Another week of earnings ahead of us, and it’s a busy week at that!
Today, I’ll be taking a look into Sofi Technologies, Snapchat, Pfizer, AMD and McDonald’s.
As always, if you spot something’s off or you believe I’ve missed an important company out; let me know!
SoFi Technologies (SOFI) – Q4 Earnings
On Monday, SoFi reported better-than-expected earnings across the board, largely thanks to the higher interest rates boosting revenue. The company also reported almost half of the loss expected, while providing upbeat guidance for the next quarter.
Key Points:
- Revenue of $457m, up from $286m (+59.8%) a year ago
- Interest income rose to $298m, up from just $91m (+327%) a year ago, thanks to much higher interest rates
- Loss before tax of ($38.9m), compared to a loss of ($109m) a year ago
- Loss after tax of ($40m), compared to a loss of ($111m) a year ago
- Basic earnings per share of ($0.05)
- Guidance for Q1 suggests net revenue of between $430m and $440m, while full-year revenue is expected to be between $1,925m and $2,000m
- The company aims to report its first positive net income in Q4 of 2023
- SoFi added 480,000 customers in the quarter, bringing the total member base to 5.2m. Members increased 51% year-over-year. In terms of total products in use (e.g., loans), the company added over 695,000 new products in the quarter, ending the year with nearly 7.9 million total, up 53% year-over-year
Snapchat (SNAP) – Q4 Earnings
Snapchat reported revenue lower than expectations, but reported a smaller loss than analysts projected. Unfortunately, the forecast for 2023 is bleak, with revenues expected to decline year-over-year. The stock price fell almost 15% in after-hours trading.
Key Points:
- Revenue of $1,300m, up from $1,298 (+0.2%) a year ago
- Gross profit of $481m, up from $449m (+7.1%) a year ago
- Operating loss of ($288m), down from ($25m) a year ago
- Loss before tax of ($284m), compared to a profit of $35m a year ago
- Loss after tax of ($288m), compared to a profit of $23m a year ago
- Basic earnings per share of ($0.18)
- The company declined to provide forward guidance, but their internal forecasts suggest revenues are expected to fall by between 2% and 10% in Q1, compared to a year ago
- Global daily active users came in at 375 million, slightly below estimates
- Snapchat’s paid membership, released in summer 2022, now has 2 million users
- Economic pressures, resulting in reduced ad spend across the board, is likely to continue impacting the company’s revenue through the first quarter
Pfizer (PFE) – Q4 Earnings
Pfizer reported revenue that matched analyst expectations, while earnings came in higher than expected. However, the company projects a significant decline in revenue for 2023, largely due to the reduced demand for Covid-19 products. The stock fell around 3% in after-hours trading as a result.
Key Points:
- Revenue of $24,290m, up from $23,838m (+1.9%) a year ago
- Gross profit of $14,642m, up from $14,102m (+3.8%) a year ago
- Profit before tax of $5,231m, compared to $3,827m a year ago
- Profit after tax of $4,995m, compared to $3,393m a year ago
- Basic earnings per share of $0.89
- Dividend of $0.41 per share announced, to be paid on 3rd March 2023
- Guidance for 2023 suggests revenue of between $67,000m and $71,000m, up to a 33% revenue decline compared to 2022
- This is largely due to the lower demand for Covid-19 vaccines and treatments, which brought in over $50,000m of revenue for 2022. Expectations are that this revenue will decrease to around $21,500m in 2023
- Revenue outside of Covid-19 related products is expected to increase by between 7% and 9% for the year
AMD (AMD) – Q4 Earnings
AMD’s results came in with a beat on both revenue and earnings. However, along with other chipmakers in recent quarters, the company have warned of a decline in revenue for Q1 year-over-year. This is in part due to high inventories across the board (companies over-ordered during the supply-chain crisis), along with lower demand.
Key Points:
- Revenue of $5,599m, up from $4,826m (+16.0%) a year ago
- Data-centre revenue increased to $1,655m, up 42.3% YoY
- Embedded revenue increased to $1,397m, up 1,868% YoY
- Client revenue decreased to $903m, down 50.6% YoY
- Gaming revenue decreased to $1,644, down 6.7% YoY
- Gross profit of $2,403m, down slightly from $2,426m (-0.9%) a year ago
- Cost of sales increased 33.2%, largely due to “amortization of acquisition-related intangibles” costs of $443m
- Operating loss of ($149m), compared to an operating profit of $1,207 a year ago
- Loss before tax of ($136m), compared to a profit of $1,203m a year ago
- Profit after tax of $21m, compared to $974m a year ago
- Basic earnings per share of $0.01
- Guidance for Q1 2023 suggests revenue of $5,300m, down about 10% year-over-year and and a decline of about 5% quarter-over-quarter
- AMD expects the PC market to continue to its weakness, with a 10% decline expected in 2023. However, they expect the data centre and embedded segments to continue growing. In terms of gaming; this will likely depend on the overall gaming market; but the outlook is optimistic considering Sony’s expected increase in PlayStation 5 sales, which utilise AMD chips
McDonald’s (MCD) – Q4 Earnings
McDonald’s, despite being a low-ticket restaurant chain in a high-inflation environment, reported both revenue and earnings that beat analyst expectations by a significant margin. Customers are choosing McDonald’s over full-service restaurants to save money, benefitting the company during a tough macroeconomic environment. In fact, they will expand their store-count more quickly in 2023 than previously expected.
Key Points:
- Revenue of $5,927, down from $6,009 (-1.4%) a year ago
- On a constant-currency basis, revenue would have increased 5% year-over-year
- This real-terms decline is despite higher pricing for most menu items due to the impact of inflation
- Comparable sales saw a 12% increase globally, suggesting customers are opting for cheaper or fewer items per visit
- Gross profit of $3,409m, up from $3,261m (+4.5%) a year ago
- Cost of sales came in at $2,518m, down from $2,748m (-8.4%) a year ago
- Operating profit of $2,583m, up from $2,397m (+7.7%) a year ago
- Profit before tax of $2,339m, compared to $2,108m a year ago
- Profit after tax of $1,903m, compared to $1,639m a year ago
- Diluted earnings per share of $2.59
- Dividend of $1.52 per share announced, to be paid on 15th March 2023
- McDonald’s plan to open 1,900 new restaurants globally in 2023, 100 higher than previously expected
- The company expects inflation to continue throughout 2023, creating headwinds on profit margins. It also expects a “mild to moderate” recession in the; the most common prediction this earnings season. However, they expect these pressures to be greater in Europe
- According to the company, customers are opting to ‘trade down’ from full-service restaurants to McDonald’s products, to reduce discretionary spending
- The company’s CEO, Chris Kempczinski, stated that “Overall, the consumer, whether it’s in Europe or in the U.S., is actually holding up better than what we would have probably expected a year ago or six months ago.”
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!
