Visa gets a beat as well. Visa beats on earnings and boosts dividend by 20% (MarketWatch). Visa Inc. topped earnings expectations for its latest quarter Tuesday as the payments giant continued to call out strong consumer spending trends. Payments volume at Visa V, 5.63% grew 10% in the fiscal fourth quarter, while processed transactions increased 12%. Visa’s revenue rose to $7.79 billion from $6.56 billion and came in ahead of the FactSet consensus, which was for $7.55 billion. “If you just looked at our numbers and didn’t look at what people are writing or saying in the media, you wouldn’t think there’s all this anxiety or uncertainty out there or that people aren’t feeling good about things,” Chief Financial Officer Vasant Prabhu told MarketWatch. “The numbers have been steady for nine months and spending is stable almost everywhere in the world and quite strong.” Through its results, Visa has seen “no evidence of consumers feeling a pinch, consumers feeling anxious,” he added. See also: American Express says spending remains strong as earnings top expectations This most recent earnings report was highly anticipated because Visa has a September-ending fiscal year and typically offers an annual forecast on its fiscal fourth-quarter earnings call. Indeed, the company did so, with Prabhu telling investors on the call that Visa currently expects reported nominal dollar net revenue growth in the high single-digit range, though he acknowledged that the economic situation is fluid. “As we’ve said before, we are not economic forecasters,” he said, according to a transcript provided by Sentieo/AlphaSense. “Clearly, there’s a high risk of a global recession, but we do not have a specific point of view on if, when or the kind of recession we might have.” He added that “for internal planning purposes,” Visa is “assuming no recession.” But the company remains “vigilant” and will have “contingency plans in place should we have an economic or geopolitical shock that impacts our business.” Visa shares were up about 1% in after-hours trading Tuesday. Chief Executive Al Kelly commented on the earnings call that Visa has a “very different” business than it did in the last downturn, calling out that e-commerce is more mainstream, and noting that company is more deeply penetrated into everyday spending categories. “We have a very heavy debit portfolio, which tends to perform better during these downturns,” Kelly said. Prabhu elaborated further when speaking with MarketWatch, highlighting that Visa didn’t own Visa Europe at the time of the last recession, meaning that its business is now “truly global.” Additionally, the company has more of a presence in emerging markets like Brazil and South Africa, and a far bigger business in value-added services. Kelly hinted on the earnings call that thinking about a downturn in the shadows comes with various uncertainties, seeing as “there still seems to be a lot of pent-up demand for travel, for example, which is a highly discretionary purchase,” and employment remains strong. “So we’ll certainly watch if payment volumes are impacted in any kind of significant way,” Kelly said. Visa saw 36% growth in cross-border volume during the September quarter, or 49% growth when excluding transactions made within Europe. Cross-border payments occur when someone with a card issued in one country makes a payment at a merchant based in another country. While the cross-border category is generally seen as a proxy for travel spending, it also captures international e-commerce. On the travel point, Prabhu told MarketWatch that consumers “are still interested in experiences and doing things they couldn’t do for a long time.” Visa is starting to lap stronger cross-border performance from a year ago, “so the rate of growth inevitably has slowed,” he said on the earnings call. But he noted to MarketWatch that given continued difficulties in getting airfares and hotel rooms, some people might still not even have been able to pursue the travel they desire. For the latest quarter, the company reported net income of $3.94 billion, or $1.86 a share, compared with $3.58 billion, or $1.65 a share, in the year-earlier period. After adjustments, Visa earned $1.93 a share, up 19% from a year prior, while analysts tracked by FactSet were looking for $1.87 a share. Prabhu noted on the earnings call that Visa was” moderating expense growth” as it starts its new fiscal year, “so expense growth is clearly coming down from the levels you’ve seen.” The company noted in its release that during October, its board of directors approved a new $12 billion stock-buyback program as well as an increase to the dividend. The quarterly cash dividend will be 45 cents a share, up from 38 cents prior, payable on Dec. 1 to shareholders of record as of Nov. 11.
