HI-Quality Company Updates Wednesday, Jan. 22, 2020Johnson & Johnson-JNJ reported fourth quarter sales increased 1.4% to $10.8 billion with net earnings increasing 32% to $4 billion and EPS up 34% to $1.50. Adjusted earnings, which excludes litigation, amortization and other discrete expenses, declined by 6.4% to $5 billion and adjusted EPS dipped 3% to $1.88. For the full year, sales increased 0.6%, or 2.8% in constant currency, to $82.1 billion with net earnings dipping 1.2% to $15.1 billion and EPS edging up 0.4% to $5.63 thanks to share repurchases. Adjusted earnings increased 4.5% to $23.3 billion and adjusted EPS increased 6% to $8.68. By business segment, Pharmaceutical sales increased 3.6% to $42.2 billion driven by sales of Stelara, DARZALEX, IMBRUVICA, SYMTUZA and TREMFYA. Medical Device sales dipped 3.8% to $26 billion and Consumer sales increased slightly to $13.9 billion driven by Neutrogena, Tylenol, Zarbee’s Imodium, ZYRTEC and the DR. CI:LABO acquisition. During 2019, Johnson & Johnson generated nearly $20 billion in free cash flow, up 7% from last year. The company returned $14 billion to shareholders through dividends of $9.9 billion and share repurchases of $4.1 billion. During the year, the company invested $7 billion in 11 acquisitions and 6 license agreements to fuel future growth. During the past four years, Johnson & Johnson’s robust cash flow enabled the company to invest $45 billion in R&D, $50 billion in value-creating acquisitions and $40 billion in shareholder distributions. Looking ahead to 2020, management expects sales to be in the $85.4 billion to $86.2 billion range, up 4% to 5%, with adjusted EPS expected in the $8.95 to $9.10 range, up 3.1% to 4.8%. The company does not anticipate repurchasing additional shares during 2020 as it continues to negotiate with state attorney generals to settle opioid lawsuits. While management is optimistic about the settlement, it cannot predict the timing or amount of the resolution.Friday, Jan. 17, 2020Fastenal-FAST reported fourth quarter revenues rose 4% to $1.3 billion with net income up 6% to $178.7 million and EPS up 5% to $.31. The increase was driven by higher unit sales related to industrial vending and Onsite locations. The general slowing in economic activity continued in the fourth quarter exacerbated by holiday timing and longer than usual year-end plant shutdowns. Industrial production remains weak going into 2020, notably in the heavy equipment, oil and gas, metals and transportation sectors. Sales of fastener products grew 1.8% in the fourth quarter and represented 34% of total revenues as sales of non-fastener products grew 5.1% and represented 66% of total revenues. Gross margin declined in the fourth quarter due to customer and product mix. For the full 2019 year, revenues increased 7% to $5.3 billion with net income and EPS each up 5% to $791 million and $1.38, respectively. Return on shareholders’ equity was an impressive 29.7% for the year. Free cash flow increased 20% during the year to $596 million with the company paying $499 million in dividends during the year. Fastenal increased the quarterly dividend an additional 14% to $.25 per share for the first quarter of 2020.Wednesday, Jan. 15, 2020Unitedhealth Group-UNH reported fourth quarter revenues increased 4% to $61 billion with net income up 17% to $3.5 billion and EPS up 19% to $3.90. For the year, Unitedhealth Group reported revenues increased 7% to $242 billion with net earnings increasing 15% to $13.8 billion and EPS increasing 18% to $14.33. By segment, Unitedhealthcare revenues of $194 billion increased 6%, primarily due to growth in the number of people served in Medicare Advantage and commercial benefits. As of December 31, 2019, Unitedhealthcare served 27.76 million commercial customers, 5.27 million Medicare Advantage customers, 4.5 million Medicare Supplement customers, 5.9 million Medicaid customers and 5.7 million international customers, with the total up slightly from last year. Optum’s full year revenues increased 12% to $113 billion, with notably strong growth in OptumHealth which grew revenues a healthy 26% to $30 billion. OptumInsight revenue grew 11% to $10 billion while OptumRX revenues rose 7% to $74.3 billion. During the year, the company generated a vigorous 22.9% return on shareholders’ equity, operating cash flow of $18.5 billion and free cash flow of $16.4 billion, up 20% from