ticker

Alphabet Earnings Fall On Slower Revenue Growth

Scott Peters
26 Jul, 2022
New York City

Alphabet reported its slowest quarterly revenues increase in two years as rising dollar and weakening economic backdrop impacted advertising environment.

Alphabet Inc said second quarter revenues increased 13% or 16% in constant currencies to $69.7 billion.

Operating income in the quarter rose to $19.5 billion from $19.4 billion a year ago.

Operating margin declined to 28% from 31% a year ago on higher operating costs.

Net income fell to $16.0 billion from $18.5 billion and diluted earnings per share fell to $1.21 from $1.36 a year ago.

Segment Breakdown

Total advertising revenues increased to $56.3 billion from $50.4 billion and traffic acquisition costs increased to $12.2 billion from $10.9 billion a year ago.

Google search revenues increased to $40.7 billion from $35.8 billion and ads on the YouTube channel increased to $7.3 billion from $7.0 billion a year ago.

Google cloud revenues increased to $6.3 billion from $4.6 billion, an increase of 37% from a year ago.

Google headcount increased by about 30,000 to 174,014.

Microsoft Earnings Growth Slows On Strong Dollar and Slowing Cloud Growth

Scott Peters
26 Jul, 2022
New York City

Microsoft said quarterly net growth slowed after cloud business growth slowed and videogame business shrank.

Microsoft said June quarter sales increased 12% to $51.9 billion and rose in constant currencies 16% from a year ago.

Operating income in the quarter rose 8% or 14% in constant currencies to $20.5 billion.

Net income jumped 2% or 7% in constant currencies to $16.7 billion from a year ago.

Diluted earnings per share rose 3% to $2.23 from $2.17 a year ago.

For the full-year net revenues rose 18% to $198.3 billion, net income surged 19% to $72.7 billion and earnings per share rose 20% to $9.65.

Segment Revenues

Cloud revenues increased 20% to $20.9 billion and revenues in productivity and business process segment rose 13% to $16.6 billion.

Revenues in personal computing increased 2% to $14.4 billion but Xbox and related revenues fell 6%.

Search and news advertising revenue excluding traffic acquisition costs increased 18% and LinkedIn revenues increased 26%.

Azure and other cloud services reported sales surge of 40% from a year ago.

Share Buyback Program

Microsoft returned $12.4 billion to shareholders including stock repurchases and dividends in the fourth quarter of fiscal year 2022, an increase of 19% from a year ago.

General Motors Earnings Plunge 40%

Scott Peters
26 Jul, 2022
New York City

General Motors declined 2.8% to $33.75 and the vehicle maker said June quarter revenues increased 4.6% to $35.8 billion and net income plunged 40% to $1.7 billion from $2.8 billion a year ago.

The company blamed the earnings fall on China lockdown and parts shortages preventing the automaker from shipping 100,000 vehicles.

The automaker said it has secured materials needed to make one million electric vehicles by 2025.

General Motors guided full-year net income between $9.6 billion and $11.2 billion and adjusted operating earnings between $13.0 billion and $15.0 billion.

The company also guided full-year diluted earnings per share between $5.76 and $6.76 and adjusted earnings per share between $6.50 and $7.50.

Coca-Cola Lifted Full-Year Sales and Earnings Growth Outlook

Scott Peters
26 Jul, 2022
New York City

Coca-Cola Company gained 1.8% to $63.33 after the beverage maker said second quarter revenues rose 12% to $11.3 billion and net income dropped 28% to $1.9 billion from $2.6 billion a year ago.

Diluted earnings per share declined to 44 cents from 61 cents a year ago.

The concentrate volume sales increase of 4 percentage points and acquisition related sales increase of 2 percentage points was offset by 6 percentage points decline in sales from the stronger dollar.

The increase in price and volume mix of 12 percentage points drove all of the total sales increase in the quarter.

Unit case volumes across all geographies rose 8% and in the North America rose 2%.

The company guided organic revenues in the full-year to increase between 12% and 13%, an increase from the previous estimate between 7% and 8%.

Coca-Cola guided its adjusted earnings per share based on constant currency to increase to between 14% and 15% from the previous estimate of between 8% and 10%.

