Connect with us

BenzingaEditorial

Mastercard Manages to Beat Both Top and Bottom Line Estimates

Published

on

Mastercard News

Mastercard (NYSE:MA) just reported its third quarter earnings, announcing that increased revenues drove an increase in profits, exceeding both top and bottom-line estimates. The company’s shares have jumped 46% since the beginning of the year, more than double than 21% increase of Standard & Poor’s 500 index. And now, increased consumer spending is driving its revenues and profits despite the fact that its acquisition strategies are getting more costly, increasing expenses. But customers have clearly shaken off fears regarding a yet another economic downturn as they decided to spend more using their debit and credit cards, boosting revenue for the world’s second largest payment processor. In pre-market trading, Mastercard shares were up 1.5 percent yesterday, reaching $280.3.

Strong quarter results

Revenue amounted to $4.47 billion whereas Wall Street expected $4.42 billion, resulting in adjusted earnings per share were $2.15 beating the estimate of $2.01. During the same quarter last year, revenue came to $3.9 billion so that’s more than solid revenue growth.
The dollar value of all processed transactions came to $1.7 trillion, a 14% jump from last year’s quarter that amounted to $1.5 trillion. But more interestingly, despite the weakening US demand in September as retail sales dropped 0.3% during last month, domestic dollar volume still increased overall from $442 billion in the same quarter last year to $494 billion. The European segment also did well with a 16% increase from last year’s quarter, amounting to $507 billion. And consequently, net revenue increased 15% comparing to that quarter, but not only due to dollar volume but also due to an increase in cross-border volumes. Expenses also increased due to acquisitions but they ended up being lower than what the company expected so therefore, they are expected to incur in the next, last quarter of the fiscal year.

Competitors

Visa (NYSE:V) who Mastercard has been battling with for decades has also outperformed and ‘joined’ PayPal Holdings Inc (NASDAQ:PYPL) by reporting better than ‘feared’ earnings. It delivered a strong double-digit earnings and revenue growth, implying a similar guidance for 2020. Overall, investors seem encouraged with the company’s longer-term opportunities. So, both Visa’s and Mastercard’s earnings seem resilient to the economic downturn with their digital transactions competitor PayPal’s stock even popping after its faster than expected growth and by being the first foreign financial company that secured a place in the Chinese market pie. So, financial payment providers are doing great despite intense competition and the weakening macroeconomic surrounding.

Outlook

Although costly, acquisitions have not altered the company’s outlook for the year. The company is making efforts to enhance its cyber security as well as customer loyalty to join its rival Visa in offering more client-luring initiatives. Also, it is committed to expand its business relationships with HSBC Holdings Plc (NYSE:HSBC) and Bank of America (NYSE:BAC), among others, who are also investing heavily in safety as Bank of America revealed that they even created a position of an “Chief Brand Safety Officer”. So, the entire industry is taking security issues seriously and these solid quarter results surely show that Mastercard’s executive strategy is successfully guiding the company in this direction, despite a weakening global economy.

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

Retailers Are Hoping for a Better 2021

Published

on

This week, three major retailers provided a glimpse of hope that the world is returning to normalcy- or at the very least, consumer behavior is. Although The Gap, Inc. (NYSE: GPS) came short on sales estimates, Kohl’s Corporation (NYSE: KSS) and Nordstrom Inc (NYSE: JWN) topped estimates, although they have other issues to deal with.

Kohl’s posted better-than-expected earnings, but activist investors aren’t pleased

Kohl topped Wall Street’s estimates and pointed to stronger growth in 2021. Net income amounted to $343 million but sales dropped to $5.88 billion from $6.54 billion a year earlier despite online sales jumping 22% from a year earlier as they accounted for 42% of total sales.

In 2020, the company added more than 2 million new customers in 2020 thanks to its Amazon (NASDAQ: AMZN) returns service, a third of which are millennials. But the group of activists looking to seize control published a letter to shareholders saying the board seems to be content performing just slightly better than the worst companies in retail. Facing pressure from activist investors whose attempt to seize control was rejected at the end of last month, the company will reinstate its dividend and buy back shares.  The retailer has a market cap of $8.99 billion, which is bigger than Nordstrom’s and Macy’s.

