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Trucks to the Rescue of Ford and Fiat Chrysler

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GMC News Earnings

Ford (NYSE: F) and Fiat Chrysler (NYSE: FCAU) reported strong profits as demand rebounded. Not only did Ford crush Wall Street expectations, but Fiat Chrysler also had record earnings.

Ford

The top and bottom beats were based on a stronger-than-expected demand during the pandemic. A long restricting has started paying off with a big jump in profit in the third quarter. Adjusted EPS were 65 cents, exceeding the expected 19 cents with automotive revenue of $34.71 billion also topping the expected $33.51 billion.

During the quarter that ended in September, the Detroit automaker earned $2.4 billion. This is an increase from $425 million for the same period a year earlier. Although it lost money overseas, Ford’s North American operations and its division that offers credit did well.

North America that made $3.18 billion on revenue of $25.3 billion led the way towards profits. The strong figures were a direct result of a stronger-than-expected demand and a rich sales mix of popular Ford trucks and SUVs, along with commercial vehicles. Ford’s new-vehicle sales were down just 5% in the third quarter as it increased the share of more-profitable trucks, vans and SUVs. This trend resulted in an increased profitability per vehicle sold.

However, Ford expects to break even or show a loss of up to $500 million in the fourth quarter before interest expenses and taxes are taken into account due to costs related to new or redesigned vehicle launches. Ford expects its figures to be hurt by higher costs and lower production due to introducing a fully redesigned F-150 pickup truck, a new Bronco and the Mustang Mach-E electric sport utility vehicle. The redesigned F-150, Mach-E and Bronco Sport are all due to reach dealer lots later this year.

Ford revised its previous guidance that had predicted an annual loss, now expecting positive full-year adjusted earnings are expected. Overall, the Blue Oval plans to invest more than $11 billion on developing EVs by 2022.

It remains unknown when Ford expects to reinstate its prized dividend which it suspended in March. Overall, despite a 15% increase in October, shares remain down by 17% this year.

Fiat Chrysler

On Wednesday, Fiat Chrysler said it earned an overall net profit of $1.414 billion , marking an increase of 773% compared to last year’s loss. Revenues in the third quarter, however, did fall 6% to $30.298 billion, although sales of profitable trucks and sport utility vehicles recovered after a sharp drop in the spring. Ram and Jeep retail sales in North America fueled Fiat Chrysler to a record $2.671 billion in pre-tax earnings and 8.8% margin in the quarter that ended in September. Ram pickup retail sales were up 15% for the quarter, and the profit-heavy truck segment in total surpassed sales of the Chevrolet Silverado for the first time this year. In the third quarter, FCA’s North America’s pre-tax earnings rose 26% year-over-year to a record $2.9 billion and 13.8% margin.

But FCA also disclosed this week it could face costs of up to $840 million to resolve a Justice Department investigation into excess diesel emissions and as a result of higher fuel economy penalties.

The Italian-American company was just joined by Honda (NYSE: HMC) in pooling its fleet with Tesla Inc.’s (NASDAQ: TSLA) to comply with emissions standards for passenger cars in Europe this year.

The results come as the European Union’s executive branch is expected to approve the Italian American automaker’s 50-50 Stellantis merger with Peugeot (OTC: PUGOY) and Citroën maker, PSA Groupe, with fourteen of 22 jurisdictions already having given their blessing. The two ancient rivals expect the merger that is expected to close during the first quarter of 2021 to bring savings of $6 billion on a yearly basis, while providing a scale for electrification.

FCA showed a strong financial position, ending the third quarter with $30 billion in cash, more than $45 billion in liquidity, and having repaid the $15 billion in credit it drew down during the first quarter.

Considering that FCA counts on only one popular pickup as opposed to its Detroit 3 counterparts, it’s quite the impressive that just at the start of last year, pickups made up less than a quarter of its vehicle sales, whereas now they make up more than a third. The ongoing success of Ram is expected to continue to add to the company’s bottom line as CEO Mike Manley confirmed plans for a battery-electric Ram only a week after General Motors Co. (NYSE: GM) debuted its electric GMC Hummer truck. The automaker plans to capitalize further on its trucks as it is also scheduled to unveil the next-generation Jeep Grand Cherokee SUV and a new three-row Jeep SUV.

Outlook

It seems that the third quarter allowed automakers to shake off the pandemic-induced losses from plant and dealership closures as U.S. automakers are reporting a strong financial performance. Record-high transaction prices were fueled by a perfect combination of an unexpectedly strong recovery of demand and low inventories due to spring’s shutdowns. Still, the companies are staying conservative in their outlook as COVID-19 cases are increasing in the United States and Europe, with Germany and France having already reinstated a second lockdown. General Motors has some large shoes to fill when it reveals its financial results on November 5th.

