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Sunday April 19, 2015



International Speedway Looks to Gain Speed

International Speedway Corporation (ISCA), operator of some of the most popular NASCAR tracks, reported its first quarter earnings on Tuesday, April 8. The company saw mild revenue and earnings growth amidst its efforts to invest in its future.

International Speedway reported that revenue for the first quarter was $131.8 million. This number was about $3 million higher than the $128.6 million reported during the comparable period last year.

Net income for the quarter was $15.5 million, or $0.33 per share. This figure was essentially unchanged from what the company earned during the same period last year.

International Speedway CEO Lesa France Kennedy had this to say about the quarter: “ISC kicked off fiscal 2014 in high gear with unforgettable racing and major milestones with DAYTONA Rising and ONE DAYTONA. Despite a forecast of inclement weather leading into Budweiser Speedweeks and a rain delayed DAYTONA 500, first quarter financial results were within our range of expectations thanks to increased revenue and stabilized earnings on a comparable basis.”

The first quarter is important for the NASCAR industry and International Speedway as it contains the popular Rolex 24 and famous Daytona 500. Many analysts feared that International Speedway’s bottom-line would be severely affected by rough weather to start the year. Fortunately for International Speedway, it appears it was able to survive the winter storms with little bottom-line damage. It managed to slightly grow sales and keep net income even. The company also has plans to grow as it spends $400 million in capital expenditures between 2014 and 2015. The hope is that these capital expenditures can strengthen and grow the NASCAR sport’s audience.

International Speedway Corporation (ISCA) shares ended the week at $32.00.

Family Dollar’s Results Disappoint

Family Dollar Stores, Inc. (FDO) announced its second quarter results on Wednesday, April 9. The results missed expectations as Family Dollar announced the closure of 370 underperforming stores.

Family Dollar reported that net sales for the quarter were $2.7 billion, a 6.1% drop from the $2.9 billion reported during the same period last year. Analysts had expected revenue of $2.77 billion.

Net income for the quarter was $90.9 million, or $0.80 per share. This was a far cry from the $140.1 million, or $1.21 per share, reported during the comparable period last year.

Family Dollar Chairman and CEO Howard R. Levine acknowledged the company’s disappointing quarter. “Our second quarter results did not meet our expectations. The 2013 holiday season was challenged by a more promotional competitive environment and a more financially constrained consumer. In addition, like many retailers, our second quarter results were significantly impacted by severe winter weather, which resulted in numerous store closings, disrupted merchandise deliveries and higher than expected utility and store maintenance expenses.”

Like many companies, Family Dollar believes its financial results were severely impacted by poor weather to start the year. In addition, Family Dollar acknowledged that the second quarter of last year contained an additional week. As such, the company estimated that the additional week added $189 million in sales and $0.07 per share to the second quarter of 2013. Still, Family Dollar Chairman and CEO Howard Levine acknowledged the company has improvements to make, regardless of other factors.

Family Dollar Stores, Inc. (FDO) shares ended the week at $56.10.

Bed, Bath & Beyond Misses Expectations

Bed, Bath & Beyond Inc. (BBBY) announced its fourth quarter results on Wednesday, April 9. The home goods retailer’s results disappointed analysts.
Bed, Bath & Beyond reported net sales for the quarter of $3.203 billion, a fall of 5.8% from net sales of $3.401 billion reported during the same period last year. Net sales also missed expectations by close to $20 million.
Net earnings for the quarter were $333.3 million, or $1.60 per share. This compared unfavorably to net earnings of $373.9 million, or $1.68 per share, reported during the comparable period last year.
Bed, Bath & Beyond CEO Steven H. Temares had this to say about the company’s disappointing quarter: “Despite the weather related challenges, we are pleased with our quarter. Absent the disruptive weather, we believe we would have been comfortably within our sales and net earnings per share ranges of our model.  Our store associates continue to perform admirably and we thank each of them for their extraordinary effort.  We continue to make excellent progress on our omnichannel initiatives and stay on course for the execution of our long term strategic plan.”
As a result of its disappointing quarter, Bed, Bath & Beyond issued first quarter earnings per share guidance of $0.92-$0.96, below expectations of $1.02. The weak quarter led the company’s stock price to fall nearly 5% after the earnings announcement. The company has faced difficulties in recent years as consumer spending has lagged and online retailers have become increasingly competitive. Despite the disappointing quarter, there are signs that Bed, Bath & Beyond will recover. The company announced plans to further develop and strengthen its online business, which will hopefully provide future revenue growth.
Bed, Bath & Beyond Inc. (BBBY) shares ended the week at $63.72.
The Dow started the week of 4/7 at 16,414 and closed at 16,027 on 4/11. The S&P 500 started the week at 1,864 and closed at 1,816. The NASDAQ started the week at 4,111 and closed at 4,000.

Treasuries Rise as Stocks Slide

Treasury prices rose on Friday, April 11, as stocks once again continued to fall following a steep descent the day before. The rise in Treasuries was further buoyed by speculation that the Federal Reserve is not on the verge of accelerated interest rate increases. 
Treasuries were headed for a weekly gain on Friday as stocks once gain fell. On Friday the S&P, Dow, and NASDAQ were all down close to 0.5%, putting them on pace for a weekly drop of around 2%. On Thursday, April 10, the NASDAQ suffered its largest one-day percentage drop since November 2011.
The weekly drop in the markets boosted Treasury prices as traders fled riskier stock investments for the security Treasuries provide. The flight to Treasuries pushed yields down to their lowest levels since July of last year. Treasury prices move inversely to yields, so as prices rise yields fall.
“You’re seeing people allocating into Treasuries and out of stocks a little bit,” said Jason Rogan, managing director of U.S. government trading at Guggenheim Securities LLC. “Treasuries are performing well, even in light of decent data this morning.”
Jim Vogel, head of agency-debt research at FTN Financial in Memphis, Tennessee, agreed with Mr. Rogan that Treasury prices will continue to stay high, keeping yields low. “Yields are going to stay low because you can no longer bet that everything is going to start turning around in the second quarter,” he said.
There was some positive news this week as data revealed that producer prices increased in March greater than expected. Data showed that producer prices increased 0.5% in March after they decreased 0.1% in February. The March increase exceeded economists’ expectation that prices would rise only 0.1% during the month.
The 10-year Treasury note yield finished the week of 4/7 at 2.62% while the 30-year Treasury note yield finished the week at 3.48%.

Interest Rates Edge Downward

Freddie Mac released the results of its latest Primary Mortgage Market Survey (PMMS) on Thursday, April 10. The results show mortgage rates decreasing this week just as warmer weather across the country begins the start of a new home buying season.  

The 30-year fixed rate mortgage averaged 4.34% this week.  This represents a decrease from last week when the 30-year fixed rate mortgage averaged 4.41%.

This week, the 15-year fixed rate mortgage averaged 3.38%.  This was a decrease from last week when the 15-year fixed rate mortgage averaged 3.47%.

“Mortgage rates eased a bit following the decline in 10-year Treasury yields,” said Frank Nothaft, Vice President and Chief Economist at Freddie Mac. “Also, the economy added 192,000 jobs in March, which was below the market consensus forecast but followed an upward revision of 22,000 jobs in February. Meanwhile, the unemployment rate held steady at 6.7%.”

The money market fund finished the week of 4/7 at 0.4%. The 1-year CD finished at 0.7%.

Published April 11, 2014

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