Wednesday October 4, 2023
General Motors Releases Earnings
General Motors announced revenue of $43.1 billion for the quarter, up 28% from $33.6 billion for the same time last year. For the full year, revenue came in at $156.7 billion, a 23% increase from $127.0 billion one year ago.
"We expect that our momentum will help us deliver strong results once again in 2023," said General Motors CEO, Mary Barra in its shareholder letter. In fact, we have all the essential ingredients to deliver EBIT-adjusted in a range of $10.5 billion to $12.5 billion thanks to our strong operating performance. 2023 will also be a breakout year for the Ultium Platform."
General Motors reported quarterly net income of $2.0 billion, or $2.12 per adjusted share. This was up from $1.7 billion, or $1.35 per adjusted share during the same quarter last year. For the full year, the company's net income was $9.9 billion.
General Motors continues its pursuit of producing affordable EVs in 2023. The Chevrolet Bolt EV and Bolt EUV saw record sales, making them the best-selling established EVs in the second half of 2022. The company plans to increase production to more than 70,000 this year for its international markets. General Motors also announced on January 31 a $650 million equity investment and supply agreement with Lithium Americas to develop U.S.-sourced Lithium production. This marks the largest investment by an automaker to produce battery raw materials and is estimated to support production of up to 1 million EVs per year.
General Motors Company (GM) shares ended the week at $41.12, up 12% for the week.
E.l.f. Beauty Reports Third Quarter Earnings
E.l.f. Beauty, Inc. (ELF) released its latest quarterly earnings on Wednesday, February 1. The American cosmetic brand surpassed sales and profit expectations and shares rose more than 12% following the release of the report.
The company reported revenue of $ 146.5 million, up 49% from $98.1 million during the same quarter last year. This exceeded analysts expected revenue by 20.3%, beating analysts' revenue estimates for the past four consecutive quarters.
"We delivered a terrific third quarter - growing our net sales by 49% and expanding our market share by 150 basis points, according to Nielsen." said Elf Beauty's CEO, Tarang Amin. "This quarter marked our 16th consecutive quarter of net sales growth, reflecting the continued strong execution by the Elf Beauty team. As we look ahead, we're excited about the potential we see as we continue to make the best of beauty accessible to every eye, lip, face and skin concern."
E.l.f. posted net income of $19.1 million, or $0.34 per diluted share for the third quarter. This was up from $6.2 million, or $0.12 per diluted share during the same time last year.
The Oakland California-based cosmetic company attributed their substantial increase in net sales to strength in both its retailer and e-commerce channels. E.l.f. Beauty saw its gross margin increase 180 basis points to 67% in the quarter, which was predominantly driven by price increases, cost savings, and product mix, partially offset by inventory adjustments and Spring shelf resets. The company raised its 2023 Fiscal Outlook to reflect net sales of $541 to $545 million versus the $478 to $486 million previously expected.
E.l.f. Beauty, Inc. (ELF) shares ended the week at $69.78, up 23% for the week.
Whirlpool Whirls Fourth Quarter and Full-Year Earnings
Whirlpool Corporation (WHR) reported its fourth quarter and full-year earnings on Tuesday January 30. The American manufacturer of home appliances reported earnings that surpassed estimates and shares rose 2% following the release of the report.
The company reported net sales of $4.92 billion during the quarter. This is down 15.3% from $5.82 billion in net sales this time last year. For the full year, the company reported $19.72 billion, down 10.3% from $21.99 billion one year ago.
"In 2023 we will reset our cost structure and expect to deliver $800 - $900 million of cost benefit," said Whirlpool's CEO, Marc Bitzer. "This new cost structure, combined with the expected demand recovery during the second half of the year has Whirlpool well positioned to deliver sustained shareholder value."
Whirlpool reported a net loss of $1.61 billion or $29.35 per diluted share for the quarter, compared to net earnings of $300 million or $4.90 per diluted share this time last year. For the full year, the company reported a net loss of $1.52 billion.
The Michigan-based appliance maker reported a decrease in sales across all regions due to demand decline and inflationary cost pressure. In its North America segment, the company reported sales of $2.85 billion, down 13.6% from $3.30 billion during the same period the year prior. Sales in its Europe, Middle East and Africa segment reached $1.03 billion, down 27.2% from one year ago. The Latin America segment reached sales of $831 million, remaining relatively flat from this time last year. Whirlpool returned $1.3 billion in cash to shareholders in fiscal 2022 with $900 million of share repurchases.
Whirlpool Corporation (WHR) shares ended the week at $154.97, up 2% for the week.
The Dow started the week of 1/30 at 33,909 and closed at 33,926 on 2/3. The S&P 500 started the week at 4,049 and closed at 4,136. The NASDAQ started the week at 11,512 and closed at 12,007.
Treasury Yields Rise
On Wednesday, the Federal Reserve released the minutes from the Federal Open Market Committee (FOMC). At the meeting, policy makers raised their target interest rate by 25 basis points, bringing the target rate to the range of 4.5% to 4.75%, reaching the highest target rates since October 2007.
"With today's action, we have raised interest rates by 4.5 percentage points over the past year," said Federal Reserve Chairman, Jerome Powell. "We continue to anticipate that ongoing increases in the target range for the federal funds rate will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time."
The benchmark 10-year Treasury note yield opened the week of January 30 at 3.51% and traded as low as 3.34% on Wednesday. The 30-year Treasury bond opened the week at 3.62% and traded as low as 3.53% on Wednesday.
On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 3,000 to 183,000 for the week ending January 28. Continuing unemployment claims decreased 11,000, reaching 1.66 million. The January jobs report released on Friday reflected 517,000 nonfarm payroll jobs added, significantly higher than economists' estimates of 187,000. The unemployment rate fell to 3.4%, which was below analysts' estimates of 3.6% and reached a low last seen in 1969.
"Layoffs remain low and demand for workers is still strong," said chief US economist at High Frequency Economics, Rubeela Farooqi. "The labor market has yet to respond meaningfully to a rapid increase in interest rates."
The 10-year Treasury note yield finished the week of 2/3 at 3.52%, while the 30-year Treasury note yield finished the week at 3.62%.
Mortgage Rates Edge Lower
This week, the 30-year fixed rate mortgage averaged 6.09%, down from last week's average of 6.13%. Last year at this time, the 30-year fixed rate mortgage averaged 3.55%.
The 15-year fixed rate mortgage averaged 5.14% this week, down from 5.17% last week. During the same week last year, the 15-year fixed rate mortgage averaged 2.77%.
"Mortgage rates inched down again, with the 30-year fixed-rate down nearly a full point from November, when it peaked at just over 7%," said Freddie Mac's Chief Economist, Sam Khater. "According to Freddie Mac research, this one percentage point reduction in rates can allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan, which is the median home price."
Based on published national averages, the savings rate was 0.33% as of 1/17. The one-year CD averaged 1.28%.
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