom as an obvious concern: For the first quarter, they missed analyst forecasts handily, with sales suffering in nearly all business areas -- from personal computers to enterprise servers and even to ink, perhaps the biggest surprise of all.
But the investment thesis is still intact. Hurd's message, even back in December, was revenues be damned. He urged investors to focus on things he can control, such as grabbing market share and increasing profit margins through tighter cost controls of items including his own paycheck. The company plans to slash Hurd's base pay of $1.45 million by 20%, while reducing other executive-level salaries by as much as 15%. Paychecks for other employees could be cut by up to 5%.
Hurd, in a conference call, pointed out that HP gained market share in many key businesses. Another bright spot was services, which now earns recurring profits of $1 billion a quarter. "In many ways, I will tell you [that the first quarter] from an execution perspective was among the strongest we have delivered," he said.
Sacconaghi, for one, is advising his clients to buy HP on this dip. He argues convincingly that the shares are attractively valued, trading at nearly a 30% discount to the S&P 500, based on his firm's fiscal 2009 estimates. His target is 47.
Friday, February 20, 2009
HP 1st Quarter Earnings
HP Reports First Quarter 2009 Results
>First quarter net revenue up 1%, or 4% in local currency, from a year earlier to $28.8 billion; >First quarter GAAP operating profit down 5% to $2.5 billion;
>$0.75 GAAP earnings per share, down from $0.80 a year earlier;
>First quarter non-GAAP operating profit up 10% to $3.1 billion;
>$0.93 non-GAAP earnings per share, up from $0.86 a year earlier;
>Services posts record operating profit of $1.1 billion; EDS integration ahead of plan
PALO ALTO, Calif.--(BUSINESS WIRE)--Feb. 18, 2009-- HP (NYSE:HPQ) today announced financial results for its first fiscal quarter ended Jan. 31, 2009, with net revenue of $28.8 billion, up 1% from a year earlier and up 4% when adjusted for the effects of currency.
In the first quarter, GAAP operating profit was $2.5 billion and GAAP diluted earnings per share (EPS) was $0.75, down from $0.80 in the prior-year period. Non-GAAP operating profit was $3.1 billion, with non-GAAP diluted EPS of $0.93, up from $0.86 in the prior-year period. Non-GAAP financial information excludes $431 million of adjustments on an after-tax basis, or $0.18 per diluted share, related primarily to amortization of purchased intangible assets, restructuring charges and acquisition-related charges. GAAP and Non-GAAP diluted EPS include $0.03 of charges related to currency hedging losses.
Personal Systems Group
Personal Systems Group (PSG) revenue declined 19% to $8.8 billion, with unit shipments down 4%. Notebook revenue for the quarter was down 13%, while Desktop revenue declined 25%. Commercial client revenue was down 19%, while Consumer client revenue decreased 18%. Operating profit was $435 million, or 5.0% of revenue, down from $628 million, or 5.8% of revenue, in the prior-year period.
Imaging and Printing Group
Imaging and Printing Group (IPG) revenue declined 19% to $6.0 billion. Supplies revenue was down 7%, while Commercial hardware revenue and Consumer hardware revenue declined 34% and 37%, respectively. Printer unit shipments decreased 33%, with Consumer printer hardware units down 31% and Commercial printer hardware units down 39%. Operating profit was $1.1 billion, or 18.5% of revenue, versus $1.1 billion, or 15.5% of revenue, in the prior-year period.
Enterprise Storage and Servers
Enterprise Storage and Servers (ESS) reported total revenue of $3.9 billion, down 18%. Storage revenue declined 7% with the midrange EVA product line down 7%. Industry Standard Server revenue and Business Critical Systems revenue declined 22% and 17%, respectively, while ESS blade revenue grew 4%. Operating profit was $405 million, or 10.3% of revenue, down from $673 million, or 14.0% of revenue, in the prior-year period.