Nordstrom sales drop despite digital surge

Fourth-quarter sales and earnings topped analysts’ estimates owed to stronger online demand and growth at its Nordstrom Rack business. The department store chain warned that it is still working through impacts from delayed holiday shipments by selling excess inventories during the first quarter, hoping to be back to normal inventory levels by the second quarter. Its quarterly net revenues of $3.64 billion dropped $893 million from fiscal 2019’s quarter, despite digital sales increasing 24% compared to the same period and contributing 54% to total sales. The digital surge wasn’t enough to move the needle and net income shrank to $33 million compared to $193 million a year earlier. Although consumer behavior remains uncertain, the retailer is calling for fiscal 2021 sales to grow more than 25%. The retailer has a market cap of $5.93 billion, which is less than Kohl’s but greater than Macy’s.

Gap misses sales but forecasts return to sales growth in 2021

Ongoing store closures overseas in Europe, parts of Asia and Canada weighed on Gap’s fourth-quarter results, with sales coming up short of estimates. The apparel retailer swung to a profit, thanks to its efforts to sell more merchandise at full price and closing underperforming stores.

For the quarter ended January 30th, Gap reported net income of $234 million, or 61 cents per share, compared with a loss of $184 million, or 49 cents per share, a year earlier. Net sales fell about 5% to $4.42 billion from $4.67 billion a year earlier. The company showed continued strength at its Old Navy and Athleta brands which cover basics and workout gear. But its namesake Gap brand and Banana Republic brands saw another quarter of sales declines. Overall online sales were up 49%, representing 46% of net sales during the quarter.

For fiscal 2021, Gap is calling for net sales to be up a mid- to high-teens percentage, as the company is hoping return to a more normalized, pre-pandemic level of net sales in the second half of the year which depends on customers soon returning to its stores and spending more money on apparel as they resume social activities.

Many retailers are facing shipping headwinds

Backlogged ports in the U.S. and heightened shipping costs continue to hit all kinds of businesses, from those selling apparel and shoes, to appliances and at-home fitness equipment. Moreover, as shoppers do return to stores, the persisting problem could make it even more difficult for retailers to plan their inventories and keep their shelves stocked with goods. COVID-19 will be put to an end by vaccines but the uncertainty that the pandemic created will be more difficult to mend as its long-term impact on consumer behavior is still unknown.

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

Zoom Is Doing Great But Can It Continue Being a Necessity?

Published

on

On Monday, Zoom Video Communications (NASDAQ: ZM) shares rose 11% in extended trading after the company reported fiscal fourth-quarter earnings, beating top and bottom-line expectations and issuing strong guidance.

As COVID-19 made physical contact impossible one year ago, video conferencing became a necessary work tool.  Microsoft Corporation (NASDAQ: MSFT) benefited from the trend thanks to its Microsoft Teams and Google Meet enabled Alphabet Inc. (NASDAQ: GOOG) to take a piece of the pie, but Zoom’s share price has almost quadrupled last year, resulting in a market value of more than $100 billion.

Q4

The video-calling software maker reported its revenue grew 369% YoY in the quarter that ended on January 31st, after growing 367% in the third quarter and losing fewer customers than executives had expected. Revenues soared to $883 million, up from $188 million the year before. Based on formal accounting rules, Zoom’s net income rose from $15 million to $260 million, or 87 cents a share. Gross margin expanded from previous quarter’s 66.7% to 69.7%.

The company also posted gains among small customers as it had 467,100 customers with more than 10 employees at the end of the fiscal fourth quarter, nearly five times as many as it had before the pandemic hitor up 470% on an annualized basis, compared with 354% growth in the previous quarter. It ended the quarter with $4.24 billion in cash, cash equivalents and marketable securities, significantly up from previous quarter’s $1.87 billion. The video conferencing start-up turned in a surprisingly strong performance in the latest quarter during which Covid-19 vaccines were intensively administered and predicted faster than expected growth in the coming year. The news sent Zoom’s shares up nearly 10 per cent in after-market trading on Monday, valuing it at $131billion. They are still more than 20 per cent below their highest level reached back in October, before investors started thinking about the impact of pandemic restrictions.

FY2021

For the year characterized by lockdowns across the globe, sales quadrupled to $2.65 billion with Zoom’s app being downloaded nearly half a billion times or twice as many times as Google’s video chat app, as reported by Apptopia.

FY2022

Despite predictions that its service will play a less central role in the lives of many workers and students in 2021, Zoom expects revenues for its next fiscal year to grow by 43 per cent to $3.76 billion to $3.78 billion, compared to Wall Street projections of about $3.5 billion. It also predicted pro forma earnings per share of $3.59 to $3.65, higher than the $2.96 a share analysts had pencilled in. Still, churn rates remain higher than they were before the pandemic and the trend is expected to persist as people begin to travel.

