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Business

Morgan Stanley (MS) This autumn 2020 earnings beat estimates

Morgan Stanley (MS) Q4 2020 earnings beat estimates

Morgan Stanley posted fourth quarter earnings and revenue on Wednesday that exceeded analysts’ expectations for strong trading, investment banking and wealth management results.

The company reported a 51% increase in earnings to $ 3.39 billion, or $ 1.81 per share. Excluding the $ 189 million integration cost associated with last year’s E-Trade acquisition, earnings per share were $ 1.92, compared to an estimate of $ 1.27 by analysts surveyed by Refinitiv. Revenue of $ 13.64 billion was over $ 2 billion above the estimate of $ 11.54 billion.

“The company had a very strong quarter and record results for the full year with excellent performance in all three businesses and regions,” said CEO James Gorman in the press release. “Our unique business model continues to serve us well as we continue to implement our long-term strategy with the acquisitions of E * TRADE and Eaton Vance.”

Expectations were high after robust trade and investment banking results at rivals Goldman Sachs and JPMorgan Chase helped boost profitability, and Morgan Stanley did not disappoint.

Investment banking had sales of $ 2.3 billion, half a billion dollars more than FactSet’s survey of $ 1.81 billion. The result was due to stocks from the underwriting of stocks, which more than doubled compared to the previous year due to robust IPOs and follow-up activities.

Stock trading generated sales of $ 2.49 billion, $ 350 million more than the estimate of $ 2.14 billion. Fixed income trading grossed $ 1.66 billion, $ 200 million more than analysts expected.

The wealth management division had sales of $ 5.68 billion, nearly $ half a billion more than analysts expected, thanks to higher assets and higher fee-generating activity, as well as the impact of the e-trade deal.

Morgan Stanley has the largest wealth management business of the six largest US banks, which typically benefit from rising markets. That business is backed by the bank’s $ 13 billion acquisition of E-Trade, which was announced a year ago. The fourth quarter is the first period in which E-Trade will be integrated into the larger company.

The bank’s shares were virtually unchanged after premarket trading rose 1.9%.

Gorman drove a small winning lap in his annual update of the company’s strategic goals, setting out the case that his company was at a turning point. In the next ten years, Gorman’s market share gains and acquisitions will sustainably generate higher sales and returns than in previous periods.

The company kept its long-term goals largely unchanged, saying the return on tangible equity will be 17% or more, instead of the 15% to 17% range reported last year.

“We are in the growth phase of this company for the next decade,” Gorman told analysts after the results were released.

Morgan Stanley is the last major US bank to post earnings in the fourth quarter. JPMorgan and Goldman Sachs beat analysts’ expectations for sales and earnings aided by trading, while Citigroup, Wells Fargo and Bank of America were disappointed with sales as credit margins were squeezed.

The shares of New York-based Morgan Stanley rose 33% in 2020, outperforming the KBW Bank Index’s 4.3% decline.

Here are the numbers:

  • Adjusted earnings of $ 1.92 per share versus $ 1.27 estimate by analysts surveyed by Refinitiv.
  • Revenue of $ 13.64 billion versus an estimate of $ 11.54 billion.
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World News

Citigroup earnings This autumn 2020 beat revenue estimates

Citigroup earnings Q4 2020 beat profit estimates

Jane Fraser, General Manager for Latin America at Citigroup Inc., speaks during the Milken Institute Global Conference in Beverly Hills, California on Monday, April 29, 2019.

Kyle Grillot | Bloomberg via Getty Images

Citigroup released fourth quarter results on Friday that beat analysts’ earnings estimates as the company partnered with rival JPMorgan Chase to free up reserves for credit losses.

Earnings fell 7% to $ 4.63 billion, or $ 2.08 per share, compared to $ 1.34 per share expected by analysts surveyed by Refinitiv, according to Citigroup. Company-wide revenue declined 10% to $ 16.5 billion, below the estimate of $ 16.7 billion.

