Peak Chicken Wings: $BWLD Culled in After Hours After Reporting Abysmal Earnings

Call me superficial. The Buffalo Wild Wing corporation just opened a store in Princeton. Upon seeing it, I had a feeling  the stock had peaked. Upon dining in it, I knew it was heading lower. The service and food are of the catastrophic varietal. They had one job to do, which was to make me some quality chicken wings. They failed. As such, the shares are inexorably lower by 12% in the after-hours blood session.

Via Briefing

• Total revenue increased 15.4% to $508.3 million
• Company–owned restaurant sales increased 16.6% to $483.9 million
• Same–store sales decreased 1.7% at company–owned restaurants and 2.4% at franchised restaurants
• Net earnings increased 12.8% to $32.8 million from $29.0 million, and earnings per diluted share increased 13.5% to $1.73 from $1.52

Sally Smith, President and Chief Executive Officer, commented, “Our total revenue in the first quarter increased 15.4%, when compared to the prior year, resulting from continued unit development and franchise acquisitions over the last 12 months. We are dissatisfied to report a same-store sales decline and we’re undertaking several sales-driving initiatives to regain momentum. We were able to manage costs and improve our restaurant-level margin, and earnings per diluted share increased 13.5% year-over-year to $1.73.”

Total revenue increased 15.4% to $508.3 million in the first quarter, compared to $440.6 million in the first quarter of 2015. Company–owned restaurant sales for the quarter increased 16.6% over the same period in 2015, to $483.9 million, driven by 100 additional Buffalo Wild Wings® restaurants at the end of the first quarter of 2016, partially offset by a same-store sales decrease of 1.7%. Franchise royalties and fees decreased 5.0% to $24.3 million for the quarter, versus $25.6 million in the first quarter of 2015. This decrease is attributed to seven fewer franchised Buffalo Wild Wings locations and a same-store sales decrease of 2.4% at franchised Buffalo Wild Wings restaurants in operation at the end of the period, compared to the same period in 2015.

Average weekly sales for company-owned Buffalo Wild Wings restaurants were $62,829 for the first quarter of 2016, compared to $64,851 for the same quarter last year, a 3.1% decrease. Franchised Buffalo Wild Wings restaurants in the United States averaged $65,636 for the period, versus $67,075 in the first quarter a year ago, a 2.1% decrease.

Other income in 2016 consisted primarily of a gain related to the valuation of contingent consideration for a franchise acquisition of $1.1 million, partially offset by interest expense of $0.9 million.

Under the previously announced share repurchase authorization, 173,892 shares were repurchased during the first quarter of 2016 for a total of $25 million.

For the first quarter, net earnings increased 12.8% to $32.8 million, versus $29.0 million in the first quarter of 2015. Earnings per diluted share were $1.73, compared to first quarter 2015 earnings per diluted share of $1.52.

2016 Outlook

Ms. Smith remarked, “We are focused on sales-driving initiatives to regain momentum in 2016. To strengthen our FastBreak™ lunch program, we’re piloting a speed of service guarantee. We’re promoting Wing Tuesdays® while evaluating different pricing and bundling options for this value day. Soccer is a growing sport in the United States and we’ll be the place to watch all the action on the pitch for the major tournaments this summer.”

Ms. Smith concluded, “The Buffalo Wild Wings brand remains strong and poised to deliver long-term earnings growth. In 2016, we’re continuing our development of new company-owned and franchised Buffalo Wild Wings restaurants in the United States and we are aggressively remodeling locations. Given our recent sales trends and an increasing outlook for the cost of traditional chicken wings, we believe earnings per diluted share in 2016 should be $5.65 to $5.85.”

For 2016, the company expects the following new unit development:

• Approximately 40 company-owned Buffalo Wild Wings restaurants
• 30 to 35 franchised Buffalo Wild Wings locations in the United States
• 12 to 15 franchised Buffalo Wild Wing locations internationally
• 6 company-owned and 4 franchised R Taco restaurants
• Continued unit expansion by PizzaRev

For 2016, the company expects the following:

• Improving same-store sales
• Deflationary food costs, excluding traditional chicken wings
• Depreciation and amortization expense of $150 to $155 million
• Share repurchase activity of approximately $100 million
• Earnings per diluted share of $5.65 to $5.85
• Capital expenditures of approximately $190 million, excluding additional franchise acquisitions or emerging brand investments

The company reported 310 million monthly users vs the consensus of 308 million. Both revenues and earnings, going forward, will be an abomination. As such, shares of TWTR are knifing lower in the after-hours, off by 10%.

