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Sprint Nextel, General Dynamics, Buffalo Wild Wings, Kimco Realty and Virgin Media

^{Published on 2010-07-29 14:11:05 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Sprint Nextel (NYSE: [ S ]), General Dynamics Corporation (NYSE: [ GD ]), Buffalo Wild Wings Inc. (Nasdaq: [ BWLD ]), Kimco Realty Corp. (NYSE: [ KIM ]) and Virgin Media Inc. (Nasdaq: [ VMED ]).

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Here are highlights from Wednesdaya™s Analyst Blog:

Sprint Beats, Grows Subscribers

Sprint Nextel (NYSE: [ S ]), the third-largest U.S. wireless carrier, reported second-quarter 2010 adjusted net loss per share of 15 cents, which surpassed the Zacks Consensus Estimate of a net loss of 19 cents. Adjusted earnings excluded a one-time tax related to non-cash charge of $302 million (10 cents per share). Sprint reported its second-quarter results before the market open on July 28.

On a GAAP basis, Sprint posted a net loss of $760 million (25 cents per share), 98% beyond the net loss of $384 million (13 cents) in the year-ago quarter.

Consolidated operating revenue dipped 1% year over year to $8.025 billion due to lower contributions from its wireline and post-paid wireless businesses, which were partially offset by higher revenues from prepaid service and equipment. However, the revenues were modestly higher than the Zacks Consensus Estimate of $8.018 billion.

Consolidated revenue from the wireless segment was $7 billion, flat year over year. Sprint gained approximately 111,000 subscribers in the quarter, which represents 55,000 net declines in retail subscribers and 166,000 net additions in wholesale and affiliate subscribers. This represents the first wireless subscriber growth in three years.

Sprint achieved the best year-over-year quarterly improvement in post-paid subscriber additions in more than five years. A net loss of 228,000 customers in the retail post-paid business reflects a considerable improvement from a net loss of 991,000 subscribers in the year-ago quarter and 578,000 subscriber loss in the sequential quarter.

Strong Quarter from General Dynamics

General Dynamics Corporation (NYSE: [ GD ]) in the second quarter of fiscal 2010 swept past the Zacks Consensus Estimate and year-ago quarterly earnings of $1.61 by 7 cents, to reach $1.68. On a reported basis, including one-time items, earnings came in at $1.67, up 4.4% from the year-ago quarter.

Operational Results

General Dynamicsa™ revenue of $8.104 billion was down 2.9% compared to the Zacks Consensus Estimate of $8.3 billion. However, revenues rose marginally (by $4 million) from the second quarter of 2010. The company reported earnings from continuing operations of $651 million compared with $621 million in the year-ago quarter. Net earnings were $648 million, compared to $618 million in the second quarter of 2009. Operating margins for the quarter grew to 12.2% compared to 11.7% in the year-ago period.

Segmental Performance

General Dynamics in the quarter witnessed a higher top-line performance at the Information Systems & Technology (12.0%) and the Marine Systems (0.7%). The other two segments witnessed lower revenues year over year. Combat Systems fell 12.2% year over year, while Aerospace fell 2.3% year over year.

At the Aerospace and Information Systems & Technology segments, General Dynamics observed steep operating earnings growth of 8.4% and 9.9%, respectively, during the quarter. However, operating earnings at the Combat Systems and Marine Systems sunk 1.7% and 0.6%, respectively, over last yeara™s operating earnings.

Financial Condition

General Dynamics generated $687 million in cash from operating activities at the end of the first half of 2010, compared to $763 million for the same period last year. The company ended the reported quarter with cash and cash equivalents of $1.9 billion compared to $2.3 billion at year-end 2009. Long-term debt remained unchanged at $3.2 billion.

Buffalo Wild Wings Beats

Buffalo Wild Wings Inc. (Nasdaq: [ BWLD ]) second quarter earnings of 50 cents per share outdid the Zacks Consensus Estimate of 42 cents and soared 28% from 39 cents posted in the prior-year quarter. The better-than-expected results were driven by double-digit growth in the top line and lower chicken wing prices.

Total revenues climbed 12.4% year over year to $145.7 million and also outperformed the Zacks Consensus Estimate of $142.0 million. Sales at company-operated restaurants rose 11.7% to $131.5 million, fueled by 19 additional restaurants in operation at the end of the quarter compared with the prior-year quarter.

Franchise royalties and fees grew 19.5% to $14.2 million propelled by 64 additional restaurants in operation at the end of the quarter compared with the year-ago quarter. However, for the first time in the last 4 years, the company experienced a drop in its comparable-store sales, which declined 0.1% and 0.7% at company-operated restaurants and franchised restaurants, respectively.

Average weekly sales for company-operated restaurants increased 0.2% from the prior-year quarter to $43,021 and for franchised restaurants, it leaped 0.9% to $49,051.

Kimco Misses Marginally

Kimco Realty Corp. (NYSE: [ KIM ]), a leading real estate investment trust (REIT), reported a 13.8% increase in second quarter 2010 rental revenues comparedwith the year-earlier quarter. Revenues for the reported quarter increased to $214.0 million from $188.1 million in the year-ago quarter. However, revenues for the reported quarter fell short of the Zacks Consensus Estimate of $216 million.

The company reported second quarter 2010 FFO (fund from operations) of $105.6 million or 26 cents per share comparedwith an FFO loss of $62.7 million or 17 cents per share in the year-ago period. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. The second quarter 2010 FFO marginally missed the Zacks Consensus Estimate by a penny.

The quarterly FFO includes certain non-recurring items, excluding which FFO for the second quarter of 2010 was $125.5 million or 31 cents per share comparedwith $113.8 million or 31 cents per share in the year-earlier quarter.

Overall occupancy in Kimcoa™s combined shopping center portfolio was 92.7% at the end of the quarter, an increase of 40 bps comparedwith second quarter 2009. In the U.S. portfolio, occupancy was 92.3% as on June 30, 2010, an increase of 50 bps comparedwith the year-ago period. Same-store net operating income (NOI) in the U.S. portfolio increased 2.1% year over year. During the quarter, Kimco executed a total of 714 leases spanning 2.1 million square feet. The number of leases executed during the quarter reported a 46% year-over-year increase, while square feet leased represented a 22% increase.

Virgin Media Reports Mixed Quarter

Virgin Media Inc. (Nasdaq: [ VMED ]) declared mixed financial results for the second quarter 2010. Quarterly total revenue of $1,446 million was up 7.1% year over year and mostly in line with the Zacks Consensus Estimate of $1,449 million. The year-over-year increase in revenue was primarily due to significant growth of all four reporting segments of the company.

The second quarter 2010 revenue growth was the highest for Virgin Media in the last four years, despite the fact that this quarter generally recognized as seasonally weakest quarter of the company.

Net loss in the second quarter of 2010 was $102.8 million or 32 cents per share compared with a net loss of $82.5 million of 26 cents per share in the prior-year quarter. Quarterly net loss of 32 cents per share was significantly higher than the Zacks Consensus Estimate of a loss of 20 cents per share. This was primarily due to an increase in interest expense and higher loss on debt extinguishment.

Quarterly cost of sales was $591.2 million, up 3.6% year over year. SG&A expense was $300.6 million, up 4.2% year over year. Total operating expenses was $1,327 million, down 0.7% year over year. Quarterly operating income was $119.4 million, up by a whopping 747% year over year.

During the quarter, Virgin Media generated approximately $554.6 million of cash from operations, up 12.9% year over year. Quarterly free cash flow was $163.4 million, up 37.3% year over year.

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