Earnings Quality

Family Dollar’s operating efficiency is deteriorating and its margins are under pressure, making its expansion plan look like a risky move that may damage the company’s earnings sustainability. Conventional wisdom has it that when the economy is shaky, dollar stores and super discounters become most popular with shoppers. But while Family Dollar Stores (FDO.N) is [...]

From kitty litter to spa treatments, PetSmart is making money from the North American tendency to spoil our pets; the company’s focus on managing costs, expenses and cash flow means that those profits are likely to be sustainable. It is a truth universally acknowledged that Americans like to pamper their pets. They buy designer togs [...]

CORRECTION: It has come to our attention that our original article, dated 25 Oct 2012, contained certain inaccuracies. We would like to correct those in the following revised article, below: Reliance Power Limited is one of India’s largest power generating companies, but it’s in the headlines for all the wrong reasons these days, including controversy [...]

Jiugui Liquor Co. has made tremendous strides in improving everything from its revenues and cash flow to managing its inventories more effectively, leading to high scores on many key StarMine models. The ever-growing ranks of China’s middle class continue to enjoy spending their disposable income on a vast array of consumer items that once were [...]

Overseas Shipholding (OSG.N) is sailing into rough waters, burdened by far too much debt and generating inadequate cash to meet its obligations. While the company ponders a bankruptcy filing, the stock has unexpectedly bounced off its lows, although StarMine models show little reason for optimism. Overseas Shipholding Co. (OSG.N) was already struggling to cope with [...]

The fallout from antitrust enforcement actions means that Brf-Brasil Foods is struggling despite a growing demand for poultry and beef products; margins and earnings quality have taken a blow. One of the big arguments in favor of viewing Brazil, Russia, India and China as a single giant multi-regional grouping of nations and businesses that has [...]

Analysts expect restaurant chains to report a gain of 2.8% in SSS for the third quarter of 2012, down slightly from year-earlier levels, as companies in the group prepare to grapple with the effects of this summer’s drought on their cost structures. Whether they are dishing up cheesecake and chicken wings or just doughnuts, fast [...]

Finding a coherent explanation for an expected earnings disappointment can be almost as difficult as tackling the problem itself. Here are several of the most commonly-cited reasons by companies for their growing bearishness. There are fewer than two weeks left before most companies in the S&P 500 index must draw a line under the third [...]

Four years after piling on debt to acquire Jaguar-Land Rover, Tata Motors is defying naysayers by reporting soaring revenues and profits, as well as sharply higher margins. Tata Motors Co (TTMT.IN), one division of the massive Indian Tata Group enterprise, made its name, in part, by manufacturing what it bills as the world’s cheapest car [...]

China’s economic growth is slowing, and debt-laden China Railway Group is among those feeling the pain, as its earnings quality deteriorates along with its margins. The slowdown in China’s economic growth, which may be more significant than it appears in the country’s formal GDP data, as we discussed earlier this week, is taking a toll [...]