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Can JetBlue Dare to Thrive Once This Nightmare Is Over?

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Airliners Stock News Corona

JetBlue Airways Corporation (NASDAQ:JBLU) will hold its quarterly conference call to discuss first quarter 2020 financial results on May 7th. Under the CARES Act, the airline will receive close to $685 million in grants from the government and an additional $251 million in form of a low-rate interest loan with an extended payback period. This cushion pillow will will help it absorb losses from disrupted operations as COVID-19 has put an end to travel.

But unlike its peers, JetBlue will actually be able to weather the storm quite well with the help of the government and even thrive after this nightmare ends due to its strong balance sheet, one of the strongest in the industry. Also, JetBlue is on good track due to surpassing earnings estimates with its last two reports.

The industry

The stock market was literally pushed off a clif as COVID-19 has put the global economy to a virtual standstill. As for airlines, Alaska Air (NYSE:ALK) and Ryanair (NASDAQ:RYAAY) were among the most heavily injured. While the market is slowly recovering, it is not excluded that there will be another major market selloff just like there being a possibility of a second wave of COVID-19. But when it comes to airlines, things couldn’t possibly get any worse they are now so most likely, the majority of stocks are trading close to the bottom. The good news is that once things restart, they will also slowly start to appreciate. But Buffet’s sell off was really the final drop as his Berkshire Hathaway Inc. (NYSE:BRKB) owned shares of American Airlines Group Inc. (NASDAQ:AAL), Delta Air Lines Inc. (NYSE:DAL), Southwest Airlines Co. (NYSE:LUV) and United Airlines Holdings Inc. (NASDAQ:UAL), all of which slumped as he bailed on the industry. Air Canada (OTC:ACDVF) gave a depressing outlook forecasting a ‘smaller airline world’ whereas Southwest Airlines dared to be a bit optimistic as its CEO believes the worst is behind for the company.

The downside of CARES Act

The government will do whatever it takes to help the airlines to weather this storm but the downside of the CARES Act is the inability of airlines to issue dividends and repurchase their shares, at least until the loan is paid back. But considering the severity of this unprecedented crisis the world has woken up to, this still seems like a fair trade.

Jet Blue has things to do!

During this quiet time, JetBlue has enough time to make all the necessary preparations to enhance its additional competitive advantages and create additional shareholder value.  The airline has been replacing its old and expensive fleet with a much more efficient one, while also refurbishing its planes in order to increase their capacity. The overall project being forecasted to boost annual income by $70 to $80 million. Considering the forced pause, this project might even be finished sooner than expected so the company could enjoy the fruits of its labour once things go back to normal.

Strong balance sheet is key

The company ended 2019 with $1.3 billion in cash. Moreover, it has more than $700 million in credit lines with the option to easily borrow against the majority of its fleet in case of an emergency. This is why JetBlue should have no problems with staying alive for an extended period.

Outlook

All airlines are being rescued by the government in the same manner but maybe JetBlue is in a position to benefit the most from this aid. Unlike its other bigger peers, JetBlue is not a hub-and-spoke carrier so it will be easier for it to restart its origin and destination traffic without major delays. But at the moment as the economy is far away from fully opening sometimes soon, all airlines are in the same position with their stock down to as much as 60% and there is the impact of new guidelines that the government will issue to enable them to carry on with their businesses like it was in pre-COVID-19 days. The airlines will continue to be trading in a depressed territory for a while and things will not be the same even after lockdown measures loosen- the only thing that can truly make things go back to normal is the vaccine. But JetBlue has the odds to not only survive but also thrive once we successfully beat COVID-19.

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

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BenzingaEditorial

Weekly Retail Recap

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This week has brought a bunch of retail earnings reports, showing that specialty stores are on their way back to health.

Urban Outfitters shows strength ahead of holiday season

Urban Outfitters (NYSE: URBN) reported its quarterly profits rose 38 percent as strength of its brands combined with reduced operating expenses drove growth. Stock climbed as earnings reached a record despite the pandemic. The retailers managed to earn $77 million, or a record 78 cents a share, even though revenue fell 1.8% YoY to $970 million, exceeding Wall Street expectations for both EPS of 45 cents and revenue of $931.5 million.

Burlington Stores tops Q3 estimates but warns on weak start to Q4

While sales were challenged due to a weak August which saw deficient inventory levels and delayed back to school purchases, Burlington Stores (NYSE: BURL) saw comparable store sales trends improve significantly throughout the other two months of the quarter. The company did not provide any formal guidance, but revealed that the undergoing quarter has gotten off to a weak start.

Dick’s Sporting Goods came out with solid earnings and big news

Dick’s Sporting Goods (NYSE: DKS) reported solid earnings Tuesday, with sales at stores open for at least one year growing 23.2% over last quarter. But its major news was that the CEO Ed Stack is stepping down after 36 years in which he transformed his family’s small business into a national presence, took the company public and enacted a strong stance on the US gun debate. The current president Lauren Hobart will be promoted to this role on February 1, and by doing so, she will become company’s first female chief executive.

