With earnings season in full swing, markets were not kind to Corning Inc. (GLW) on Tuesday following the pre-market release of its second-quarter earnings. It was not a bad quarter, as Corning reported earnings that were in line with the consensus (45 cents a share) and revenue of $2.99 billion that was a bit better than forecast, but the stock was greeted by an 8% haircut. Could be that investors have gotten used to Corning producing better-than-expected results; it has done so in 11 of the last 13 quarters.
Corning bought back $150 million in stock during the quarter, which likely puts the repurchase in the range of 5 million shares. The buyback activity will continue in light of Corning's recently announced new $5 billion repurchase authorization. Based on Corning's dividend history and stated intention to increase dividends at least 10% annually, the next increase can be expected in early 2020 and should push the quarterly payout to 22 cents a share. Corning currently yields about 2.5%.
Following Tuesday's drubbing, Corning trades at about 14.4x next year's consensus estimates. Perhaps the markets will be in a better mood in the coming days as far as GLW is concerned; Tuesday's treatment was seemingly unwarranted.
Here on Wednesday morning, Bloomin' Brands (BLMN) , a name I've been intrigued by for quite a while, reported better-than-expected second-quarter earnings per share (36 cents vs. a 35-cent consensus) while falling just short on revenue ($1.02 billion vs. $1.04 billion). Same-store sales of company-owned restaurants were positive at Outback Steakhouse (up 1.3%), Fleming's Prime Steakhouse & Wine Bar (up 1.6%), and Bonefish Grille (up 0.1%), and negative at Carrabba's (down 1.6%). Outback Steakhouse is the flagship brand with 861 worldwide locations (674 company-owned and 187 franchises) out of a total of 1,481 locations for the company. Total U.S. same-store sales were up a tepid 0.6%. Restaurant-level operating margins of 15% showed some improvement versus the same quarter last year (14.6%).
Since the company's $150 million share repurchase program was announced in February, Bloomin' Brands has bought back $107 million of stock, or 5.5 million shares, which puts the average price in the $19.50 range.
Investors have not been happy with the stock's performance over the years; it has done little since going public in 2012. Bloomin' Brands also has sparked the ire of some activist investors; I would not be surprised if we see more of this.
BLMN trades at just under 10.5x next year's consensus estimates and yields 2.2%. I'm not sure how it will be greeted by markets here on Wednesday given its second-quarter results; the earnings beat here was rather small compared to the past six quarters, where surprises have ranged from 3.4% to 29%.