3 Earnings Reports That Caught My Attention Last Week

After wrapping up an incredibly strong first quarter of earnings reports, we're more than halfway through the second quarter with many reports still coming in better than expected. With so many companies reporting during the weeks that comprise earnings season, it's easy for some earnings reports to fall through the cracks.

Each week this year, I've taken a look at three companies that could be worth further research after either beating or missing their profit expectations. Today, we'll take a gander at three more companies that reported earnings last week. If they slid under your radar, they deserve a look:

Company

Consensus EPS

Reported EPS

Surprise

RealD (NYSE: RLD  ) ($0.07) $0.10 243%
TiVo (Nasdaq: TIVO  ) ($0.15) ($0.17) (13%)
Yingli Green Energy (NYSE: YGE  ) ($0.21) ($0.29) (38%)

Source: Yahoo! Finance.

RealD
If there was ever a time not to be excited about a headline number, this is it!

RealD sells and licenses products to movie theaters to allow digital cinema projectors to show 3-D motion pictures. It also sells its 3-D products directly to consumers for home entertainment 3-D viewing. The problem is that the last time I checked, 3-D sales weren't doing all that well.

Case in point, Best Buy (NYSE: BBY  ) . I know what you're thinking, "Nothing is selling well in Best Buy!" You'd be partially correct, but television sales have been notoriously weak. Within that subcategory of TVs, 3-D-capable television sales have been incredibly low, with the demand for the technology waning.

Keeping that in mind makes RealD's earnings report easier to understand. While the company did beat on the top line, it saw product revenue decline 28%, license revenue fall 4%, and it used $25 million of its $150 million revolving credit line. Although that's not bad per se, the company went from being debt-free to having a marginal net debt position. Until 3-D sales actually show signs of life, you'll need some special glasses to make RealD look like a reasonable investment.

TiVo
It's finally time to publicly ask, "When is TiVo ever going to get its act together?" One-time settlements put the company into the black last year, but its first-quarter results look like we've returned to more of the same for the digital video recording and television solutions provider.

For the quarter, TiVo reported a huge 48% increase in revenue with another negative churn rate of 1.6% and added 235,000 pay TV signal providers -- a key growth component to TiVo's long-term outlook. Unfortunately, without the settlement gains from last year, TiVo yet again lost more than Wall Street had anticipated, and its pay TV subscriber growth was weaker than some analysts had expected. On top of that, on Friday, Cisco Systems (Nasdaq: CSCO  ) decided not to wait for a TiVo lawsuit against it, instead suing TiVo itself and alleging that TiVo deliberately chose not to license its DVR patents. Cisco now wants those patents invalidated or at least a ruling that Cisco's products don't infringe against them.

If there was one bright spot, TiVo did win a $215 million legal settlement against AT&T payable through 2018, but the company can't rely on just legal revenue. This is a murky road that I want nothing to do with. Where's the fast-forward button?

Yingli Green Energy
Just because the entire solar sector is weak doesn't mean that all solar companies are created the same, as we learned from Yingli Green Energy last week.

Fool solar expert Travis Hoium did a good job of breaking down Yingli's report into easily understandable terms: Its gross margin improved as it shipped more modules while its Chinese rival, Hanwha SolarOne, continues to careen ominously in the wrong direction. The report also signaled the first sign of genuine bullishness in the forlorn sector in a long time with Yingli predicting that China's demand for solar will increase by 36% in 2012. That's fantastic news, since Yingli boosted its reliance on China for revenue from 22% to 30% year over year.

Yingli looks on pace to be one of the first solar companies to turn around when prices finally do stabilize and supply levels drop adequately to meet lower global demand.

Foolish roundup
Sometimes an earnings beat or miss isn't as cut and dried as it appears. I've given my two cents on what's next for each of these companies; now it's your turn to sound off. Share your thoughts in the comments section below, and consider adding these stocks to your free and personalized watchlist.

If you'd like the inside track on three more companies that could wind up in the earnings beat column, then I suggest you get a copy of our latest special report, "3 American Companies Set to Dominate the World." Did I mention the best part? This report is completely free, so don't miss out!

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He has no desire to watch a movie in 3-D. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of Best Buy and Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that always exceeds expectations.


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  • Report this Comment On June 04, 2012, at 2:05 PM, MrSinnister wrote:

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