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

This Week’s Earnings Repertoire

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Last week ended with the Omicron Covid variant casting a shadow over the joy revolving around the upcoming holidays. This week, Costco (NASDAQ: COST), Stitch Fix (NASDAQ: SFIX), Lululemon Athletica (NASDAQ: LULU) and GameStop Corporation (NYSE: GME) will show how they are weathering global challenges that even got the big ones tripped up.

1. Stitch Fix

The online apparel specialist’s shares have been having a hard time this year, which means the bar is set low for its Tuesday report. Back in September, management expected sales growth to slow to as low as 15% in the new fiscal year, compared to last year’s 23%. Although that slowdown might be temporary, Wall Street is worried about the impact of slowing growth, rising competition, and pressured margins due to supply chain disruptions and inflationary costs.

Adding direct shopping offerings is expected to help the subscription-based apparel delivery service business unlock a much bigger addressable market. But as it faces off well-established rivals, Stitch Fix has fewer competitive advantages.

Everyone’s eyes will be on the engagement metrics such as average spending will help show whether Stitch Fix is succeeding in reaccelerating sales growth. But investors are doubting the business’ capability to recapture that 20% sales growth momentum, let alone go beyond it.

2. GameStop

After the bell on Wednesday, GameStop has a lot to prove as management is yet to show the real turnaround plan. The reinvigorated video game retailer classified by CNBC’s Jim Cramer as the “king of the meme stocks” is expected to report sales at $1.2 billion that resulted in a loss of 52 cents. The only thing certain is that the stock will move as investors are used to a wild ride with this stock that kicked off the year reaching for the stars, only to go on to shed nearly half of its value throughout the year.

3.  Costco’s inventory wins

Investors are expecting the warehouse retailer to report growth of 13% YoY that translates to sales of $49 billion. Expectations are high for the world’s second-biggest retailer when it reports its earnings on Thursday afternoon as its biggest competitor, Walmart (NYSE: WMT), recently revealed strong sales growth as it succeeded to overcomesupply and inventory challenges that have tripped up smaller peers. Costco likely handled these issues as it licenses its own shipping fleet earlier this year.

Moreover, any gains in renewal rate as well as online and physical customer traffic could lay the groundwork for higher membership fees that power most of Costco’s annual earnings.

4. Lululemon’s holiday outlook

After upgrading its 2021 outlook in its previous two earnings reports, Lululemon is expected to provide a third upgrade on Thursday. Annual sales guidance is currently at $6.3 billion which is a significant increase from $4.4 billion before the pandemic struck.

To further improve, Lululemon needs to show it can keep up the momentum on pricing after profitability soared to new highs. For the last reported quarter, gross profit margin made 58% of sales with operating profit being over 20% of revenue. This year’s stock rally is greatly owed to that success fueled by strong demand for its athleisure products but inflationary pressures threaten to spoil that “picture perfect” trend.

However, even if this is the case, growth avenues such as new geographies and new demographics likes menswear and outerwear can help Lululemon overcome those short-term constraints that will ease over the next few quarters. All in all, the retailer has plenty of room to run.

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

Omicron Casts a Shadow Over Salesforce’s Better-Than-Expected Q3 Results

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Salesforce.com Inc (NYSE: CRM) has had the worst day since COVID-19 started its relentless march across the globe due to a disappointing guidance. Despite profit and revenue for the reported quarter exceeding expectations, its shares dropped 12% whereas time the stock had its worst day was March 16th, 2020, when the stock plummeted 16%.

Q3 results

What was largely ignored by the market was the fact that Salesforce produced big earnings beat with the help of Slack Technologies Inc. Fiscal third profit amounted to $468 million or 47 cents per share. Adjusted earnings amounted to $1.27 per share which is well ahead of estimates but below last year’s comparable quarter. Revenue amounted to $6.86 billion.

Disappointing Q4 guidance

Earnings per share for the December quarter are expected to be in the range between 72 and 73 cents, behind the 81-cent average estimate by analysts surveyed by Refinitiv. While profit missed expectations, Salesforce raised its guidance for revenue to the range between $7.22 billion and $7.23 billion, which is in line with estimates. Revenue is expected to increase 24% helped by $285 million from Slack’s sales.

Atlantic Equities analyst believes that the forecast is a reflection of “management conservatism” as Chief Financial Officer Amy Weaver did warn of headwinds to adjusted earnings, along with rising costs that will eat into profits. Management’s guidance continues to incorporate expense seasonality in the undergoing quarter. Increased costs are due to appear in various ways, including investments in the  workforce and growth opportunities, along with travel and expense expectations that are going to cause a quarter over quarter decline in operating margin.

