Please ensure Javascript is enabled for purposes of website accessibility

Why Bloomin' Brands, Knowles, and Sanmina Jumped This Morning

By Dan Caplinger - Apr 26, 2016 at 11:19AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The market started out slow, but these stocks jumped. Find out why.


Image: Bloomin' Brands.

The stock market didn't move much Tuesday morning, as investors seemed content to wait to see whether the Federal Reserve would make any interest rate changes when it completes its two-day meeting Wednesday afternoon. After the big drop to start 2016 and the subsequent recovery to approach all-time highs, stocks are pausing to deal with company-specific aspects of earnings season. Even though major market benchmarks moved modestly on both sides of the unchanged line during the first 90 minutes of the trading day, several stocks managed to post substantial gains. Among them were Bloomin' Brands (BLMN -3.92%), Knowles (KN -1.11%), and Sanmina (SANM -3.79%).

Bloomin' Brands climbed 8% after announcing its first-quarter earnings results. The restaurant company behind the Outback Steakhouse chain said that its earnings came to $0.29 per share for the quarter, down almost 40% from year-ago figures. Combined comparable-restaurant sales were weak, falling 1.5% as the Outback, Carrabba's Italian Grill, and Bonefish Grill concepts all posted declines in comps. Wage inflation and unfavorable product mix weighed on operating margins, and restructuring costs also held back Bloomin' Brands from growing. Yet the company highlighted some success stories internationally, including an 8.8% rise in comps in its Brazilian Outback Steakhouse locations. Moreover, investors appeared to respond favorably to repurchases of $75 million during the quarter, along with the fact that the company reiterated its full-year 2016 guidance even in light of its results.

Knowles jumped 17% in the wake of its first-quarter earnings success. The provider of audio processing, micro-acoustic, and specialty components and solutions said that revenue came in at $185.3 million, falling just 1% from year-ago levels. Knowles said it lost $29.4 million during the quarter, nearly doubling its loss from the previous year's first quarter. However, after adjusting for discontinued operations and one-time charges, adjusted earnings of $0.08 per share were stronger than expected. CEO Jeffrey Niew pointed to microphone shipments on mobile consumer electronics that helped offset seasonal weakness in health-related hearing products. In addition, Knowles pointed to accelerating sales and earnings in the second half of the year as it looks to launch new products and boost awareness of some of its intelligent audio solutions. Second-quarter guidance for $180 million to $200 million in sales and adjusted earnings of $0.08 to $0.14 per share were also received favorably.

Finally, Sanmina gained 11%. The contractor for electronics manufacturing services reported fiscal second-quarter results that included a 5% rise in revenue and earnings per share that topped expectations by nearly 10%. Guidance for the current quarter was also favorable, with Sanmina now expecting earnings of $0.61 to $0.65 per share on revenue of $1.625 billion to $1.675 billion. CEO Jure Sola celebrated the company's best earnings per share in more than a decade, and he cited "solid execution coupled with growth in the majority of our market segments [that] drove improvements in our results." With demand for manufacturing services following the health of the markets for electronic devices, Sanmina looks primed to do well as long as the mobile revolution keeps pushing forward.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Bloomin' Brands Stock Quote
Bloomin' Brands
BLMN
$19.35 (-3.92%) $0.79
Sanmina Corporation Stock Quote
Sanmina Corporation
SANM
$41.18 (-3.79%) $-1.62
Knowles Corporation Stock Quote
Knowles Corporation
KN
$18.67 (-1.11%) $0.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
331%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.