Market Update
Apple Reports Record Sales, iPhone Sales Rise 9%
Scott Peters
28 Apr, 2022
New York City
Apple Inc reported first quarter 2022 sales increased 11.7% to $124 billion from $111.4 billion a year ago.
Net income in the period rose 21% to $34.6 billion from $28.7billion and diluted earnings per share increased to $2.10 from $1.68 a year ago.
By geography, sales in the Americas rose 11% to $51.5 billion from $46.3 billion, in Europe rose 9% to $29.7 billion, in Greater China increased 7% to $25.8 billion, in Japan declined 13.4% to $7.1 billion. and in the rest of Asia Pacific increased 20% to $9.8 billion.
iPhone sales jumped 9% to $71.6 billion.
Mac sales increased t22% to $10.8 billion from $8.8 billion.
iPad sales decreased to $7.2 billion from $8.4 billion.
Wearables and Home and accessories sales rose 13.9% to $14.7 billion.
Services sales increased 24% to $19.5 billion.
Amazon Grapples With Slowing Growth, Rising Costs
Scott Peters
28 Apr, 2022
New York City
Amazon.com, Inc said first quarter 2022 revenues increased 7% to $116 billion, net loss was $3.6 billion compared to net income of $8.1 billion a year ago.
Diluted loss per share in the quarter was $7.56 compared to profit of $15.79 a year ago.
In the quarter, net sales growth in North America slowed to 8% from 40%, international sales declined 6% from 60% increase, and AWS sales rose 37% from 32% in the quarter a year ago.
Worldwide quarterly sales growth has been steadily declining in the last five quarters from 42% in the last quarter of 2020 to 9% in the first quarter of 2022.
North America segment sales growth has been also on slide from 40% to 8% in the same period.
Amazon also recorded a $7.6 billion loss on its investment in Rivian after the share of the electric maker declined in the quarter resulting in a loss of $3.8 billion.
Outlook and Guidance
The online retailer estimated second quarter sales to increase between 3% and 7% or to between $116.0 billion and $121.0 billion.
Tech Rally Lifts Nasdaq 3%, S&P 500 2.5%
Barry Adams
28 Apr, 2022
New York City
Tech stocks rebound lifted major averages higher, shrugging off the latest read on economic growth.
The S&P 500 index climbed 2.5% and Nasdaq Composite Index gained 3.0% after investors focused on better-than-expected earnings from Facebook parent Meta Platforms and Google's buyback plan.
Gross domestic product in the first quarter declined 1.4% largely on the rising imports and supply disruption linked to the Omicron virus in January.
Investors focused on the strength in consumer and business spending and looked ahead to a stronger rebound in the remaining quarters of year.
Weekly jobless claims declined 5,000 to 180,000 at the end of last week and continuing claims of unemployment dropped to 1.4 million, the lowest in 51 years.
After the close, Amazon and Apple are scheduled to release earnings.
In Europe, market indexes in Frankfurt gained 1.4%, in London advanced 1.1%, and in Paris increased 1.0%.
In Asian markets, the Nikkei index in Tokyo jumped 1.8%, the Hang Seng index in Hong Kong gained 1.6%, the Sensex index in Mumbai increased 1.2%, and the SSE index in Shanghai added 0.6%.
The yen dropped to a new two-decade low after the central bank reiterated its low interest rate policy.
Indonesia expanded its ban on exports of palm oil to include crude and refined varieties.
Twitter's Global Daily Active Users Rise 16%
Scott Peters
28 Apr, 2022
New York City
Twitter, Inc reported first quarter 2022 revenues increased 16% to $1.2 billion, net income in the quarter rose to $513 million from $68 million, and earnings per share increased to 61 cents from 8 cents a year ago.
Net income of $513 million includes a pre-tax gain of $970 million from the sale of MoPub for $1.05 billion and income taxes related to the gain of $331 million.
This compares to net income of $68 million, a net margin of 7% and diluted EPS of $0.08 in the same period of the previous year.
The average monetizable daily users increased 15.9% to 229 driven by 6.4% increase to 39.6 million and 18.1% increase in international users to 189.4 million.
The company also corrected its previous daily active users between first quarter in 2019 and fourth quarter 2021.