last year. The company returned $9.4 billion to shareholders during 2019 through dividend payments of $3.9 billion, that were up 18.4% from last year, and share repurchases of $5.5 billion at an average cost per share of $245.53 per share. Unitedhealth Group ended the year with $51.5 billion in cash and investments, $36.8 billion in long-term debt and $60.4 billion in shareholders’ equity. The company affirmed its recently issued full year earnings outlook for 2020 with net earnings of $15.45 to $15.75 per share, up about 9% at the mid-point.Collins Aerospace Systems, a unit of United Technologies Corp-UTX, has signed a contract with Lockheed Martin to provide critical subsystems to support production of NASA's Orion spacecraft fleet for Artemis missions III through VIII. Valued at $320 million, the systems being provided by Collins Aerospace will play an important role in enabling NASA's goal of boots on the Moon by 2024, as well as establishing a sustained presence on and around the Moon to prepare for missions to Mars.Monday, Jan. 13, 2020T. Rowe Price Group, Inc.-TROW reported preliminary month-end assets under management of $1.21 trillion as of December 31, 2019, representing a 25.5% increase for the full 2019 year.Wednesday, Jan. 8, 2020MSC Industrial-MSM reported fiscal 2020 first quarter sales dipped 1% to $823.6 million with net earnings declining 12% to $65.4 million and EPS down 11% to $1.18. These results reflect broad-based softness in the industrial sector, especially in autos, heavy trucks, agriculture and oil & gas and management’s ongoing journey to reposition the company from a spot buy-only supplier to a mission critical partner on the plant floors of its manufacturing customers. During the quarter, MSC Industrial generated $72.4 million in free cash flow, up 11% from last year on working capital efficiencies. The company paid $42 million in dividends during the quarter, reflecting the regular quarterly dividend of $0.75 per share. Consistent with the company’s balanced allocation strategy of returning cash to shareholders, the Board declared a special dividend of $5.00 per share in addition to the regular dividend, both payable on February 5th. These dividends totaling almost $320 million will be paid from existing cash on hand and by tapping into the company’s revolving credit facility. MSC Industrial ended the quarter with $28 million in cash, $268 million in long-term debt and $1.5 billion in shareholders’ equity. Given weakness in December, which management attributes to holiday timing, shutdown schedules, and end of year purchasing decisions by customers; its anticipated mid-year price increase; and ongoing efforts to reposition the business, second quarter sales are expected in the $781 million to $798 million range, down 4% year-over-year at the mid-point. Gross margins are expected in the 41.8% to 42.2% range from 42.7% last year. Operating margins are expected in the 9.5% to 9.9% range from 11.7% last year. EPS are expected in the $0.97 to $1.03 range, down 19% from last year at the mid-point.Walgreens Boots Alliance-WBA reported first fiscal sales increased 1.6% to $34.3 billion with net income dropping 25% to $845 million and EPS declining 20% to $.95. Earnings were adversely impacted by costs related to the acquisition of Rite Aid stores and to the implementation of the Transformational Cost Management Program, which is on track to deliver in excess of $1.8 billion in annual cost savings by fiscal 2022. The first fiscal quarter came in softer than expected with gross margin down due to lower than expected prescription drug volume, continued reimbursement pressure and a challenging competitive environment. Walgreen’s market share declined 55 basis points in the Retail Pharmacy USA to 20.9% reflecting in part the impact of store optimization. Retail Pharmacy International sales declined 5.4% during the quarter reflecting foreign currency headwinds and lower retail sales in Boots U.K. due to a soft economy and lower sales in Chile due to social unrest. Free cash flow improved significantly during the quarter to $674 million as operating income more than doubled thanks to working capital improvements. While the second fiscal quarter is expected to continue to be challenging, management expects the second half of the fiscal year to improve which enabled them to maintain their full year adjusted EPS guidance of roughly