Walt Disney, the world’s largest entertainment and media company, posted weaker-than-expected earnings and revenues in its fiscal fourth quarter, and saw a significant slowdown in subscriber growth for its Disney + streaming service. Disney’s quarterly revenue increased 26% to $ 18.5 billion, below market guidance of $ 18.8 billion. Net income for the quarter ended October 2 was $ 159 million, or $ 0.09 per share, compared with a net loss of $ 710 million, or $ 0.39 per share, for the same period last year. Earnings excluding one-off factors were $ 0.37 per share, well below the consensus forecast of $ 0.52 per share. Weak reporting disappointed investors. Disney shares were down 9% last week.
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Good reporting and strong driver ahead
At the end of October, Merck released strong 3Q results. The company’s revenue increased by 20.4% yoy in the last quarter, reaching $ 13.15 billion, which turned out to be better than the consensus forecast of $ 12.32 billion. Net profit in July-September grew by 55.4% yoy and amounted to $ 4.57 billion, or $ 1.80 per share, up from $ 2.94 billion, or $ 1.16 per share, in the same period a year earlier. Excluding one-off factors, earnings per share rose to $ 1.75 from $ 1.37, also beating market expectations of $ 1.55. The company’s management has improved its forecast for adjusted earnings per share for 2021 to $ 5.65-5.60 from $ 5.47-5.57. Revenue is expected to be $ 47.4-47.9 billion. The market expects these figures to be $ 5.63 and $ 47.60 billion, respectively.
Results are worse than expected, but we believe in strong future
On Tuesday, after the close of the main session, Coinbase released its Q3 earnings. The company’s revenue fell 41% qoq to $ 1.31 billion, which was worse than the market consensus of $ 1.57 billion. The decrease in the indicator was due to a drop in interest in the crypto currency market after bitcoin fell in value from $ 60 thousand to May to $ 30,000 in July. Against this background, many alternative tokens, including meme coins, have become uninteresting to the investment community and trading volumes have dropped significantly. Coinbase’s 3Q trading volume fell 29% qoq to $ 308.88 billion, while active users fell 16% to 7.09 million.Adjusted EBITDA declined 46% qoq to $ 618 million, which was also worse the forecast of $ 662.3 million. Earnings per share was $ 1.62 versus $ 6.42 a quarter earlier, but the financial result almost coincided with the market consensus ($ 1.68). The company’s results were met negatively, with shares plummeting 15% after the market closed in an additional session.
Southwest Airlines Continues to Show Improved Operations
Southwest Airlines posted encouraging 3Q results. The company’s quarterly operating revenue was $ 4.68 billion, up from $ 1.79 billion in the same period last year. Revenue in July-September of this year was 17% lower than Q3 2019, but above market expectations at $ 4.58 billion. by about $ 100 million and $ 200 million, respectively. Net profit in July-September amounted to $ 446 million, compared with a loss of $ 1.16 billion in the same period a year earlier. Earnings per share were $ 0.73 per share versus a loss of $ 1.96 per share a year earlier. Excluding one-off factors, the company recorded a loss of $ 0.23 per share, which was better than the market forecast, which assumed a loss of $ 0.27.
Authentic Brands Group
Authentic Brands Group is a New York-based holding company that operates clothing subsidiaries. Authentic Brands’ portfolio consists of over 50 consumer brands. For example, Aéropostale, Nautica, Eddie Bauer, Jones New York, Forever 21, Juicy Couture, and Van Heusen. However, the company is not only concerned with clothing. Authentic Brands acquires the rights to sell products bearing the names of bygone celebrities such as Elvis Presley and Marilyn Monroe, as well as living legends such as Shaquille O’Neill and Doctor. J “Julius Erving. Despite the severe difficulties faced by shopping malls during the pandemic, many stores founded in the 1980s have been given a new lease of life thanks to Authentic Brands and its licensing activities.
Authentic Brands was established in 2010. In 2016, the company partnered with shopping center developers Brookfield Property Partners and Simon Property Group to save Aéropostale from bankruptcy. Shortly thereafter, Authentic Brands and Simon Property joined forces to form Simon Property Authentic Retail Concepts (SPARC Group). In 2020, Authentic Brands announced a partnership with Simon Property to save Lucky Brand Jeans from Chapter 11 litigation.
In June 2021, Authentic Brands and the SPARC Group teamed up to acquire the Eddie Bauer online store. In 2021, the company also announced the acquisition of assets held by Collective Licensing International such as Airwalk, Hind, Vision Street Wear and Above The Rim. These brands were previously owned by Payless Holdings, which has since ceased operations. In August 2021, Adidas sold its Reebok brand to the company. As of September 2020, the company’s list of acquisitions was expected to bring in annual revenue to $ 15 billion, not counting all acquisitions made in 2021. From 2016 to 2020, Authentic Brands’ revenue grew from $ 165 million to $ 489 million at a compound annual growth rate (CAGR) of 31%. From 2016 to 2020, net income grew at an average annual rate of 47%, increasing from $ 45 million to $ 211 million. For the 12 months ended March 31, 2021, Authentic Brands’ sales amounted to $ 529 million.