Twitter said it made an error after the company allowed users with multiple accounts to switch between accounts and overcounted users between 1.4 million and 1.9 million in that period. The error resulted from overcounting separate but linked accounts as individual accounts.
Outlook and Guidance
The company is no longer providing forward looking earnings estimates and withdrawing all provided goals and outlook.
Weekly Initial Jobless Claims Fell to 180,000
Brian Turner
28 Apr, 2022
New York City
Seasonally adjusted jobless claims declined last week to 180,000, in the week ending on April 23.
The initial clams declined 5,000 from the previous week's revised claims up 1,000 to 185,000.
The 4-week moving average was 179,750, an increase of 2,250 from the previous week's revised average.
The previous week's average was revised up by 250 from 177,250 to 177,500.
The advance seasonally adjusted insured unemployment rate was 1.0% for the week ending April 16, unchanged from the previous week's unrevised rate.
The advance number for seasonally adjusted insured unemployment during the week ending April 16 fell 1,000 to 1,408,000.
This is the lowest level for insured unemployment since February 7, 1970 when it was 1,397,000.
The previous week's level was revised down by 8,000 from 1,417,000 to 1,409,000.
The 4-week moving average was revised lower 24,500 to 1,455,000. This is the lowest level for this average since March 14, 1970 when it was 1,435,250.
The previous week's average was revised down by 2,250 from 1,481,750 to 1,479,500.
The advance number of actual initial claims under state programs, unadjusted, totaled 202,983 in the week ending April 23, an increase of 5,005 (or 2.5 percent) from the previous week.
There were 611,236 initial claims in the comparable week in 2021.
U.S. First Quarter GDP Shrank at 1.4% Pace
Brian Turner
28 Apr, 2022
New York City
The U.S. GDP fell unexpectedly at 1.4% pace after adjusting for inflation in the first quarter of 2022.
The unexpected decline was driven by a large trade deficit, surging inflation, and the rise of omicron virus in the beginning of the year.
Moreover, the government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households all decreased as provisions of several federal programs expired or tapered off.
The decline was also driven by a decrease in government spending and defense expenses, fall in exports and rise in imports and a deceleration in private inventory investments.
The GDP growth suffered from a 0.3 percentage point decline after the defense spending fell 8.5%.
Most of the factors that drove the GDP growth to negative are likely to reverse before the year's end.
Current dollar GDP expanded at 6.5% annual rate to a level of $24.38 trillion.
The price index for gross domestic purchases increased 7.8% in the first quarter, compared with an increase of 7.0% in the fourth quarter.
The PCE price index increased 7.0%, compared with an increase of 6.4%. Excluding food and energy prices, the PCE price index increased 5.2%, compared with an increase of 5.0%.
The real disposable income declined 2% compared with a decrease of 5.6% in the fourth quarter.
The economy expanded at 5.7% in 2021 and in the fourth quarter rose at 6.9% annual pace.
Movers: Caterpillar, Comcast, Meta, McDonald's, PayPal, Teladoc, ServiceNow, Qualcomm
Barry Adams
28 Apr, 2022
New York City
Caterpillar Inc fell 1.7% after the construction equipment maker said first-quarter revenues increased 14% to $13.6 billion but operating profit margin declined to 13.7% from 15.3% a year ago.
Cheesecake Factory eased 0.01% after the restaurant chain operator reinstated its quarterly dividend and share repurchase program.
Fiscal first-quarter 2022, ending on March 29, sales rose 26% to $793.7 million, net income surged five-fold to $23.2 million from $3.8 million, and diluted earnings per share was 45 cents compared to a loss of 3 cents.
Comcast Corp declined 3.2% after the media company said revenues increased 14% to $31 billion and net income rose 6.6% to $3.5 billion.
Ford Motor Company gained 0.9% after the automaker said revenues declined 5% to $34.5 billion and net loss of $3.1 billon primarily attributable to investment valuation in Rivian. Adjusted earnings before interest and taxes was $2.3 billion.
The market share declined to 4.8% from 5.3% a year ago and the company shipped 966,000 vehicles or 6% fewer a year ago.
Meta Platforms, Inc increased 14.3% after the social media platform operator said monthly daily active users across all platforms increased 6%.