Services
Services revenue increased 116% to $8.7 billion due primarily to the EDS acquisition. Revenue in Technology Services was flat. ITO, Application Services and BPO posted revenue of $3.9 billion, $1.6 billion and $743 million, respectively. Operating profit was $1.1 billion, or 12.8% of revenue, up from $499 million, or 12.3% of revenue, in the prior-year period.
HP Software
HP Software revenue declined 7% to $878 million. Business Technology Optimization portfolio revenue declined 4% while Other Software revenue was down 14%. Operating profit was $140 million, or 15.9% of revenue, up from $49 million, or 5.2% of revenue, in the prior-year period.
HP Financial Services
HP Financial Services (HPFS) reported revenue of $636 million, down 1% from the prior-year period. Financing volume increased 2%, and net portfolio assets declined 3%. Operating margin was 6.4% of revenue, down from 6.7% in the prior-year period.
Asset management
HP generated $1.1 billion in cash flow from operations for the first quarter. Inventory ended the quarter at $7.6 billion, down 2 days. Accounts receivable of $14.8 billion was up 7 days. Accounts payable ended the quarter at $11.2 billion, down 1 day. HP’s dividend payment of $0.08 per share in the first quarter resulted in cash usage of $193 million. HP utilized $1.2 billion of cash during the first quarter to repurchase approximately 34 million shares of common stock in the open market. HP exited the quarter with $11.3 billion in gross cash.
Outlook
HP estimates second quarter FY09 revenue will decline approximately two to three percent from the prior-year period.
Second quarter FY09 GAAP diluted EPS is expected to be approximately $0.70 to $0.72, and non-GAAP diluted EPS is expected to be approximately $0.84 to $0.86. Second quarter FY09 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.14 per share, related primarily to the amortization of purchased intangibles and restructuring charges.
HP estimates full year FY09 revenue will decline approximately two to five percent from the prior-year period.
Full year FY09 GAAP diluted EPS is expected to be approximately $3.19 to $3.31, and non-GAAP diluted EPS is expected to be approximately $3.76 to $3.88. FY09 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.57 per share, related primarily to the amortization of purchased intangibles and restructuring charges.
>First quarter net revenue up 1%, or 4% in local currency, from a year earlier to $28.8 billion; >First quarter GAAP operating profit down 5% to $2.5 billion;
>$0.75 GAAP earnings per share, down from $0.80 a year earlier;
>First quarter non-GAAP operating profit up 10% to $3.1 billion;
>$0.93 non-GAAP earnings per share, up from $0.86 a year earlier;
>Services posts record operating profit of $1.1 billion; EDS integration ahead of plan
PALO ALTO, Calif.--(BUSINESS WIRE)--Feb. 18, 2009-- HP (NYSE:HPQ) today announced financial results for its first fiscal quarter ended Jan. 31, 2009, with net revenue of $28.8 billion, up 1% from a year earlier and up 4% when adjusted for the effects of currency.
In the first quarter, GAAP operating profit was $2.5 billion and GAAP diluted earnings per share (EPS) was $0.75, down from $0.80 in the prior-year period. Non-GAAP operating profit was $3.1 billion, with non-GAAP diluted EPS of $0.93, up from $0.86 in the prior-year period. Non-GAAP financial information excludes $431 million of adjustments on an after-tax basis, or $0.18 per diluted share, related primarily to amortization of purchased intangible assets, restructuring charges and acquisition-related charges. GAAP and Non-GAAP diluted EPS include $0.03 of charges related to currency hedging losses.
Personal Systems Group
Personal Systems Group (PSG) revenue declined 19% to $8.8 billion, with unit shipments down 4%. Notebook revenue for the quarter was down 13%, while Desktop revenue declined 25%. Commercial client revenue was down 19%, while Consumer client revenue decreased 18%. Operating profit was $435 million, or 5.0% of revenue, down from $628 million, or 5.8% of revenue, in the prior-year period.