You can just....."FEEL"....how the markets want to go up today. Since the open they have been pushing against the negativity in the markets today. The NASDAQ is being held back by BIG TECH. My account is also......four stocks down.....GOOGL, AMZN, AAPL and MSFT.....are holding my account in the red today. There is "HOPE" for the afternoon......but I dont know if the BIG TECH can pull off a green close for my account with yesterdays earnings and the rest that hit tomorrow.
Direction is pretty clear now for today. Probably for tomorrow too. Perhaps for the rest of the week depending on earnings tomorrow from....AMZN, AAPL,.....and for me......HON. For those with CASH......some amazing buys in the greatest companies in the world....will be available after tomorrow.
Reaction to the earnings.....hit my account today. I was definately in the red with a solid moderate LOSS. I also got smashed by the SP500 today by 2.0%. I did manage to have four of ten stocks UP for the day.....NKE, COST, HON, and TSLA. They could not stem the tidal wave from the BIG TECH stocks today....even though they tried
I think we all know what happened today in the markets....but just to be sure: Tech titans lead stocks down after weak earnings https://finance.yahoo.com/news/stock-market-news-live-updates-october-26-114326444-114957078.html (BOLD is my opinion OR what I consider important content) "U.S. stocks slumped Wednesday after weak earnings from Alphabet (GOOGL) and Microsoft (MSFT) raised concerns that slowing output could dent corporate profits in the coming months. The technology-heavy Nasdaq Composite (^IXIC) was down 2%, while the S&P 500 (^GSPC) pushed lower by 0.7%, breaking three-day winning streaks for the indices. The Dow Jones Industrial Average (^DJI) ticked higher by 0.01% after seesawing throughout the day. Stocks had rallied of late, posting three straight days of gains before Wednesday's selloff. After the closing bell on Tuesday, however, Microsoft posted its weakest quarterly revenue growth in five years as a strong dollar and slumping PC sales held back the tech giant’s growth. Microsoft shares closed down 7.7%, while intraday action saw the biggest drop since March 2020. Google parent Alphabet, meanwhile, posted results that missed analysts’ revenue expectations, while YouTube recorded its first decline in digital ad revenue since the company began reporting the video unit’s performance. The company's shares closed down more than 9%, its worst one-day loss since 2020. “The fact of the matter is, we are heading into, whether we want to call it a recession or not, we're heading into a softer or tighter macro environment. ... You hear this from all the software vendors,” RBC Capital Markets software equity analyst Rishi Jaluria told Yahoo Finance Live on Tuesday following the quarterly earnings report. “It was disappointing,” Morningstar senior equity analyst Ali Mogharabi told Yahoo Finance Live on Tuesday. The decline in Youtube’s digital ad revenue was due in part to the “foreign currency headwinds,” but the broader picture here is the economic downturn, he explained. “A lot of advertisers are becoming more hesitant. They're maybe holding back a little bit on their ad spending. But at the same time, even during an economic downturn, you're seeing the importance of that digital transition of that cloud migration,” Mogharabi said. The downturn rippled across the tech sector. Facebook parent Meta Platforms (META) fell 5.6%, while Amazon (AMZN) dropped 4.1%. While tech shares have been downbeat this year, mega-cap technology stocks still hold heavyweight over the major indexes. The five biggest tech firms — Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (FB), Apple (AAPL), and Amazon (AMZN) — alone represent roughly a quarter of the S&P 500 index's market capitalization. Earnings reports will continue to roll in Wednesday, with Facebook parent Meta Platforms and automaker Ford (F) taking the headline spots. Both are set to report after the bell. Still, earnings this quarter have provided bits of positive corporate news. Chipotle (CMG) posted results Tuesday that slightly topped market expectations. Most of its sales numbers came from another round of menu price increases as the company navigates inflationary pressures. Spotify (SPOT), meanwhile, added more users on both its free and paid tiers than expected in the third quarter. The streaming company reported a 19% ad-revenue increase, while sales weakened due to the “challenging macro environment.” Also on the earnings front Tuesday, some of the largest shipping companies in the U.S. pointed to coming price hikes. The Atlanta-based United Parcel Service Inc (UPS) posted revenue gains in the third quarter of 2022 compared to the prior year, despite a pullback in global shipping demand. By late December, UPS plans to increase rates UPS Ground, Air and International services by an average of 6.9%. Memphis, Tennessee-based rival shipping giant FedEx Corp. (FDX) also plans to increase rates by 6.9% and expects to cut between $2.2 to $2.7 billion in costs to counteract weakened global demand and light shipping volumes, which the company similarly cites as a hit to the bottomline. Boeing on Wednesday, meanwhile, became the latest company to report a third-quarter loss and revenue that missed analysts' expectations amid a “challenging environment.” Also on Wall Street’s plate is Twitter’s drama-filled acquisition deal. Elon Musk has until Friday evening to close the deal on his $44 billion acquisition or face a legal battle at Delaware Chancery Court next month. "Once Twitter deal closes on Friday (which is our expectation) and Musk sells his needed Tesla stock this 6 month painful overhang will be over and Tesla investors can finally focus on moving forward and seeing the next chapter of growth story take hold into 23 despite macro," Wedbush Securities analyst Dan Ives wrote on Twitter following the news on the deal. In the crypto market, Bitcoin (BTC) climbed above $20,000 for the first time in about three weeks as trade volume moves downward for the quarter." MY COMMENT At least it is nice to see some new drama for the media to fear monger. Not a single mention of the FED today that I saw. So nice to not be focused on them....at least for one day.
Not a stock that I own or ever will.....I simply dont like this company. BUT....many people still hold it and no doubt this will be a potential catalyst for another down day tomorrow. Meta earnings miss on revenue, offers lighter-than-expected Q4 guidance https://finance.yahoo.com/news/meta-thid-quarter-earnings-130316557.html
This does not sound good. The US now has just 25 days of diesel supply — the lowest since 2008. Here's why that's more alarming than a dwindling 'oil piggy bank' https://finance.yahoo.com/news/us-now-just-25-days-160000619.html (BOLD is my opinion OR what I consider important content) "The U.S. is facing a diesel crunch just as demand is surging ahead of winter — with only 25 days of supply left, according to the Energy Information Administration. National Economic Council Director Brian Deese told Bloomberg TV that diesel inventories are “unacceptably low” and “all options are on the table” to bolster supply and reduce prices. However, even as the stockpiles are being drained, the Biden administration seems to be left with very few sustainable options for long-term relief. What’s causing the crunch? Unlike gas and jet fuel, demand for diesel recovered at a much faster pace from the pandemic. Diesel is used for transporting goods as well as powering construction, farming and military vehicles and equipment. In 2021, the U.S. transportation sector alone consumed 46.82 billion gallons, or 1.11 billion barrels of distillate fuel (essentially diesel fuel) — at an average of about 128 million gallons a day. With higher demand for this dirty fuel, traders are paying more for prompt deliveries than longer-term ones and they expect prices to drop in the future — a downward market structure known as “backwardation.” This also means it’s more profitable for suppliers to sell now. The market usually moves into “contango” — the opposite of backwardation, where demand is lower and suppliers build up inventory with the expectation of higher future prices — in the summer. However, strong domestic and international demand, shrinking domestic refining capacity and sanctions on Russian petroleum imports have kept the diesel market tight throughout the year. New England’s stockpiles have been depleted to less than a third of its usual levels for this time