Earnings Recap: Phillips Van Heusen (PVH), Longtop Financial (LFT), Yingli Green Energy (YGE)
Earnings: Q1 profits of $0.83 vs. $0.79 consensus.
Revenue: Up 11% YOY to $619 million vs. $606 million consensus.
“It looks like they’re doing better than we expected for the rest of the year,” said one analyst who has a “Buy” rating on the shares and a $75 price target.
Comment: After rallying about 2.5% on a bad tape on Monday, shares slid as much as 5% after-hours due to what has been perceived to be weak guidance. This, however, may be a red herring, as PVH seems to have decided to account for its acquisition of Tommy Hilfiger differently than most analysts expected. Rather than recording a dilution in share count beginning at the end of Q2, PVH is recording the dilution over the entire Q2, resulting in a higher Q2 share count, and thus a lower EPS. Revenue forecasts came in better-than expected, so if you’re looking for a solid retailer, this may be a good opportunity to accumulate some PVH.
Longtop Financial (NYSE: LFT): Big move on strong revenue.
Earnings: Q1 profits of $0.28 vs. $0.27 consensus.
Revenue: Up 66% YOY to $43.1 million.
According to one analyst, LFT’s Q “served as further evidence that Longtop is at the center of a long term secular growth trend as the financial-services industry in China updates and builds out its information technology capabilities.”
Comment: Shares of LFT shot up more than 11% Monday on the heels of a report that reflected continued growth in Chinese financial IT. The move pushed shares through their 10-, 20- and 50-day moving averages on huge volume, and almost made up for all of the selling that has hit the broad market since early May. The company also beat on guidance for the next Q and the FY.
Considering the fact that market is trending lower at the moment you’d probably be best off not jumping into shares here, but LFT has definitely demonstrated its ability to thrive even in a climate that has seen many a china bear spring up. If you can find your way into shares closer to pre-report levels LFT is certainly worth a shot for some Chinese mainland tech exposure.
Yingli Green Energy (NYSE: YGE): A slight beat sends shares down marginally.
Earnings: Q1 profits of $0.23 vs. $0.22 consensus.
Revenue: $358.9 million vs. $354 million consensus.
“Chinese solar companies have benefited as demand has rebounded of late and prices remain low compared to U.S. and European rivals, with many companies stepping up production,” reported one analyst.
Comment: Despite the beat, shares closed down nearly 2% on the day, finishing up at 9.40. YGE is down almost 30% this month due in part to significant weakness in the solar sector related to cheap oil and negative sentiment in the semiconductor space. Still, guidance was strong, as management believes that a rush to purchase solar technology in countries like Germany, where subsidies are set to lapse in the near future, will boost sales over the next few Qs. Where YGE stands after that is another story.
Disclosure: No holdings in PVH, LFT, YGE.