Zacks Analyst Blog Highlights: Public Storage, Chunghwa Telecom, Petroleo Brasileiro S.A., Medicis Pharmaceutical and Jack in the Box

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Mar 01, 2011, 09:30 ET

CHICAGO, March 1, 2011 /PRNewswire/ -- Zacks.com Analyst Blog features: Public Storage (NYSE: PSA), Chunghwa Telecom Co. Ltd. (NYSE: CHT), Petroleo Brasileiro S.A. (NYSE: PBR), Medicis Pharmaceutical Corp. (NYSE: MRX) and Jack in the Box Inc. (Nasdaq: JACK).

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Here are highlights from Monday's Analyst Blog:

Public Storage Beats Estimates

Public Storage (NYSE: PSA), a top real estate investment trust (REIT) operating self-storage facilities, reported fourth quarter 2010 FFO (funds from operations) of $1.33 per share, compared with $1.27 in the year-earlier quarter. 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.

Excluding several non-recurring items, FFO for fourth quarter 2010 was $1.45 per share compared with $1.33 in the year-ago quarter. Recurring FFO for fourth quarter 2010 exceeded the Zacks Consensus Estimate by 8 cents.

For full year 2010, Public Storage reported FFO of $4.72 per share, compared with $5.61 in the previous year. Recurring FFO for fiscal 2010 was $5.22 per share compared with $5.03 in 2009. Fiscal 2010 recurring FFO surpassed the Zacks Consensus Estimate by 50 cents.

During the reported quarter, Public Storage recorded an increase in total revenues to $418.2 million from $402.2 million in the year-earlier quarter. Total revenues for the reported quarter were well ahead of the Zacks Consensus Estimate of $392 million. For full year 2010, the company reported total revenues of approximately $1.6 billion – similar to that recorded in the previous year.

Same-store revenues increased 2.4% year-over-year to $360.4 million during the quarter, while net operating income climbed 4.2% to $260.3 million. The increase in same-store revenues was primarily due to a 1.7% increase in average occupancy and a 0.3% rise in realized rent per occupied square foot.

Chunghwa Delivers Solid 4Q

Chunghwa Telecom Co. Ltd. (NYSE: CHT) declared impressive financial results for the fourth quarter of 2010 with net income increasing 1.6% year over year. This was primarily attributable to massive reduction in income tax rate from 25% in the year-ago quarter to just 17%. Chunghwa is now more confident regarding fiscal 2011 and projected yearly total revenue to rise by approximately 1.94%.

Quarterly, GAAP net income was approximately $354.8 million, up 1.6% year over year. Net earnings per ADR were 38 cents, up 1.6% year over year. Total revenue, in the fourth quarter of 2010, was approximately $1,727.5 million, up 2.4% year over year. This encouraging performance was the combined result of higher broadband access revenue and continuously growing revenue from both mobile value-added services (VAS) and Internet services.

Quarterly operating income was $433.3 million, down 0.3% year over year. Operating margin was 25.1% compared with 25.7% in the year-ago quarter. Fourth-quarter 2010 EBITDA was $708.2 million, down 3% year over year. Quarterly EBITDA margin came in at 41% compared with 43.3% in the prior-year quarter.

During fiscal 2010, Chunghwa generated around $2,791.5 million cash from operation, up 9.5% year over year. Capital expenditure during fiscal 2010 was around $808.5 million, down 3.8% year over year.

At the end of fiscal 2010, Chunghwa had approximately $3,000 million of cash & marketable securities and around $112.7 million of outstanding debt on its balance sheet compared with $2,341.2 million of cash & marketable securities and $33.5 million of outstanding debt at the end of fiscal 2009.

Petrobras Ends 2010 on Strong Note

Brazilian state-run energy giant Petroleo Brasileiro S.A. (NYSE: PBR), or Petrobras S.A., announced its fourth quarter earnings of R$10.6 billion or R$0.81 per share, compared with R$7.7 billion or R$0.87 per share in the year-earlier quarter.

Earnings per ADR came in at 98 cents (exchange rate: U.S.$1.00 = R$1.66, 1 ADR = 2 shares), ahead of the Zacks Consensus Estimate of 83 cents. Petrobras' revenues of R$54.5 billion (or approximately $32.8 billion) was up 14.3% from the fourth quarter 2009 level and also beat our projection by 10.8%.

The positive comparisons can be primarily attributed to improved crude prices amid strong domestic energy demand, aided by a strengthening currency.

For full-year 2010, Petrobras earned R$35.2 billion or R$3.57 per share on revenues of R$213.3 billion.

Medicis Misses, Provides Outlook

Medicis Pharmaceutical Corp. (NYSE: MRX) posted fourth quarter 2010 earnings of 60 cents per share, in line with the Zacks Consensus Estimate but down 12.9% year over year from the year-ago earnings of 68 cents per share. Higher operating expenses led to a decline in earnings during the quarter. Quarterly revenues increased 1.7% to $182.1 million, but were slightly below the Zacks Consensus Estimate of $184 million. Increased sales of Restylane and Dysport helped boost revenues.

Fourth quarter earnings and revenues came within the guidance range provided by the company. Medicis Pharma was expecting earnings in the range of 57 cents to 62 cents per share on revenues of $180 million to $185 million.

For 2010, Medicis Pharma's earnings increased 36.2% to $2.28, missing the Zacks Consensus Estimate by a cent. Higher revenues accounted for increased earnings. Revenues for the year amounted to $700 million, just missing the Zacks Consensus Estimate of $703 million, but were 22.4% above the year-ago figure. Increased sales of Solodyn, Triaz, Ziana, Restylane, Vanos and Dysport led to the annual growth.

As in the fourth quarter, full year figures also conformed to the company's revenue ($698 million to $703 million) and earnings ($2.25 to $2.30 per share) guidance range.

Jack in the Box Beats

Jack in the Box Inc. (Nasdaq: JACK) posted first-quarter 2011 earnings of 61 cents per share, surpassing the Zacks Consensus Estimate of 46 cents as well as the year-ago quarter earnings of 43 cents. The results included a gain of 34 cents per share from the sale of 88 restaurants to franchisees; however, excluding the gain, earnings were 27 cents per share in the quarter.

Quarter Performance

During the quarter, Jack in the Box total revenue slipped 2.4% to $664.7 million from $681.3 million in the prior-year quarter. However, the company outperformed the Zacks Consensus Estimate of $630.0 million.

The revenue declined as restaurant sales dipped 14.7% to $436.9 million mainly due to the company's strategy to sell company-owned restaurants to franchisees. However, distribution revenue increased 40.2% to $146.7 million and franchised restaurant revenue climbed 25.6% to $62.7 million.

Jack in the Box same-store sales climbed 1.1%, driven by 1.5% upside at the company-owned and 0.9% hike at franchised restaurants. The comparable sales growth was attributed to higher customer visitation resulting from the company continues focus on efficiency, by improving the quality of food and service. Additionally, to enhance the guest's dining experience, the company plans to complete its restaurant re-imaging program by 2011. Moreover, same-store sales at Qdoba's restaurant were up 6.4%, driven by transaction growth and higher catering sales.

Jack in the Box's restaurant operating margin dipped 170 basis points (bps) to 12.6%. The margin contracted as food and packaging costs were up 80 bps, payroll and employee benefits costs inched up 30 bps and occupancy and other costs increased 60 bps.

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