Imaging and Printing Group
Imaging and Printing Group (IPG) revenue declined 19% to $6.0 billion. Supplies revenue was down 7%, while Commercial hardware revenue and Consumer hardware revenue declined 34% and 37%, respectively. Printer unit shipments decreased 33%, with Consumer printer hardware units down 31% and Commercial printer hardware units down 39%. Operating profit was $1.1 billion, or 18.5% of revenue, versus $1.1 billion, or 15.5% of revenue, in the prior-year period.
Enterprise Storage and Servers
Enterprise Storage and Servers (ESS) reported total revenue of $3.9 billion, down 18%. Storage revenue declined 7% with the midrange EVA product line down 7%. Industry Standard Server revenue and Business Critical Systems revenue declined 22% and 17%, respectively, while ESS blade revenue grew 4%. Operating profit was $405 million, or 10.3% of revenue, down from $673 million, or 14.0% of revenue, in the prior-year period.
Services
Services revenue increased 116% to $8.7 billion due primarily to the EDS acquisition. Revenue in Technology Services was flat. ITO, Application Services and BPO posted revenue of $3.9 billion, $1.6 billion and $743 million, respectively. Operating profit was $1.1 billion, or 12.8% of revenue, up from $499 million, or 12.3% of revenue, in the prior-year period.
HP Software
HP Software revenue declined 7% to $878 million. Business Technology Optimization portfolio revenue declined 4% while Other Software revenue was down 14%. Operating profit was $140 million, or 15.9% of revenue, up from $49 million, or 5.2% of revenue, in the prior-year period.
HP Financial Services
HP Financial Services (HPFS) reported revenue of $636 million, down 1% from the prior-year period. Financing volume increased 2%, and net portfolio assets declined 3%. Operating margin was 6.4% of revenue, down from 6.7% in the prior-year period.
Asset management
HP generated $1.1 billion in cash flow from operations for the first quarter. Inventory ended the quarter at $7.6 billion, down 2 days. Accounts receivable of $14.8 billion was up 7 days. Accounts payable ended the quarter at $11.2 billion, down 1 day. HP’s dividend payment of $0.08 per share in the first quarter resulted in cash usage of $193 million. HP utilized $1.2 billion of cash during the first quarter to repurchase approximately 34 million shares of common stock in the open market. HP exited the quarter with $11.3 billion in gross cash.
Outlook
HP estimates second quarter FY09 revenue will decline approximately two to three percent from the prior-year period.
Second quarter FY09 GAAP diluted EPS is expected to be approximately $0.70 to $0.72, and non-GAAP diluted EPS is expected to be approximately $0.84 to $0.86. Second quarter FY09 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.14 per share, related primarily to the amortization of purchased intangibles and restructuring charges.
HP estimates full year FY09 revenue will decline approximately two to five percent from the prior-year period.
Full year FY09 GAAP diluted EPS is expected to be approximately $3.19 to $3.31, and non-GAAP diluted EPS is expected to be approximately $3.76 to $3.88. FY09 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.57 per share, related primarily to the amortization of purchased intangibles and restructuring charges.
Exxon Adds To Reserves
IRVING, Texas--(BUSINESS WIRE)--Exxon Mobil Corporation (NYSE:XOM) announced today that additions to its proved reserves in 2008 totaled 1.5 billion oil-equivalent barrels, replacing 103 percent of production. Excluding the impact of asset sales, reserves additions replaced 110 percent of production. These additions assume the long-term pricing basis that the corporation uses to make its investment decisions, rather than single-day, year-end pricing.
“ExxonMobil continues to make quality reserves additions, and has replaced an average of 110 percent of production over the last 10 years,” said Rex W. Tillerson, chairman and chief executive officer. “This strong performance reflects our strategic focus on resource capture, a disciplined approach to investment and excellence in project execution."
"We take a long-term view of resource development and invest throughout the commodity price cycle. Adding new reserves ensures that ExxonMobil will continue to develop new supplies of energy that will be critical to help meet the world’s growing needs into the future."
The annual reporting of proved reserves is the product of the corporation’s long-standing, rigorous process that ensures consistency and management accountability in all reserve bookings.