flat growth in fiscal 2020 at constant currency rates, with a range of plus or minus 3%.Private sector employment increased by 202,000 jobs from November to December according to the December ADP National Employment Report®. "As 2019 came to a close, we saw expanded payrolls in December," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. "The service providers posted the largest gain since April, driven mainly by professional and business services. Job creation was strong across companies of all sizes, led predominantly by midsized companies." Mark Zandi, chief economist of Moody's Analytics, said, "Looking through the monthly vagaries of the data, job gains continue to moderate. Manufacturers, energy producers and small companies have been shedding jobs. Unemployment is low, but will begin to rise if job growth slows much further." Monday, Dec. 30, 2019Raytheon Missile Systems Co., a unit of Raytheon-RTN, has been awarded a $768,283,907 non-competitive fixed-price incentive (firm) contract for Advanced Medium Range Air-to-Air Missile (AMRAAM) Production Lot 33. This contract provides for the production of the AMRAAM missiles, captive air training missiles, guidance sections, AMRAAM telemetry system, spares and other production engineering support hardware. Friday, Dec. 20, 2019 F5 Networks-FFIV will acquire privately held Shape for a total enterprise value of about $1 billion, financed with F5 Networks’ balance sheet cash and a $400 million senior unsecured term loan. Shape, a leader in fraud and abuse prevention, adds protection from automated attacks, botnets and targeted fraud to F5’s world-class portfolio of application services, protecting customers’ digital experiences. This strategic acquisition accelerates F5’s growth momentum and more than doubles F5’s addressable market in security to $8 billion. With $60 million in mostly subscription revenues and growing 50% year-over-year, Shape improves F5’s software revenue growth rate from mid-single-digits to mid-to-high single-digits and boosts software revenue growth from 35-40% to 60-70%. F5’s fiscal 2020 gross margins are expected to be about 85%, in line with prior guidance, while non-GAAP operating margins are expected to be 30-32%, down from 33-35%, reflecting investments to drive future growth. The transaction is expected to be dilutive to fiscal year 2020 non-GAAP EPS in the mid-to-high single-digit range and accretive to cash flow within 12 months of closing, which is expected in the first calendar quarter of 2020.Thursday, Dec. 19, 2019NIKE-NKE reported fiscal 2020 second quarter sales increased 10% to $10.3 billion with net earnings increasing jumping 32% to $1.1 billion and EPS increasing 35% to $0.70. By geography, North America sales increased 5% to $4 billion, Europe, Middle East & Africa sales increased 10% to $2.5 billion, Greater China sales increased 20% to $1.8 billion and Asia Pacific & Latin America sales increased 13% to $1.5 billion. Gross margins increased 20 basis points as strong pricing more than offset a 40 to 50 basis point headwind from tariffs and increased supply chain investments including RFID technology and new distribution centers to accommodate the growth in Nike Direct. SG&A expenses declined by 130 basis points in the wake of management’s decision to defer a portion of demand creation expense to the second half to capitalize on the Olympics and other major global sporting events even as the company continues to invest in its digital transformation to accelerate future growth. During the second quarter, NIKE, Inc. repurchased 10.1 million shares for about $922 million, or $91.29 per average share, as part of the four-year, $15 billion program approved by the Board of Directors in June 2018. As of November 30, 2019, a total of 33.6 million shares had been repurchased under this program for approximately $2.9 billion, or $86.31 per average share. Nike ended the quarter with more than $3.5 billion in cash and investments and $3.5 billion in long-term debt. Looking ahead to the full year, Nike expects sales to grow in the high-single digits range with foreign currency headwinds of 2% to 3%. FactSet-FDS reported fiscal first quarter revenues increased 4% to $366.7 million with net income up 12% to $94 million and EPS up 12% to $2.43. The increase in sales was primarily due to higher sales of analytics, content and technology solutions and wealth