Since 2010 Authentic Brands has raised funding through several rounds of direct investment. In total, the company managed to raise $ 1.1 billion. In the last private round in August 2019, the company raised $ 875 million from BlackRock’s Long Term Private Capital, GIC and Jasper Ridge Partners. Authentic Brands did not disclose the date of the planned IPO, however, it is known that investors will be offered two classes of shares: ordinary shares of class A will be available to all investors, and class B shares will be available only to the CEO and his key employees. Class B shares will also have more votes than Class A shares. There is no official price range indicative. However, according to various media reports, Authentic Brands may be assessed at $ 10 billion. Renaissance Capital estimates that during the IPO the company will be able to raise up to $ 1.5 billion. It is known that the organizers of the deal will be BofA Securities, J.P. Morgan, Goldman Sachs, Jefferies, UBS Investment Bank, Wells Fargo Securities, Cowen, Guggenheim Securities, and KeyBanc Capital Markets.
Many analysts estimate that the apparel and footwear retail industry could grow from $ 1.9 trillion in 2019 to over $ 3 trillion by 2030. Favorable market conditions will support Authentic Brands’ business as the company operates a variety of in-demand brands. In addition, most of the company’s revenue comes from licensing fees, so the company can continue to grow by selling licensing agreements through e-commerce platforms even if malls and brick-and-mortar stores are out of service in the event of new outbreaks of coronavirus infection.
Airbnb surprised the market with record revenue
Airbnb posted strong Q3 results last week. Revenue in July-September grew by almost 70% year-on-year and reached a record value of $ 2.2 billion compared to $ 1.3 billion in the same period a year earlier. Market consensus predicted an increase in the indicator to $ 2.06 billion. It is important to note that revenue exceeded the figure for the third quarter of 2019 – before the start of the coronavirus pandemic – by 36%. The total volume of orders of the company increased by 48%, to $ 11.9 billion.
Uber generates positive EBITDA for the first time
At the end of last week, Uber Technologies published its 3Q financials. The company increased its net loss, but increased revenue amid easing restrictions related to the COVID-19 pandemic, and most importantly, generated positive EBITDA. Uber’s quarterly revenue rose 72.6% to $ 4.85 billion from $ 2.81 billion a year earlier, significantly better than market expectations of $ 4.42 billion. The number of Uber platform users (account activity at least once a month, MAPC ) in the last quarter increased by 40%, to 109 million. The total volume of orders of the company increased by 57%, to a record $ 23.1 billion (consensus forecast – $ 23.3 billion).
Dave.com
Dave is a non-banking application that helps clients solve their current financial problems. The application uses an algorithm to predict the ability of users to repay loans based on their checking account and income history. The algorithm predicts when the user’s expenses may exceed his balance by sending a notification and the possibility of obtaining a loan until the user’s next paycheck. The company does not charge an overdraft fee, instead charges a monthly fee for using the application and provides a “hint” option after receiving a loan. Dave.com allows users to sign up for $ 1 per month to receive a free verification, and up to $ 100 as overdraft protection with no fees or interest on use. The company claims that more than 25% of Americans have overdrapped in the past 12 months.
Dave held its Serie A seed round in 2017 and was able to raise $ 13.3 million. In 2021, the company was able to raise $ 100 million in a debt investment round. So far, the company has raised $ 176 million from institutional investors. The exact date for Dave’s IPO has yet to be determined, but it is expected to conclude in the fourth quarter of 2021. The company intends to complete the SPAC deal with its subsidiary Victory Park Capital, which is headquartered in Chicago. Subsidiary Impact Acquisition Holdings III was listed in March 2021. During the deal, Dave will receive $ 210 million in equity (PIPE) from Tiger Global Management and other investors. The deal has an indicative value of $ 4 billion. Dave is truly committed to disrupting the banking and financial services industry and is struggling to help clients avoid financial mistakes. This is the first app to help customers get real benefits. According to the company, the Side Hustle feature has already resulted in app users earning $ 200 million.
Weak outlook disappointed investors Copy
Netherlands-based ASML, Europe’s largest chip maker, increased its fiscal third quarter net profit by 64%, exceeding market expectations. ASML’s revenue in the last fiscal quarter was 5.24 billion euros, compared with 3.96 billion euros in the same period in 2020. The gross margin was 51.7% compared to 47.5% a year earlier and the company’s forecast of 51-52%. The company itself expected a figure in the range from 5.2 billion euros to 5.4 billion euros. Net income for the quarter ended October 3 rose to 1.74 billion euros from 1.06 billion euros in the same period a year earlier, significantly better than the market forecast of 1.63 billion euros. According to the company’s forecast, in the fourth quarter its revenues will amount to 4.9-5.2 billion euros, with a gross margin of 51-52%. The company will pay an interim dividend of € 1.80 per share.
Pfizer surprises with strong results and improved annual forecast
Pfizer released excellent third-quarter financials, which showed a 5.5-fold increase in net income and an 8.5-fold increase in revenues. The company’s management also improved its annual forecast. Pfizer’s quarterly revenue more than doubled to $ 24.094 billion from $ 10.277 billion a year earlier. The consensus forecast of analysts for this indicator was $ 22.576 billion. Net income in July-September was $ 8.146 billion, compared with $ 1.469 billion in the same period last year. Earnings per share increased to $ 1.42 from $ 0.26 a year earlier. Profit excluding one-off factors was fixed at $ 1.24 per share, exceeding the market average forecast of $ 1.08 per share.