The bank released $ 1.5 billion in reserves for loan losses, a move larger than analysts expected. That compares with a reserve build-up of $ 436 million in the third quarter and $ 253 million a year ago. As a result, borrowing costs for the period were more than $ 2 billion lower than a year ago.

Over the past year, banks have allocated tens of billions of dollars in provisions for loan losses in the expectation that shutdowns caused by the Covid shutdown would force customers large and small to default on credit. Now it seems like the industry has turned a corner and will begin releasing some of those reserves, increasing earnings and their ability to buy back stocks this year.

“As a sign of the strength and longevity of our diversified franchise, our sales remained unchanged through 2019 despite the massive economic impact of COVID-19,” said outgoing CEO Mike Corbat in the press release.

Citigroup shares fell 6.2%.

Citigroup made history when it announced that Jane Fraser would take over the running of the company. This made it the first major Wall Street bank to be run by a woman. Weeks before her successor at Corbat, Fraser spoke to investors and analysts for the first time on Friday. Shareholders wanted to know how Fraser, a former McKinsey partner who led Citi’s Latin American operations before becoming president in 2019, will improve the company’s bottom line.

Fraser said she is embarking on a review of the company’s strategy to best position it to meet its ROI targets and meet regulatory requirements.

“We’re taking a clinical look at our strategic positioning and assessing which companies can achieve leading market positions in a much more digitalized world,” said Fraser. “Like any true Scot, I believe there is value in unlocking by simplifying the company.”

Citigroup, the third largest US bank by assets, was hurt by relatively poor performance when compared to competitors such as JPMorgan Chase. The results have frustrated investors, including activist hedge fund ValueAct. The bank is also working on a government agency agreement to improve its internal risk controls after it accidentally sent nearly $ 900 million to Revlon lenders last year.

Citigroup has announced that trading sales will increase 15% year over year in the fourth quarter, while investment banking fees should increase 10% to 15%.

The shares of the New York-based bank fell 23% last year, compared with the KBW Bank Index’s 4.3% decline.

Here are the numbers:

  • Earnings: $ 2.08 per share versus $ 1.34 per share for analysts surveyed by Refinitiv.
  • Revenue: $ 16.5 billion versus an estimate of $ 16.7 billion.

JPMorgan on Friday reported fourth quarter earnings and sales that were above estimates.

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Business

Walgreens (WBA) Q1 2021 earnings beat

Walgreens (WBA) Q1 2021 earnings beat

The Walgreens Boots Alliance on Thursday reported first-quarter earnings that exceeded Wall Street’s expectations, aided by stronger-than-expected pharmacy sales.

Walgreens stock was up about 7% on Thursday morning.

Walgreens reported, versus analyst expectations for the first quarter ended November 30th: based on refinitive data:

  • Earnings per share: $ 1.22, adjusted versus expected $ 1.03
  • Revenue: Expected to be $ 36.31 billion versus $ 34.95 billion

For the first quarter, Walgreens posted a net loss of $ 308 million, or 36 cents per share, compared to net income of $ 845 million, or 95 cents per share, last year.

Excluding a charge from investing in AmerisourceBergen, the company earned $ 1.22 per share, above the $ 1.03 analysts surveyed by Refinitiv expected.

Revenue rose to $ 36.31 billion from $ 34.34 billion a year ago, surpassing analysts’ $ 34.95 billion.

Walgreens said its US pharmacy sales increased as there were more prescriptions filled and flu shots. The comparable pharmacy turnover increased by 5% compared to the previous year. The higher sales came despite less pedestrian traffic, lower sales of cough, cold and flu medication, and fewer new prescriptions as people skipped the doctor’s office and socially distanced themselves during the pandemic.

In the UK, Walgreen’s like-for-like pharmacy sales increased 2.5% year over year, mainly driven by reimbursement from the national healthcare system. Boots UK’s businesses were particularly hard hit by restrictions during the pandemic. The NHS payment helped offset a drop in prescription volumes.