UBS Reports Weak Performance Across All Divisions

Scott Peters
26 Jul, 2022
New York City

UBS AG dropped 10.9% to $15.04 after the Swiss bank reported sharply lower-than-expected earnings in its latest quarter.

Total revenues in the June quarter were essentially flat at $8.9 billion and net income gained 5% to $2.1 billion from $2.01 a year ago.

Many analysts were looking for earnings to fall between $2.2 billion and $2.45 billion in an informal poll conducted by Ticker.com in the U.S. and Switzerland.

Diluted earnings per share rose to 61 cents from 55 cents a year ago.

Fee generating assets in its global wealth management unit, fee-generating assets decreased by 12% or $169.5 billion to $1,244 billion, almost entirely driven by market decline and foreign currency effects.

The earnings were supported by a one-time gain of $848 million from the sale of its minority stake in its real estate joint venture in Japan with Mitsubishi.

Investment banking revenues declined 14% to $2.1 billion and wealth management unit revenues dropped to $4.7 billion from $4.8 billion a year ago.

UBS said assets under management declined $12 billion, mostly driven by outflows in equities assets.

Movers: 3M, Coca-Cola, General Electric, General Motors, Shopify, Walmart

Barry Adams
26 Jul, 2022
New York City

Benchmark indexes traded lower ahead of the Fed's rate decision on Wednesday followed by the GDP data on Thursday.

The S&P 500 index declined 1.1% to 3,921.26 and the Nasdaq Composite index fell 1.9% to 11,569.95.

Futures of crude oil declined $1.20 to $95.10 a barrel and natural gas rose 22 cents to $8.95 a thermal unit.

Natural gas futures surged Russia controlled Gazprom throttled down gas flow to 20% of capacity of the Nord Stream 1.

3M increased 6.3% to $142.72 after the company reported better-than-expected earnings and said it plans to separate its healthcare unit as a separate independent company.

Coca-Cola Company gained 1.8% to $63.33 after the beverage maker said second quarter revenues rose 12% to $11.3 billion and net income dropped 28% to $1.9 billion from $2.6 billion a year ago.

Diluted earnings per share declined to 44 cents from 61 cents a year ago.

The concentrate volume sales increase of 4 percentage points and acquisition related sales increase of 2 percentage points was offset by 6 percentage points decline in sales from the stronger dollar.

The increase in price and volume mix of 12 percentage points drove all of the total sales increase in the quarter.

Unit case volumes across all geographies rose 8% and in the North America rose 2%.

The company guided organic revenues in the full-year to increase between 12% and 13%, an increase from the previous estimate between 7% and 8%.

Coca-Cola guided its adjusted earnings per share based on constant currency to increase to between 14% and 15% from the previous estimate of between 8% and 10%.

General Electric increased 6.9% to $73.10 after the company reported higher earnings and cash flow on the recovery in its aviation engine business.

General Motors declined 2.8% to $33.75 and the vehicle maker said June quarter revenues increased 4.6% to $35.8 billion and net income plunged 40% to $1.7 billion from $2.8 billion a year ago.

The company blamed the earnings fall on China lockdown and parts shortages preventing the automaker from shipping 100,000 vehicles.

The automaker said it has secured materials needed to make one million electric vehicles by 2025.

General Motors guided full-year net income between $9.6 billion and $11.2 billion and adjusted operating earnings between $13.0 billion and $15.0 billion.

The company also guided full-year diluted earnings per share between $5.76 and $6.76 and adjusted earnings per share between $6.50 and $7.50.

Shopify plunged 15.5% to $31.02 after the e-commerce platform operator announced a layoff of 10% or about 1,000 employees.

Walmart Inc declined 7.9% to $121.62 after the retailer lowered its outlook for the fiscal year second quarter and said consumers are sticking to basic necessities because of high food and energy prices.

The shifting consumer pattern is also forcing the retailer to mark down several items including apparel and other discretionary items.

Europe Movers: Lindt & Spruengli, Rolls Royce, Stratec, UBS, Zalando

Bridgette Randall
26 Jul, 2022
New York City

European markets traded down ahead of the U.S. GDP data and interest rate decision.

Stocks in Frankfurt edged lower after Russia -controlled Gazprom throttled down natural gas flow to 20% of the capacity of Nord Stream 1 pipeline network.

