Merck & Co Inc (MRK)www.merck.comBusiness Profile Why FQIC Purchased: Pharmaceutical industry leader operating with strong long term growth potential.
Recent Financial Summary:
Earnings per share (EPS) for the first quarter of 2005 were $.62, compared to $.73 for the first quarter of 2004. Net income was $1,370.1 million, compared to $1,618.6 million in the first quarter of last year. Worldwide sales were $5.4 billion for the quarter, compared to $5.6 billion in the first quarter of 2004.
Total sales declined 5% for the quarter, which includes a decrease of 13% related to the Vioxxwithdrawal, partially offset by other revenue growth of 8%. This growth reflects a volume increase of 5%, a 2% favorable effect from foreign exchange and a 1% favorable effect from price changes. The volume increase of 5% reflects growth in Merck's newer franchises and higher alliance revenues.
The Company's gross margin was 76.3% in the first quarter of 2005 compared to 79.6% in the first quarter of 2004, reflecting the impact of changes in product mix, including the effect of the voluntary withdrawal of Vioxx, manufacturing variances and inventory adjustments.
Proctor & Gamble Co (PG)www.pg.comBusiness Profile Why FQIC Purchased: Consumer products giant that touches our life every day. PG was initially purchased while the overall market undervalued the company's restructuring efforts for long term growth potential.
Recent Financial Summary: Earnings per share (EPS) for the first quarter of 2005 were $.62, compared to $.73 for the first quarter of 2004. Net income was $1,370.1 million, compared to $1,618.6 million in the first quarter of last year. Worldwide sales were $5.4 billion for the quarter, compared to $5.6 billion in the first quarter of 2004.
Total sales declined 5% for the quarter, which includes a decrease of 13% related to the Vioxxwithdrawal, partially offset by other revenue growth of 8%. This growth reflects a volume increase of 5%, a 2% favorable effect from foreign exchange and a 1% favorable effect from price changes. The volume increase of 5% reflects growth in Merck's newer franchises and higher alliance revenues.
The Company's gross margin was 76.3% in the first quarter of 2005 compared to 79.6% in the first quarter of 2004, reflecting the impact of changes in product mix, including the effect of the voluntary withdrawal of Vioxx, manufacturing variances and inventory adjustments.
Pfizer Inc (PFE)www.pfizer.comBusiness Profile Why FQIC Purchased: Pharmaceutical industry leader operating with a high profit margin and a strong pipeline of future blockbuster drugs.
Recent Financial Summary: Total revenues increased 5% in the first quarter of 2005, as compared to the same period in 2004.
Revenues increased in the first quarter of 2005, reflecting a number of positive and negative factors. Positive impacts include three additional business days in our fiscal calendar in the first quarter of 2005 compared to the same period in 2004, strong performances by Lipitor, Zithromax and other product lines and the weakening of the U.S. dollar relative to a number of foreign currencies. Such impacts were offset in part by sales declines for Celebrex and Bextra as well as for Neurontin, Diflucan, and Accupril due to recent generic competition in the U.S.
McDonald's Corp (MCD)www.mcdonalds.comBusiness Profile Why FQIC Purchased: MCD is the best quick-service restaurant business and maintains an outstanding marketing position. We purchased MCD while the overall market undervalued the company's long term growth potential.
Recent Financial Summary: • Consolidated revenues increased 9% (6% in constant currencies).
• Comparable sales increased 4.6%.
• Company-operated restaurant margins increased $30 million ($19 million in constant currencies) but declined 30 basis points.
• Franchised restaurant margins increased $76 million ($58 million in constant currencies) and 70 basis points.
• Operating income increased 6% (4% in constant currencies).
• Net income per common share was $0.56, up 40% versus $0.40 in 2004, including a $0.13 per share benefit from a lower effective tax rate as well as a $0.03 per share expense related to share-based compensation.
General Electric Co (GE)www.ge.comBusiness Profile Why FQIC Purchased: Diversified industrial conglomerate that continues to grow through aquisitions and provide steady income distributions. GE is the largest company (by market capitalization) in the USA.
Recent Financial Summary: General Electric Company net earnings were $3.965 billion, or $0.37 per share, in the first quarter of 2005, compared with $3.366 billion ($0.33 per share) in the first quarter of 2004.
