Weekly StockWatch: Amazon’s Rosy Guidance, Apple Solid’s Results, Ford’s Impressive Quarter & More

  • AIR.fr
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  • AMZN.us
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  • AAPL.us
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  • BA.us
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  • F.us
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Amazon Upbeat Q3 Guidance

The tech and retail giant had posted its first loss since 2015 in Q1 and Thursday's second quarter results revealed a back-to-back Net Loss, to the tune of $2.028 billion, which narrowed on a quarterly basis. [1]

Despite the hit in the bottom line, Revenues grew to $121.234 billion, a noted increase compared not only to the year-ago quarter, but also to Q1 2022. More to it, Amazon.com offered rosy forward guidance for Q3, projecting further increase to its total net sales to $125.0 - $130.0 billion.

Amazon began disclosing metrics for its advertising business, only in Q4 2021 and so far they have been very strong. Advertising Services generated revenue of $8.757 billion, which was 18% higher than Q2 2021.

The all important Web Services (AWS), represented another bright spot, as its Net Sales surged 33% year-over-year, to $19.739 billion, extending the uptrend.

CEO Andy Jasse sounded more upbeat, compared to the previous report, seeing "revenue accelerate" and "progress on the more controllable costs", despite "continued inflationary pressures in fuel, energy, and transportation costs"

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Amazon's stock surges more than 10% in pre-market, at time of writing, after yesterday's report. This will give AMZN.us it the opportunity to avoid weekly losses, after the poor start.

Apple Solid Result

The iPhone maker reported solid results for Q3 FY2022 (period ended in June 25) yesterday, in a record June quarter, in spite of the "challenging operating environment", as per CFO Luca Maestri. [2]

Apple refrained from offering forward guidance, but during the earnings call, Mr Maestri expressed his belief that "year-over-year revenue growth will accelerate during the September quarter compared to the June quarter". [3]

The tech giant's Revenue grew 2% year-over-year to $83.0 billion and every product category performed better compared to a year ago, including the iPhone, despite slowdown in the global smartphone market.

Comparisons with the previous quarter however are unfavorable, which is not unsurprising though, as we approach autumn, when the company typically has its major product release.

Markets liked the results, since the stock is upbeat in today's pre-market. AAPL.us had a brutal second quarter, but heads towards a strong July and a four-week profitable streak.

Ford Returned to Profits

During the current earnings season, we have seen many big corporations reporting mixed results or strong growth year-over-year, but unflattering quarterly comparisons. Not for the Ford Motor Company though, which absolutely crushed its both top and bottom line.

The automaker's Revenues soared to $40.2 billion in the second quarter of the year and it also returned to profits, with Net Income of roughly 700 million, after the $3.1 billion loss in Q1. This was achieved in spite of another hit from its investment in Rivian Automotive, which costed it $2.4 billion this time. [4]

Ford is focused on its electric vehicles, with a still limited, albeit impressive line-up of EVs and CEO Jim Farley saying that "we're selling them as fast as we can make them" [5]. The electric portfolio includes the F-150 Lighting truck, shipments of which started two months ago and nearly all 2022-model year vehicles have sold out.

Futhermore, the historic automaker announced last week that it has secured battery and raw material sourcing to ramp up its EV production to 600,000 units/year by late 2023 and 2 million by the end of 2026.

F.us surged on Thursday after the quarterly results and heads towards another profitable week, extending its recovery from the one and a half year lows earlier in the month.

Airbus vs Boeing

The European aerospace conglomerate reported rather unimpressive results for the first half of the year (H1) on Wednesday, in what the CEO Guillaume Faury described as "solid performance", in a "complex operating environment". [6]

Airbus reported Revenue of € 24.8 billion, which was marginally higher compared to a year ago and Adjusted Profit (EBIT) of 2.6 billion, marking a small decline from H1 2021.

Commercial aircraft deliveries were stagnant on a yearly basis at 297 units, with an uptick in Q2 over Q1. However, the firm slashed its full-year delivery outlook to 700 planes, form 720 previously.

