10:10 ET
INFY Guides Q1 and FY12 Below Consensus
Infosys (INFY $63.58 -9.43) reported fourth quarter earnings of $0.70 per share, in-line with the Thomson Reuters consensus of $0.70.
Revenues rose 23.6% year-over-year to $1.6 billion versus the $1.63 billion consensus.
For the first quarter, the company expects to see earnings in the range of $0.62 to $0.63 versus $0.69 Thomson Reuters consensus. Revenues are expected to be $1.643 billion to $1.659 billion versus the $1.65 billion Thomson Reuters consensus.
For fiscal year 2012, the company sees earnings of $2.83 to $2.88 versus the $3.10 Thomson Reuters consensus and expectes revenue to be $7.13 billion to $7.25 billion versus the $7.25 billion Thomson Reuters consensus. The company said, "We expect the demand environment to be normal this year for the industry."
Revenues rose 23.6% year-over-year to $1.6 billion versus the $1.63 billion consensus.
For the first quarter, the company expects to see earnings in the range of $0.62 to $0.63 versus $0.69 Thomson Reuters consensus. Revenues are expected to be $1.643 billion to $1.659 billion versus the $1.65 billion Thomson Reuters consensus.
For fiscal year 2012, the company sees earnings of $2.83 to $2.88 versus the $3.10 Thomson Reuters consensus and expectes revenue to be $7.13 billion to $7.25 billion versus the $7.25 billion Thomson Reuters consensus. The company said, "We expect the demand environment to be normal this year for the industry."
GOOG Q1 EPS Misses Expectations
Google (GOOG $540.91 -37.60) reported first quarter earnings of $8.08 per share, $0.02 worse than the Thomson Reuters consensus of $8.10.
Revenues rose 29.1% year-over-year to $6.54 billion, ex-TAC, versus the $6.32 billion consensus.
Google reports Q1 Paid Clicks +18% year-over-year versus the +15% consensus; CPC +8% YoY vs. the +6% consensus. Google reports Q1 non-GAAP operating margin of 38% vs. the 38.4% consensus... Net cash provided by operating activities in the first quarter of 2011 totaled $3.17 billion, compared to $2.58 billion in the first quarter of 2010.
In the first quarter of 2011, capital expenditures were $890 million, the majority of which was related to IT infrastructure investments, including data centers, servers, and networking equipment. In the first quarter of 2011, free cash flow was $2.28 billion. "We expect to continue to make significant capital expenditures."
Revenues rose 29.1% year-over-year to $6.54 billion, ex-TAC, versus the $6.32 billion consensus.
Google reports Q1 Paid Clicks +18% year-over-year versus the +15% consensus; CPC +8% YoY vs. the +6% consensus. Google reports Q1 non-GAAP operating margin of 38% vs. the 38.4% consensus... Net cash provided by operating activities in the first quarter of 2011 totaled $3.17 billion, compared to $2.58 billion in the first quarter of 2010.
In the first quarter of 2011, capital expenditures were $890 million, the majority of which was related to IT infrastructure investments, including data centers, servers, and networking equipment. In the first quarter of 2011, free cash flow was $2.28 billion. "We expect to continue to make significant capital expenditures."
BAC's Q1 EPS Falls Short of Expectations
Bank of America (BAC $13.11 -0.02) reported first quarter earnings of $0.17 per share, $0.10 worse than the Thomson Reuters consensus of $0.27.
Revenues fell 15.9% year-over-year to $26.88 billion versus the $26.69 billion consensus.
Results for the most recent quarter were positively affected by lower credit costs, gains from equity investments, and higher asset management fees and investment banking fees. These factors were partially offset by higher legacy mortgage-related costs, higher litigation expenses, and lower sales and trading revenue from the record levels reported in the first quarter of 2010.
Tangible book value1 per share rose to $13.21 in the first quarter of 2011, up from $12.98 at the end of 2010 and $11.70 in the first quarter of 2010. Regulatory capital ratios remained strong with the Tier 1 common ratio at 8.64% at March 31, 2011, compared to 8.60% at December 31, 2010, and 7.60% at March 31, 2010.