Twitter sees Q2 revs $590-610 mln vs $677.39 mln Capital IQ Consensus Estimate; EBITDA $145-155 mln

I am ignoring what the company is saying in the after-hours, trying to stem the flow of sellers out of the stock. This company has done nothing but disappoint since coming public.

This company is being grossly mismanaged. Fire Jack now.

Via briefing
Reports Q1 (Mar) earnings of $0.15 per share, $0.05 better than the Capital IQ Consensus of $0.10; revenues rose 36.5% year/year to $595 mln vs the $607.55 mln Capital IQ Consensus.
MAUs comes in at 310 mln, street expectations were for 308 mln
Advertising revenue totaled $531 million, an increase of 37% year-over-year. Excluding the impact of year-over-year changes in foreign exchange rates, advertising revenue would have increased 39%.
Mobile advertising revenue was 88% of total advertising revenue.
Data licensing and other revenue totaled $64 million, an increase of 34% year-over-year.
U.S. revenue totaled $390 million, an increase of 35% year-over-year.
International revenue totaled $204 million, an increase of 39% year-over-year. Excluding the impact of year-over-year changes in foreign exchange rates, international revenue would have increased 46%.
Co issues downside guidance for Q2, sees Q2 revs of $590-610 mln vs. $677.39 mln Capital IQ Consensus Estimate; Adjusted EBITDA is expected to be in the range of $145-155 mln.
Co reaffirms FY16 Capital expenditures guidance to be $300 to $425 million; Adjusted EBITDA margin in the range of 25-27%.

This is equal to watching a NY Mets game, seeing the opposition constantly increase their lead, and feeling increasingly better about the specter of a Mets win. ‘Tis is the case with the U.S. economy. People have gone fucking apeshit mad, sopping up secondary offerings and greasy oil stocks, amidst BILLIONS in write-downs. The Atlanta Fed is forecasting a 0.4% growth rate for Q1, yet the level of fear is virtually non-existent, judging by recent polls and the VIX tits index.

Markets don’t give a shit. Share buybacks and firings will keep this economy humming along just fine. Let’s see what Apple has to see, due to report earnings after the bell.

I’m not going to pretend to know what’s at stake here, especially with kids who are cursed with muscular dystrophy. But the FDA advisory panel voted against approval for a drug that was, apparently, being tested without the full benefits of science. Critics argue the trials were too small–because parents didn’t want to sign kids to a trial that potentionally would give them a placebo instead of an active drug.

It’d be the equivalent to signing a death warrant for your child, all for the love of science.

Shares have risen like a Phoenix since the lows set this morning, based upon the belief that the FDA will cave into political pressures and approve the drug, in spite of the board advising otherwise.

Really? Has everyone gone mad?

S&P slashed Exxon’s credit rating to AA+, based on the fact that the company is being run by a bunch of asshats.

Let me explain the ways this company has shot itself in the foot.

Their oil fields are dying. Last year they only replaced 67% of lost oil production. Peak Exxon.

The company bought natural gas producer XTO Energy for $40 billion in 2009, the peak of natural gas. That company would be worth nothing today.

Retarded joint venture with Russian driller that resulted in a $1 billion loss.

And then there’s this: the company has wasted $54 billion in stock buybacks since 2012, as the companies debt more than doubled.

“The company’s debt level has more than doubled in recent years, reflecting high capital spending on major projects in a high commodity price environment and dividends and share repurchases that substantially exceeded internally generated cash flow,” S&P wrote in the note.

Exxon now has $34 billion in debt, declining production due to old wells, and a management team who thinks the best way to spend $54 billion is to buy its own stock.

Lazy fuckers.

The only two American companies left with a AAA rating is JNJ and MSFT.