Nordstrom’s turnaround is real

The iconic fashion retailer reported better than expected third-quarter results. Nordstrom (NYSE: JWN) delivered the quarterly earnings of $0.22 per share, beating the Zacks Consensus Estimate of $0.01 per share but significantly below last year’s $0.81 per share. This has been a hard year for the retailer who saw its shares lose about 42.7% since the beginning of the year while the S&P 500 gained approximately 10.7%.  But after being crushed by the pandemic, Nordstrom now managed to crush Q3 earnings estimates, proving that it is already on the road back to health. COVID-19 gave a severe blow to the retailer due to its focus on selling dressy apparel for work and social events, resulting in sales sinking more than 40% YoY during the first six of the year. But this month, Nordstrom stock has doubled with growing hopes of upcoming COVID-19 vaccines. Also on a bright note, the company is poised to exceed its cost-cutting goals this year, including substantial and permanent reductions to its overhead costs.

American Eagle Outfitters – Sometimes a Beat Just Isn’t Enough

American Eagle Outfitters (NYSE: AEO) posted quarterly earnings of $0.35 per share exceeding Zacks consensus which looked for the company to post $0.33. However, revenue numbers didn’t fare quite so well as it amounted $1.03 billion for the quarter ended October 2020, missing the Zacks Consensus Estimate by 2.08%. This compares to year-ago revenues of $1.07 billion. The company did not provide any fourth quarter or full year guidance. For Q4, Street analysts forecasted sales declining only 1% this current quarter but profits are expected to drop another 14%, with an overall loss for the year.

Gap fell short

The Gap Inc (NYSE: GPS) shares tumbled as earnings fell short, but the retailer remains optimistic about the holidays.It expects fourth-quarter sales to be about equal to or slightly higher than a year ago as consumers can’t spend on entertainment and travel, the expectation is that this budget will be directed to discretionary goods during the gift giving season. But fiscal third-quarter earnings fell short of estimates as Old Navy and Athleta sales gains did not manage to offset the increased marketing costs aimed at defining core brands and growing market share.

Shares fell more than 10% in after-hours trading, having risen more than 51% since the start of this year, Gap has a market cap of $10 billion. Gap earned $95 million or earnings per share of 25 cents versus the expected $140 millionand 32 cents by Refinitiv data on a revenue of $3.99 billion versus the $3.82 billion expected.

Same-store sales were up as sales were boosted in large part by the company’s digital business, which surged 61% and accounted for 40% of total sales during the quarter. Gap said it added more than 3.4 million new customers online.

Retailers are hoping for a ‘holiday miracle’

It seems that recovery from the pandemic is underway despite a spike in COVID-19 infections across the globe. Arising number of cases could still hamper both sales and traffic in physical stores. Retailers such as Abercrombie & Fitch (NYSE: ANF) and Macy’s (NYSE: M) have cited this threat of temporary store closures. But retailers are hoping that the enthusiasm brought on by the holidays might be strong enough to conquer consumer fears of being infected by actually going shopping.  One thing is certain – in a changing apparel retail environment, the above clothing retailers now have the opportunity to fully demonstrate how vital online shopping really is.

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

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EVs Are Not the End of Specialized Automotive Equipment

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There’s no doubt that electric vehicles are coming. Moreover, it seems that the pandemic only accelerated the shift from ICEs to electrification despite also causing supply chain disruptions and plant closures. While it is true that EVs have fewer parts and lower maintenance costs, they still need equipment. Although the parts are obviously not the same, the demand for specialized automotive equipment cannot be diminished. Moreover, it carries significant opportunity for innovation.

Worksport launches an investment opportunity to public

A well-established innovator and tonneau-cover manufacturer, Worksport (OTC: WKSP), is one of those rare companies that can bring EVs to a whole new level with its intellectual properties. This Canadian-based company just revealed it has achieved another important milestone by receiving a Regulation A qualification that allows it to issue securities. This has been a remarkable year for Worksport that sealed exclusive deals for its TerraVis ground-breaking solar technology to be integrated within the upcoming Hercules’s Alpha and Atlis’ XT electric pickups. These are eagerly awaited all-electric pickups that are poised to challenge Tesla’s (NASDAQ: TSLA) cybertruck. Besides its TerraVis solar system, Worksport has already positioned itself as a high quality, functional, and aggressively priced tonneau cover provider for traditional light trucks like US’ favorite Ford’s (NYSE: F) F150, along with the remainder of F-series, as well as General Motors’ (NYSE: GM) Silverado, Canyon as well as Fiat’s (NYSE: FCAU) RAM. The plans for electric versions of these traditional models are well underway. As for Worksport that will clearly play an important role in the electrification era, the proceeds that come from Regulation A qualification will be used for further product developments and inventory as this specialized equipment company continues to grow at an exponential pace.

