Connect with us

BenzingaEditorial

Home Depot’s Earnings Exceed Expectations But Sales Fall Short

Published

on

Home Depot News

Trouble Is on the Horizon for Retail Chains

Home Depot just reported its third quarter earnings. The Atlanta-based company trimmed its fiscal year sales outlook, explaining that its sales fell below expectations because of the timing of benefits of its strategic investments. For the year, the Dow Jones giant still expects earnings per share growth of 3.1% but trimmed its sales growth view to 1.8% from 2.3%. As a result, hares of Home Depot dropped more than 5.8% in premarket trading.

Third quarter earnings report

Revenue rose 3.5% to $27.22 billion, whereas Wall Street expected 27.53 billion. But adjusted earnings came to $2.53, exceeding analysts’ forecasts of $2.52. In the same quarter last year, they came to $2.51 per share. A somewhat rocky third quarter left the company with a net income of $2.77 billion.

Competition

Its rival Lowe (NYSE:LOW) is reporting earnings on Wednesday. To keep its customers away from its smaller rival, the largest US home improvement chain invested heavily into its online business by improving functions of the website to make in-demand products more easily accessible. The company even added lockers in stores for shoppers who want to pick up their orders as opposed to wait for them to be delivered. They also worked to improve the supply network to shorten delivery times. But the benefits of all these efforts seem to be taking a bit more time to show.

Last quarter, Home Depot lowered its sales outlook for the year due to fears that the trade war will pressure consumer spending down. In the second quarter of 2018, Lowe’s said that the company added 35,000 new customers as the company focused more on professional contractors, but did not disclose the total number of customers for competitive reasons. Lowe has a market value of nearly $89 billion and has gained 24% year to date. But Home Depot’s rocky third quarter results also pulled shares of smaller Lowe down nearly 3% in premarket trading.

Outlook

The company’s shares did hit a 52-week high of $239.31 on Monday. And the stock, which is valued at $262 billion, has surged 39% in 2019. Also on the bright side, Jefferies Financial Group Inc finds that foot traffic in stores and e-commerce website visitations favour Home Depot over Lowe’s. But Home Depot already lowered its sales outlook for the year in the last quarter due to fears that the trade war and consequent tariffs will pressure consumer spending down. No company can surely benefit from that scenario.

The earnings season might be nearing its end but there are more retailers to come. Last week, Wall Street rewarded Walmart (NYSE:WMT) that posted strong quarter results as the company shifts in the Amazon era. But its rival Target (NYSE:TGT) will post earnings tomorrow and it seems to be even better off as its shares rose 70% this year. And then there’s Macy’s that will report its results later this week and show how is it managing to deal with to the changing retail environment. The general vibe is that retailers are having difficulties to grow due to companies leaving them to focus on ‘direct-to-consumer’ sales, like Nike (NYSE:NKE) leaving Amazon (NASDAQ:AMZN). So whichever industry you opt for, evolving changes are on the horizon so we need to wait and see how will retailers recover from these blows.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com

Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

BenzingaEditorial

This Week Will Be About More Than Inauguration Day Alone

Published

on

Since 2020 March lows, the market saw a nothing short of extraordinary record-shattering rally. But how much higher can it go as COVID continues to rage across the US and Europe? That answer will become a bit clearer as traders have returned from the long holiday weekend and equity markets have reopened. This week will be defined by the first days of the Biden administration and by another batch of corporate earnings reports.

Inauguration in times of COVID-19

On Wednesday, president-elect Joe Biden’s inauguration ceremony will take place as a dialed-down event, due to the ongoing pandemic. Americans have been urged to avoid the city on the day, given the risk of violence surrounding the event. Last Wednesday, Airbnb (NASDAQ: ABNB) announced it would block and cancel reservations in the D.C. metro area this week, refunding guests and reimbursing hosts who already made bookings. Interestingly, the stock rallied nearly 6% upon the announcement. Marriott (NASDAQ: MAR) which has close to 200 hotels in the D.C. area and owns brands including The Ritz-Carlton said it would honor existing reservations, along with IntercontinentalHotelGroup (NYSE: IHG), Hilton (NYSE: HLT), Hyatt (NYSE: H) and Expedia-owned VRBO (NASDAQ: EXPE).

Biden also said he aims to roll out 100 million vaccines in his first 100 days in office, which would significantly accelerate the pace of current efforts to counteract the pandemic. On January 20th, Biden is seeking to sign about a dozen executive actions to address the pandemic, as well as a virus-stricken economy, climate change and racial equity.

