Rising Consensus

Since Alex wrote about the donut shop a few weeks ago, it has seen 2 upward revisions for both this year and the next. The Zacks Consensus Estimate is up a penny for both periods to $1.67 and $1.86, respectively.

These levels are good enough for year-over-year growth of 8% and 11%.

Expanding

Tim Hortons opened 25 new stores during the last quarter. The U.S. has 10 new locations and Canada has the remaining 15. Additionally, the company announced plans to increase its foothold in New York City, with 12 new locations.

You may also start to see stores co-branded with Cold Stone Creamery, 39 of which were added during the quarter.

The Chart

As you can see below, the consensus estimates are making a comeback after sliding during the recession. Fortunately, shares have a lot of room to catch up.

Read the September 18th Feature Here

Last Week's Growth & Income Zacks Rank Buy Stocks

International Business Machines Corp. (IBM) just hit a new 52-week high and pays a respectable 1.8% dividend, providing shareholders with a 1-2 punch of capital gains and income. Read Full Article.

Strayer Education Inc. (STRA) surged a few weeks ago in response to a government report. The company has done well maintaining the higher share price and is seeing bullish Zacks Consensus Estimates ahead of reporting later this month Read Full Article.

Carlisle Companies Inc. (CSL) is outpacing the market and seeing bullish Zacks Consensus Estimates ahead of reporting. Full-year projections of $1.83 per share jumped from $1.43 over the past 3 months. CSL reports on Oct 20.

Read Full Article.

Hershey Co. (HSY) is seeing higher Zacks Consensus Estimates ahead of reporting later this month. The full-year earnings forecast of $2.07 per share was increased from $1.99 over the past 90 days.

Read Full Article. Zacks Investment Research

The EPS variations reflect the year-over-year differences, where Con Edison of New York benefited from 28 cents per share as higher rates authorized higher recovery of costs. This was partially offset by 6 cents from higher operations and maintenance expense, 12 cents from depreciation and 5 cents from interest expense, and 1 cent from dilutive stock issuance. The net effect was a 4-cent spike in EPS year over year while Orange and Rockland utilities remained steady.
 
The real variation in EPS year over year came from Competitive energy businesses where EPS gap got wider due to absence of 99 cents from discontinued operations, 50 cents from gain on the sale of generation projects, 4 cents from net mark-to-market effects. This was compensated to a small extent by 2 cents higher operating earnings per share.
 
The bottom-line results also reflect the dilutive effect of a higher weighted average number of common shares outstanding of 275.3 million, compared to 273.5 million shares in the prior-year quarter.
 
On the revenue front, Consolidated Edison witnessed a 9.7% fall year over year to $2.8 billion. Although electricity revenues held firm, the downside came from all the other segments – gas, stream and non-utility.

New York City-based Consolidated Edison is a diversified utility holding company with subsidiaries engaged in both regulated and unregulated businesses. Consolidated Edison’s regulated businesses operate through two subsidiaries — Consolidated Edison Company of New York (Con Edison of New York) and Orange and Rockland Utilities (O&R). 
 
Con Edison of New York is a regulated utility that provides electricity to roughly 3.3 million customers, natural gas to 1.1 million customers, and steam services to about 1,850 customers, primarily in New York City and Westchester County. O&R serves nearly 400,000 electric and gas customers in southeastern New York State, northern New Jersey, and northeastern Pennsylvania.
 
Consolidated Edison’s future growth will be largely dependent on rate increases of its utility subsidiaries. However, on account of uncertain outcome from the pending regulatory cases we maintain our Neutral recommendation on Consolidated Edison.

Net earnings for the quarter were $296 million, or $0.89 per share -- an 18.5% drop from a year-ago profit of $363 million, or $1.09 per share. However, it surpassed the Zacks Consensus estimate of $0.85 per share.

Despite the challenging economic environment, EPS was above expectations primarily on savings generated from the restructuring actions initiated in 2008 and taken in the first half of 2009 as well as reduction of material costs and operating expenses across the company.

Quarterly sales were $2.67 billion, 18.5% lower than the $3.28 billion reported a year ago. Core revenues fell 15% in the quarter, compared to the second quarter of 2008.

Revenue from the professional instrumentation segment decreased 17% for the quarter with core revenues down 15.5% primarily on lower sales volumes and incremental impact of year-over-year restructuring costs incurred during the quarter.

Environmental platform revenue fell 3.5% in the quarter with core revenue down 1%. ChemTreat revenue was essentially flat year over year as unseasonably cool weather in April and May briefly delayed sales to boiler cooler applications. Test and Measurement revenue declined 30.5% in the quarter with core revenue down 30% reflecting a very challenging market environment.

At Tektronix, sales were down across all product categories and geographies as customers continued to delay investments. Trojan’s core revenue grew at a double-digit rate in the quarter with strong growth in waste-water applications as well as continued shipments for the New York City drinking-water program. This project is expected to boost Trojan’s sales for the rest of this year.

Medical Technologies revenue for the quarter decreased 12% compared to last year with core revenue down 7.5%. Dental business core revenue declined at a low double-digit rate in the quarter. KaVo revenue fell at a high-teen rate in the quarter with a general slowing across all major geographies and most product categories. Leica core revenue declined in a mid single-digit rate in the quarter driven by weak demand in the industrial and life science research markets.

Product ID revenue dropped 19.5% in the quarter with core revenue down 12.5%. Motion revenue fell 43.5% in the quarter with core revenue down 35%. Tools and Components revenue were down 23% with a core revenue decline of 22.5%.

We are encouraged by Danaher’s free cash flow performance, which was $438 million at the end of second quarter 2009. Moreover, free cash flow to net income conversion ratio was 148%.