First-quarter 2022 total revenues increased 7% to $27.9 billion, net income declined 21% to $7.5 billion, and diluted earnings per share fell 18% to $2.72 from $3.30 a year ago.
McDonald's Corporation gained 1.4% after the restaurant chain operator said first-quarter sales increased 11% and global comparable sales increased 12% driven by 3.5% increase in U.S. location.
First-quarter 2022 total revenues increased 11% to $5.7 billion, earnings decreased 28% to $1.1 billion, and earnings per share fell to $1.48 from $2.05.
PayPal Holdings Inc added 2.8% after the payment processing company said it added a net new 2.4 million accounts and processed a total payment volume of $323 billion.
First quarter revenues increased 7% to $6.6 billion but earnings per share declined to 43 cents from 92 cents a year ago.
ServiceNow Inc advanced 7.3% after the digital workflow company said total revenues in the first quarter rose 27% to $1.7 billion but net income plunged to $75 million from $352 million and earnings per share declined to 37 cents from $1.73 a year ago.
Southwest Airlines increased 3.2% and said first quarter operating revenues declined 8.8% to $4.7 billion and reported quarterly loss of $278 million.
The airline also guided second quarter revenues to increase between 8% and 12% and load factor around 88%.
Teladoc Health Inc plunged 44.3% after the online health service provider said first quarter revenues increased 25% to $565 million and $6.6 billion of loss in the quarter linked to goodwill impairment charges.
The company guided second quarter revenues between $580 million and $600 million and net loss per share between 72 cents and 60 cents.
Qualcomm, Inc increased 6.6% the wireless chipmaker reported fiscal second quarter revenues increased 41% to $11.1 billion on higher sales for android phone chips.
Earnings per share rose 68% to $2.57 from $1.53 a year ago.
McDonald's Global Comparable Sales Rise 12%, U.S. Sales Up 3.5%
Scott Peters
28 Apr, 2022
New York City
McDonald's reported first-quarter 2022 total revenues increased 11% to $5.7 billion, earnings decreased 28% to $1.1 billion, and earnings per share fell to $1.48 from $2.05.
Sales at company owned and operated restaurants increased 7% to $2.3 billion and revenues from franchised restaurants rose 13% to $3.3 billion.
Systemwide sales increased 10% or rose 14% on constant currency basis.
Global comparable sales increased 11.8% driven by 3.5% increase in the U.S., 20.4% rise in international company-operated restaurants, and 14.7% jump in international franchise restaurants.
Sales at U.S. locations was driven by higher menu prices, strong marketing promotions, and growth in digital channels.
Digital systemwide sales surpassed $5 billion and rose to 30% in the top six markets.
Nasdaq Futures Jump 2% in Pre-Market Trading
Barry Adams
28 Apr, 2022
New York City
U.S. stocks are pointing to a higher opening as investors digest latest wave of earnings.
Futures of the Nasdaq Composite and S&P 500 indexes show an opening as high as 2% after Meta Platforms reported better-than-expected earnings.
Meta Platforms, the parent of Facebook and Instagram. is trading 15% higher in pre-market trading.
Comcast, Cheesecake Factory, Qualcomm are expected to open sharply higher after beating estimates.
McDonald's jumped 2.4% in the pre-market trading after reporting revenues rose 11% to $5.67 billion but earnings declined to $1.1 billion or $1.48 per share from $1.54 billion or $2.05 a share.
PayPal is trading higher 2% after beating the earnings estimated but offered a slightly weaker current quarter outlook.
European markets are ahead between 1.% and 1.3% as investors focus on domestic earnings and look beyond the war in Ukraine.
Asian markets closed higher led by a 1.7% rise in the Nikkei and Hang Seng. The Sensex index in Mumbai jumped 1.3%.
Crude oil in international markets was nearly unchanged but traded with a slight negative bias.
Cheesecake Net Jumps Five-fold, Reinstates Dividend and Buyback
Scott Peters
27 Apr, 2022
New York City
The Cheese Cake Factory Incorporated reported fiscal first-quarter 2022, ending on March 29, sales rose 26% to $793.7 million, net income surged five-fold to $23.2 million from $3.8 million, and diluted earnings per share was 45 cents compared to a loss of 3 cents.
Comparable sales at restaurants across all its brands increased 8.2% driven by 20.7% increase at its namesake brand.