management solutions. Annual Subscription Value (ASV) plus professional services was $1.48 billion. Operating margin increased to 30.9% compared to 28.6% in the prior year period as a result of improved operating results. Client count increased by 27 to 5,601 driven by an increase in corporate clients and wealth management. User count decreased by 37 to 126,785 due to a decrease in sell side users. Annual ASV retention was greater than 95%. When expressed as a percentage of clients, annual retention was 89%. Employee count increased 2.8% to 9,865. Free cash flow increased 88% during the first quarter to $69 million due to higher earnings and favorable working capital changes. During the past quarter, the company paid $27 million in dividends and repurchased 343,000 shares for $84.4 million at an average cost of $246.13 per share. FactSet has $154.2 million remaining authorized for future share repurchases. FactSet maintained their guidance for the full fiscal 2020 year with revenue expected in the range of $1.49 billion and $1.5 billion and EPS in the range of $8.70 and $9.00.Accenture-ACN reported fiscal first quarter revenues increased 7%, or 9% in constant currency, to $11.4 billion with net income increasing 6% to $1.4 billion and EPS up 7% to $2.09. Accenture’s first quarter revenue growth was broad-based across industries and geographic markets, reflecting the diversity and scale of the company’s business around the world. By operating group, Communications, Media & Technology revenues increased 7% to $2.2 billion, Financial Services revenues increased 6% to $2.2 billion, Health & Public Service revenues increased 13% to $2 billion, Products revenues increased 12% to $3.2 billion and Resources revenues increased 7% to $1.7 billion. North America revenues increased 9% to $5.3 billion, Europe grew by 7% in local currency and growth markets increased 13% to $2.3 billion. New bookings were $10.3 billion, up slightly from last year. The New, Accenture’s digital transformation business, accounted for more than 65% of the company’s bookings during the quarter. Accenture generated $692 million in free cash flow during the quarter, down 27% from last year, on working capital changes and a 22% jump in capital expenditures as the company continues to invest in the business to support growth. The company returned $1.2 billion to shareholders during the quarter through share repurchases of $729 million at an average cost per share of $189.65 and dividends of $508 million, or $0.80 per share, up 10% from last year. Management raised the bottom range of its guidance for fiscal 2020 with revenue growth now expected in the range of 6% to 8% in local currency, compared to prior guidance of 5% to 8%. Management expects fiscal 2020 EPS in the $7.66 to $7.84 range, compared to $7.62 to $7.84 previously guided. During fiscal 2020, the company expects to generate free cash flow in the range of $5.7 billion to $6.1 billion and return $4.8 billion to shareholders through share repurchases and dividends.Wednesday, Dec. 18, 2019Paychex-PAYX reported fiscal second quarter revenues rose 15% to $990.7 million with net income up 10% to $258.7 million and EPS climbing 11% to $.72. The acquisition of Oasis Outsourcing contributed about 9% to the growth in total revenue. Solid growth was delivered across the major business lines during the quarter, particularly in human resource outsourcing services, time and attendance solutions and retirement services. Interest on funds held for clients increased 9% during the quarter to $19.9 million due to higher realized gains, average investment balances and average interest rates. Return on shareholders’ equity over the trailing 12 months was a stellar 42%. Free cash flow increased a robust 16% during the first half of the year to $505 million thanks to higher earnings and working capital changes. During the first half, the company paid $444.3 million in dividends and repurchased 2.0 million shares for $171.9 million at an average cost of $85.95 per share. For the full fiscal 2020-year, management raised their financial outlook with Management Solutions revenue expected to grow in the range of 5% to 5.5%, PEO and Insurance Services revenue expected to grow in the range of 25% to 30% and EPS expected to increase in the range of 9% to 10%. Paychex sees continued growth for small businesses in the year ahead as strong demand is leading to