The DAX index fell 0.8% to 13,102.31, the CAC-40 index declined 0.4% to 6,210.59, and the FTSE index was nearly unchanged 7,306.28.

Lindt & Spruengli increased to 107,825 Swiss francs after the chocolate maker released a stock repurchase plan of up to one billion swiss francs.

For the full-year, the chocolate maker revised its sales growth outlook to between 8% and 10% from the previous estimate between 6% and 8%.

Organic sales in the first half of 2022 ending in June increased 12.3% to 1.99 billion Swiss francs and operating profit rose 33.4% to 185.2 million Swiss francs.

Rolls Royce gained 1.5% to 93.34 pence after the aerospace and defense company appointed private equity partner and BP executive Tufan Erginbilgic as its chief executive .

Tufan will take up his new role on January 1, 2023, succeeding Warren East,

In February, East announced his intention to step down at the end of this year

Net income jumped 36.2% from a year ago to 138.4 million Swiss francs.

Stratec SE declined 11.9% to 84.60 euros after the maker of in-vitro diagnostics systems maker estimated first-half sales of 137.2 million euros compared to 155.8 million a year ago.

UBS AG dropped 10.9% to $15.04 after the Swiss bank reported sharply lower-than-expected earnings in its latest quarter.

Total revenues in the June quarter was essentially flat at $8.9 billion and net income gained 5% to $2.1 billion from $2.01 a year ago.

Many analysts were looking for earnings to fall between $2.2 billion and $2.45 billion in an informal poll conducted by Ticker.com in the U.S. and Switzerland.

Diluted earnings per share rose to 61 cents from 55 cents a year ago.

Fee generating assets in its global wealth management unit, fee-generating assets decreased by 12% or $169.5 billion to $1,244 billion, almost entirely driven by market decline and foreign currency effects.

The earnings were supported by one-time gain of $848 million from the sale of its minority stake in its real estate joint venture in Japan with Mitsubishi.

Investment banking revenues declined 14% to $2.1 billion and wealth management unit revenues dropped to $4.7 billion from $4.8 billion a year ago.

UBS said assets under management declined $12 billion, mostly driven by outflows in equities assets.

Zalando SE declined 9.8% to 25.99 euros on no corporate news. The e-commerce stocks in Europe were under pressure after the Canada-based Shopify announced a plan to layoff 10% or 1,000 employees.

Nasdaq and S&P 500 Down 1% On Rate Jitters

Barry Adams
26 Jul, 2022
New York City

Benchmark indexes traded lower ahead of the Fed's rate decision on Wednesday followed by the GDP data on Thursday.

The S&P 500 index declined 1.1% to 3,921.26 and the Nasdaq Composite index fell 1.9% to 11,569.95.

Futures of crude oil declined $1.20 to $95.10 a barrel and natural gas rose 22 cents to $8.95 a thermal unit.

Natural gas futures surged Russia controlled Gazprom throttled down gas flow to 20% of capacity of the Nord Stream 1.

Separately, the EU member states agreed to lower natural gas consumption by 15% for the next eight months.

Russia supplies about 40% of natural gas needs of the European Union 27 member states and alternative supplies from Norway, U.S., Qatar and Algeria are likely to fall far short of the region's needs.

The yield on 10-year Treasury notes declined to 2.78% ahead of the Fed's rate decision tomorrow after a two-day meeting.

Investors are looking for the Fed to raise between 50 and 75 basis points to stem the sky-high inflation hovering near 8.6% for the last two months.

The inflation measure, Consumer Price Index, has been above the Fed's preferred target rate of 2% for the last 18 months in a row.

Walmart Inc declined 7.9% to $121.62 after the retailer lowered its outlook for the fiscal year second quarter and said consumers are sticking to basic necessities because of high food and energy prices.

The shifting consumer pattern is also forcing the retailer to mark down several items including apparel and other discretionary items.

Shopify plunged 15.5% to $31.02 after the e-commerce platform operator announced a layoff of 10% or about 1,000 employees.

3M increased 6.3% to $142.72 after the company reported better-than-expected earnings and said it plans to separate its healthcare unit as a separate independent company.

General Electric increased 6.9% to $73.10 after the company reported higher earnings and cash flow on the recovery in its aviation engine business.

