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The Week of Detroit’s Big Three

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Stock Market Tumble

Although all eyes are on Tesla (NASDAQ:TSLA) who now achieved its last milestone so it can be considered for inclusion in the S&P index, we cannot forget about Detroit’s Big Three. Starting Wednesday, General Motors (NYSE:GM) will open the earnings lineup, followed by Ford Motor (NYSE:F) on Thursday with Fiat Chrysler Automobiles (NYSE:FCAU) closing the week on Friday. The second quarter is expected to be the worst of the year as it has been most severely hit by the pandemic.

GM

Although it has experienced significant disruptions with plant closures, GM learned the lesson back in 2018. It has plenty of liquidity to survive the short-term difficulties. During the second quarter, GM burned $8 billion in cash, but it previously announced it expected to spend between $7 billion and $9 billion. Its core business is strong and well-positioned for an electric future. Throughout 2025, GM plans to invest 15% of its 2019 revenue, amounting to $20 billion, in its electric future. Moreover, its CFO Dhivya Suryadevara notified investors that the automaker is aggressively reducing costs and using “a zero-based budgeting approach”. The company already exited unprofitable markets such as Europe and it keeps fortifying its balance sheet.

Unlike Ford and Fiat Chrysler, it did report a $294 million profit in the first quarter. This figure includes a pandemic-induced cost of $1.4 billion before interest and taxes. But as for this quarter, all three automakers are in for a loss. But GM’s was at least less than what Wall Street feared as it lost 50 cents a share on an adjusted basis while analysts expected the automaker to lose $1.77 a share. These results drove its shares up by almost 4% in premarket trading so a loss of about $800 million wasn’t that bad!

Ford

After the markets close on Thursday, analysts expect Ford Motor to report it lost $4.9 billion. In the first quarter, Ford lost $2 billion. But, it ended the quarter with $35.1 billion in liquidity. Like GM, it doubled its debt during the first quarter. But according to Reuters, Ford extended the maturity of at least 90% of $5.35 billion of its revolving loans for one year. Ford is undergoing severe restructuring and is reportedly on track with its $11 billion plan.

Fiat Chrysler Automobiles

On Friday, analysts expect Fiat Chrysler to report a loss of $2.3 billion. The company spent about $5.5 billion in cash during the first quarter. It ended up losing $1.8 billion and finished the quarter with a debt of $16.7 billion. But, it did identify about $2.2 billion in operational cuts for this year, in addition to reducing capital expenditures by about $1.1 billion. With the planned 50-50 merger with Peugeot’s (OTC:PUGOY) owner PSA Group which will open its new “Stellantis” chapter, it will become the world’s fourth largest automaker when the deal gets finalized in early 2021.

Takeaway- it will take a while before stars can realign

The pandemic has literally pressed a pause button on the U.S. automotive industry. This didn’t happen since World War II. Factories didn’t reopen before mid-May so no wonder the second quarter has been written off. It could easily be the toughest in modern history for majority of industries, excluding big tech that thrived as people were forced to stay home. As for automakers, investors will be looking less at earnings and more at cost cutting measures, inventory levels and debt. They will look for any insight that will help us assess how long it might take for the industry to recover. One thing is only certain: cash remains king – and automotive industry is no exception. However, a second wave of the pandemics could be fatal for the automotive industry.

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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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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December Will Be the Big IPO Finale of 2020

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Mid Cap Stocks

We are getting close to the end of 2020. It’s been a year like no other, the year where everything was in the shade of a global pandemic. How did that affect the companies’ decisions to go public? For a majority of business, it posed a serious obstacle, maybe even the one which cannot be bypassed as companies are fighting for their existence. But some lucky ones such as tech companies were only boosted by it. One market that saw extraordinary activity was the IPO market, with the number of companies going public so far in 2020 nearly double that of the same time last year.

We already talked about last week’s six new IPOs, Sotera Health Company (NASDAQ: SHC), Olema Pharmaceuticals (NASDAQ: OLMA), Yatsen Holding Limited (NYSE: YSG), Maravai LifeSciences Holdings, Inc. (NASDAQ: MRVI), NeoGames S.A. (NASDAQ: NGMS), and Telos Corporation (NASDAQ: TLS). Last week also brought us 15 special purpose acquisition companies (SPACs) which managed to raise $2.5 billion. The activity is set to continue in December, with several high-profile companies filing to make their public debut.

Roblox

Roblox (NYSE: RBLX), an online kid-focused gaming platform, which achieved some epic gains in 2020, is one of the beneficiaries of COVID-19. In-game currency, which is bought with real money, became a way for some folks to amuse their children for a while and either get some peace and quiet or manage to complete their own work. Although it is expected that the growth in 2021 will not be as sharp as in 2020, this user-generated content platform turned out to be a great business. Revenues grew from $312 million in 2018, to $488 million in 2019. The end of September saw revenues of $589 million, which is 68% higher than the same period last year.

Affirm

Affirm (NASDAQ: AFRM) is a fintech company founded by PayPal (NASDAQ: PYPL) co-founder Max Levchin in 2012 alongside Nathan Gettings, Jeffrey Kaditz and Alex Rampell. This e-commerce platform offers consumers to make purchases with interest-free installments, as well as to manage payments or open high-yield savings accounts. Affirm’s products are focused on both consumers and merchants. Consumers can make payments with no deferred interest, hidden fees, or penalties, as well as interest loans with a fixed installment agreed upfront that never compounds. Merchants will get an opportunity to promote their products and services, by getting more and more information to prepare more tailor-made offers. In 2019, the company recorded net revenues of $264.4 million. By the of June 2020, revenues increased to $509.5 million, or 92.7% comparing to the whole 2019. This trend continued in the period from June to September.

Wish

Affirm’s IPO was well-timed and the same could be said for Wish (NASDAQ: WISH), an e-commerce platform selling products from Asia at the lowest possible prices. Even though the company hit some problems regarding its supply chain at the beginning of the pandemic, the timing for its IPO is good. The parent company ContextLogic thinks that way, as it filed a preliminary S-1 to be listed in December. The business model that brings an affordable and entertaining mobile shopping experience to billions of consumers around the world turned out to be a good idea, as the company reported revenues of $1.9 billion in 2019, which is 10% more than 2018 when the company grew 57%. First nine months of 2020 brought the same impressive growth of 32%, with revenues of $1.75 billion. The company also came out with a very strong balance sheet with $1.1 billion in cash and short investments.

The list goes on…

The list of high-profile companies does not end here. We can truly expect a very busy period for initial public offerings. The list includes Airbnb, the home-sharing platform, DoorDash, the food delivery company, as well as some other big IPOs that could be launched by the end of the year, like Churchill Capital Corp V, Far Peak Acquisition and Spartan Acquisition II planned through a SPAC.

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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