Thanks to the latest housing and durable goods data, the Atlanta Fed’s GDPNow model is forecasting red hot economic growth for the first quarter of 2016 of 0.4%, up from a paltry 0.3%

No wonder why the Fed is so worried about rapid runaway inflation.

Giddy up!

Pioneer Resources is sharply higher today on better than expected results. What’s interesting to note is that cheap crude has not deterred them from producing oil. Moreover, they fully intend to deploy additional resources at $50 crude, as stated in today’s call.

Via Briefing.com

The co hit record production again, Q1 2016, 222,000 barrels of oil equivalent per day, 55% oil so co is well along in its movement from 52% to 56% oil (Above Pioneer’s guidance range of 211 MBOEPD to 216 MBOEPD)

Oil production is up 10,000 oils a barrel per day or 9% versus Q4, obviously driven by the growth of the Spraberry/Wolfcamp horizontal drilling program

Increase of 7 MBOEPD, or 3%, vs. Q4 2015
Placed 55 horizontal wells on production in the Spraberry/Wolfcamp during Q1

All wells benefited from completion optimization
Continuing to realize significant capital efficiency gains in the Spraberry/Wolfcamp

Co has increased oil and gas derivative coverage for 2017
2016 Outlook:
Pioneer plans to maintain 12 horizontal rigs in the northern
Spraberry/Wolfcamp based on favorable well returns in this area
Currently operating 12 horizontal rigs in the northern Spraberry/Wolfcamp and 2 horizontal rigs in the southern Wolfcamp JV (both will be terminatedby the end of June)
This activity level is expected to deliver production growth of 12%+ in 2016 compared to 10%+ previously and will allow the Company to continue to progress its completion optimization program

The higher forecasted growth rate reflects improving Spraberry/Wolfcamp well productivity

Planned capital expenditures for drilling activity and vertical integration spending continue to be $2.0 B for 2016

Pioneer expects to add 5 to 10 horizontal rigs when the price of oil recovers to ~$50 per barrel and the outlook for oil supply/demand fundamentals is positive

Strong commodity derivatives position helps protect the Company’s cash flow

Oil derivative coverage of ~85% for 2016 and ~50% for 2017
Gas derivative coverage of ~70% for 2016 and ~25% for 2017
Strong investment grade balance sheet coupled with forecasted cash flow enables Company to grow production and fund its expected capital program through 2017 without increasing debt

It’s becoming abndantly clear who is benefitting from this rout in crude. All of the marginal, highly leveraged, producers are getting crushed, while the larger operators continue to drill and acquire assets like it’s business as usual. This had nothing to do with supply/demand dynamics.

As oil continues to March higher, producers like PXD are shining up their rigs, getting ready to deploy them back into the field, as crude stair-steps back towards $100 for no discernible reason, other than the fact that it’s business as usual.

This is the nightmare that keeps repeating. No one is talking about this yet. But, come summer, if a deal isn’t hammered out yet, this is going to become an issue for markets and the EU.

Because of differences of opinion, the Greeks, and the other people in Europe footing their bills, bailout talks have been delayed for months. The IMF and the EU want more draconian cuts to provide them with a 3.5% surplus. The Greeks are having an issue complying. Therein lies the issue.

The government has used between roughly nine billion euros ($10 billion) and 10 billion through repurchase agreements since last year, most of which has been rolled over, officials said.
“The situation is not pleasant but not as dramatic as last year,” said one government official, who declined to be named. “But the more time passes without concluding the review, we could find ourselves with our backs against the wall.”

“The cash earned an annual 3.7 percent on average in the second half of last year and the return during the first half of 2016 is similar, better than what the entities would have been earning from commercial banks,” a second official said.
No one at the finance ministry was immediately available to comment.

A third bailout deal of up to 86 billion euros was agreed last summer but a review of compliance with the terms of the agreement was expected to be completed late last year and Athens is still scrambling to conclude those requirements.
Greece needs the funds, more than 5 billion euros, to repay European Central Bank and IMF loans due in June and July.

Talks between Athens, European Union institutions and the International Monetary Fund (IMF) have been snagged by disagreements over whether Greece’s cutbacks are enough to reach a primary surplus target of 3.5 percent by 2018.