higher wages and hours worked for employees of small businesses.Tuesday, Dec. 17, 2019MSC Industrial-MSM announced that its Board of Directors has declared a special cash dividend of $5.00 per share. The special cash dividend is payable on February 5, 2020 to shareholders of record at the close of business on January 22, 2020. The company will initially fund the approximately $277 million required for the special cash dividend from cash on hand and its revolving credit facility. The company also announced that its Board of Directors has declared the regular quarterly cash dividend of $0.75 per share.Thursday, Dec. 12, 2019Oracle-ORCL reported fiscal 2020 second quarter revenues increased 1% to $9.6 billion with net income dipping 1% to $2.3 billion and EPS up 13%, on fewer shares outstanding, to $0.69. Cloud Services and License Support revenues were $6.8 billion, up 3% from last year, while Cloud License and On-Premise License revenues were $1.1 billion, down 7%, as the company continues to transition its business to cloud-based offerings. Cloud and License revenues by ecosystem included applications revenues of $2.9 billion, up 4% from last year and infrastructure revenues of $5 billion, which were flat when compared to last year. Fusion and NetSuite drove growth in cloud applications with Fusion ERP revenues growing 37% and NetSuite ERP revenues growing 29%. While still in its early days, the Oracle Autonomous Database has thousands of customers running in the company’s Gen2 Public Cloud with growth rates exceeding 100%. During the quarter, Oracle repurchased 91 million shares for $5 billion ($54.95 per average share), bringing the total repurchases during the past twelve months to $26 billion. Over the past five years, Oracle has reduced its share count by 25%. During the first half of the fiscal year, Oracle generated $5.7 billion in free cash flow, down 11% from last year, with the company returning $11.6 billion to shareholders through share repurchases of $10 billion and dividends of $1.6 billion. Oracle ended the quarter with $26 billion in cash, $52 billion in long-term debt and $16 billion in shareholder equity. During the quarterly conference call, Larry Ellison, Oracle’s founder and CTO, stated that the company has no plans to replace its recently deceased co-CEO, Mark Hurd, that he has complete confidence in Safra Catz as Oracle’s sole CEO. Looking ahead to the third quarter, Ms. Catz expects revenues to grow by 1% to 3%.Tuesday, Dec. 10, 2019T. Rowe Price Group-TROW reported preliminary month-end assets under management of $1.18 trillion as of November 30, 2019, which represents a 22.8% increase since year end. Monday, Dec. 9, 2019UnitedHealth Group-UNH announced that OptumRx, the pharmacy care services business of Optum, and Diplomat, a provider of specialty pharmacy and infusion services, are combining. The agreement calls for the acquisition of Diplomat’s outstanding common stock for $4.00 per share through a cash tender offer and assumption of outstanding debt worth approximately $300 million.Thursday, Dec. 5, 2019Ulta Beauty-ULTA reported third quarter sales increased 7.9% to $1.7 billion with net income dipping 1% to $130 million and EPS increasing 3.2% on fewer outstanding shares to $2.25. Comparable sales (sales for stores open at least 14 months and e-commerce sales) increased 3.2% compared to an increase of 7.8% in the third quarter of fiscal 2018, driven by 2.3% transaction growth and 0.9% growth in average ticket and a modest increase in traffic. By category, skincare generated double-digit comp growth, fragrance increased high-single digits, haircare sales increased mid-single digits while makeup declined by low-single digits. Despite the current challenging environment in cosmetics, Ulta Beauty continued to gain market share in the category. During the third quarter, Ulta Beauty opened 28 net new stores ending the quarter with 1,241 stores. During the quarter, the company repurchased 529,404 shares, a higher number than initially planned, at a cost of $128.6 million, or $242.91 per average share. Year-to-date, the company repurchased 1,639,438 shares at a cost of $507 million, or $309.19 per average share. As of November 2, 2019, $388.8 million remained available under the $875 million share repurchase program announced in March 2019 with the company expecting to repurchase a total of $700 million shares in 