Earnings

One of this week’s key earnings reports will come from Netflix (NASDAQ: NFLX) on Tuesday after market close. Last quarter’s results showed disappointing signs that the skyrocketing user growth that Netflix enjoyed during pandemic was slowing down. The streaming giant missed even its own conservative third-quarter new subscriber guidance for the summer, adding just 2.2 million new members as opposed the 2.5 million the company had expected. For the fourth quarter, Netflix expects 6 million net paid additions to its streaming platform, representing another YoY decline after adding 8.8 million in the fourth quarter of 2019.

Netflix, while still the leader among U.S. streaming platforms when it comes to total users, has also faced increasing competition over the past year, especially from relative newcomer Disney+ (NYSE: DIS). Disney’s streaming service had 86.8 million paying subscribers as of December 2nd, compared to the more than 195 million Netflix reported at the end of September. Disney also revealed it would be raising the monthly price of its streaming subscription starting in March, suggesting the entertainment giant believes it has the user demand and pricing power to command higher fees. Netflix needs to prove it can maintain its status as the king of streaming among this intense competition.

Wall Street expects earnings $1.38 per share on revenue of $6.61 billion, compared to the year-ago quarter when earnings were $1.30 per share on $5.47 billion in revenue.

Also, on Tuesday, Tuesday: Halliburton (NYSE: HAL), Charles Schwab (NYSE: SCHW), Bank of America (NYSE: BAC) and Goldman Sachs (NYSE: GS) will report their earnings before market open.

Wednesday

Morgan Stanley (NYSE: MS), US Bancorp (NYSE: USB), Citizens Financial Group (NYSE: CFG), Bank of New York Mellon Co. (NYSE: BK), Procter & Gamble (NYSE: PG), UnitedHealth Group (NYSE: UNH) will report before market open whereas Alcoa (NYSE: AA) and United Airlines (NASDAQ: UAL) will report after market close. Wall Street expects United Airlines to lose $6.58 per share on revenue of $3.46 billion. This compares to the year-ago quarter when earnings came to $2.67 per share on revenue of $10.89 billion. United had some $24 billion of capital expenditure commitments as of Q3 so amid the decline in travel demand, its aim is to reduce that spending as much as possible. Investors will be looking at such economic improvements to justify the argument that UAL is better positioned than other airlines to survive this downturn.

Thursday will feature IBM and Intel

Wall Street expects International Business Machines Corporation (NYSE: IBM) to earn $1.79 per share on revenue of $20.63 billion but what investors are really wondering is when will the real turnaround begin? Its cloud ambitions have promised to return value to shareholders, but shares still haven’t regained even their pre-COVID levels while the rest of the market has seen record highs. Cloud leaders such as Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG)(NASDAQ: GOOGL) are seemingly too far ahead for IBM to catch up. The new CEO Arvind Krishna is tasked with elevating Big Blue into a leading cloud and AI position, while distancing the company from the legacy business. Investors want to hear progress on these fronts.

Truist Financial (NYSE: TFC), Baker Hughes (NYSE: BKR), Union Pacific (NYSE: UNP) will also report on the same day before market open and Intel (NASDAQ: INTC) will make its appearance after market close.  Wall Street expects Intel to earn $1.10 per share on revenue of $17.48 billion, whereas the same quarter last year saw earnings of $1.52 per share on revenue of $20.21 billion. Intel shares have soared more than 10% Wednesday after the company confirmed that CEO Bob Swan will step down on February 15 and be replaced by Pat Gelsinger, the current CEO of VMWare (NYSE: VMW). On several important chip development fronts, Intel has lost ground to rivals AMD (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA). On Thursday, it must show the right things to support the confidence that Gelsinger can turn things around and quickly.

The week will be closed on Friday with earnings from Kansas City Southern (NYSE: KSU), Schlumberger (NYSE: SLB) and Ally Invest (NYSE: ALLY) who will all report before the stock market opens.

The inauguration may signal a dramatic shift and increase in government spending, but it remains to be seen whether hopes of a transformation can survive the reality of a narrowly divided Congress.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

Continue Reading

BenzingaEditorial

This Week’s IPOs

Published

on

This week brings us four IPOs which are aiming to raise $1.8 billion. These four companies operate in different markets and they come from different countries, but they share at least one thing, they all want to go public.

RLX Technology

RLX Technology (NYSE: RLX) is a leading e-cigarette brand in China. The company announced its terms for its IPO on Friday, and it plans to $1.0 billion through offering 116.5 million units at a price between $8 and $10. That means RLX Technology would have a market cap of $14.0 billion. This company is profitable and fast-growing. In 2019, it was holding around 63% of the e-vapor market share in China. RLX believes in the strength of the retails sales, therefore it has more than 110 authorized distributors, so their products are present in more than 250 cities in China, through 5,000 branded stores and over 100,000 other retail outlets. As of the end of September 2020, the revenues have doubled compared to 2019. This is all very promising having in mind that the company was founded in 2018.