The increase from the fourth quarter of 2010 was largely due to higher retained earnings and a reduction in risk-weighted assets, partially offset by an increase in the co's disallowed deferred tax asset (27 basis points of Tier 1 common). The tangible common equity ratio1 rose to 6.10% at March 31, 2011 from 5.99% at December 31, 2010 and 5.22% at March 31, 2010. The provision for credit losses declined 61% from the year-ago quarter as net charge-offs fell for the fourth consecutive quarter, reflecting improved credit quality across most consumer and commercial portfolios.
The allowance for loan and lease losses to annualized net charge-off coverage ratio improved in the first quarter of 2011 to 1.63 times, compared with 1.56 times in the fourth quarter of 2010 and 1.07 times in the first quarter of 2010. "Strong growth in deposit balances and positive contributions from five of our six businesses reflect the steady improvement in the broader economy [mortgage biz the outlier]."
Revenues fell 15.9% year-over-year to $26.88 billion versus the $26.69 billion consensus.
Results for the most recent quarter were positively affected by lower credit costs, gains from equity investments, and higher asset management fees and investment banking fees. These factors were partially offset by higher legacy mortgage-related costs, higher litigation expenses, and lower sales and trading revenue from the record levels reported in the first quarter of 2010.
Tangible book value1 per share rose to $13.21 in the first quarter of 2011, up from $12.98 at the end of 2010 and $11.70 in the first quarter of 2010. Regulatory capital ratios remained strong with the Tier 1 common ratio at 8.64% at March 31, 2011, compared to 8.60% at December 31, 2010, and 7.60% at March 31, 2010.
The increase from the fourth quarter of 2010 was largely due to higher retained earnings and a reduction in risk-weighted assets, partially offset by an increase in the co's disallowed deferred tax asset (27 basis points of Tier 1 common). The tangible common equity ratio1 rose to 6.10% at March 31, 2011 from 5.99% at December 31, 2010 and 5.22% at March 31, 2010. The provision for credit losses declined 61% from the year-ago quarter as net charge-offs fell for the fourth consecutive quarter, reflecting improved credit quality across most consumer and commercial portfolios.
The allowance for loan and lease losses to annualized net charge-off coverage ratio improved in the first quarter of 2011 to 1.63 times, compared with 1.56 times in the fourth quarter of 2010 and 1.07 times in the first quarter of 2010. "Strong growth in deposit balances and positive contributions from five of our six businesses reflect the steady improvement in the broader economy [mortgage biz the outlier]."
Industrial Production Continues Strong Expansion
Industrial production surged 0.8% in March after increasing a lackluster 0.1% in each of the last two months. The Briefing.com consensus expected industrial production to increase 0.6%.
Most of the difference between March and the previous months was due to a return to growth in utilities production. Warmer than normal temperatures led to a 2.3% and 3.6% decline in utilities production in January and February, respectively. As temperatures returned to more normal levels, utilities production rebounded 1.7% in March.
Manufacturing production remained on firm ground. Production increased 0.7% in March after increasing 0.6% in February.
Motor vehicles and parts production increased 3.0% in March as motor vehicle assemblies increased from 8.55 million SAAR in February to 8.94 million SAAR in March. Auto production increased from 2.78 million SAAR in February to 2.97 million SAAR in March while light truck assemblies increased from 5.58 million SAAR in February to 5.97 million SAAR in March. With gasoline prices encroaching on $4.00 per gallon in many parts of the country, however, the growth in light truck assemblies could eventually saddle motor vehicle manufacturers with a glut of undesirable supply.
Capacity utilization increased from 76.9% in February to 77.4% in March. This is exactly what the consensus expected.
Outside of Food and Energy, CPI Growth Remains Mild
Consumer prices increased 0.5% in March after increasing by the same amount in February. The Briefing.com consensus expected CPI to increase 0.5%.
As expected, energy was a strong contributor to the rise in inflation. Energy prices rose 3.5% during the month as gasoline prices increased 5.6%.
Unlike the PPI, which showed a decline in food prices, consumer food costs increased 0.8%. We believe that food prices will return to more normal levels in the near future and put downward pressure on prices.
Excluding food and energy costs, core prices increased 0.1% in March, down from 0.2% growth in February. The consensus expected core prices to increase 0.2%.
New and used car prices jumped 0.8% as many motor vehicle dealers ended their incentive programs in the face of supply shortages from Japanese manufacturers. The growth in vehicle prices, however, were offset by a 0.5% decline in apparel prices.
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