Walgreens reiterated its outlook for low single digit growth in adjusted earnings per share for the year. However, the company cautioned against headwinds in the second quarter as the UK is again locked and customers continue to restrict trips to the store.

“We are now much better at managing through lockdown, which is good, but it is also a cloud in the future,” said CFO James Kehoe on a profit call on Thursday. “Second, you see the large number of incidents in the US that are leading to fewer doctor visits pretty quickly.”

For the company, this means fewer prescriptions and fewer visits to the branches.

However, Kehoe said Walgreens continues to focus on long-term opportunities rather than short-term pandemic-related challenges. He said that The company has cut costs and is investing in areas of growth as the drugstore industry faces disruption and the pandemic changes shopping patterns. It adds more Health services and expansion of the digital offer. The company has unveiled a new mobile app and is now offering roadside pick-up in its US stores, which enables customers to prepare online purchases in just 30 minutes.

In July, the company announced plans to open hundreds of primary care clinics in its VillageMD-owned and operated branches. It said on Wednesday it would speed up the schedule for this and expect 600 to 700 clinics to open over the next four years.

The company also announced on Wednesday that it would divest its European drug distribution business by selling it to US drug wholesaler AmerisourceBergen for $ 6.5 billion. The sale allows Walgreens to focus on the pharmacy and retail business.

The company has almost completed its planned store closings. Kehoe said it closed 232 of the 250 Walgreens stores that are slated to close and 158 of the 200 Boots UK stores. He said it is on track to achieve more than $ 2 billion in annual cost savings by fiscal 2022.

In the past year, more than 4,000 jobs were cut in the Boots UK and Boots Opticians business units, representing a 7% reduction in the workforce in these units.

Stefano Pessina, CEO of the Walgreens Boots Alliance, is stepping down after five years in the role, but his successor has not yet been named. Its rival CVS Health is also getting a new CEO. Karen Lynch will succeed longtime CVS CEO Larry Merlo in February.

Walgreens began giving Covid vaccines to employees and residents of nursing homes and other long-term care facilities in mid-December. There are plans to offer the recordings to the public in drug stores as soon as they become available.

Walgreens shares are down 28% over the past year, taking their market value to $ 37.2 billion.

Read the company’s full press release here.

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Business

Nike (NKE) stories Q2 fiscal 2021 earnings, gross sales beat

Nike (NKE) reports Q2 fiscal 2021 earnings, sales beat

Nike reported quarterly sales and earnings on Friday that exceeded analyst estimates. This is due to triple-digit online growth in North America and strong Chinese consumer demand for sneakers and workout clothing.

Due to the pandemic, costs could be reduced as less marketing spending was made at sporting events. The lower costs increased profitability. Strong sales during Alibaba’s Single’s Day in China and Black Friday in the US helped it kick off the holiday season with stock shortages, reducing the need for discounts.

“These are the times when strong brands are getting stronger,” said CEO John Donahoe during a conference call on the results. “Constant changes in the direction of digital, sporty clothing as well as health and wellness continue to offer us incredible opportunities.”

Its stocks jumped more than 4% in trade outside of business hours.

Here’s how the company performed in the second quarter of the fiscal year compared to analyst expectations based on refinitive data:

  • Earnings per share: 78 cents versus 62 cents, expected
  • Revenue: $ 11.24 billion versus $ 10.56 billion expected

For the three-month period ended November 30, Nike reported net income of $ 1.25 billion, or 78 cents per share, compared to $ 1.12 billion, or 70 cents per share, last year. Analysts had demanded a profit of 68 cents per share.

Revenue increased 9% year over year to $ 11.24 billion from $ 10.33 billion last year. That was better than what analysts had expected to be $ 10.56 billion.

According to Nike, digital sales for its eponymous brand rose 84% in the quarter as more shoppers visited the site to purchase sportswear and shoes to help maintain their fitness routines and personal health during the pandemic. This has helped to compensate for declines in wholesale partners and in the company’s own brick and mortar stores, as the global health crisis made fewer people feel good when they left their homes to shop.

