Weekly StockWatch: Energy Giants Profits, Uber’s Strong Quarter, Automaker Updates & More

  • ABNB.us
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  • BMW.de
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  • BP.uk
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  • NIO.us
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  • STLA.fr
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  • UBER.us
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  • XPEV.us
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Energy Giants Profits

Oil Prices slumped in the third quarter after the first-half surge, with USOil having lost around 25% during that three-month period, whereas NGAS posted profits. In any case, prices remain elevated and OPEC+ announced a massive oil output cut in early October, to the tune of 2 million barrels/day.

Oil and gas giant continue to reap the benefits and UK-based British Petroleum (BP.uk) was the latest one to report strong quarterly results this week, also announcing a new $2.5 billion share buyback program. [1]

Its Q3 Underlying Replacement Cost (RC) Profit may have been lower compared to the second quarter when oil prices were higher, but stayed above the $8 billion mark and constituted a nearly 40% surge from a year ago.

Last week, French multinational TotalEnergies (TTE.fr) saw its bottom line further boosted, with Adjusted Net Income of $9.9 billion in Q3 vs $9.8 billion in Q2 2022 and $4.8 billion in Q3 2021, in spite of a $3.1 billion impairment related to Russia. [2]

US Exxon Mobil however was the one that had the highest quarterly increase in its profits, with Q3 Earnings of $19.66 billion, against $17.850 billion in Q2 2022 and $6.750 billion in Q3 2021. [3]

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Given those outsized profits, Energy giants have drawn criticism for not working to lower prices at the pump, as societies are burdened by the high cost of leaving and soaring inflation, largely due to high oil and gas prices. This is turning into a political headache as well, especially in the US, ahead of next week's mid-term elections.

US President Biden had called on oil companies on Monday to act in the best interest of consumers and communities and lower prices, while threatening them with "higher tax" on their excess profits and "other restrictions".

Uber Solid Results

The ride-hailing firm reported strong metrics for the third quarter, as the transportation business recovers from the pandemic shock, along with the travel and hospitality industry. CEO Dara Khosrowshahi said that the "core business is stronger than ever", despite the "uncertain" macroeconomic environment. [5]

Monthly Active Platform Consumers (MPACs) rose by 14% year-over-year to 124 million, driven by the reopening and a spending shift towards services. Active drivers and passengers in the mobility segment moved to pre-pandemic levels. [6]

In terms of financials, its bottom line showed improvement, since the Net Loss narrowed to $1.2 billion, compared to a more hefty $2.6 billion loss in the previous quarter.

UBER's Gross Bookings were up by 26%, in excess of $29 billion, while Revenues grew 72% year-over-year to $8.343 billion, both being higher that Q2 2022 as well. The firm's core Mobility sector remained the main revenue generator, with all three segments (mobility, delivery, freight) growing on both annual and quarterly basis.

Furthermore, the firm sees further progress in the fourth quarter, expecting Revenues to rise to the $30-$31 billion range. It is also on track to achieve Gross Bookings of $115-$116 billion for the full year.

Not all is rosy though, since the gig-economy continues to undergo changes. In mid-Ocotber, the U.S. Department of Labor had published a proposal that could open the door to the reclassification of gig-workers as employees [7]. This would afford them more benefits and could lead to increased costs for companies such as Uber and Lyft.

UBER.us comes from a profitable third quarter, but the current one has started mixed. It jumped on Tuesday after the strong quarterly results.

AirBnB Disappointing Guidance

The US short-term home-renting platform that change the face of the hospitality industry, is also benefiting from the post-pandemic reopening and the increased demand for traveling, posting its best quarter in terms of both bottom and top lines.

Based in Tuesday's results, its Net Income ballooned in excess of $1.2 billion in Q3, while Revenues grew to a record of around $2.9 billion. Airbnb also announced nearly 100 million Nights and Experiences Booked, with $15.6 billion of Gross Booking Value, both representing strong year-over-year increase, bit were lower compared to the previous quarter. [8]

The strong Dollar poses a headwind for AirBnB, as for many other companies, caused by the Fed's aggressive tightening, having delivered another jumbo rate hike this week. The firm's year-over-year growth in the above metrics is much higher, excluding the FX impact.

Despite the strong results, Airbnb's forward guidance disappointed markets, since it forecasts Revenue of just $1.80-1.88 billion in Q4, a notable decline compared to the last two quarters. It also expects Nights and Experiences Booked growth to "moderate slightly" relative to the third quarter of this year.

Markets reacted negatively to the conservative forward guidance, since ABNB.us slumped close to its all-time lows from the summer (86.64).

Chinese EV Makers Deliveries

A slew of Chinese electric vehicle startups provide their monthly update this week, with Nio (NIO.us) achieving more than 170% year-over-year growth with the delivery of 10,059 cars in October, although this marked a decline on a quarterly basis. [9].