The corporation’s reserve additions in 2008 reflect both new developments with significant funding commitments and revisions and extensions of existing fields resulting from drilling, studies and analysis of reservoir performance. Reserves additions from the Kearl Phase 1 oil sands project in Canada totaled 1.1 billion oil-equivalent barrels. Proved additions were also made in a diverse range of countries including the United States, Norway, Nigeria, Angola and Australia. Asset sales in 2008 reduced proved reserves by 0.1 billion oil-equivalent barrels.
Utilizing December 31 liquids and natural gas prices, proved reserves replacement was 2.0 billion oil-equivalent barrels in 2008, replacing 136 percent of production, including the effect of asset sales. However, prices from a single date are not considered when long-term investment decisions are made by the corporation, and annual variations in reserves based on such year-end prices are not aligned with how the business is actually managed.
Long-Term View
The long-term nature of the industry and the large size of the discrete projects that provide a significant portion of the corporation’s reserves additions make it appropriate to consider a time horizon longer than a single year. Excluding single day, year-end pricing effects, the corporation’s 10-year average reserves replacement ratio is 110 percent, with liquids replacement at 103 percent and gas at 119 percent. For the last 15 consecutive years our reserves additions have more than replaced production.
The reserves additions made during this period comprise a diverse range of resource types and have broad geographical representation. At the end of 2008 ExxonMobil’s proved reserves base increased to 22.8 billion oil-equivalent barrels, split approximately evenly between liquids and gas. ExxonMobil’s reserves life at current production rates is 15.3 years and the portion of proved reserves already developed is 62 percent.
Industry-Leading Resource Base
ExxonMobil added 2.2 billion oil-equivalent barrels to its resource base in 2008, with key additions from Canada, the onshore United States, deepwater Gulf of Mexico and West Africa. Overall, the corporation’s resource base grew by 0.3 billion oil-equivalent barrels to 72.4 billion oil-equivalent barrels, taking into account production, revisions to existing discoveries, and asset sales. This figure also includes the impact of increased government take, which reduced the resource base by 0.5 billion oil-equivalent barrels in 2008. The resource base includes proved and probable reserves, plus other discovered resources that are expected to be ultimately recovered.
“ExxonMobil continues to make quality reserves additions, and has replaced an average of 110 percent of production over the last 10 years,” said Rex W. Tillerson, chairman and chief executive officer. “This strong performance reflects our strategic focus on resource capture, a disciplined approach to investment and excellence in project execution."
"We take a long-term view of resource development and invest throughout the commodity price cycle. Adding new reserves ensures that ExxonMobil will continue to develop new supplies of energy that will be critical to help meet the world’s growing needs into the future."
The annual reporting of proved reserves is the product of the corporation’s long-standing, rigorous process that ensures consistency and management accountability in all reserve bookings.
The corporation’s reserve additions in 2008 reflect both new developments with significant funding commitments and revisions and extensions of existing fields resulting from drilling, studies and analysis of reservoir performance. Reserves additions from the Kearl Phase 1 oil sands project in Canada totaled 1.1 billion oil-equivalent barrels. Proved additions were also made in a diverse range of countries including the United States, Norway, Nigeria, Angola and Australia. Asset sales in 2008 reduced proved reserves by 0.1 billion oil-equivalent barrels.
Utilizing December 31 liquids and natural gas prices, proved reserves replacement was 2.0 billion oil-equivalent barrels in 2008, replacing 136 percent of production, including the effect of asset sales. However, prices from a single date are not considered when long-term investment decisions are made by the corporation, and annual variations in reserves based on such year-end prices are not aligned with how the business is actually managed.
Long-Term View
The long-term nature of the industry and the large size of the discrete projects that provide a significant portion of the corporation’s reserves additions make it appropriate to consider a time horizon longer than a single year. Excluding single day, year-end pricing effects, the corporation’s 10-year average reserves replacement ratio is 110 percent, with liquids replacement at 103 percent and gas at 119 percent. For the last 15 consecutive years our reserves additions have more than replaced production.