Sales for the Converse brand, owned by Nike, declined 1% in the second quarter. According to Nike, thanks to the introduction of yoga and plus sizes, the women’s category has grown faster than business as a whole.

In Greater China, Nike sales grew 24%, compared to just 1% year-over-year growth in North America.

With domestic turf sales stagnating, Nike has doubled in the Chinese market, viewing the region as a key growth opportunity for the brand. Over the summer, a new type of store called Nike Rise opened in a mall in Guangzhou, hosting local meetups for mobile app users.

According to Nike, more than 4 million new customers bought their products during Singles Day, a shopping event hosted by Chinese e-commerce giant Alibaba. Overall, Nike achieved online sales of over half a billion dollars on Singles Day on November 11th.

The retailer also said it had “record” sales online during the week of Black Friday in the US but did not disclose the amount.

Nike stands alongside Lululemon, Dick’s Sporting Goods, and other retailers selling exercise gear and exercise equipment that have recovered faster this year. Other clothing retailers, especially those that deal with workwear and dresses, have problems.

Still, pedestrian traffic in stores in North America, Europe, and Latin America is down year-over-year due to social distancing measures. However, customers who venture into stores are more likely to buy, which increases conversion rates. Ninety percent of the stores are open, but some have reduced hours.

At the close of the market on Friday, Nike shares were up more than 37% this year. The company has a market capitalization of $ 215.5 billion.

The full press release on Nike’s earnings can be found here.

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Business

Darden Eating places (DRI) Q2 2021 earnings beat, gross sales fall brief

Darden Restaurants (DRI) Q2 2021 earnings beat, sales fall short

Customers arrive at an Olive Garden location in San Antonio, Texas.

Callaghan O’Hare | Bloomberg | Getty Images

Darden Restaurants reported quarterly sales on Friday that fell short of analysts’ expectations as another wave of pandemic food restrictions weighed on sales in the same store.

For the next quarter, usually the best of the year, Olive Garden’s parent company expects sales to decline by 30% to 35%. CFO Rick Cardenas said the company doesn’t expect significant revenue improvements until the fourth quarter of fiscal 2021, which ends in May.

The company’s shares fell 1.6% in premarket trading.

The company reported for the quarter ended November 29th, versus Wall Street’s expectations, based on an analyst survey conducted by Refinitiv:

  • Earnings per share: 73 cents compared to 71 cents expected
  • Revenue: $ 1.66 billion versus $ 1.69 billion expected

The company reported net income of $ 96 million, or 73 cents per share, for the second quarter, compared to $ 24.7 million, or 20 cents per share, a year earlier. Analysts polled by Refinitiv expected earnings of 71 cents per share.

Net sales declined 19.4% to $ 1.66 billion, falling short of expectations of $ 1.69 billion. Sales of all brands in the same store decreased 20.6% in the quarter. Revenue was also impacted by the timing of Thanksgiving, which shifted from the third fiscal quarter to the second fiscal quarter this year.

Olive Garden, the jewel in Dardens portfolio, saw sales drop 19.9% ​​in the same store. The chain has focused its marketing on its convenient pickup options and main menu items, rather than limited-time promotions that could hurt profit margins. LongHorn Steakhouse, which saw strong demand for its take-out, saw sales in the same store decline just 11.1%.

Dardens gourmet business, which also includes The Capital Grille, was hit hardest. The segment’s revenue in the same store decreased 31% for the quarter.

During the previous quarter’s earnings call, CEO Gene Lee said Darden needs states to relax its food restrictions in order to improve sales in the same business. Instead, the governors did the opposite when the number of new Covid-19 cases increased. About a quarter of Darden restaurants had their dining rooms closed by December 13, up from just 8% of locations in the week ending November 8.

“We have been able to do business effectively and move it off-premise, and we can do it effectively again,” Lee told analysts.

During November and December, combined sales of Darden in the same store declined in turn as more states rolled back restrictions on personal dining and temperatures dropped. After falling just 23.4% for the week ending November 8, sales in the same store were down 36.9% for the week ending December 13.

