Weekly Stockwatch: Apple Solid Earnings, No New Teslas this Year, Intel Fine Reversal & More

Intel Q4 Results & Fine Reversal

Intel reported Revenue of $19.5 billion in the fourth quarter, exceeding the firm's guidance by $1.2 billion. Earnings/share came in at $1.09, also higher than Intel's projection of $0.9. [1]

Its largest segment, the Client Computing Group (CCG), underperformed once again, since it declined 7% year-over-year to $10.1 billion. Its Data Center Group (DCG) Revenue however, rose to a record $7.3 billion, marking a 20% year-over-year jump.

Intel offered unimpressive guidance for the first quarter of 2021, seeing Revenue at approximately $18.3 billion and Earnings of $0.80/share.

Earlier this month, it had announced initial investment of more than $20 billion to build two new leading-edge chip factories in Ohio, which will be its first new manufacturing site in 40 years.

The US company received some good news from Europe this week, as the General Court of the European Union annulled the € 1.06 billion fine that the European Commission had imposed on Intel. [2]

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The fine had been issued for abuse of its dominant position on the worldwide market for x86 processors between October 2002 and December 2007.

Markets did not seem to like the firm's results and sent INTC.us down on Thursday, which moves towards another losing week.

Apple Solid Results

On Thursday, the tech giant delivered strong results for the period ended in December 25, 2021 (Q1 FY2022), defying supply chain fears. Revenues surged 11% year-over-year to a record of $123.9 billion, with its CEO Tim Cook, commenting: "This quarter's record results were made possible by our most innovative lineup of products and services ever". [3]

iPhone Revenue rose around 9% year-over-year and was once again the largest sales contributor, while iPad sales declined to $7.248 billion – a nearly 15% year-over-year drop.

According to Counterpoint's research, Apple captured the largest smartphone market share in Q4 2021 in China, returning to the top spot, for the first time since 2015. [4]

No New Teslas in 2022

Tesla reported another strong quarter with Revenues of $17.719 billion – a 65% year-over-year surge. This was largely fueled by the firm's record deliveries of 308,650 during the reported period. [5]

The firm said it that "Full Self-Driving (FSD) software remains one of our primary areas of focus" and that it wants to increase production "not only through ramping production at new factories in Austin and Berlin, but also by maximizing output from our established factories in Fremont and Shanghai".

The earnings call however, provided some disappointing news, since Mr Musk mentioned that the firm "will not be introducing any new models this year" [6], likely meaning that the highly anticipated futuristic Cybertruck will not roll-out in 2022.

TSLA.us shed more than 10% after the earnings, closing yesterday below its EMA200.

Netflix New Investor

Netflix collapsed last week, after disappointing subscriber growth guidance for the first quarter of the current year amidst broader poor market sentiment due to the Fed's tightening path.

Overall, financial results for the fourth quarter were solid, but Netflix projected the addition of just 2.5 million paid users in Q1 2022, causing the stock to plunge on Friday January 21st, after the report.

Bill Ackman's Pershing Square Capital Management, saw the opportunity and acquired more than 3.1 million shares of Netflix, making Pershing Capital a top-20 shareholder in the company. [7]

In a letter to the firm's investors, mr Ackman said that "the opportunity to acquire Netflix at an attractive valuation emerged when investors reacted negatively to the recent quarter's subscriber growth and management's short-term guidance".

NFLX.us had erased around 20% Friday and extended losses this week to the lowest level in nearly two years, while yesterday it managed to post profits.

Airbus Cargo

The European plane maker has launched a new air-cargo service, named Airbus Beluga Transport, in its pursuit to take down US rival Boeing in the freight business. [8]

The new airline will use Airbus'gigantic Belugas, which were traditionally used for the transportation of the firm's own large aircraft sections. The Airbus Beluga Transport will have a fleet of five BelugaSTs, whereas Airbus will use six new-generation BelugaXLs for its own needs.

Airbus is expected to release its financial results for the fourth quarter of 2021 and Full 2021 on February 17th.

AIR.fr was helped by the news, but today it loses around 3% and heads towards a negative week.

Next Week (January 31-February 4)

The earnings season heats up next week and the tech sector remains front and center, as the remaining FAANGs report. Alphabet (Google) on Tuesday, Meta Platforms (Facebook) on Wednesday and Amazon on Thursday.

US automaker Ford, is another firm that stands out, as it releases its financial results on Thursday. It comes from a very good year during which its push into electrification started paying off.

There are more releases from the US, while European firms also get into the mix, with Royal Dutch Shell, Infineon and Sanofi, being some of them.

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 28 Jan 2022 https://d1io3yog0oux5.cloudfront.net/_8744922ecc2041c3f4eeb6d8a2aa60b2/intel/news/2022-01-26_Intel_Reports_Fourth_Quarter_and_Full_Year_2021_1522.pdf

2

Retrieved 28 Jan 2022 https://curia.europa.eu/jcms/upload/docs/application/pdf/2022-01/cp220016en.pdf

3

Retrieved 28 Jan 2022 https://www.apple.com/newsroom/2022/01/apple-reports-first-quarter-results/

4

Retrieved 28 Jan 2022 https://www.counterpointresearch.com/apple-reaches-highest-ever-market-share-china/

5

Retrieved 28 Jan 2022 https://tesla-cdn.thron.com/static/WIIG2L_TSLA_Q4_2021_Update_O7MYNE.pdf

6

Retrieved 28 Jan 2022 https://www.youtube.com/watch

7

Retrieved 28 Jan 2022 https://assets.pershingsquareholdings.com/2022/01/26170421/Pershing-Square-Capital-Management-L.P.-Releases-Letter-to-Investors-01-26-2022.pdf

8

Retrieved 26 May 2022 https://www.airbus.com/en/newsroom/press-releases/2022-01-airbus-iconic-beluga-super-transporters-ready-to-serve-global

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