2019. Year-to-date, the company generated free cash flow of $316 million, up 10.7% from last year, ending the quarter with $209 million in cash. Given challenged top line growth due to softness in the makeup category and the year-to-date performance, the company narrowed its full year guidance. Sales are now expected to increase 10% versus the previous expectation of growth between 9% and 12% with same store sales growth now expected in the range of 4.7% to 5% versus 4% to 6% previously expected. EPS are now expected in the range of $11.93 to $12.03 versus $11.86 to $12.06 previously expected. Capital expenditures are now expected in the range of $305 million to $315 million, $35 million less than previously expected due to the decision to delay the opening of the new Jacksonville distribution until 2021.Brown-Forman-BFB reported fiscal second quarter revenues rose 9% to $989 million with net income up 13% to $282 million and EPS up 14% to $.59. Results improved during the second quarter as the company delivered solid underlying growth from both a geographic and portfolio basis despite the impact of tariffs and the uncertain global economic and geopolitical environment. Underlying net sales grew 6% in the United States, 5% in emerging markets and 3% in developed international markets. Jack Daniel’s family of brands underlying net sales grew 2% bolstered by the October launch of Jack Daniel’s Tennessee Apple. The company’s premium bourbons grew underlying net sales 22% driven by Woodford Reserve’s 20% growth and even stronger growth from Old Forester. The tequila portfolio grew underlying net sales 11% led by Herradura’s 19% growth and el Jimador’s 13% growth. During the first half of the fiscal year, free cash flow declined 37% to $139 million with the company paying $158 million in dividends. During the quarter, the board raised the dividend 5%, marking the 36th consecutive year of dividend increases and 74 consecutive years of dividend payments. As the company gets set to celebrate its 150th anniversary in 2020, management reaffirmed its full year fiscal 2020 underlying net sales growth outlook of 5% to 7% with EPS expected in the range of $1.75-$1.85.Wednesday, Dec. 4, 2019Stryker-SYK announced that its Board of Directors has declared a quarterly dividend of $0.575 per share payable on January 31, 2020 to shareholders of record at the close of business on December 31, 2019, representing an increase of approximately 11% versus the prior year and the previous quarter. “We continue to deliver strong financial results, and consistent with our stated capital allocation philosophy, are raising our dividend 11%," said Kevin Lobo, Chairman and Chief Executive Officer. Private sector employment increased by 67,000 jobs from October to November according to the November ADP National Employment Report®. "In November, the labor market showed signs of slowing," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. "The goods producers still struggled; whereas, the service providers remained in positive territory driven by healthcare and professional services. Job creation slowed across all company sizes; however, the pattern remained largely the same, as small companies continued to face more pressure than their larger competitors." Mark Zandi, chief economist of Moody's Analytics, said, "The job market is losing its shine. Manufacturers, commodity producers, and retailers are shedding jobs. Job openings are declining and if job growth slows any further unemployment will increase."Tuesday, Dec. 3, 2019Mastercard-MA announced that its Board of Directors has declared a quarterly cash dividend of 40 cents per share, a 21 percent increase over the previous dividend of 33 cents per share. The Board of Directors also approved a new share repurchase program, authorizing the company to repurchase up to $8 billion of its Class A common stock. The new share repurchase program will become effective at the completion of the company’s previously announced $6.5 billion program. The company has approximately $300 million remaining under the current program authorization.Alphabet Inc.