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BenzingaEditorial

Pinterest Is a Unique Diamond in the Social Media Jewel Collection

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Social-media stocks have blossomed over the past year as the pandemic forced the world to communicate virtually. Snap’s (NYSE: SNAP) shares have more than doubled over the past four months, besting both Twitter (NYSE: TWTR) and Facebook (NASDAQ: FB) during the news-heavy election season. The online product and idea discovery platform platform Pinterest (NYSE: PINS) has blossomed into an e-commerce destination that ended up being among the biggest pandemic winners as its shares have roughly quadrupled since the beginning of last year.

Outperforming peers

Last Friday, Citigroup (NYSE:C) raised its price target as it was impressed with the company’s recent fourth-quarter earnings results and superior business growth momentum. Over the past year, Pinterest grew its sales 48% which is twice as fast as Facebook, according to data from S&P Global Market Intelligence. Moreover, data also shows Pinterest has been outgrowing Facebook over the past two- and three-year periods.

Pinterest’s lack of controversy is its main strength

Unlike Facebook and Twitter that have been surrounded by controversy for the better part of the last eight months, with Facebook even having to face an advertiser boycotts, Pinterest ended up being a “safe” place. It’s almost impossible to infuriate tens of millions of people with cooking recipes and just pretty visual boards. The social media giants seem like they are going to be fine in the long run, but Pinterest’s squeaky-clean reputation is pure gold that could fuel its ARPU over the long-run.

The best is yet to come

The image-based social network smashed fourth quarter revenue and earnings estimates last week. With 76% YoYgrowth, revenue amounted to $705.6 million, greatly exceeding analyst consensus at $645.6 million. But its bottom-line growth was even more impressive as adjusted net income nearly quadrupled to $294.3 million, resulting in aprofit margin of 42% and per share adjusted earnings of $0.43, beating average estimates of $0.32.

The monthly active user base rose 37% over the past year as Pinterest gathered 459 million Pinners. Based on fourth quarter’s momentum, Pinterest’s business is on fire with its price more than tripled over the last year and the performance smashing the company’s own guidance over several consecutive quarters.

It is unique and it is positive

Pinners come to Pinterest to work on themselves, rather than connect with other people and that means this social ‘network’ has a different mission than others that exist to connect people. The platform is focused on inspiring Pinners which generally makes it a positive place, free of trolls or hate speech. Pinterest also doesn’t allow political advertising and downplays political content, helping avoid much of the controversy that’s swirled around Facebook and Twitter.

All of this makes Pinterest a unique platform and despite the intense competition in digital advertising, Pinterest hasa competitive advantages that solidifies its position as a leader in image-based social interaction.

It has an outstanding business model

The latest results offer an alluring example of what can Pinterest’s future look like at scale. Not many businesses can deliver profit margins of 42%, but that is the beauty of the digital advertising model. The costs to build and maintain the platform are relatively fixed as users generate the content. As ad spending power grows, margins will widen because its users actually want to see ads since they often come to the site to look for inspiration on what to buy. That characteristic makes Pinterest appealing to advertisers and distinguishes it from other social media platforms where ads disrupt the user experience.

Facebook may offer the best example of the power of the digital advertising model at scale , so there’s plenty of room for the much smaller Pinterest to grow both its the top and bottom lines if it can execute its strategy.

It is committed to constantly improving

One of the reasons that Pinterest was so successful last year is because it launched new products like automatic bidding on ads, shopping ads, and story pins. There are many new features in store for 2021 as the company plans on enriching the Pinner experience by investing in video and building a creator ecosystem.

Pinterest also cares for advertisers, so it aims to make it easier for them to succeed on the platform by improving performance-measuring capabilities and expanding sales coverage to all types of advertisers. The idea is to makePinterest more shoppable by having businesses list their products on the platform.

The point is that Pinterest just begun monetizing its international business outside the U.S., and that is where the majority of its Pinners are.  The latest quarter saw strong growth in Western Europe and its ad product will be launched in Latin America in the first half of this year.

In the fourth quarter, ARPU was $1.57, which is up 29% from the year before. Facebook’s ARPU for the quarter was nearly seven times higher so there’s plenty of space to run as Pinterest introduces more advertising products and builds its ad base.

Outlook

Over the coming years, Pinterest’s business should only get better as there is massive monetization potential. With its appeal to advertisers, its positive social environment, growth momentum, and unique position in the world of social media, the idea platform is moving in the right direction. The fact that its shares are up just modestly since the fourth-quarter earnings report means that high expectations are already priced into the stock.