General Motors declined 2.8% to $33.75 and the vehicle maker said June quarter revenues increased 4.6% to $35.8 billion and net income plunged 40% to $1.7 billion from $2.8 billion a year ago.

The company blamed the earnings fall on China lockdown and parts shortages also prevented the automaker from shipping 100,000 vehicles.

The vehicle maker said it has secured materials needed to make one million electric vehicles by 2025.

General Motors guided full-year net income between $9.6 billion and $11.2 billion and adjusted operating earnings between $13.0 billion and $15.0 billion.

The company also guided full-year diluted earnings per share between $5.76 and $6.76 and adjusted earnings per share between $6.50 and $7.50.

EU States Agrees to Cut Gas Consumption, UBS Drops 10%

Bridgette Randall
26 Jul, 2022
New York City

European markets traded down ahead of the U.S. GDP data and interest rate decision.

Stocks in Frankfurt edged lower after Russia controlled Gazprom throttled down natural gas flow to 20% of the capacity of Nord Stream 1 pipeline network.

The widely anticipated move from Gazprom also lifted natural gas and crude oil prices in European trading.

The European Union member states agreed to cut natural gas consumption by 15% for the next eight months beginning next month.

Europe has been looking for alternative natural gas supplies from Norway, Algeria, Qatar, and the U.S.

Russia supplies about 40% of the natural gas consumption of the 27 member states of the European Union and alternative supplies from other nations can only provide less than 10% of Europe's needs.

Moreover, alternative supplies will be delivered in a liquid form and Europe lacks LNG processing facilities at ports.

The DAX index fell 0.8% to 13,102.31, the CAC-40 index declined 0.4% to 6,210.59, and the FTSE index was nearly unchanged 7,306.28.

Lindt & Spruengli increased 107,825 Swiss francs after the chocolate maker released a stock repurchase plan of up to one billion swiss francs.

For the full-year, the chocolate maker revised its sales growth outlook to between 8% and 10% from the previous estimate between 6% and 8%.

Organic sales in the first half of 2022 ending in June increased 12.3% to 1.99 billion Swiss francs and operating profit rose 33.4% to 185.2 million Swiss francs.

Net income jumped 36.2% from a year ago to 138.4 million Swiss francs.

UBS AG dropped 10.9% to $15.04 after the Swiss bank reported sharply lower-than-expected earnings in its latest quarter.

Total revenues in the June quarter was essentially flat at $8.9 billion and net income edged slightly to $2.1 billion from $2.01 a year ago.

Diluted earnings per share rose to 61 cents from 55 cents a year ago.

Fee generating assets in its global wealth management unit, fee-generating assets decreased by 12% or $169.5 billion to $1,244 billion, almost entirely driven by market decline and foreign currency effects.

Asian Indexes Slip In Cautious Trading, South Korea's GDP Expands

Arjun Pandit
26 Jul, 2022
New York City

The Nikkei average eased 0.16% to 27,655.21 and the broader Topix index closed fractionally lower at 1,943.17.

The latest minutes of the meeting from the Bank of Japan highlighted the need to monitor the impact of the moves in the financial and currency markets on the broader economy.

SoftBank Group increased 3.2% to 9,984.20 yen and the company called off its plan to invest $1.6 billion in the U.K. based e-commerce company The Hut Group.

In broader trading in Tokyo, pharmaceutical and shipping sector stocks led the decliners.

The Shanghai Composite index rose 0.83% to 3,277.44 after local media reported that the financial and housing authorities are working together to establish a bailout fund for select real estate projects.

Hong Kong's Hang Seng index advanced 1.67% to 20,905.88 and Alibaba Group said it is looking for ways to make its Hong Kong traded shares more accessible to mainland Chinese investors.

The Kospi average inched higher 0.39% to 2,412.96 after South Korea's GDP expanded seasonally adjusted 2.9% from a year ago in the second quarter ending in June.

On a quarterly basis, the economy expanded unexpectedly at a faster pace 0.7% from the first quarter.

Economists were expecting the economy to grow at a 0.4% rate on a quarterly basis and 2.5% annually.

The Sensex index in Mumbai fell 497.73 or 0.89% to 55,268.49 and the Nifty index declined 147.15 or 0.88% to 16,483.85.