“It has been a bumpy road since mid April but Greece can make it and not go bust until the end of May or early June by also using pension funds cash reserves and piling up state arrears if needed,” a senior government official told Reuters.

Don’t worry. If the Greeks keep this up, the EU will simply appoint a new leader to rule Greece, one who will obey their demands without terms.

I’ve never heard anyone stand up for women’s rights in these Middle East countries. I’d rather be a camel than a woman in these places.

The young Prince Mohammed has declared that the community isn’t convinced women should be permitted, by law, to drive in Saudi Arabia.

But don’t worry, positive changes are coming soon.

Allowing women to drive is “not a religious issue as much as it is an issue that relates to the community itself that either accepts it or refuses it,” said the 30-year-old prince, who has amassed unprecedented powers since his father, King Salman, ascended to the throne. “The community is not convinced about women driving” and sees negative consequences if it’s allowed, the prince said on Monday after outlining a plan to reduce the kingdom’s reliance on oil.

The prince had signaled his support for more freedom for women during an interview this month, saying “we believe women have rights in Islam that they’ve yet to obtain.” But when asked about the driving ban by a reporter on Monday, he said reform couldn’t be rushed. “Changes could happen in the future and we always hope they will be positive changes,” he said.

Our good friends the Saudis. A good rule of thumb, at least in my experience, is to judge others by the company he keeps. If we were to hold America to the same scrutiny, what does it say about us?

It looks like the company is on track and will continue to deleverage its  balance sheet through asset sales. This is the quintessential commodity play, with large copper and oil interests, even gold. Back in the dark days of February, it looked as though the stock was heading to the ash heap of time. Now it’s looking more and more like a huge winner in the making, as investors sashay in and out of commodity stocks with genteel decorum.

Reports Q1 (Mar) loss of $0.16 per share, excluding $3.19/share in charges, in-line with the Capital IQ Consensus of ($0.16); revenues fell 15.1% year/year to $3.53 bln vs the $3.52 bln Capital IQ Consensus.

Consolidated sales totaled 1.1 billion pounds of copper, 201 thousand ounces of gold, 17 million pounds of molybdenum and 12.1 million barrels of oil equivalents (MMBOE) for first-quarter 2016, compared with 960 million pounds of copper, 263 thousand ounces of gold, 23 million pounds of molybdenum and 12.5 MMBOE for first-quarter 2015.

Consolidated sales for the year 2016 (adjusted for the anticipated closing of the Morenci transaction in second-quarter 2016) are expected to approximate 5.0 billion pounds of copper, 1.85 million ounces of gold, 71 million pounds of molybdenum and 54.4 MMBOE, including 1.15 billion pounds of copper, 195 thousand ounces of gold, 19 million pounds of molybdenum and 13.5 MMBOE for second-quarter 2016. Average realized prices were $2.17 per pound for copper, $1,227 per ounce for gold and $29.06 per barrel for oil for first-quarter 2016.

Consolidated unit net cash costs averaged $1.38 per pound of copper for mining operations and $15.85 per barrel of oil equivalents (BOE) for oil and gas operations for first-quarter 2016. Consolidated unit net cash costs for the year 2016 are expected to average $1.05 per pound of copper for mining operations and $15 per BOE for oil and gas operations.

Capital expenditures for oil and gas operations for the year 2016 are estimated to total $1.5 billion, excluding $0.8 billion in idle rig costs (which reduce operating cash flows). ~90 percent of the 2016 capital budget is expected to be directed to the GOM.

Operating cash flows for the year 2016 are expected to ~$4.8 bln, up from $3.4 bln (including $0.8 billion in working capital sources and changes in other tax payments). Capital expenditures are expected to ~$3.3 bln for FY16, down from $3.4 bln, consisting of $1.8 billion for mining operations (including $1.4 billion for major projects) and $1.5 billion for oil and gas operations.

FCX continues to advance discussions for the sale of certain interests in its mining and oil and gas assets to accelerate its debt reduction initiatives. While the process did not identify a buyer for the entire oil and gas business, a number of parties have interest in select assets, and FCX continues to engage in discussions with parties interested in potential asset or joint venture transactions. In the interim, FCX is taking immediate steps to reduce oil and gas costs further.

The stock is little changed in pre-market trading.