Autozone

Autozone (NYSE: AZO) has a long history of growing faster than its peers and opportunities for continued domestic and international growth, as well as the position to benefit from rising used car sales, rising average age of cars on the road, and the forecasted growth in the number of global vehicles. With the crisis, it is to assume many people will opt to update their existing vehicles rather than obliging to a new purchase. Moreover, EVs have a long way to go before they become affordable. Like most specialty retailers, AutoZone is competing with big box retailers and e-commerce giants like Walmart (NYSE:  WMT) and Amazon (NASDAQ: AMZN), besides its peers. However, its specialized customer service is making it superior to these giants.

AutoZone has grown its revenue in each of the past 22 years. Since 2015, its domestic same store sales have grown by 3.1% compounded annually. This is impressive considering the U.S. auto parts retail market achieved only 1.8%

AutoZone offers free services such as diagnostics, readings, testing, charging, while also helping customers locate and sometimes even install parts. This is how they managed to build a loyal customer base.

Even though many customers prefer the convenience of walking out the door of a brick-and-mortar store, AutoZone has also developed a competitive e-commerce platform for those who prefer to find their auto parts online. The firm has two websites, one for retail and one for commercial customers.

Obviously, the long-term demand for auto parts remains important to AutoZone’s future profit growth. But the rising age of cars provides long-term demand for auto parts that will fuel long-term growth in profits for AutoZone. Moreover, AutoZone already supplies several parts for Tesla’s (NASDAQ: TSLA) such as struts, brake pads, rotors, windshield wipers, headlights, cabin air filters, and mirror replacement glass.

An All-Electric Future Is Not Behind the Corner

 BloombergNEF expects there will be 200 million more conventional vehicles on the road by 2030 while the number of EVs increases by only 108 million. In other words, the number of new conventional vehicles on the road will increase nearly twice as much as the number of EVs. Even when EVs to replace traditional cars, they still require maintenance. While it is true that EVs have fewer parts and lower maintenance costs, their maintenance costs are only 26% lower than conventional vehicles, according to a Forbes study.

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

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BenzingaEditorial

A PC Tuesday

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Working and learning from home trends are still on the rise due to the pandemic. Simultaneously, these trends are boosting the revenues of the tech segment, including personal computer makers. The last reported quarter was a good one for Dell Technologies Inc. (NYSE: DELL) and HP Inc. (NYSE: HPQ), since both companies reported better than expected earnings on Tuesday. What is common for the two companies is that they both saw sales increase in their consumer segments, especially laptops. Having in mind that we are all spending more time at home, having a personal computer, the one which is not shared with the others, has become a must.

Dell’s quarterly earnings

Dell reported its results for the third fiscal quarter of 2021, stating that it achieved non-GAAP earnings of $2.03 per share, 46% higher than the Zacks Consensus Estimate. This figure is also 16% higher when looked at year over year. Non-GAAP revenues were $23.52 billion, which is 3% higher YoY, with Zacks Consensus Estimates of revenues being 7.3% lower than the achieved ones. Revenues from products stayed stable while service revenues increased by 10%. However, there are some business segments with lower revenues compared to the previous year. Servers and networking revenues dropped by 2%, while storage revenues fell 7%. Commercial revenues grew 5% and consumer revenues increased 14%. It is important to say that the company hit an all-time high sale in client devices, by generating $12.3 million. Non-GAAP gross profit stayed flat at %7.77 billion (33% gross marking), while adjusted EBITDA increased to $3.23 billion (14% EBITDA margin). Dell increased its cash and cash equivalent position from $11.22 billion to $11.30 billion, with an undrawn capacity of $5.9 billion. The debt was reduced to $49.86 billion from $54.5 billion.

HPQ’s quarterly earnings

Like Dell, HP notebook sales jumped during the fourth fiscal quarter. The company reported fiscal fourth-quarter earnings which ended on October 31st, beating the estimates and providing some optimistic forecasts. Reported revenues are $15.3 billion, while the analysts’ expectations were $14.7 billion. Revenues from the company’s biggest segment, personal systems, remained flat. However, within the segment, there was a drop in demand for desktops and workstations, while the demand for notebooks rose 18% to $7.41 billion. Adjusted earnings were 62 cents per share, exceeding the 52 cents expected by the analysts.

Outlook
Gartner rankings of PC vendors include HP and Dell in the top three positions, just after Lenovo (OTC: LNVGY). HP is at the second position, with Dell following suit. This sequence has been like this for a while, meaning that sales of PCs are growing overall and that PC sales will probably continue to benefit from higher demand caused by the COVID-19 pandemic, despite setbacks such as occasional component shortages.

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

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