Half way through the week! Hope you’re all well.
Short post today – only two companies to cover.
In this post, I’ll be covering earnings from Persimmon and Salesforce.
Persimmon (PSN) – FY 2022 Earnings
While Persimmon beat analyst expectations on revenue, its earnings and outlook for 2023 spooked investors. This is of no surprise, in my opinion, with interest rates reaching ever-higher levels combined with an energy and cost-of-living crisis squeezing potential home buyers.
Key Points:
- Revenue of £3,816m, up from £3,611m (+5.7%) a year ago
- Gross profit of £868m, down from £1,084m (-20.0%) a year ago
- Cost of sales rose to £2,948m, an increase of 16.7% year-over-year
- Operating profit of £725m, down from £961m (-24.5%) a year ago
- Profit before tax of £731m, compared to £967m a year ago
- Profit after tax of £559m, compared to £846m a year ago
- Basic earnings per share of 175.8p
- Dividend of 60p per share announced, to be paid on 5th May 2023
- At the end of 2022, the company had forward sales of £1.52bn, compared to £2.21bn a year ago
- At the end of 2022, the average selling price was £288,638, compared to the 2022 average of £248,616, signalling that while housing demand is falling, home prices remain strong
- For 2023, the company expects 8,000 to 9,000 home completions, down from 14,868 in 2022
- In the first eight weeks of 2023, the average sales rate was 0.52, down from 0.96 a year ago; essentially, the company is selling around half as many homes as a year ago, on average across its regions.
Salesforce (CRM) – Q4 (Fiscal Q4 2023) Earnings
An impressive earnings report from Salesforce, beating analyst expectations across the board, including guidance for 2023, while also announcing a huge increase in its share repurchasing plan. The stock rose about ~14% in after-hours trading as a result.
Key Points:
- Revenue of $8,384m, up from $7,326m (+14.4%) a year ago
- Subscription and support increased to $7,789m, up 14.1% year-over-year
- Professional services and other increased to $595m, up 19.5% year-over-year
- Gross profit of $6,284m, up from $5,312m (+18.3%) a year ago
- Operating profit of $357m, compared to an operating loss of ($176m) a year ago
- Profit before tax of $33m, compared to a loss of ($197m) a year ago
- Loss after tax of ($98m), compared to ($28m) a year ago
- Worth noting that this includes a one-off $828m restructuring charge, relating to reducing workforce and reducing office space
- Basic loss per share of ($0.10)
- Revenue guidance for 2023 (Fiscal 2024) of between $34,500m and $34,700m, a ~10% increase year-over-year, with GAAP operating margin expected to be around 10.8%
- As at 31st January 2023, Salesforce had $7,016m in cash and cash equivalents, compared to $5,464m a year ago
- The company extended its share buyback plan, announcing an increase to $20,000m in total. $4,000m of shares were purchased in 2022, meaning $16,000m are still to be purchased. $10,000m will be set aside in August 2023 for this purpose
Do you invest in any of these companies? Have these earnings changed your view about the company’s prospects in any way? Let me know in the comments!