The reserves additions made during this period comprise a diverse range of resource types and have broad geographical representation. At the end of 2008 ExxonMobil’s proved reserves base increased to 22.8 billion oil-equivalent barrels, split approximately evenly between liquids and gas. ExxonMobil’s reserves life at current production rates is 15.3 years and the portion of proved reserves already developed is 62 percent.
Industry-Leading Resource Base
ExxonMobil added 2.2 billion oil-equivalent barrels to its resource base in 2008, with key additions from Canada, the onshore United States, deepwater Gulf of Mexico and West Africa. Overall, the corporation’s resource base grew by 0.3 billion oil-equivalent barrels to 72.4 billion oil-equivalent barrels, taking into account production, revisions to existing discoveries, and asset sales. This figure also includes the impact of increased government take, which reduced the resource base by 0.5 billion oil-equivalent barrels in 2008. The resource base includes proved and probable reserves, plus other discovered resources that are expected to be ultimately recovered.
Wednesday, February 18, 2009
Aetna 4th Quarter Earnings
Aetna Reports Fourth-Quarter and Full-Year 2008 Results
HARTFORD, Conn.--(BUSINESS WIRE)--Feb. 12, 2009-- Aetna (NYSE: AET):
>Fourth-quarter 2008 operating earnings per share increased 9 percent to $0.96
>Full-year 2008 operating earnings per share increased 13 percent to $3.93
>Net income per share decreased 52 percent in the fourth quarter 2008 to $0.42 per share and decreased 18 percent to $2.83 per share for the full year. Net income includes net realized capital losses and other items, which are excluded from operating earnings
>Medical membership totaled 17.7 million members at December 31, 2008; representing an annual growth of 848,000 and a quarter-over-quarter growth of 33,000
>Aetna projects 2009 operating earnings per share of $3.85 to $3.95. Excluding a projected $0.54 per share year-over-year increase in pension expense, operating earnings per share growth is projected to be 12 to 14 percent over 2008
Aetna (NYSE: AET) today announced that fourth-quarter 2008 operating earnings per share, (1) which exclude net realized capital losses and other items, increased 9 percent to $0.96. Full-year 2008 operating earnings per share increased 13 percent to $3.93. The increase in operating earnings per share reflects significant growth in revenue, solid underwriting results and continued operating expense efficiencies, partially offset by lower net investment income. Operating results also benefited from share repurchases and the full-year impact of recent acquisitions. The company’s 17 percent growth in full-year health care revenue was driven by premium rate increases and medical membership growth in both core and newer customer segments. Total health care revenue, including realized capital losses, grew by 16 percent for the full year.
Net income, which includes net realized capital losses and other items, was $0.42 per share for the fourth quarter of 2008, 52 percent lower than the prior-year quarter, due to net realized capital losses of $0.42 per share and the previously announced severance and facility charge and contribution for the establishment of a new out-of-network pricing database of $.08 and $.04 per share, respectively. Full-year 2008 net income was $2.83 per share, 18 percent lower than 2007, primarily due to net realized capital losses of $.99 per share. The majority of the net realized capital losses resulted from declines in the market value of debt securities in the company’s investment portfolio as a result of the widening of credit spreads in 2008.
