For Immediate Release
Chicago, IL – November 17, 2010 – Zacks.com Analyst Blog features: The TJX Companies (TJX), BP Plc (BP), Anadarko Petroleum Corporation (APC), Mitsui & Co. Ltd. (MITSY) and Benihana Inc. (BNHN).
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Here are highlights from Tuesday's Analyst Blog:
TJX Beats, Lifts Guidance
The The TJX Companies's (TJX) fiscal third-quarter earnings grew 13.6% to 92 cents a share from 81 cents in the year-ago period. The quarterly earnings were a penny above the Zacks Consensus Estimate of 91 cents. Profits were primarily driven by prudent inventory management and increased store traffic.
Buoyed by the quarterly results, TJX lifted its adjusted earnings guidance for fiscal 2011 to a range of $3.33 to $3.38 per share. Previous guidance was in the range of $3.27 to $3.37 per share. The revised guidance remains in line with the Zacks Consensus Estimate of $3.37 per share, which edged up a penny over the past week.
Cash Flow, Balance Sheet and Share Repurchase
TJX exited the quarter with cash and cash equivalents of $1,339 million, compared to $1,445 million in the year-ago period. Quarter-end long-term debt was $774 million, reflecting a capitalization ratio of 20.0%. Year to date, the company generated $1099 million of cash from operations and deployed $141.9 million towards share buybacks, $540.4 million towards capital expenditure and $170 million towards dividend payments.
During the reported quarter, the company repurchased shares worth $256 million. For full fiscal 2011, the company intends to repurchase shares worth $1.2 billion. Moving forward, TJX expects fiscal 2011 fourth-quarter EPS of 89 cents to 94 cents based on same-store sales decline of 1% to 3%. The guidance is in line with the Zacks Consensus Estimate of 94 cents per share.
BP Continues to Divest
British oil giant BP Plc (BP) agreed to divest its fuels marketing businesses in five southern African countries for $296 million to Puma Energy, subject to certain post-completion price adjustments. This move is reflective of the distressed oil major's constant endeavor to raise $25–$30 billion by the end of 2011 to pay off its Macondo oil spill related charges.
The sale includes BP's fuels marketing businesses in Namibia, Botswana and Zambia as well as 50% interest in both BP Malawi and BP Tanzania to Puma Energy, subsidiary of Amsterdam-based commodities trader Trafigura Beheer B.V. However, it excludes BP's refining and marketing businesses in Mozambique and South Africa.
The businesses supply commercial and aviation fuel along with lubricants, and include almost 190 service stations across the five countries. They also own and operate storage depots, an import terminal in Namibia, and employ a total staff of 402 employees.
The divestiture is expected to close by this year at Botswana and through 2011 in the other countries, pending certain regulatory approvals. BP also confirmed that Angola's state-owned petroleum company, Sonangol (Sociedade de Combustíveis de Angola), plans to take a 10% stake in Puma's acquired businesses.
With the present sale of its southern African business unit, BP is well on track with its planned divestment target of $30 billion and subsequently reducing debt by $10–$15 billion by the end of 2011. However, the company's total divestment program accounts for only a minimum number of its total reserves and we believe that its production volumes will slowly gain traction in the near to medium term.
BP, which has a 65% interest in the Macondo well, has not received any payment from its partners Anadarko Petroleum Corporation (APC) and Mitsui & Co. Ltd. (MITSY), which have a respective 25% and 10% interest. Despite incurring massive spill-related costs in the third quarter, we believe that the long-term fundamentals of BP remain strong based on its third quarter performance and efforts toward the targeted $30 billion asset divestiture program.
We, thereby, retain our long-term Neutral recommendation on the company. BP holds a Zacks #3 Rank (short-term Hold rating).
Benihana Sales Rise
Miami-based Benihana Inc. (BNHN) posted restaurant sales of $23.0 million for the four-week period ending November 7, 2010, up 3.7% from $22.2 million in the year-ago period. This is the first four-week period of third quarter 2011.
Results reflect the benefits of the Benihana Teppanyaki Renewal Program, which the company initiated in 2009 to improve the dining experience of the guests at the Benihana Teppanyaki restaurants.
The company's comparable restaurant sales grew 4.8% in the reported period, representing the ninth consecutive period of growth. The comparable restaurant sales jumped 8.2% year over year at Benihana Teppanyaki restaurants, given the traffic gain of 11.8%. However, due to challenging economic environment, same store-sales declined 1.3% at RA Sushi restaurant and dipped slightly by 0.2% at Haru.
The largest U.S. chain of Japanese restaurants generated 99.5% of its revenues from restaurant sales (65% from Benihana Teppanyaki, 25% RA Sushi and 10% Haru) and 0.5% from franchisee fees and royalty.
The Zacks Consensus Sales Estimate for the third quarter of 2011 is $71 million. We expect the company to exceed the estimate as holiday season is ahead. Additionally, the company is undertaking promotional and marketing initiatives to attract the customers.
We have a Zacks #3 Rank (short-term Hold recommendation) on the shares. We also reiterate our long-term Neutral rating.
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