Off-premise sales were about 25% of total sales.
Cheesecake Factory Restaurants revenues surged 41% to $609.8 million from $499 million.
North Italia revenues soared 36% to $52.7 million from $32.8 million a year ago.
The restaurant chain now expects to open as many as 15 to 16 new restaurants in fiscal 2022, including as many as four Cheesecake Factory restaurants, four to five North Italia restaurants, and as many as seven FRC restaurants, including three to four Flower Child locations.
This includes a Flower Child which opened subsequent to the first quarter-end in Fort Worth, Texas.
The company reinstated its quarterly dividend at 27 cents a share and its stock repurchase program.
The company added one and operated a total of 208 restaurants and total restaurant operating weeks increased to 2,704 from 2,678.
Facebook Parent Meta Platforms Net Falls 21%
Scott Peters
27 Apr, 2022
New York City
Meta Platforms Inc said first-quarter 2022 total revenues increased 7% to $27.9 billion, net income declined 21% to $7.5 billion, and diluted earnings per share fell 18% to $2.72 from $3.30 a year ago.
Facebook daily active users increased 4% to 1.96 billion and increased 6% to 2.87 billion across all its brands.
Monthly active users across all the company platforms and brands increased 6% to 3.64 billion and rose 3% to 2.94 billion on Facebook platform.
The advertising revenues in the U.S. and Canada increased $100 million to $12 billion, declined in Europe to $6.3 billion from $8.2 billion, and fell in Asia to $5.6 billion from $6.2 billion.
In the quarter, capital expenditures increased to $5.5 billion from $4.4 billion a year ago.
The company repurchased $9.39 billion of our Class A common stock in the first quarter of 2022 and as of March 31, 2022, the company had $29.41 billion available and authorized for repurchases.
Outlook
The company guided second quarter revenues between $28 billion and $30 billion.
Nasdaq Erases 1.4% Rebound After Tech Stocks Lose Momentum
Barry Adams
27 Apr, 2022
New York City
U.S. stocks opened higher and quickly reached the high of the day after thirty minutes of trading.
The S&P 500 and Nasdaq Composite fell sharply after one hour of trading and tested low of the day. Indexes continued to rebound in the rest of the session till the final hour.
At close, the S&P 500 index edged up 0.2% and the Nasdaq Composite Index fell 0.01%.
Microsoft jumped 5% after reporting strong growth across all business segments and Alphabet Inc declined 4% after revenue growth disappointed investors.
After the close Meta Platforms is scheduled to report earnings. Amazon and Apple are scheduled to report earnings on Thursday.
U.S. 10-year Treasury bond yield increased a fraction to close at 2.82%.
Crude oil edged up 45 cents to close at $102.15 a barrel and gained by the same amount to close at $105.20 in international trading.
European markets closed up between 0.2% and 0.4%.
Asian markets closed mixed with the Nikkei index in Tokyo down 1.2% and the Sensex index in Mumbai fell nearly 1%.
The Indian government is set to open next week the trimmed public offering of Life Insurance Corporation.
The LIC is the largest insurance company in India and the 221 million shares offering is set to raise at least $2.6 billion.
LIC, the household name in India, has about 100,000 and has 250 million policyholders.
Skechers Net Rises 23% On Record Quarterly Sales
Scott Peters
27 Apr, 2022
New York City
Skechers USA Inc said first-quarter 2022 revenues increased 26.8% to $1.82 billion, net income rose 23% to $121.2 million, and diluted earnings per share increased to 77 cents from 63 cents.
In the quarter, wholesale sales rose 32.7% and direct-to-consumer sales increased 16%.
Domestic sales increased 28.7% and international sales rose 25.5%.
By region, sales in the Americas rose 31% by double-digit increase in the U.S., APAC sales rose 4% driven by a 9% increase in China.
Sales in Europe, Middle East and Africa surged 49% driven by strong growth in Europe.
Gross margin was 45.3%, a decrease of 250 basis points, driven by higher per unit freight costs partially offset by average selling price increases.
In the quarter, the company repurchased 652,000 Class A common shares for $25 million and approximately $475 million remain available for the buyback program.
At the end of the quarter, the company opened 108 and closed 106 stores totaling 4,308.