Its troubled US rival, Boeing, also had a tough first-half, with 5% Revenue slide (year-over-year) to $30.672 billion and a Net Loss of around $1 billion.[7]

Things were more upbeat on the commercial deliveries though, since it handed over 216 planes. This marked an impressive 38% increase year-over-year, although most of them were delivered in the first quarter of 2022.

Boeing managed to score some high-profile deals recently, including this month's order by Delta for 100 737 MAXs. Delivery is expected to begin in 2025, while the agreement has the option for 30 more units. [8]

AIR.fr reacted negatively to the results and is poised to snap its four-week profitable streak. BA.us traded mixed on Wednesday after the report, but advanced yeaterday.

Walmart Slashed Profit Outlook

The US retailer lowered its profit outlook for Q2 and full fiscal year on Monday, just three weeks before the publication of its financial results (August 16), as it tries to manage supply chains costs and higher inflation. [9]

Walmart (WMT.us) now expects its Operating Income to register a more than 10% decline year-over-year, for both Q2 and FY2023. Higher prices may be detrimental for its bottom line, but they boost its Revenues, since the retail giant now sees a bump of 7.5% in the second quarter and 4.5% in the full year.

Around a month earlier, rival Target had downgraded its Operating Margin forecast to around 2% for the second quarter, from 5.3% previous projection. [10]

WMT.us shed more than 7% on Tuesday after the updated forward guidance, also dragging TGT.us lower, but the two stocks staged a rebound over the next couple of days as markets sentiment improved.

Next Week (August 1-5)

After this week's earnings galore, things begin to slowdown in the US as we step into August, but we still get some high profile names.

The two ride-hailing rivals Uber (UBER.us) and Lyft (LYFT.us) will be in the spotlight (Tuesday and Thursday respectively), Airbnb (ABNB.us) (Tuesday) will also be keenly awaited as the travel and tourism industry recovers, while Chinese tech and retail giant Alibaba will draw attention on Thursday.

The European continent will also be in focus, with French banks Societe Generale and Credit Agricole, reporting on Wednesday and Thursday respectively.

From Germany, luxury car maker BMW (Wednesday), sports apparel and equipment giant Adidas and airliner Lufthansa (both on Thursday) standout, while Netherlands-based food delivery platform Just Eat Takeaway (TKWY.nl) (Wednesday) is also going to attract attention.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 29 Jul 2022 https://ir.aboutamazon.com/news-release/news-release-details/2022/Amazon.com-Announces-Second-Quarter-Results-fe1df2b70/

2

Retrieved 29 Jul 2022 https://www.apple.com/newsroom/2022/07/apple-reports-third-quarter-results/

3

Retrieved 29 Jul 2022 https://www.apple.com/investor/earnings-call/

4

Retrieved 29 Jul 2022 https://s23.q4cdn.com/799033206/files/doc_financials/2022/q2/updated/PRESS-RELEASE-Q2-2022.pdf

5

Retrieved 29 Jul 2022 https://s23.q4cdn.com/799033206/files/doc_financials/2022/q2/Ford-2022-Second-Quarter-Earnings-Call.pdf

6

Retrieved 29 Jul 2022 https://www.airbus.com/sites/g/files/jlcbta136/files/2022-07/Press-Release-Airbus-H1-2022-Results.pdf

7

Retrieved 29 Jul 2022 https://s2.q4cdn.com/661678649/files/doc_financials/2022/q2/2Q22-Press-Release.pdf

8

Retrieved 29 Jul 2022 https://news.delta.com/delta-adds-state-art-fuel-efficient-boeing-737-max-fleet

9

Retrieved 29 Jul 2022 https://corporate.walmart.com/newsroom/2022/07/25/walmart-inc-provides-update-for-second-quarter-and-fiscal-year-2023

10

Retrieved 02 Oct 2022 https://investors.target.com/news-releases/news-release-details/target-corporation-announces-updated-2022-plan-focused-inventory

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