Revenues of $39.7 billion were 18% higher than in the first quarter of 2004. Organic revenues - which exclude the effects of acquisitions, dispositions and changes in currency exchange rates, as well as the Insurance Segment - increased 8%. Industrial sales increased 25% to $20.8 billion, reflecting the combined effect of the post-first quarter 2004 combination of NBC with Vivendi Universal Entertainment LLLP (VUE) and the acquisitions of Amersham plc (Amersham) and other businesses, and organic growth. Sales of product services (including sales of spare parts and related services) grew 15% to $6.3 billion. Financial services revenues of $19.0 billion were up 10% over last year; and included $1.0 billion and $0.3 billion of revenue from acquisitions for the first quarters of 2005 and 2004, respectively, and $0.1 billion in 2005 from the effects of dispositions. Revenues were reduced by $0.1 billion and included $0.2 billion in the first quarters of 2005 and 2004, respectively, related to the 2005 restatement.
Wal-Mart Stores Inc (WMT)www.walmartstores.comBusiness Profile Why FQIC Purchased: Fair prices never go out of style in the retail world. WMT provides one of the most admired business models in USA history.
Recent Financial Summary: Net sales for the first quarter of fiscal 2006 increased 9.5% to $70.9 billion from $64.8 billion in the first quarter of fiscal 2005.
Net income increased 13.6% to $2.5 billion, or $0.58 per share, in the first quarter of fiscal 2006. Net income for the first quarter of fiscal 2006 includes the favorable impact of two items amounting to $145 million after tax, or $0.03 per share: $77 million from favorable tax resolutions and positive legal developments of $68 million after tax.
Total assets increased 13.1% to $122.2 billion at April 30, 2005 when compared to April 30, 2004. During the first quarter of fiscal 2006, we made $2.8 billion of capital expenditures.
Paychex Inc (PAYX)www.paychex.comBusiness Profile Why FQIC Purchased: Financial company offers business and payroll processing services to small and medium sized companies. PAYX services have a strong potential for growth and can be replicated with above average profit margins.
Recent Financial Summary: At February 28, 2005, the Company maintained a strong financial position with total cash and corporate investments of $693.4 million. The Company's primary source of cash is from its ongoing operations. Cash flow from operations was $367.5 million for the nine months ended February 28, 2005, compared with $324.9 million for the nine months ended February 29, 2004.
Mellon Finanial Corp (MEL)www.mellon.comBusiness Profile Why FQIC Purchased: Global financial services company should offer continued growth as fee based financial and asset management services develop. We purchased MEL at a low price relative to book value with the expectation of long term growth potential.
Recent Financial Summary: Consolidated net income in the first quarter of 2005 totaled $255 million, or $.60 per share. This compares to $245 million, or $.57 per share, in the first quarter of 2004 and $192 million, or $.46 per share, in the fourth quarter of 2004. First quarter 2005 income from continuing operations totaled $305 million, or $.72 per share. This compares to net income from continuing operations of $247 million, or $.58 per share, in the first quarter of 2004 and $199 million, or $.47 per share, in the fourth quarter of 2004.
Bank of America Corp (BAC)www.bankofamerica.comBusiness Profile Why FQIC Purchased: Industry leading bank and financial holding company that has the capability to provide steady income distributions.
Recent Financial Summary: Net Income totaled $4.7 billion, or $1.14 per diluted common share, for the three months ended March 31, 2005, 75 percent and 25 percent increases from $2.7 billion, or $0.91 per diluted common share, for the three months ended March 31, 2004.
Medco Health Solutions Inc (MHS)www.medcohealth.comBusiness Profile Why FQIC Purchased: Pharmacy benefit manager spun off from Merck & Co Inc. MHS should prosper if growth of the pharmaceutical industry continues.
Recent Financial Summary: Net income increased 26.6% to $131 million and diluted earnings per share increased 23.7% to $0.47 in the first quarter of 2005 from the same period in the prior year, largely as a result of increased generic dispensing rates and improved overall margins, as well as the effect in 2004 of a charge for the multistate taskforce of attorneys general settlement. The diluted weighted average shares outstanding were 280.1 million for the first quarter of 2005 and 273.7 million for the first quarter of 2004.
ConocoPhillips (COP)www.conocophillips.comBusiness Profile Why FQIC Purchased: Integrated, global energy company that should provide steady income distributions. COP was purchased with a low price relative to book value with the expectation of long term growth potential.
Recent Financial Summary: At March 31, 2005, our debt-to-capital ratio was 23 percent, compared with 26 percent at December 31, 2004, and 34 percent at December 31, 2003. In addition to reducing total debt by $1 billion during the first quarter of 2005, net income of $2.9 billion increased stockholders' equity. On April 7, 2005, our Board of Directors declared a 2-for-1 stock split, payable June 1, 2005, to stockholders of record as of May 16, 2005. See Note 20-Subsequent Event, in the Notes to Financial Statements, for additional information on the stock split.
