Last big earnings day of the week.
Being on day 8 of having Covid, I can’t wait for the weekend – hope your week is fairing better!
Today, I’ll be covering The BAE Systems, Block, Intuit and Moderna.
BAE Systems (BA) – FY 2022 Earnings
I’m no fan of defence stocks, but I thought it’d be interesting to take a (very brief) look at what was happening in light of the war in Ukraine.
As it turns out, BAE Systems now have around a two-year backlog of orders to attend to, with many more orders likely on the way. What’s more surprising, though, is that the company doesn’t expect a large boost of revenue in 2023, implying they are content with current production capacity.
Key Points:
- Revenue of £21,258m, up from £19,521m (+8.9%) a year ago
- Operating profit of £2,384m, down from £2,389m (-0.2%) a year ago
- Profit after tax of £1,674m, compared to £1,912m a year ago
- Basic earnings per share of 51.1p
- No dividend declared; this will occur in a few months’ time
- Guidance for 2023 seems light, with BAE Systems only expecting revenue to grow between 3% and 5% for the year, despite a huge order backlog, suggesting they will not be ramping up production in any way
- In July of 2022, the company announced a new £1,500m share buyback programme and this is apparently proceeding as planned
- Order backlog reached a huge £48,900m, or around two years of production
Block (SQ) – Q4 Earnings
Despite the collapse of the crypto-currency market and a weakening consumer, Block (formally known as Square) beat analyst expectations on both revenue and gross profit, but unfortunately missed expectations on earnings. The stock price rose 8% in after-hours trading.
Note that analysts and investors prefer to look at gross profit for this company, as “revenue” also includes the money received via bitcoin trading, of which profit margins are negligible.
PLEASE NOTE: Block have altered how they report earnings, making some metrics harder to compare. I’ve done my best to keep things consistent, but can’t guarantee it’s without error.
Key Points:
- Revenue of $4,650m, up from $4,079m (14.0%) a year ago
- Transaction-based revenue increased to $1,475m, up 12.7% year-over-year
- Subscription and services-based revenue increased to $1,307m, up 69.3% year-over-year
- Hardware revenue decreased slightly to $36.7m, down 0.7% year-over-year
- Bitcoin revenue decreased to $1,833m, down 6.5% year-over-year
- In terms of the two core businesses, Cash App revenue rose 11.9% year-over-year, while Square revenue rose 19.4% year-over-year
- Gross profit of $1,660m, up from $1,182m (+40.4%) a year go. Gross profit margin of 35.7%, up from 29.0% a year ago
- Operating loss of ($135m), a wider loss than the ($55m) operating loss a year ago
- Loss before tax of ($112m), compared to ($74m) a year ago
- Loss after tax of ($114m), compared to ($77m) a year ago
- Basic loss per share of ($0.19)
- No GAAP guidance provided for 2023
- Cash App reportedly had 51m monthly transacting users in December, of which two thirds transacted on a weekly basis on average
Intuit (INTU) – Q4 (Fiscal Q2 2023) Earnings
A solid quarter for Intuit, beating analyst expectations on both revenue and earnings with a reasonable outlook for 2023. This is in part thanks to customer growth across its products and higher effective pricing for its services (e.g., QuickBooks and Mailchimp).
Key Points:
- Revenue of $3,041m, up from $2,673m (+13.8%) a year ago
- Product revenue increased to $607m, up 15.6% year-over-year
- Service and other revenue increased to $2,434m, up 13.3% year-over-year
- Gross profit of $1,660m, up from $1,182m (+40.4%) a year ago
- Operating profit of $270m, up from $56m (+382%) a year ago
- Profit before tax of $228m, compared to $30m a year ago
- Profit after tax of $168m, compared to $100 a year ago
- Basic earnings per share of $0.60
- Dividend of $0.78 per share announced, to be paid on 18th April 2023
- For 2023, Intuit expects revenue of between $14,035m and $14,250m, suggesting a 10% to 12% growth in revenue. For Q1 (Fiscal Q3 2023), it expects revenue to grow between 8% and 9% year-over-year. However, it also expects GAAP diluted earnings per share of between $6.92 and $7.22, a decline of between 1% and 5% year-over-year.
Moderna (MRNA) – Q4 Earnings
A troubling quarter for Moderna, whose only real product is their Covid-19 vaccine, as they miss on analyst expectations on revenue and earnings. They also provided guidance that would concern any active investor.
As the world moves on from the pandemic, and fewer consumers have the desire to pay for (or go for, in countries where it is free) Covid-19 boosters, Moderna has seen its revenue shrink dramatically. To continue the financial success it has enjoyed over the last two years, the company must innovate and develop effective new product lines or risk dwindling away, returning to a relatively unknown business in a few years time.
Key Points:
- Revenue of $5,084m, down from $7,211m (-29.5%) a year ago
- Gross profit of $3,166m, down from $6,259m (-49.4%) a year ago
- Cost of goods sold increased by 101.4% year-over-year, largely due to increased royalty costs, inventory write-offs due to Covid-19 products reaching their expiry date, as well as recognising order cancellations
- Operating profit of $1,580m, down from $5,410m (-70.8%) a year ago
- The company have been aggressively hiring and increasing R&D expenses to speed up the development of future products (namely, RSV and CMV vaccines, as well as the Merck cancer vaccine)
- Profit before tax of $1,655m, compared to $5,410m a year ago
- Profit after tax of$1,465m, compared to $4,868m a year ago
- Basic earnings per share of $3.81
- Guidance for 2023 looks to be bleak and was not well-received by investors. Moderna has just $5,000m in revenue contracted for the year for its Covid-19 products. $2,000m of this is expected to be received/recognised in the first half of the year, a significant fall year-over-year. However, the company has stressed that “additional potential sales opportunities” exist in the US, Europe, Japan and “other key markets”
- At the end of the quarter, the company had $9,902m available in cash, cash equivalents and short-term investments, which will aid in getting through this period of being reliant on Covid-19 product revenue while other products are being developed. It also has $8,318m in long-term investments
- The company announced it has an impressive 48 programs in progress, of which 38 are currently in the active clinical trials stage. These are largely in the RSV and CMV (respiratory syncytial virus and cytomegalovirus) space. However, this is an area that both Pfizer and GSK are also pursuing in 2023, so they will see strong competition. It is also making good progress with a much-anticipated breakthrough cancer vaccine, developed with Merck
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!
