We’ve made it through another week of earnings; the last big week, in fact! Phew!
Today, I’ll be covering Taylor Wimpey, Costco Wholesale and Dell Technologies.
Taylor Wimpey (TW) – FY 2022 Earnings
Taylor Wimpey largely met analyst expectations, fairing somewhat better than Persimmon yesterday. House building is definitely on the decline, but so far seem to have stabilised in 2023, with average selling prices staying firm.
Despite only a modest increase in revenue for 2022, the company seems to have successfully prevented costs rising too quickly, expanding their operating and net profit for the year. With fewer homes expected to be built in 2023 and a struggling consumer, investors will be keeping a close eye on how these home-builder companies fare.
Key Points:
- Revenue of £4,420m, up from £4,285m (3.2%) a year ago
- Gross profit of £1,132m, up from £1,027m (+10.3%) a year ago
- Operating profit of £828m, up from £698m (+18.5%) a year ago
- Profit before tax of £828m, compared to £680m a year ago
- Profit after tax of £644m, compared to £556m a year ago
- Basic earnings per share of 18.1p
- Dividend of 4.78p per share announced, to be paid on 12th May 2023
- 2023 guidance suggests total number of home completions in the range of between 9,000 to 10,500, down from 14,154 in 2022. Similar to Persimmon, Taylor Wimpey are seeing a slowdown in the number of completions/sales, but average home prices have thus far remained stable compared to Q4 2022
- As at 26th February 2023, the company had an order book of £2,154m, compared to £2,899 at the same time 12 months earlier
Costco Wholesale (COST) – Q4 (Fiscal Q2 2023) Earnings
A mixed set of earnings from Costco. Similarly to Walmart, Target and the other retailers, Costco has seen a more money-conscious consumer who are reducing the number of discretionary items they purchase, particularly in the electronics and jewellery categories. Additionally, many shoppers are switching to cheaper, lower-margin brands to reduce spending.
While beating analyst expectations on earnings, the company missed expectations on revenue, with 2023 shaping up to be a difficult year for retail.
Key Points:
- Revenue of $55,266m, up from $51,904m (+6.5%) a year ago
- Gross profit of $6,843m, up from $6,387m (+7.1%) a year ago
- Operating profit of $1,903, up from $1,812 (+5.0%) a year ago
- Profit before tax of $1,983m, compared to $1,801m a year ago
- Profit after tax of $1,466m, compared to $1,299m a year ago
- Basic earnings per share of $3.30
- Dividend not yet declared – previous dividend of $0.90 per share was paid on 17th February 2023
- As far as I can see, Costco have not provided any guidance
Dell Technologies (DELL) – Q4 (Fiscal Q4 2023) Earnings
Despite revenues falling substantially in recent quarters, Dell blew analyst expectations out of the park on both revenue and earnings. This was largely helped by sales in servers, storage and infrastructure equipment; the PC market is still in a demand lull from the Covid-19 pandemic. Despite providing a better-than-expected result, the company gave bleak guidance for the quarters ahead, expecting demand to continue to fall.
Key Points:
- Revenue of $25,039m, down from $27,992m (-10.5%) a year ago
- Gross profit of $5,756m, up from $5,618m (+2.5%) a year ago. Gross profit margin rose to 23.0%, compared to 20.1% a year ago
- Operating profit of $1,189, down from $1,609m (-26.1%) a year ago
- Profit before tax of $923m, compared to a loss of ($48m) a year ago
- Profit after tax of $614m, compared to $2m a year ago
- Basic earnings per share of $0.84
- Dividend of $0.37m per share, to be paid on 5th May 2023
- On the earnings call, the company gave a cautious warning regarding guidance for the next couple of quarters, reiterating that PC and server demand are still weak. Not only that, but they are now seeing signs in other segments, particularly storage, of a decline in interest from smaller and medium businesses who are becoming much more conscious of costs. As such, fiscal 2024 is expected to be a somewhat muted year (a common theme, it seems!)
- As at 3rd February 2023, Dell Technologies had $8,607m available in cash and cash equivalents
- Chuck Whitten, Dell’s co-chief operating officer, had this to say regarding storage demand during the earnings call: “Underlying demand in PCs and servers remains weak and we are seeing signs of changing customer behaviour in storage… Though Q4 was a very good storage demand quarter, we saw lengthening sales cycles and more cautious storage spending with strength in very large customers offset by declines in medium and small business.”
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!