of year, which is concerning since those states rely on fuel for heating more than other parts of the country. The national average price of diesel as of Oct. 24 is at $5.34 a gallon — $1.63 more than last year. What are the government’s options? If diesel inventory continues to run down without the government intervening, the impact on transportation costs for goods could drive inflation up even further. Deese adds that the Fed has some tools to bolster diesel supply, like the Northeast Home Heating Oil Reserve, which houses one million barrels of diesel in case of a disruption in supplies. “We have looked very carefully at being prepared to deploy as and when necessary,” he said. But The Washington Post reports that diesel demand is so high, that if a million barrels of diesel were delivered from the Northeast reserves, they would be depleted in less than six hours. The Biden administration also recently announced it would be tapping into the country’s emergency oil reserves to counter rising gas prices, despite concerns over the long-term efficacy. White House officials haven’t completely ruled out fuel export restrictions either, but the American Petroleum Institute and the American Fuel and Petrochemical Manufacturers sent out a joint letter expressing their concerns in early October. "Banning or limiting the export of refined products would likely decrease inventory levels, reduce domestic refining capacity, put upward pressure on consumer fuel prices and alienate U.S. allies during a time of war,” the group wrote. Setting minimum inventory levels could affect the number of exports being sent out to foreign countries as well. And even if domestic supply sees some relief, this could push up prices around the rest of the world." MY COMMENT This is a sure way to jack up inflation.....our entire economy runs on diesel. It is also bad news for the North-East and the quickly approaching winter. There is nothing that can be done to increase supply over the short term.....or for that matter......over the long term. Our refinery capacity is limited since we are adding.......NONE.
For Emmett....MOH looks like a beat today too. Molina (MOH) Q3 Earnings and Revenues Beat Estimates Molina (MOH - Free Report) came out with quarterly earnings of $4.36 per share, beating the Zacks Consensus Estimate of $4.25 per share. This compares to earnings of $2.83 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 2.59%. A quarter ago, it was expected that this provider of Medicaid-related services would post earnings of $4.34 per share when it actually produced earnings of $4.55, delivering a surprise of 4.84%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Molina, which belongs to the Zacks Medical - HMOs industry, posted revenues of $7.93 billion for the quarter ended September 2022, surpassing the Zacks Consensus Estimate by 0.91%. This compares to year-ago revenues of $7.04 billion. The company has topped consensus revenue estimates four times over the last four quarters.
Just going through and looking at some of the earnings from companies we don't see on our screens everyday. Different sectors within our economy/different products and services, it appears a good number of them have held up pretty well. They are not going to get the lions share of coverage for obvious reasons, but they quietly go about carrying their own weight. Good to see. The TECH groups mentioned above with MFST, AAPL, GOOGL being the dominant leaders will continue to be in the top positions. I think the other two, META and AMZN, have some work to do. AMZN needs to focus on developing what has worked and ditch some of these treasure hunts they get distracted with. META/FB seems to have just flopped since metaverse or whatever the heck they are doing. On the diesel fuel post above, yeah just what we need right now. Energy....look around policy makers and take note of some glaring examples to learn from.
I guess these earnings are a strong indication that the market is FAR from done with dropping. My prediction is that we will shed AT LEAST another 15% in the s&p in the next month, which will put me in a pretty good buying point for this year. I honestly think that anything at that point will be a BARGAIN, and I may end up putting my 2023 installment at that time.