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

BenzingaEditorial

Johnson & Johnson’s Vaccine Is on Hold But lts Businesses Emerged Healthier From the Pandemic

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On Tuesday, Johnson and Johnson (NYSE: JNJ) reported $100 million in first-quarter sales of its single shot Covid-19 vaccine that’s on hold in the U.S. due to a rare and potentially life-threatening blood clotting disorder which has been also related to AstraZeneca (NASDAQ: AZN) vaccine which still hasn’t been approved for emergency use in the U.S. But on the financial side, the company exceeded Wall Street estimated both in terms of revenue and earnings.

First quarter figures

Adjusted EPS amounted to $2.59 per share, exceeding the expected $2.34. Revenue amounted to $22.32 billion, also topping the expected $21.98 billion.

The pharmaceutical business behind the vaccine generated $12.19 billion in revenue. Sales sales of the company’s multiple myeloma drug and a treatment for Crohn’s disease also did their part in fueling the 9.6% YoY increase.

The consumer unit which makes products such as Neutrogena face wash and Listerine mouth wash, generated $3.5 billion in revenue. The drop of 2.3% from a year earlier was due to an “unfavorable comparison” to last year when people were stockpiling on over-the counter- products due to the pandemic-induced lockdowns.

The medical device unit was hit hard last year as hospitals were forced to postpone elective surgeries but it now generated $6.57 billion, a 7.9% increase, as the pandemic recovery is underway.

The FDA halts JNJ’s vaccine production

On Wednesday, The US Food and Drug Administration put the production of Johnson & Johnson’s vaccine on pause at the Emergent BioSolutions facility where millions of potential doses were contaminated.

Already manufactured vaccines will undergo additional testing to ensure their quality hasn’t been compromised before any potential distribution. According to the report, the emergent facility is deeply flawed as written procedures to prevent cross-contamination weren’t followed during production or documented. Components and product containers were not handled or stored in a way to prevent contamination whereas written procedures to assure drug substances are manufactured at the appropriate quality, strength and purity were found inadequate. The report also notes that employees weren’t properly trained and that the facility is of inadequate size or design to allow adequate cleaning and sanitization. Besides unsuitable equipment, the inspection noted peeling paint, unsealed bags of medical waste, residue on walls and damaged floors and rough surface all of which prevent pursuing the intended protocol.

Meanwhile, JNJ is confident about emerging stronger from the pandemic

The CFO, Joseph Wolk told CNBC on Tuesday that the three business segments are “healthier” than they were before COVID-19 shaped our reality last year. The company slightly raised its earnings and revenue guidance for the year as it now expects full-year profit in the range between $9.42 to $9.57 per share with revenue between $90.6 billion and $91.6 billion.

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

It Seems Netflix Has Been Dethroned

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Netflix (NASDAQ: NFLX) shares fell as much as 11% in after-hours trading after the streaming giant reported a large miss in subscriber numbers in its first-quarter earnings report. The facts that revenue still grew on a YoY basis along with a strong beat on earnings were not enough to offset the weak number of subscriber additions, especially as management only expects 1 million new subscribers in the undergoing quarter.

First quarter figures

Revenue amounted to $7.16 billion, slightly topping $7.13 billion expected, resulting in earnings per share of $3.75 that exceed the expected $2.97, as gathered by Refinitiv. Global paid net subscriber additions came at 3.98 million which is significantly below the 6.2 million expected, according to FactSet. This figure seems even more pessimistic compared to a quarterly record of 15.8 million new paying users it gathered during the first three months of 2020.

Still, the company’s revenue grew 24% YoY and was in line with its beginning of quarter forecast. Netflix also delivered a strong beat on earnings compared to Street estimates. Operating income for the quarter came in at $1.96 billion which is more than double $958 million in the year-earlier period. Moreover, as content spending was lower, it resulted in a 27% operating margin which is an all-time high for the first quarter.

Netflix is losing subscribers

Netflix believes that the shortfall subscriber numbers could be blamed on the ongoing pandemic or more precisely on its smaller pipeline of originals as COVID-19 restrictions forced the company to delay some of its big-name shows and films. It doesn’t believe that competition from Walt Disney Company’s (NYSE: DIS) Disney+ and Hulu, AT&T’s (NYSE: T) HBO Max, Apple’s (NASDAQ: AAPL) Apple TV+ , Amazon’s (NASDAQ: AMZN) Prime video and Comcast Corporation’s (NASDAQ: CMCSA) NBCUniversal’s Peacock played a factor in the weak subscriber numbers. But the reality is that Netflix is facing an increasing set of competitors in the streaming space with HBO Max having reached 41 million U.S. subscribers two years ahead of schedule in January this year and Disney+ topping 100 million global subscribers as of early March, ballooning to about half of Netflix’s 208 million worldwide subscribers only within a year-and-a-half of its launch.