The company reintroduced its program to pay employees whose dining rooms were closed, costing Darden $ 3 million in the quarter.

For the third quarter of the financial year, Darden expects earnings per share from continuing operations of 50 to 75 cents. The company reiterated its full year guidance of 35 to 40 net new restaurants and total investments of $ 250 to 300 million.

Lee said the company is seeing more availability in real estate, but rents have not fallen significantly despite permanent closings. Darden predicts that 5% to 15% of restaurants will close permanently due to the pandemic.

Darden also announced some changes in its management. Cardenas will become President and Chief Operating Officer in January and Treasurer Rajesh Vennam will take over as Chief Financial Officer. The board also voted to appoint Lee as chairman, replacing Charles Elseeby, the former CFO of Brinker International and Michaels Stores.

The company will pay a dividend of 37 cents to shareholders on February 1st.

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Business

Lululemon (LULU) stories Q3 2020 earnings, gross sales beat estimates

Lululemon (LULU) reports Q3 2020 earnings, sales beat estimates

Lululemon Athletica store exterior, Ponce City Market.

John Greim | LightRocket | Getty Images

Lululemon reported sales of $ 1.1 billion on Thursday, up 22% year over year, beating analysts’ estimates as shoppers visited the retailer’s stores and website to purchase workout clothes during the reporting period.

In North America, net sales increased 19% driven by the e-commerce business. Overall, direct sales to consumers increased 94%, representing 42.8% of total sales, compared to 26.9% a year ago. This represents the sales that Lululemon makes directly to consumers through its stores and website with no intermediaries.

Due to the uncertainty surrounding the Covid-19 pandemic, which has forced it to temporarily close a handful of its stores again, Lululemon doesn’t offer a full outlook for 2020. Like others in retail, Lululemon faces the risk of additional store closings Coronavirus- Cases are still increasing in the US and other parts of the world.

However, CFO Meghan Frank noted that the company planned the holiday quarter “based on multiple performance scenarios” and believes it is “well positioned” for the holiday season. During the week of Thanksgiving and Black Friday, the company announced that its online business was generating record sales, offsetting the decline in store traffic.

Lululemon shares started to make gains, falling around 1% in after-hours trading shortly after 5pm. As of Thursday’s close of trading, Lululemon shares were up more than 59% year-to-date, bringing the company’s market cap to $ 48.1 billion.

Here’s how the retailer performed in the third quarter of fiscal year compared to analyst expectations based on refinitive data:

  • Earnings per share: $ 1.16, adjusted versus 88 cents expected
  • Revenue: $ 1.12 billion versus $ 1.02 billion expected

For the quarter ended November 1, Lululemon made $ 143.6 million, or $ 1.10 per share, compared to $ 126 million, or 96 cents per share, a year ago. Without a one-time charge, the company made $ 1.16 per share, better than what analysts had expected to be 88 cents.

Net sales rose 22% to $ 1.12 billion, beating analysts’ estimates of $ 1.02 billion.

In-store sales, tracking sales online and in stores that have been open for at least 12 months, increased 19%.

The company said sales for women were up 22% year over year, while those of men were up 14%.

While the entire apparel category has struggled this year, Lululemon is a retailer that has taken advantage of more consumers focusing on exercising at home during the pandemic and opting for comfortable sportswear over dresses and suits.

“While a V-shaped rebound may not happen for most of the apparel retail sector, Lululemon has recovered from a poor start to the year with impressive third quarter numbers,” said Neil Saunders, managing director of GlobalData Retail.

“Our data also shows that Lululemon has attracted a lot of new buyers, especially in women’s fashion,” he added.

Earlier this year, Lululemon also acquired home exercise equipment maker Mirror for $ 500 million to compete with the likes of bike maker Peloton. During the quarter, Lululemon announced it had started selling the startups’ $ 1,500 mirror-like devices in 18 stores and on its website.

The full press release on the result can be found here.