Well we got a strong open today....considering how things went yesterday....and....the META earnings. GDP is probably part of it....but.....the futures were green last night before GDP. Stock futures waver as GDP beats, tech earnings on tap https://finance.yahoo.com/news/stock-market-news-live-updates-october-27-120335778.html (BOLD is my opinion OR what I consider important content) "U.S. stock futures wavered Thursday morning as investors brace for another batch of tech earnings from Amazon (AMZN) and Apple (AAPL) and digested a better-than-expected U.S. GDP report. Futures tied to the S&P 500 (^GSPC) inched higher by 0.11%, while futures on the Dow Jones Industrial Average (^DJI) ticked higher by 0.8%. The technology-heavy Nasdaq Composite (^IXIC) fell by as much as 0.44% in premarket trading amid disappointing results from some of the U.S.'s biggest tech companies. The S&P 500 and Nasdaq fell Wednesday, snapping three straight days of gains for the indices. Stocks had rallied as of late on positive signals from Federal Reserve officials concerned with the pace of the interest rate hikes ahead of their November meeting, as well as a slew of better-than-expected third-quarter earnings. But the rally ran out of steam amid two lackluster reports from Alphabet (GOOGL) and Microsoft (MSFT), which raised concerns about slowing economic growth. On Wednesday, shares of Facebook parent Meta Platforms (META) plunged in after-hours trading as the tech giant posted a second quarterly revenue decline. “Look, across the board, tech continues to miss. And they're disappointing— I think what's most disappointing are the expenses,” Jefferies senior analyst Brent Thill told Yahoo Finance Live on Wednesday after Meta’s earnings. “I think everyone wants Zuckerberg to hit the air brakes on expenditures. The fact that they're holding headcount flat is good, but I think everyone is calling for more severe measures in terms of trimming headcount, trimming expenses to get a hold of what's happening in this macro storm,” Thill added. A report from the Commerce Department released on Thursday showed the nation's gross domestic product grew at an annual rate of 2.6% in July through September after recording two consecutive quarters of negative growth. Economists surveyed by Bloomberg had estimated a 2.4% uptick. Investors also digested earnings from Ford (F) that narrowed its profit forecast for the year and took hefty charge from its autonomous-driving venture Argo AI. Shares of the automaker are lower by 3% in pre-market trading. Also on the earnings front Thursday: Southwest Airlines (LUV): The airline posted results before the bell forecasting a higher fourth-quarter revenue as travel demand still holds strong. Shopify (SHOP): TheE-commerce firm reported a smaller-than-expected quarterly loss, while revenue topped expectations after adding more avenues for merchants to sell and promote their products. Caterpillar Inc. (CAT): The construction-equipment maker posted earnings that topped expectations even with slowdown of sales growth in Asia. McDonald's (MCD): The fast-food chain beat Wall Street estimates for its third-quarter earnings and revenue amid currency fluctuations. Shell (SHEL): The British oil major reported quarterly profits which more than doubled from the same period last year. The oil giant announced it would buy back $4 billion worth of shares and increase its dividend by 15%. Credit Suisse (CS): The Swiss posted a $4 billion loss as the investment bank radically restructures over the next three years. Shares fell over 10% in pre-market trading. Also on Wall Street’s plate is Twitter’s drama-filled acquisition deal. Elon Musk paid a visit to Twitter’s headquarters ahead of his Friday deadline as banks have started to send $13 billion, the Wall Street Journal reported. A move indicating that the deal is on track to close. “The $44 billion price tag for Twitter will go down as one of the most overpaid tech acquisitions in the history of M&A deals on the Street in our opinion,” Wedbush Securities analyst Dan Ives wrote in a note to clients. “With fair value that we would peg at roughly $25 billion, Musk buying Twitter remains a major head scratcher that ultimately he could not get out of once the Delaware Courts got involved.” Yields on the 10-year Treasury note rebounded to just 4% after hitting 4.291% on Monday. A gauge of the dollar gained following two consecutive days of declines. Elsewhere, the European Central Bank raised its interest rate by 75 basis points to 2.0%, the highest level since 2008. The ECB expects to increase the pace of interest rates over the next meetings. A similar sentiment was carried by the Bank of Canada as it hiked interest rates by a smaller amount than expected on Wednesday." MY COMMENT Looks like the recession is over.....for now......at least based on GDP. Unfortunately it will not make any difference what the markets do today. the key day of the week will be tomorrow.....after the rest of the BIG TECH earnings come out after the bell today.
I will miss the close and the earnings after the close today. I have a little 250 mile road trip for a show tonight. BUT....dont worry....EMMETT will hit it out of the park today......with his market management, private phone bank, and little red phone book.
It i a deceptive market today if you just glance at the averages. The DOW is way up. BUT....the SP500 and NASDAQ are borderline.
