For Immediate Release
Chicago, IL – November 10, 2010 – Zacks.com Analyst Blog features: BJ's Wholesale Club Inc. (BJ), Costco Wholesale Corporation (COST), Allscripts Healthcare Solutions, Inc. (MDRX), Telus Corporation (TU) and MarkWest Energy Partners L.P. (MWE).
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Here are highlights from Tuesday's Analyst Blog:
BJ's Posts Healthy Sales
BJ's Wholesale Club Inc. (BJ), a leading warehouse club operator in the United States, recently posted healthy sales results for the four-week period ended October 30, 2010.
After registering a growth of 1.5% in September 2010, BJ's experienced comparable club sales growth of 3.7% in October. For the third quarter of 2010, comps climbed 2.5%. Rising gasoline prices positively impacted the comparable club sales by 1.5% during the reported month and by 1% in the quarter.
The company witnessed increased comparable club sales in all the four weeks, with minimum growth in the third week and maximum growth in the fourth week. Excluding gasoline sales, BJ's merchandise comparable club sales for October climbed 2.2% and for the third-quarter rose 1.5%.
Net sales for October jumped 6.3% to $812.7 million from $764.7 million in the same month last year. In the third quarter, sales climbed 4.8% to $2,569 million from $2,450.4 million posted in the same period last year.
Traffic (excluding gasoline sales) rose by about 2% in October 2010 and for the third quarter. The average transaction amount remained flat with the same month last year but dropped 1% for the quarter.
Heavy job losses and the recent economic downturn have changed the way consumers used to shop. BJ's hinted that food sales grew 5% for October, and 4% for the quarter, which contributed to the growth of comparable club sales. Sales of general merchandise slid 3% for both the month and the quarter.
By categories, dairy, deli, frozen, juices, meat, milk, prepared foods, produce, small appliances and sugar reported robust sales. On the contrary, apparel, automotive, baby food, diapers, household chemicals, pre-recorded video, televisions and toys delivered sluggish sales.
BJ's, which faces stiff competition from Costco Wholesale Corporation (COST), currently operates 190 clubs in 15 states.
Allscripts Beats Zacks Estimate
Allscripts Healthcare Solutions, Inc. (MDRX) reported third-quarter fiscal 2010 adjusted (excluding one-time items) earnings per share of 19 cents, exceeding both the Zacks Consensus Estimate and the year-ago earnings of 16 cents. Adjusted net income was $36.8 million, up 21% year over year.
On August 24, 2010, Allscripts completed its merger with Eclipsys Corporation following which its Board of Directors changed the company's financial year-end from May 31 to December 31.
Revenues
Revenue for the quarter increased 47% year over year to $242.4 million (includes $51.2 million of reported revenue from Eclipsys). Total bookings in the third quarter amounted to $215.9 million, which included legacy Allscripts bookings of $112 million.
Growth was registered in all of Allscripts' business segments. Maintenance was up 29.3% year over year to $76.8 million in the third quarter. Transaction processing and other revenues, consisting of Payerpath Revenue Cycle Management and SaaS sales, jumped 42.1% to $79.7 million. System sales increased sharply to $46.9 million, up 40% year over year. Professional services revenues shot up 145.3% to $39 million.
Outlook
Allscripts updated its guidance for fiscal 2010 and 2011. For fourth-quarter fiscal 2010, it expects adjusted revenue in a range of $332 million to $337 million, adjusted operating margin of 19% and adjusted earnings per share in a band of 18 cents to 19 cents. The corresponding figures for fiscal 2010 are $1,295 million to $1,300 million, 19% and 73 cents to 74 cents, respectively.
For fiscal 2011, the company expects adjusted revenue between $1,425 million and $1,450 million, adjusted operating margin of 21%, and earnings per share of 85 cents to 89 cents. Telus Beats, Raises Dividend
Telus Corporation (TU), the second largest Canadian telecommunications company, reported third quarter adjusted earnings per ADS of 86 U.S. cents (89 Canadian cents per share) outpacing the Zacks Consensus Estimate of 78 U.S. cents. Adjusted earnings increased 6% year over year. Strong earnings were driven by robust wireless demand, which was partially offset by declines in traditional voice services.
Adjusted earnings exclude an after-tax charge of C$37 million (or 12 Canadian cents) from the early redemption of notes, an after-tax regulatory financing charge of C$11 million (or 3 Canadian cents) and favorable income tax-related adjustments of $9 million (or 3 Canadian cents).
Total revenue inched up 1.8% year over year to C$2.46 billion ($2.36 billion) attributable to higher revenues from wireless and wireline data services partially offset by declines in fixed-line voice revenues. Consolidated EBITDA rose 1.5% year over year to C$937 million ($902 million), aided by ongoing benefits from efficiency initiatives and lower restructuring costs.
Dividend
On January 4, 2011, Telus will pay an increased quarterly dividend of 525 Canadian cents per share to shareholders of record as of December 10, 2010. This quarterly dividend represents a 5% increase from 50 Canadian cents per share paid in the previous quarter and a 10.5% increase from 475 Canadian cents per share paid in the year-ago quarter.
MarkWest Blows Away Estimates
MarkWest Energy Partners L.P. (MWE), a master limited partnership (“MLP”), reported strong third quarter results, reflecting a robust performance of its core assets and the growing contribution from the Marcellus expansion projects.
Earnings per unit, excluding marked-to-market derivative loss and compensation expense, came in at 47 cents, way ahead of the Zacks Consensus Estimate of 19 cents and the year-ago adjusted profit of 8 cents.
Revenue of $292.4 million was up 40.6% from the third quarter 2009 level and was also ahead of our projection of $269 million.
Quarterly Cash Distribution
MarkWest's quarterly distribution of 64 cents per unit ($2.56 per unit annualized), remains unchanged from the year-earlier quarter as well as the previous quarter's distribution.
Distributable Cash Flow
During the quarter, the partnership generated distributable cash flow (“DCF”) of $54.7 million, up from $40.3 million in the prior-year quarter, providing 1.20x distribution coverage.
Guidance
Looking forward, management guided towards a DCF of approximately $225 – $235 million for 2010, up from the previous guidance of $210 – $230 million. MarkWest's capital plan for the year includes approximately $300 of capital expenditures for growth projects, plus $10 million for maintenance capital.
Our Recommendation
We have a long-term Outperform recommendation on MarkWest Energy units, reflecting its promising prospects. With a proven track record of supporting producers in the growth of shale plays, the partnership is in a great position to participate in the expansion of infrastructure that will be required for the development of leaseholds.
Additionally, the successful completion of a notes offering, formation of joint ventures and the Starfish stake sale support MarkWest's financial profile and provide sufficient liquidity to meet its near- to medium-term needs. As such, we believe MarkWest is well positioned going forward, and view it as an attractive investment.
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BJ'S WHOLESALE (BJ): Free Stock Analysis Report
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ALLSCRIPTS-MISY (MDRX): Free Stock Analysis Report
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TELUS CORP (TU): Free Stock Analysis Report
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