For the undergoing Q1, adjusted EPS are expected to be between 95 cents and 97 cents with revenue in the range between $900 million and $905 million in revenue. The outlook is significantly brighter than 72 cents and $829.2 million that Refinitiv gathered analysts penciled in.

“Zoom fatigue”

A possible major bump in the road was recently identified by a study from the Silicon Valley Itself that was published on February 23rd in the journal of Technology, Mind and Behavior. Researchers from Stanford University found that all those hours of video calls take more of a toll on our brain and body than regular office work. Seemingly never-ending video calls leave us utterly drained, even though our most strenuous physical activity during the workday involved smiling at the camera. Although it concerns all video chat platforms, researchers named it “Zoom fatigue.” Researchers say Zoom fatigue has four main culprits: excessive and intense eye contact, constantly watching video of yourself at a frequency and duration that hasn’t been seen in the history of people, the limited mobility of being stuck at your desk, and more energy spent identifying social cues that is much easier to do in person. The “non-verbal overload” is a result that we are gifting even strangers with the behavior that is ordinarily reserved for close relationships. Although some issues can be easily resolved such as by removing our selfie from the user interface and going for an audio call, others might require a lot more effort.

Zoom’s prospects

Oddly enough, the founder of a company whose success is inextricably linked to the pandemic-fueled rise of remote work and home offices, Eric Yuan, himself admitted that everybody’s desperate to return to the office. But then again, the company knows too well it has to show no fear about the world going back to its pre-pandemic days if it wants to protect its equity value. The video call software company’s 2020 growth story will probably never be repeated and a post-pandemic slowdown is inevitable but Zoom’s betting on a new normalcy that combines in-person meetings with video calls.

Zoom has plans for an independent future. Like Salesforce.com,inc (NYSE: CRM), it is trying to take on Microsoft Teams with a suite of office collaboration products. The pandemic awarded Zoom with the sort of brand recognition that no money can’t buy. But Microsoft has $132 billion in its war chest and is busy improving Teams, so there’s no way it will relinquish its domination over workplace software willingly.

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

News From The Vaccine World

Published

on

Less than a year before the COVID-19 started its relentless march across the globe Novavax (NASDAQ: NVAX) was facing delisting from the Nasdaq. The 33-year-old Maryland-based pharmaceutical company didn’t have a single approved shot after hundreds of millions of dollars invested in its R&D efforts. Wall Street likes to take bets on unproven biotech such as Moderna Inc (NASDAQ: MRNA), but it can be unforgiving of failure.  Fortunately, Novavax is now on the verge of getting approval in the UK, which will probably be followed by the US. Interim data have shown that its vaccine has an efficacy rate up there with the shots developed by Moderna, BioNTech (NASDAQ: BNTX) and Pfizer (NYSE: PFE), all of which are based on revolutionary mRNA technology. However, Novavax’ candidate s is cheaper and easier to transport and can be stored at room temperature for at least 24 hours. Additionally, the one-shot candidate by Johnson & Johnson (NYSE: JMJ) that can be kept at normal temperatures was granted an emergency use authorization during the weekend.

Merck and Johnson will join forces

Merck & Co Inc (NYSE: MRK) will manufacture the vaccine made by Johnson & Johnson (NYSE: JMJ) under an unusual deal that the Biden administration engineered to boost production of the single-shot ja which has been hampered by manufacturing delays.

The Biden administration helped to engineer the deal between the competitors after J&J, which was, experienced production hold-ups. J&J is the world’s largest healthcare company, but when it comes to vaccines, Merck has the expertise as it is one of the world’s largest vaccine makers with many approved shots.

Sanofi (NASDAQ: SNY) is another large vaccine maker that has fallen behind in the COVID-19 vaccine race and has agreed to help boost supplies of the J&J vaccine in Europe. Last month, it stated it would use its capacity to fill vials.

Novavax has finally stopped gasping for air

The CEO of Novavax, Stanley Erck, stated their candidate is more than 90% effective against the original strain, 86% effective against the U.K. strain and considerably less effective against the South African strain. According to forecasts, Novavax will generate more than $5 billion in revenue this year. As it is applying for approval for it flu shot, it will start studies on combining the Covid-19 and flu vaccine into a single shot later this year.

A story with a happy ending for everyone?

Novavax’s story resembles a Cinderella story as a little company that was on the verge of potentially closing has really been able to play with the big boys in the race for the Covid vaccine. The bottom line is that the US will have enough coronavirus vaccine doses for every adult by the end of May, which is sooner than anticipated, thanks in part to an unusual type of collaboration we didn’t see since World War II between two of the country’s largest drugmakers.

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