HERE is a bit more on GDP. U.S. GDP growth rebounds in Q3, but demand is slowing https://finance.yahoo.com/news/trade-seen-boosting-u-economy-040605062.html (BOLD is my opinion OR what I consider important content) "WASHINGTON (Reuters) - U.S. economic growth rebounded more than expected in the third quarter amid a continued decline in the trade deficit, but that overstates the economy's health as the Federal Reserve's aggressive interest rate increases curbed consumer spending. Gross domestic product increased at a 2.6% annualized rate last quarter, the Commerce Department said in its advance GDP estimate on Thursday, ending two straight quarterly decreases in output, which had raised concerns that the economy was in recession. The economy contracted at a 0.6% pace in the second quarter. Economists polled by Reuters had forecast GDP growth rebounding at a 2.4% rate. Estimates ranged from as low as a 0.8% rate to as high as a 3.7% pace. While the economy may not be in recession, the risks of a downturn have increased as the Fed doubles down on rate hikes as it fights the fastest-rising inflation in 40 years. The U.S. central bank has raised its benchmark overnight interest rate from near zero in March to the current range of 3.00% to 3.25%, the swiftest pace of policy tightening in a generation or more. The report will have little impact on monetary policy, with Fed officials watching September personal consumption expenditures price data and third quarter labor cost numbers due on Friday, ahead of their Nov. 1-2 policy meeting. The trade deficit narrowed sharply in part as slowing demand curbed the import bill. Exports also increased for much of last quarter. Wild swings in trade and inventories were behind the contraction in GDP in the first half of the year. Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, slowed to 1.4% rate from the April-June quarter's 2.0% pace. Consumer spending is being supported by a strong labor market, which is driving up wages. The Labor Department reported on Thursday a modest increase in the number of people filing new claims for unemployment benefits last week. Initial claims for unemployment benefits increased 3,000 to a seasonally adjusted 217,000 for the week ended Oct. 22. Claims have remained significantly low despite reports of companies, mostly in the interest rate-sensitive sectors of the economy, laying off workers." MY COMMENT The economy is all over the place.......as we continue the SLOW recovery from the economic shut-down. Lets hope we learned our lesson on that......and NEVER shut down the economy again. AND......GDP, who cares......it is all about EARNINGS and the ELECTION.
Looks like about anything non-tech is doing pretty good and riding their earnings reports so far this morning. It is early and may turnaround in that aspect though. I don't think any of the latest reports are going to change anything in any significant way. The rate hikes are going to continue as we expect and it is going to take time to reverse some of this mess. I still like how most of the companies have held up so far and we will see if they can do so later down the road. I think this tug of war between green and red will continue until something on either side breaks or improves significantly. Until then we are just along for the bumpy ride.
My last post today.....I have to hit the road. I looked at my account......I knew it was going to be down. I was actually surprised that is was only down by a bit.....not near as much as I expected. Of course....ALL the BIG TECH names were down so far today. I had 6 stocks down and 4 stocks up. I guess there is some hope for improvement in the averages as the day progresses.....but......with the mild loss I have......I dont particularly care one way or the other. It is ALL short term....."STUFF". AND....like they say......"stuff happens". I did put in a trade in one of the accounts that I manage.......to put $10,000 in new money into the SP500 Index at the close today......all in, all at once as usual. It is extremely long term money.....so I am not going to try to time it by a few days. Over time that money will COMPOUND MASSIVELY.