Patria Investments

One of the leading private markets investment firms in Brazil and Latin America, Patria Investments Limited (NASDQAQ: PAX), announced that it has launched its IPO. The company offers 26,650,000 Class A common shares in total. The estimated price range of the offered units is between $14 and $16, so the plan is to raise $400 million at a $2.0 billion market cap. The net proceeds from the offering are planned to be used for general corporate purposes, expansion of the company’s operations (through new distribution channels, acquisitions of asset managers and portfolios), and to fund capital commitments to its existing and new contracts. As one of the leading PE firms in Brazil, the company’s investment portfolio includes over 55 companies and it has raised more than $8.7 billion since 2015.

MYT Netherlands

MYT Netherlands (NYSE: MYTE), a Germany-based luxury fashion site, which operates under the brand name Mytheresa, likes to say it offers the Finest Edit in Luxury Fashion. As in the company’s store with the same name (The Mytheresa store in Munich), fashion “doyens” can find some of the renowned brands like Balmain, Gucci, Prada, Saint Laurent, and Fendi, and their latest collections. As the pandemic has ravaged the luxury goods sector, the salvation might be in the online sales of luxury goods, which rose between 12% and 23%. Therefore, Mytheresa decided to go public, planning to raise $266 million at a $1.5 billion market cap and to focus on offering clothing, shoes, and accessories from many luxury brands through its e-commerce platform.

Dream Finders Homes 

After successful completion of several acquisitions and expanding nationally, the Florida-based homebuilder Dream Finders Homes (NASDAQ: DFH) decided to launch its IPO and to raise $130 million at a $1.2 billion market cap. For the first nine months of 2020, the company announced an increase of 29% of pro forma revenues (pro forma – a method of calculating financial results using certain projections or presumptions) and an increased EBITDA margin of 9%.

These companies and their IPOs are offering a lot of variety and potential. So far, 2021 looks promising.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

Continue Reading

BenzingaEditorial

The EV Industry Is Worth More Than The Traditional Automakers

Published

on

Many things that were considered to be impossible actually happened in 2020. One of them is that electric vehicle makers became more valuable than traditional automakers and by about by about $100 billion, according to Barrons. EV makers are now worth about $1.3 trillion whereas traditional car makers combined have a market capitalization of about $1.2 trillion. This figure includes 100 auto makers around the globe with market caps ranging from $10 million all the way to Tesla’s (NASDAQ: TSLA). Based on its fully diluted share count, Tesla is worth about $1 trillion.

This feat is even more impressive if you consider that this is a much smaller industry based on actual number of cars. The last year taught us that the connection between the stock market and the economy is imprecise at best. However, the fact that technology enabled batteries to overpass ICEs is the kind of disruption that investors look for. Even though Tesla is the main contributor to the value of the EV market, the overall image is just as impressive as three of the top five most valuable are EV makers, with Tesla being followed by NIO (NYSE: NIO) and BYD (OTC: BYDDF). As for traditional automakers, Volkswagen (OTC: VWAGY) and Toyota (NYSE: TM) are the most valuable ones with both undergoing serious investments into electrification.

Traditional automakers are going electric

On Friday, BMW said it aims to double its sales of fully-electric vehicles this year. Including plug-in hybrids, it aims for a 50 percent increase in sales of electrified vehicles versus 2020. It did not give sales volumes for its fully electric vehicles but in data released on Tuesday, BMW said it sold close to 193,000 electrified vehicles, including fully electric and plug-in hybris in 2020. As a reminder, Tesla delivered almost half a million all-electric models last year, which is 75% of General Motor’s (NYSE: GM) third-quarter deliveries.

The automotive industry is at an inflection point

BEVs take approximately 1% of the total market for light vehicles, but the figure rises to about 3% if we include hybrid and plug-in hybrids. Why exactly it takes a relatively small market share to disrupt an industry is a bit of a mystery, but one reason is that more investment capital tends to flow in when market share come is within the 3% to 5% range. As more capital drives more innovation and improvement, investors are lured by high growth rates, bringing in even more capital and this is how success is made. Over the past year, EV makers have raised more than $20 billion in fresh capital, which is a fraction of what traditional auto companies spend on plants and equipment. However, on a per car basis, the EV industry is investing at roughly 10 times the rate of the traditional industry. Add to this President Joe Biden’s aim of a carbon-free future by 2035 and the drive toward adoption of EVs which is already seeing impressive results in Europe, the all-electric future is around the corner.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

Continue Reading
Advertisement

TRENDING

Advertisement

Submit an Article

Send us your details and the subject of your article and an IAM editor will be in touch with you shortly

Trending