Guidance and Outlook
In the second quarter, revenues are estimated between $1.75 billion and $1.8 billion and earnings per share between 50 cents and 55 cents.
For the full-year the retailer guided sales between $7.2 billion and $7.4 billion and earnings per share between $2.75 and $2.95.
Chipotle Revenues Rise 16%, Plans to Add 235-250 Restaurants
Scott Peters
27 Apr, 2022
New York City
Chipotle Mexican Grill Inc reported first-quarter 2022 revenues rose 16% to $2 billion, net income increased 24.4% to $158.2 million, and earnings per share increased to $5.59 from $4.45 a year ago.
Comparable restaurant sales increased 9% and digital sales increased to 41.9% of total food and beverage revenues.
Restaurant-level operating margin declined 106 basis points to 20.7% and operating margin for the company increased to 9.4% from 9.3%.
Operating margins at the restaurant-level declined on higher wages and higher food prices for beef, avocado, and paper costs.
Food, beverage and packaging costs in the first quarter were 31.0% of total revenue, an increase of 100 basis points from a year ago.
The restaurant chain opened 51 new restaurants during the first quarter with 42 locations including a Chipotlane.
Guidance and Outlook
The company plans to open between 235 and 250 new restaurants in the second quarter and guided comparable same store sales in the range between 10% and 12%.
Movers: Boeing, CME, Carvana, CoStar, NCR, Skecher, Visa
Barry Adams
27 Apr, 2022
New York City
The Boeing Company dropped 8.5% after the aerospace company reported lower than expected quarterly revenues of $14 billion and larger than expected loss of $2.75 per share.
CME Group added 5.2% after the commodities exchange operator reported March quarter earnings per share of $2.11 compared to $1.79 a year ago.
Revenues also jumped 7.4% to $1.35 billion on higher market volatility and average daily contract volume increased 19% to 25.9 million.
Carvana declined 7.8% extended losses in the week to 23% after the company said it plans to raise as much as $2.8 billion in a junk bond offering to acquire the auction business of Adesa.
CoStar Group added 6.3% after the real estate information provider reported better-than-expected earnings of 31 cents a share.
Revenues in the first-quarter of 2022 increased 13% to $516 million and the company lifted its adjusted EPS and 2022 revenues estimate.
F5 Inc plunged 12.8% after the computer networking company reported quarterly revenues increased to $634.2 million and net income rose to $56.2 million or 92 cents a share.
The stock declined after the company guided lower than expected revenue range between $660 million and $680 million below the estimate of at least $690 million.
MasterCard Inc added 5.6% after Visa reported quarterly earnings that beat the estimates and also offered a stronger outlook for the next quarter.
Microsoft Corp advanced 7.2% after the software developer reported quarterly revenues rose 18% and net income rose 8%. Sales were strong across all segments including personal and enterprise computing, cloud segment, and Internet searches and social platforms.
NCR Corp declined 24.01% and traded near a 52-week low after the computer systems maker reported first-quarter loss of 18 cents a share compared to 19 cents profit a year ago. Revenues increased to$1.87 billion from $1.54 billion in the prior year's quarter.
The company also lowered its full-year revenue outlook to $8 billion from the previous range between $8 billion and $8.2 billion.
Skechers U.S.A. Inc jumped 6.4% after the company said sales increased 25% to $1.82 billion and net income jumped 20% to $121.2 million or 77 cents a share.
For the current quarter, the retailer guided revenues between $1.75 billion and $1.8 billion and earnings per share between 50 cents and 55 cents.
Robinhood Markets, Inc dropped 5.1% after the online broker said it plans to layoff 9% of its staff. The company is scheduled to release earnings on Thursday.
The online broker rapidly grew in the first year of the pandemic and total headcount jumped to 3,800 from 700 in the period.
The stock is down 73% from its first-day of close as a publicly traded company July 30, 2021.
Visa Inc gained 8.2% after the payment processing network operator reported quarterly revenues increased to $7.2 billion and net income rose to $1.70 a share.
The company also said the current quarterly revenues are expected to increase in the upper end of the mid-teen percentage range and earnings are expected to match the latest quarter.
Gross payment volume increased 17% and cross-border volumes rose 38% from a year ago.