HARTFORD, Conn.--(BUSINESS WIRE)--Feb. 12, 2009-- Aetna (NYSE: AET):
>Fourth-quarter 2008 operating earnings per share increased 9 percent to $0.96
>Full-year 2008 operating earnings per share increased 13 percent to $3.93
>Net income per share decreased 52 percent in the fourth quarter 2008 to $0.42 per share and decreased 18 percent to $2.83 per share for the full year. Net income includes net realized capital losses and other items, which are excluded from operating earnings
>Medical membership totaled 17.7 million members at December 31, 2008; representing an annual growth of 848,000 and a quarter-over-quarter growth of 33,000
>Aetna projects 2009 operating earnings per share of $3.85 to $3.95. Excluding a projected $0.54 per share year-over-year increase in pension expense, operating earnings per share growth is projected to be 12 to 14 percent over 2008
Aetna (NYSE: AET) today announced that fourth-quarter 2008 operating earnings per share, (1) which exclude net realized capital losses and other items, increased 9 percent to $0.96. Full-year 2008 operating earnings per share increased 13 percent to $3.93. The increase in operating earnings per share reflects significant growth in revenue, solid underwriting results and continued operating expense efficiencies, partially offset by lower net investment income. Operating results also benefited from share repurchases and the full-year impact of recent acquisitions. The company’s 17 percent growth in full-year health care revenue was driven by premium rate increases and medical membership growth in both core and newer customer segments. Total health care revenue, including realized capital losses, grew by 16 percent for the full year.
Net income, which includes net realized capital losses and other items, was $0.42 per share for the fourth quarter of 2008, 52 percent lower than the prior-year quarter, due to net realized capital losses of $0.42 per share and the previously announced severance and facility charge and contribution for the establishment of a new out-of-network pricing database of $.08 and $.04 per share, respectively. Full-year 2008 net income was $2.83 per share, 18 percent lower than 2007, primarily due to net realized capital losses of $.99 per share. The majority of the net realized capital losses resulted from declines in the market value of debt securities in the company’s investment portfolio as a result of the widening of credit spreads in 2008.
Aetna Partners With Patient Choice Insights
Aetna Signs Contract with Patient Choice Healthcare, Inc.
ST. LOUIS PARK, Minn.--(BUSINESS WIRE)--Feb. 17, 2009-- Aetna (NYSE: AET), the nation’s third largest insurance company, announced that it will begin offering Patient Choice Insights, a tiered health care provider network in Minnesota.
Patient Choice is recognized as a leader for its tiered network model launched nearly a decade ago. With the Patient Choice Insights network, health care providers are ranked on cost and quality measures and members are encouraged to use providers who rank best in delivering value.
Aetna will offer the Patient Choice Insights network to self-funded employers and their employees in central and southern Minnesota. “This network option allows us to offer new customers a highly competitive network solution, and consequently, greater quality and value to both our employers and their employees,” said Ross Sanders, president of national accounts for Aetna’s north central and southwest regions.
“We can now offer a national solution to both Minnesota-based employers, and national employers with employees in Minnesota, that combines highly regarded transparency and quality tools for members with some of the strongest medical management capabilities in the industry,” he added.
“Now more than ever, employers are looking for ways to reduce costs and having a quality network of participating providers greatly helps achieve that goal. We’re conducting a seminar on February 23 in Minneapolis for brokers, consultants and employers focusing on additional ways we can help them reduce costs,” said Sanders.*
ST. LOUIS PARK, Minn.--(BUSINESS WIRE)--Feb. 17, 2009-- Aetna (NYSE: AET), the nation’s third largest insurance company, announced that it will begin offering Patient Choice Insights, a tiered health care provider network in Minnesota.
Patient Choice is recognized as a leader for its tiered network model launched nearly a decade ago. With the Patient Choice Insights network, health care providers are ranked on cost and quality measures and members are encouraged to use providers who rank best in delivering value.
Aetna will offer the Patient Choice Insights network to self-funded employers and their employees in central and southern Minnesota. “This network option allows us to offer new customers a highly competitive network solution, and consequently, greater quality and value to both our employers and their employees,” said Ross Sanders, president of national accounts for Aetna’s north central and southwest regions.
“We can now offer a national solution to both Minnesota-based employers, and national employers with employees in Minnesota, that combines highly regarded transparency and quality tools for members with some of the strongest medical management capabilities in the industry,” he added.
“Now more than ever, employers are looking for ways to reduce costs and having a quality network of participating providers greatly helps achieve that goal. We’re conducting a seminar on February 23 in Minneapolis for brokers, consultants and employers focusing on additional ways we can help them reduce costs,” said Sanders.*
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