The key is the business remains healthy and that it keeps growing

To respond its competitors, Netflix expects to spend more than $17 billion in cash on content this year. Production is up and running in nearly all of its major markets and While ramping up content spending more than 44% compared with $11.8 billion last year, Netflix is also trying to combat password sharing. Historically, it wasn’t concerned about this issue as subscriber growth and stock price were easily offsetting concerns around lost revenue. But, things changed as Netflix has found itself amid intense ‘streaming wars’.

Netflix’s board approved a buyback program to repurchase up to $5 billion in common stock, beginning in 2021 with no fixed expiration date. The program is expected to begin during the quarter.

The winner of the streaming wars is still unknown

While Netflix matures in terms of subscriber growth, its business has also become increasingly efficient from an operating standpoint, despite channeling billions into content creation. After posting its first full-year of positive free cash flow since 2011 last year, it believes it is “very close to being sustainably” free cash flow positive.  As for 2021, it expects free cash flow to be around breakeven while no longer having to raise external financing for its day-to-day operations.  In other words, it’s been more than a year that streaming wars intensified and all players are investing heavily to be on the winning side even after the world successfully combats 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

Coca Cola Made a Sparkling Recovery

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Coca-Cola’s (NYSE: KO) business was hit extra hard during the COVID-19 pandemic as people avoided gatherings with events being cancelled across the globe. As its business model is heavily reliant on these point-of-sale drinks, the pandemic translated into sharp volume drops for fiscal 2020 while peers like PepsiCo (NASDAQ: PEP) enjoyed booming demand at supermarkets and warehouse retailers. However, on Monday, the beverage giant showed it rebounded by beating on earnings with demand in March hitting pre-pandemic levels.

Fiscal first-quarter

Net sales rose 5% as they amounted to $9.02 billion, exceeding estimates of $8.6 billion. Organic revenues grew 6%, but unit case volume was flat compared to a year earlier. Demand improved every month of the quarter, driven by markets like China where uncertainty concerns around the virus eased.

Coca Cola reported a net income of $2.25 billion, or 52 cents per share. This is a drop compared to last year’s $2.78 billion, or 64 cents per share. Excluding items, earnings amounted to 55 cents per share, exceeding the 50 cents per share expected by analysts surveyed by Refinitiv.

Coca Cola has done a great job focusing on what it can control

Through the pandemic, executives slashed costs by finding ways to cut supply chain, marketing, production and packaging expenses, leading to rising profitability even as peer PepsiCo’s margins fell.

At the beginning of the year, management said the first quarter would be the hardest of the year, but that the scale of the recovery that follows would depend on big variables like the pace of vaccine distribution.

Unchanged demand

Quarterly demand was unchanged from a year earlier as North America and Western Europe take longer to recover from the pandemic but global unit case volume in March returned to 2019 levels.

While the central North American business is still under pressure, growth in India, China and Latin America managed to offset those declines. Nutrition, juice, dairy and plant-based beverage segment experienced a 3% volume growth as it was fueled by higher demand in China and India. Hydration, sports, coffee and tea segment was the hardest hit with volumes shrinking 11%. The coffee business declined 21% as Costa cafeswere heavily impacted by the lockdowns. The hydration category that includes Dasani and Smartwater reported volume declines of 12% as consumers across the globe bought less single-use water bottles. Demand for tea products fell 6%, whereas sports drinks saw volume decline slightly by 1%.

Uncertainty still remains

Back in February, management stated that the giant has positioning itself to come out of the crisis targeting faster growth and higher margins compared to its pre-pandemic figures.

The company restated its full-year forecast, with organic revenue growth expected in high single digits and adjusted earnings growth expected in the range between high single digits to low double digits. India and parts of Europe are reintroducing lockdowns due to spikes in new Covid-19 cases, while Latin America and Africa are expecting slower vaccine distribution and embracing for new waves. While vaccinations are rising in many countries such as the U.S., U.K., the flip side is there’s actually a new high in terms of cases as the weekly number of new cases has just hit an all-time peak.

Although April has started well for Coke, the looming risk of new lockdowns threatens to reverse that progress.

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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