Earnings recap 4th calendar week
I recently made a poll, asking if I should make short earnings recaps of my portfolio holdings. 89% voted yes, so here we are: Let’s recap the last week, featuring MSFT 0.00%↑ , TXN 0.00%↑ , DIM 0.00%↑ , ASML 0.00%↑ , DHR 0.00%↑
I want this to be in a fast and concise format, so I’ll try a bullet-point approach. Let me know how you like it.
Microsoft MSFT 0.00%↑
The good: Intelligent cloud and Productivity/Business Processes with strong CC Growth, especially Azure is strong and Search + Advertising is growing in this difficult environment.
The bad: Personal Computing was weak, mainly due to Windows OEM (where they get royalties if i.e. Dell sells a notebook with Windows installed) and Devices saw 39% declines.
Comments: The Investment is perfectly intact, MSFT saw strong performances in the important parts of the business. Cash flows declined a bit, but I am confident in the future performance. Also here is a recent article I wrote on Microsoft.
Texas Instruments TXN 0.00%↑
The good: Operating cash flow was stable, the business is holding up well in this environment. Buybacks up 580% shows managements capital allocation skill.
The bad: Revenue declined due to the sector, Outlook is not the best, but long term it’s whatever. FCF declined due to CapEx, but again that was to be expected.
Comments: TI Continues to perform well in this challenging environment where many peers are struggling big time.
Sartorius Stedim DIM 0.00%↑
The good: Outlook raised for 2025, revenue growth expected to around 4.4 billion Euros with 35% operating margin.
The bad: Not a lot of growth in the next year, but Covid also pulled demand forward.
Comments: The investment is in tact, the company needs to show that it can meet and possibly exceed its medium-term targets. It’s a high-moat business in a growth market, so I am confident. Family-owned as well.
ASML ASML 0.00%↑
The good: ASML Beat expectations in this challenging environment after Chip stocks were hated just a few months ago. Shows how fast sentiment changes and how it created opportunities. Especially impressive: The backlog increased by another 6.3 Billion Euros (3.4 being EUV), to around 40 billion. 2023 revenue growth expected to be above 25%.
The bad: Net income declined and so did cash flows like in so many companies. I do not see this as an issue, ASML had a lot of trouble with fast shipments messing up the numbers a little in 2022.
Comments: ASML stands by its investor day targets and is looking to accelerate growth. The bookings are especially impressive and give reassurance that demand won’t dry up soon. Also important: All 5 EUV customers already placed order for High NA machines.
Danaher DHR 0.00%↑
The good: Revenue Core growth of 7.5% is decent, EPS up 6.5%, FCF up 15% (highlighting DHR long history of consistent >100% FCF conversion. Covid business only has a minimal impact now. Guidance seems good
The bad: The “new” Biotechnology segment saw margins decline as the only segments of the company.
Comments: Danaher continues doing what they do best. The company now also changed its operating segments and separated Life Sciences into Life Sciences and BioTechnology. Here my recent Danaher and TMO 0.00%↑ coverage.
That’s a wrap. Please give me feedback if you found value in this post.
But before you go, I’d like to offer you a discount on Seeking Alpha Premium, a service I use and contribute to daily. If you want to check out the service, with my affiliate link you can save 50% for the first year!