The firm faced production and delivery challenges last month, due to Covid-19 curbs, with factory activity temporarily suspended this week, according Reuters. [10]

The EV maker is pushing ahead however, with its expansion into Europe. It hosted its NIO Berlin 2022 event in early October, unveiling three vehicles that will be gradually available Norway, Germany, the Netherlands, Denmark and Sweden. [11]

The first ET7 flagship sedans have already been handed over to customers in Germany and the Netherlands, a few weeks ago/ Furthermore, it plan to build twenty Power Swap Stations in the continent, having already launched the first one in Germany. [12]

Rival XPENG (XPEV.us) meanwhile, fell behind with the disappointing delivery of just 5,101 vehicles in October – half of what it had delivered in the same month of 2021 [13]. On the bright side, this included 623 units of the recently unveiled G9 flagship SUV, which also secured a permit for autonomous driving test on public roads in China. [14]

Li Auto Inc (LI.us) fared better with the delivery of 10,052 cars last month, which constituted a 31.4% year-over-year increase, but was lower than the 11,000+ vehicles of September. The electric SUV maker expects to start handing over its latest model, the L8 during the current month. [15]

BMW & Stellantis Q3 Update

The European auto industry was also in the spotlight this week, with German luxury automaker BMW, announcing its results for the third quarter on Thursday. The Group's Revenues surged to €37.176 billion, while Net Profit grew approximately 30% year-over-year, to €3.175 billion. [16]

The firm delivered 587,744 cars to customers during that period, which was marginally lower from Q3 2021, but constituted growth on a quarterly basis. Thing were more impressive on the electrification front as the BMW group handed over 98,816 Battery Electric Vehicles (BEV's) and Plug-in Hybrids (PHEVs), up 26.2% year-over-year.

Multinational group Stellantis NV (STLA.fr) meanwhile, which includes American, French and Italian car brands, posted Revenues of €42.1 billion in the third quarter, up 29% compared to a year ago. It shipped 1,281,000 vehicles and sales of Battery Electric Vehicles (BEV's) rose 41% year-over-year. [17]

Fully electric vehicles are gaining popularity in the Old Continent, which accounted for 11.9% of total passenger car registrations in the European Union in the third quarter, according to the European Automobile Manufacturers' Association (ACEA). [18]

Next Week (November 7-11)

A large number of big US firms has already reported its quarterly results by now, but we still expect some high-profile releases. Entertainment giant Disney will be in the spotlight and subscriber figures of streaming services will be in the spotlight, to see if it can stay ahead of rival Netflix, which returned to growth in Q3 after a disappointing first half.

Uber rival Lyft (LYFT.us) reports during the upcoming week, after having announced the lay-off of 13% of its workforce. [19]. EV startups Lucid Group Inc and Rivian Automotive will also draw my attention, as well Buy-Now-Pay-Later (BNPL) Affirm Holdings Inc. Over in Europe, sports apparel and equipment behemoth Adidas, will be in the spotlight.

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 04 Nov 2022 https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/investors/bp-third-quarter-2022-results.pdf

2

Retrieved 04 Nov 2022 https://totalenergies.com/system/files/documents/2022-10/3Q22_Results.pdf

3

Retrieved 04 Nov 2022 https://corporate.exxonmobil.com/-/media/global/files/investor-relations/quarterly-earnings/earnings-announcements/2022-earnings-announcements/3q-earnings-release.pdf

5

Retrieved 04 Nov 2022 https://s23.q4cdn.com/407969754/files/doc_financials/2022/q3/Uber-Q3-22-Prepared-Remarks.pdf

6

Retrieved 04 Nov 2022 https://investor.uber.com/news-events/news/press-release-details/2022/Uber-Announces-Results-for-Third-Quarter-2022/default.aspx

7

Retrieved 04 Nov 2022 https://www.govinfo.gov/content/pkg/FR-2022-10-13/pdf/2022-21454.pdf

8

Retrieved 04 Nov 2022 https://s26.q4cdn.com/656283129/files/doc_financials/2022/q3/Airbnb_Q3-2022-Shareholder-Letter_Final.pdf

9

Retrieved 04 Nov 2022 https://ir.nio.com/news-events/news-releases/news-release-details/nio-inc-provides-october-2022-delivery-update

10

Retrieved 04 Nov 2022 https://www.reuters.com/business/autos-transportation/chinas-nio-suspends-production-due-covid-measures-2022-11-02/

11

Retrieved 04 Nov 2022 https://twitter.com/NIOGlobal/status/1582422207250038785

12

Retrieved 04 Nov 2022 https://www.nio.com/blog/first-nio-power-swap-station-germany-officially-opens

13

Retrieved 04 Nov 2022 https://ir.xiaopeng.com/news-releases/news-release-details/xpeng-announces-vehicle-delivery-results-october-2022

14

Retrieved 04 Nov 2022 https://heyxpeng.com/news/01843316f44d82358aaf2c9e232415ee

15

Retrieved 04 Nov 2022 https://ir.lixiang.com/news-releases/news-release-details/li-auto-inc-october-2022-delivery-update

16

Retrieved 04 Nov 2022 https://www.bmwgroup.com/content/dam/grpw/websites/bmwgroup_com/ir/downloads/en/2022/q3/BMW_Q3-2022_EN.pdf

17

Retrieved 04 Nov 2022 https://www.stellantis.com/en/news/press-releases/2022/november/third-quarter-2022-shipments-and-revenues

18

Retrieved 04 Nov 2022 https://www.acea.auto/fuel-pc/fuel-types-of-new-cars-battery-electric-11-9-hybrid-22-6-and-petrol-37-8-market-share-in-q3-2022/

19

Retrieved 30 Nov 2022 https://www.lyft.com/blog/posts/an-update-on-our-team

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