Full year guidance

Just like when it reported its first and second quarter results, Salesforce again raised its full-year expectations. Full-year revenue is expected to be in the range between $26.39 billion and $26.4 billion with adjusted earnings being in the range between $4.68 to $4.69 a share, up from prior projections of $4.36 to $4.38 a share on sales of $26.25 billion to $26.35 billion.

Team news

The company announced the promotion of Bret Taylor, president and COO, to co-CEO. Taylor, who was heavily involved in the acquisition of Slack, will be joining Marc Benioff at the helm. On Monday, Taylor was also announced as the new board chairman of Twitter Inc. (NYSE: TWTR) whose CEO, Jack Dorsey, will be replaced by CTO Parag Agrawal. Salesforce also announced that Williams-Sonoma Inc. (NYSE: WSM) CEO Laura Alber and former United Airlines Holdings Inc. (NYSE: UAL) CEO Oscar Munoz will be joining the company’s board. Alber’s appointment took effect immediately, while Munoz will be taking his seat at the beginning of next year.

Better-than-expected Q3 overshadowed by Omicron

During its September Dreamforce conference, Salesforce showed off how it plans to integrate Slack with other large acquisitions, such as MuleSoft and Tableau, as well as its different verticals focused on specific industries, giving the company plenty of room to room. These prospects indeed gave the company’s shares a boost around Dreamforce time but they have fallen back in recent weeks after hitting record highs in early November.

All in all, better-than-expected third-quarter results were overshadowed by disappointing earnings guidance amid growing concerns surrounding the heavily mutated Covid variant. on Wednesday, the US confirmed its first case in California.

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

News From Microsoft’s Soon-To-Be-Metaverse

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On Tuesday’s annual general meeting, shareholders voted for Microsoft Inc (NASDAQ: MSFT) to publish a report on the effectiveness of its workplace sexual harassment policies in what was a rare win for activists two decades after the board’s investigation into co-founder Bill Gates’ activities. The board’s recommendation was to reject the proposal, but it ended up being supported by 77.97% votes, as shown by a regulatory filing.

To protect its reputation and shareholder value, Microsoft made an effort with the rise of the MeToo movement with some employees speaking out about experiencing harassment at the company but activists believe the tech titan hasn’t done enough. The software and hardware maker will now need to provide details of its investigations, including that of Gates, as well as the number of cases it has looked into and their outcome.  .

A first step into the metaverse

Microsoft is also taking on Facebook that has now been renamed Meta Platforms Inc (NASDAQ: FB) by bringing its own version of the metaverse to office life.
The US software giant said that in the first half of next year, Teams users would be able to appear as avatars, or animated cartoons in other words. Besides attending virtual meetings, remote workers will also be able to use their avatars to visit their virtual offices. Microsoft’s first step in the new digital universe might seem modest compared to the ambitious vision that Facebook laid out but management sees the adoption of personal avatars as the first step for workers to become comfortable with new forms of virtual interaction.

With 250 million people around the world using Teams, the introduction of avatars is the first element of the metaverse that will make the story real, according to Jared Spataro, the head of the software app. With the help of AI, aavatar’s lips will appear to mouth the words being spoken. Facial expressions and hand gestures will also be in the picture.

Microsoft’s plan is on Mesh technology it unveiled earlier this year to handle complex virtual interactions using PCs to VR headsets.

Following on Musk’s footsteps

Like CEO of Tesla Inc (NASDAQ: TSLA), Microsoft’s chairman and CEO Satya Nadella has shed more than half of shares of the company he’s running. According to a SEC filing, Nadella sold 840,000 Microsoft shares just before Thanksgiving, with proceeds amounting to $285 million. Microsoft has been having a fantastic year with its rock skyrocketing more 50% with the only Dow Jones stock doing better being Home Depot (NYSE: HD).

The tech titan even overpassed Apple (NASDAQ: AAPL) in value with Nadella at the helm so it is only natural that he has been well compensated for his successful leadership. This fiscal year alone, his salary amounted to $2.5 million along with his total annual compensation package, which includes stock awards and cash incentives, that add up to nearly $50 million. Over the past two fiscal years, Nadella earned more than $40 million. Nadella still owns more than 830,000 shares which is  significantly greater than the requirements set by the company’s Board of Directors.

Microsoft is having a great earnings and revenue run thanks to the cloud leadership position Nadella helped it gain since he took over as CEO in 2014. The company’s exceeded $2.5 trillion as it fueled up its Azure cloud unit while core Office 365 suite, LinkedIn corporate social networking unit and Xbox gaming division continue doing a great job at bringing in revenue. Microsoft is knocking on the door of $3 trillion market cap club as it builds its own metaverse and hopefully, a more transparent and accountable company culture.

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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