Despite the banks, vehicle makers and industrial companies reporting a surge in earnings, investors sold stocks ahead of the U.S. Fed's rate decision tomorrow.

Walmart Lowered Profit Outlook, Inflation Affects Consumer Spending Pattern

Scott Peters
25 Jul, 2022
New York City

Walmart lowered its outlook for the fiscal year second quarter ending in July and for the full-year.

Accelerating food prices are forcing customers to spend less on other items forcing the retailer to markdown apparel and other discretionary items.

U.S. Stocks Waver Ahead of Rate Decision and GDP Data

Barry Adams
25 Jul, 2022
New York City

U.S. stocks lacked direction ahead of the Fed's rate decision and the GDP data later in the week.

Investors have been battling worries of inflation, corporate earnings growth and the path of the economic growth.

About 450 companies including one-third of the companies listed in the S&P 500 index are scheduled to release quarterly results this week.

The S&P 500 index increased 2.46 to 3,963.91 and the Nasdaq Composite index declined 0.4% or 49.06 to 11,781.94.

Benchmark indexes in volatile trading hugged flat line and traders avoided bets ahead of the Fed's rate decision at the end of two-day meeting on July 27.

Economists are anticipating at least 50 basis points increase in the key lending rate and many are rooting for a larger 75 basis point hike in the rate helping the policymakers in front-loading inflation containment.

Inflation has stayed above the Fed's target rate of 2% for 18 months in a row and surged as high as 8.6% in the last two months.

The Bureau of Economic Analysis is set to release the second quarter GDP estimate at 8:30 a.m. on July 28,

Futures of crude oil increased $1.56 to $96.24 a barrel and natural gas rose 36 cents to $8.66 a unit.

The yield on 10-year Treasury notes edged up 3 ticks to 2.82%.

The euro traded at $1.0216 and the Japanese yen dropped to 136.71 against one U.S. dollar.

Energy stocks traded higher after crude oil prices rebounded from the lows of last week.

Hess, Marathon Oil, Valero Energy, and Diamondback Energy gained more than 4%.

Newmont Corporation dropped 12.8% to $44.86 after the resource company reported flat sales of $3.06 billion and net income declined to $387 million from $650 million a year ago.

Diluted earnings per share fell to 49 cents from 81 cents a year ago.

The gold mining company also trimmed its annual capital expenditure plan to $1.1 billion from the previous $1.4 billion released at the end of 2021.

World Wrestling Entertainment Inc increased 7.3% to $71.21 after the company said its chief executive Vince McMahon retired on Friday amid an internal investigation of sexual misconduct.

The company also disclosed previously unrecorded $14.6 million expenses paid personally by McMahon.

The company also said it "is facing or may face additional investigations from regulatory agencies and other entities" in a regulatory filing with the SEC.

Philips NV declined 7.9% to $20.80 after the medical equipment maker swung to a quarterly loss and said comparable sales fell 7% in its latest quarter ending in June.

Ryanair gained 4.6% to $74.22 after the discount airline operator reported better-than-expected earnings and estimated passenger traffic to rebound to the pre-Covid 2019 levels either this or the next year.

Germany's Business Confidence at 25-month Low

European markets lacked direction in volatile trading as investors digest another batch of corporate earnings in the region.

A private survey showed confidence in the business community dropped to the lowest level in the last 25 months.

The business confidence index declined to 88.6 in July from a revised 92.2 in June.

Higher energy prices and uncertainties linked to the natural gas deliveries and rising wage pressures are worrying business leaders.

The DAX index declined 0.3% to 13,210.46, the CAC-40 index inched up 0.3% to 6,237.55, and the FTSE 100 index increased 0.4% to 7,306.30.

Volkswagen AG declined 3.9% to 183.0 euros after the automaker said that the chief executive Herbert Diess will be replaced by Oliver Blume, head of Porsche.

In another management shake up, the company appointed chief financial officer Arno Antlitz as chief operating officer.

Under Diess, VW accelerated its investment and migration to electric vehicle production and in 2021 sold 450,000 units, surpassing Tesla sales in Europe.