Amazon reports and not a great look. Amazon stock sinks 19% on weak fourth-quarter guidance (CNBC). Shares of Amazon plunged as much as 19% in extended trading on Thursday after the company posted weaker-than-expected earnings and revenue for the third quarter and gave a disappointing fourth-quarter sales forecast. Earnings: 28 cents per share Revenue: $127.10 billion vs. $127.46 billion, according to Refinitiv estimates Here’s how the other key Amazon segments did during the quarter: Amazon Web Services: $20.5 billion vs. $21.1 billion expected, according to StreetAccount Advertising: $9.55 billion vs. $9.48 billion expected, according to StreetAccount Amazon said it expects to post fourth-quarter revenue between $140 billion and $148 billion, representing year over year growth of 2% to 8%. Analysts were expecting sales to come in at $155.15 billion, according to Refinitiv. Revenue grew 15% in the third quarter, marking a return to double-digit sales expansion, but it still fell short of Wall Street’s projected $127.46 billion. Like the rest of Big Tech, Amazon has had a rocky year so far as it confronts macroeconomic headwinds, soaring inflation and rising interest rates. Those challenges have coincided with a slowdown in Amazon’s core retail business, as consumers returned to shopping in stores. Under CEO Andy Jassy, who took the helm from founder Jeff Bezos in July 2021, Amazon has responded to rising expenses by aggressively cutting costs across numerous divisions in recent months. It shed warehouse space, halted some experimental projects, shuttered its telehealth service and froze hiring for corporate roles in its retail business. “There is obviously a lot happening in the macroeconomic environment,” CEO Andy Jassy said in the press release. “And we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets.” Amazon is rounding out a disappointing earnings week for Big Tech. Alphabet and Facebook parent Meta both posted earnings that fell short of expectations as they navigate challenges in the digital ad market. Microsoft wasn’t immune, reporting softer-than-expected cloud revenue and weak quarterly guidance. Operating income fell by almost half from a year earlier to $2.53 billion from $4.85 billion. AWS accounted for all of the company’s profit, plus some, as the cloud unit generated operating income of $5.4 billion. Still, AWS missed analyst estimates for revenue.
Apple beats...again. TECH Apple beats but comes up light on iPhone sales and services ( CNBC). Apple reported fiscal fourth-quarter earnings on Thursday that beat Wall Street expectations on revenue and earnings per share. However, Apple came up short versus sales expectations in core product categories including the company’s iPhone business and services. Apple shares fell over 4% in extended trading. Here is how Apple did versus Refinitiv consensus estimates: EPS $1.29 vs. $1.27 est. Revenue. $90.15 billion vs. $88.90 billion estimated, up 8.1% year-over-year iPhone revenue: $42.63 billion vs. $43.21 billion estimated, up 9.67% year-over-year Mac revenue: $11.51 billion vs. $9.36 billion estimated, up 25.39% year-over-year iPad revenue: $7.17 billion vs. $7.94 billion estimated, down 13.06% year-over-year Other Products revenue: $9.65 billion vs. $9.17 billion estimated, up 9.85% year-over-year Services revenue: $19.19 billion vs. $20.10 billion estimated, up 4.98% year-over-year Gross margin: 42.3% vs. 42.1% est. Apple did not provide official guidance for its first fiscal quarter, which ends in December and contains Apple’s biggest sales season of the year. It hasn’t provided guidance since 2020, citing uncertainty. Apple increased revenue by 8% during the quarter, and Apple CEO Tim Cook told CNBC that it would’ve grown “double-digits” if not for the strong dollar. Total sales in Apple’s fiscal 2022 were up 8% to $394.3 billion. “The foreign exchange headwinds were over 600 basis points for the quarter,” Cook told CNBC’s Steve Kovach. “So it was significant. We would have grown in double digits without the foreign exchange headwinds.” Cook told CNBC that Apple had slowed the pace of its hiring. Other tech companies are looking to make cuts ahead of a possible recession and as interest rates rise. “We are hiring deliberately. And so we we’ve slowed the pace of hiring,” Cook said. Although Apple’s iPhone business increased sales by over 9% on an annual basis, it came up short versus analyst expectations. Apple’s September quarter had 8 days of iPhone 14 sales, and analysts are closely looking for details about if Apple customers are trading up for more expensive models or if the new devices are poised to sustain higher sales through Apple’s fiscal 2023. Cook indicated that Apple’s performance in phone sales was strong despite signs that other smartphone companies