-GOOGL announced a management change. The change is effective immediately. Larry Page and Sergey Brin, the CEO and President, respectively, of Alphabet, have decided to leave these roles. They will continue their involvement as co-founders, shareholders and members of Alphabet’s Board of Directors. Sundar Pichai, the CEO of Google, becomes the CEO of Google and Alphabet. He will remain the CEO of Google and assumes the role of managing Alphabet’s investment in its portfolio of Other Bets. Pichai will remain a member of Alphabet’s Board of Directors.Biogen-BIIB announced positive top-line results from the Phase 2 LILAC study evaluating the efficacy and safety of BIIB059, a fully humanized IgG1 monoclonal antibody (mAb) targeting blood dendritic cell antigen 2 (BDCA2) expressed on plasmacytoid dendritic cells, in patients with lupus. “There is substantial unmet medical need for people with lupus given the limited number of treatment options available to help manage this difficult-to-treat and chronic disease,” said Nathalie Franchimont, M.D., Ph.D., Vice President, Lupus and Multiple Sclerosis Portfolio at Biogen. “We are excited by the LILAC study results, and the potential for BIIB059 to be a meaningful new treatment option for patients living with lupus. We also believe these results support Biogen’s goal of continuing to build a multi-franchise portfolio by bringing potential new treatment options to people with great unmet medical need.”Canadian National-CNI announced that its recovery plan is on track and that it is revising its guidance following the impact of the 8-day strike. Due to the impact of the strike, estimated at around $0.15 of EPS, CNI is revising its 2019 full year financial outlook, and remains focused on continuing to realign its resources in light of the weaker demand, including its workforce, to address cost takeout efforts that started prior to the strike. CNI is now targeting to deliver 2019 adjusted diluted EPS growth in the low to mid single-digit range versus last year's adjusted diluted EPS of C$5.50, compared with its October 22, 2019 financial outlook which called for adjusted diluted EPS growth in the high single-digit range. Monday, Dec. 2, 2019UnitedHealth Group’s-UNH revenues for 2019 are expected to approximate $242 billion, with net earnings to approach $14.25 per share and adjusted net earnings to approach $15.00 per share, at the higher end of the company’s most recent earnings per share outlook provided with its third quarter 2019 earnings release. Adjusted net earnings exclude from net earnings only the after-tax non-cash amortization expense pertaining to acquisition-related intangible assets. UnitedHealth Group’s 2020 outlook includes revenues of $260 billion to $262 billion, net earnings of $15.45 to $15.75 per share, and adjusted net earnings of $16.25 to $16.55 per share. Cash flows from operations are expected to range from $19.0 billion to $19.5 billion in 2020.General Dynamics-GD was named lead contractor on a $22.2 billion U.S. Navy contract for the construction of nine Virginia-class submarines, the Pentagon said in announcing its largest-ever shipbuilding award.Tuesday, Nov. 26, 2019Hormel Foods-HRL reported fourth quarter revenues declined 1% to $2.5 billion with net income down 2% to $256 million and EPS down 2% to $.47. For the full year, revenues were relatively flat at $9.5 billion with net income and EPS each down 3% to $979 million and $1.80, respectively. Return on shareholders’ equity was 15.5% for the year. Organic volume for the year was flat at 4.74 billion pounds with organic sales up 1% and operating income up 1%. Free cash flow declined 23% during the year to $667 million due to working capital changes as the company strategically built inventory. During the year, the company paid $437 million in dividends, repurchased $174 million of its common stock and repaid $375 million of debt taken on for an acquisition. Thanks to the sale of a business during the year for $480 million, Hormel’s cash and investments increased 50% during the year to $688 million. Hormel announced an 11% increase in its annual dividend to $.93 per share. This is the 54th consecutive year of dividend increases and the 11th consecutive year of double-digit growth in the dividend. Management’s outlook for 2020 is for net sales in the range of $9.5billion-$10.3 billion with EPS expected in the range of $1.69-$1.83. This outlook assumes higher protein prices and further volatility related to the impact from African swine fever and global trade uncertainty. The company expects organic pretax earnings growth of 5%-7%. Results in 2019 included $.10 per share related to CytoSport which was sold during the year.