Schaeffler AG declined 1.2% to 5.52 euros and the German industrial products maker signed an agreement with an affiliate of Triton Fund V for the acquisition of the Ewellix Group for 582 million euros and assume debt of 120 million euros.

In 2018, Triton acquired the linear actuators maker Ewellix Group from the Swedish bearings maker SKF.

Philips AG declined 7.7% to 20.08 euros after the medical equipment and systems maker reported sharply lower-than-expected earnings.

Revenues in the second quarter declined 1% or 7% on a comparable basis to 4.2 billion euros.

In the quarter, the company swung to a net loss of 20 million euros from 153 million profit a year ago.

Sales in Western Europe declined 6% to 873 million euros and in North America increased 11% to 1.7 billion euros.

Telefonica S.A. increased 1.9% to 4.42 euros after the company agreed to sell its rural fiber network in Spain to a consortium for around 1 billion euros.

Orange S.A. increased 1.5% to 10.27 euros after the French telecom operator agreed to merge its unit in Spain with MasMovil.

The equally-owned joint venture values Orange's Spain business at 7.8 billion euros and Masmovil at 10.9 billion euros.

China Worries Hobble Asian Markets

Asian markets traded lower and indexes in China led the declines in the region after real estate and banking crises.deepen in China

Investors also awaited the restructuring plan from the troubled China Evergrande Group.

At least four smaller banks in Henan and three additional banks in Anhui are restricting customer withdrawals.

Moreover, mortgage boycotts are spreading in central and southern China as investors await the fate of completion of 249 real estate projects reflecting over 1 million apartment units.

The Shanghai Composite index fell 0.60% to 3,250.39 and the Hang Seng index in Hong Kong closed down 0.22% to 20,562.94.

In Tokyo, benchmark indexes lower ahead of the U.S. Fed's rate decision and the release of the U.S. GDP data later in the week

The Nikkei average fell 0.77% to 27,699.25 to snap a seven-day advance while the broader Topix index dropped 0.65% to 1,943.21.

The Sensex index in India declined 0.6% to 55,766.20 after the industrial, telecom, and retail conglomerate Reliance Industries reported a 40% surge in earnings on the back of a 65% jump in crude oil prices.

In addition, tech service companies Infosys and Tech Mahindra reported sharply lower-than-expected earnings in the latest quarter ending in June.

Europe Movers: Orange, Philips, Schaeffler, Telefonica, Volkswagen

Bridgette Randall
25 Jul, 2022
Frankfurt

European markets lacked direction in volatile trading as investors digest another batch of corporate earnings in the region.

The DAX index declined 0.3% to 13,210.46, the CAC-40 index inched up 0.3% to 6,237.55, and the FTSE 100 index increased 0.4% to 7,306.30.

Volkswagen AG declined 3.9% to 183.0 euros after the automaker said that the chief executive Herbert Diess will be replaced by Oliver Blume, head of Porsche.

In another management shake up, the company appointed chief financial officer Arno Antlitz as chief operating officer.

Under Diess, VW accelerated its investment and migration to electric vehicle production and in 2021 sold 450,000 units, surpassing Tesla sales in Europe.

Schaeffler AG declined 1.2% to 5.52 euros and the German industrial products maker signed an agreement with an affiliate of Triton Fund V for the acquisition of the Ewellix Group for 582 million euros and assume debt of 120 million euros.

In 2018, Triton acquired the linear actuators maker Ewellix Group from the Swedish bearings maker SKF.

Philips AG declined 7.7% to 20.08 euros after the medical equipment and systems maker reported sharply lower-than-expected earnings.

Revenues in the second quarter declined 1% or 7% on a comparable basis to 4.2 billion euros.

In the quarter, the company swung to a net loss of 20 million euros from 153 million profit a year ago.

Sales in Western Europe declined 6% to 873 million euros and in North America increased 11% to 1.7 billion euros.

Telefonica S.A. increased 1.9% to 4.42 euros after the company agreed to sell its rural fiber network in Spain to a consortium for around 1 billion euros.

Orange S.A. increased 1.5% to 10.27 euros after the French telecom operator agreed to merge its unit in Spain with MasMovil.

The equally-owned joint venture values Orange's Spain business at 7.8 billion euros and Masmovil at 10.9 billion euros.

European Markets Rebound from Morning Losses