are struggling with a recent decrease in demand and said the company grew “switchers,” or people who bought an Apple phone after having an Android device. “We clearly countered the industry trends on the on the phone if you look at third party estimates of what the smartphone industry did,” Cook said. Apple’s services business also missed estimates. Apple’s services business reported just under 5% growth during the quarter, a significant slowdown for the investor-favorite and profitable business line versus last quarter, which was 12%. For the fiscal year, Apple services grew just over 14% to $78.13 billion, a slower rate of growth than 2021′s 16% annual increase, and much slower than 2020′s 27% services growth. The business includes several different lines, including Apple’s online services like Apple Music and Apple TV+, revenue from the App Store, hardware warranties, and search deals with companies like Google. Apple recently increased prices for Apple Music and Apple TV+, but the increases started during the December quarter. Cook said the price increases were “disconnected” from Apple’s services performance. “Well, they’re in the if you look at the price increases as an example, music, the licensing cost has increased,” Cook said. He added that Apple TV+ has more shows now, so Apple feels that the product is more valuable. Investors generally like Apple’s move into services because the products are more profitable than Apple’s hardware and often bring in recurring revenue. There were a few bright spots in Apple’s report. Mac sales were up over 25% to $11.51 billion, even as data points from parts suppliers, chipmakers, and competing PC firms were pointing during the quarter to a significant slowdown in laptop and desktop sales after two boom years during the pandemic. Apple’s Other Products category, which includes Apple Watch and AirPods, also saw an annual increase and beat Wall Street expectations. Some analysts believed that Apple’s wearables were most likely to be hurt if recessionary fears slowed discretionary spending. That business increased nearly 10% year-over-year to $9.65 billion. Apple’s iPad, which had been hampered by supply issues, decreased nearly 10% year-over-year and is Apple’s smallest individual line of business. The company recently released new models in October, which could boost sales just after the September quarter finished. Cook said that it was a difficult comparison because last year, Apple released new iPads in September.
Honeywell's (HON) Q3 Earnings Beat, 2022 EPS View Upbeat (Yahoo Finance) Honeywell International Inc.’s HON third-quarter 2022 adjusted earnings (excluding 3 cents from non-recurring items) of $2.25 per share surpassed the Zacks Consensus Estimate of $2.16. The bottom line improved 11.4% year over year. Total revenues of $8,951 million missed the Zacks Consensus Estimate of $9,075.3 million. The top line increased 5.6% from the year-ago quarter. Organic sales increased 9% due to growth in Honeywell Building Technologies, Performance Materials and Technologies and Aerospace segments. Segmental Details Aerospace’s quarterly revenues were $2,976 million, up 9% year over year. Strong commercial aftermarket demand drove the segment’s performance. Honeywell Building Technologies’ revenues increased 11% to $1,526 million owing to growth in building solutions. Performance Materials and Technologies’ revenues totaled $2,720 million, up 8%. Segmental revenues were driven by higher volumes and pricing in the advanced materials business. Safety and Productivity Solutions revenues decreased 7% to $1,727 million due to lower volumes in warehouse and workflow solutions and personal protective equipment. Costs/Margins The company’s total cost of sales in the reported quarter was $5,981 million, up 4.1% year over year. Selling, general and administrative expenses were $1,228 million, up 6.6%. Interest expenses and other financial charges were $98 million compared with $90 million a year ago. Operating income in the third quarter was $1,742 million, up 10.6% year over year. The operating income margin was 19.5% compared with 18.6% in the year-ago period. Balance Sheet/Cash Flow Exiting the third quarter, Honeywell had cash and cash equivalents of $7,449 million compared with $10,959 million at the end of December 2021. Long-term debt was $12,236 million, lower than $14,254 million recorded at the end of 2021. In the first nine months of 2022, HON generated $2,908 million in cash from operating activities compared with $3,375 million at the end of the year-ago period. Capital expenditures totaled $525 million in the first nine months of 2022 compared with $614 million incurred in the year-ago period. Free cash flow in the reported quarter was $1,899 million, up more than 100% year over year.
