PepsiCo increased its net profit by 43.3% and revenues by 20.5% in the second quarter of fiscal year 2021, while the results exceeded market expectations. The company’s net income for the twelve weeks ended June 12 was $ 2.358 billion, or $ 1.7 per share, compared to $ 1.646 billion, or $ 1.18 per share, earned in the comparable period a year earlier. Profit excluding one-off factors rose to $ 1.72 from $ 1.32 per share. Revenue increased to $ 19.217 billion from $ 15.945 billion. Organic growth was 12.8%. Market consensus assumed adjusted earnings of $ 1.53 per share on revenue of $ 17.96 billion.
Tag: CASH MANAGEMENT
Google Triples Quarterly Profits And Revenues Hit Record
Google’s holding company Alphabet nearly tripled its net profit in the second quarter of 2021, while its revenue climbed 62%, to another record. Alphabet’s quarterly revenue rose to $ 61.9 billion from $ 38.3 billion a year earlier. The consensus forecast for this indicator was $ 56.2 billion. Net income in April-June was $ 18.5 billion, compared with $ 7 billion in the same period last year. Earnings per share rose to $ 27.26 from $ 10.13, beating Wall Street’s median forecast of $ 19.35. The company’s management attributes Alphabet’s strong quarterly results to increased user activity on the Internet, as well as a widespread increase in advertiser spending.
Leidos remains our favorite in the sector
Second quarter results are likely to support Leidos stock as the company posted strong growth in defense IT orders in June. We forecast over 10% organic revenue growth for the company in 2021. In 2022, growth will continue, but at a less modest pace of 6-10%. With the company’s attractive 12x TEV / EBITDA valuation, Leidos remains our top pick in the sector.
Amazon disappointed investors
Amazon, the world’s largest online retailer, increased its net profit by more than 48% in Q2, but the online shopping boom fueled by the pandemic appears to be fading away. Revenue increased by 27% and reached $ 113.080 billion against $ 88.912 billion a year earlier. Net income in April-June was $ 7.778 billion, or $ 15.12 per share, compared to $ 5.243 billion, or $ 10.3 per share, received in the same period last year. Although the company’s revenue surpassed the $ 100 billion mark for the third quarter in a row, the market regarded last quarter’s growth as weak, as it jumped 44% in January-March. Experts, on average, expected the company to receive earnings of $ 12.28 per share in the second quarter on revenue of $ 115.4 billion. The financial statements disappointed investors, so the company’s stock prices fell 7% after the publication of the financial statements.
Stepped back from the highs
Last week, major US indices lost about 1%. Investors were evaluating the new portion of the quarterly reports of companies, statistics and the speech of the US Federal Reserve Chairman Jerome Powell. The first half of the week was successful. The Nasdaq 100 managed to test a new all-time high at 15,000 points. The S&P 500 came close to the level of 4,400 points. However, on Thursday and Friday, the indicators lost all growth and corrected. June inflation data and the spread of a new strain of coronavirus have put pressure on asset values around the world. In our opinion, it is too early to talk about a global correction. From a technical point of view, American indicators look pretty confident. In addition, a successful 2Q corporate reporting season can bring many surprises to investor sentiment.
In June, the pace of US consumer price increases peaked in nearly 13 years as the economic recovery picks up steam. The CPI jumped 5.4% compared to June last year. Prices excluding food and energy (Core CPI) in June increased 4.5% year-on-year, a record rise since November 1991. Statistics released Thursday showed that US jobless claims fell last week in line with forecast. The volume of industrial production in the United States in June increased by 0.4% from the previous month, according to data from the Federal Reserve System. Analysts polled by Trading Economics predicted an average growth of 0.6%.
Apple surprised with record quarterly revenue
Apple increased its net profit by 93%, the revenue was a record for 3 financial quarters. Apple increased its fiscal third quarter net income by 93% and revenue by 36%, both of which beat market forecasts. Apple’s revenue was $ 81.43 billion and was a record for the third financial quarter. The consensus forecast of experts for this indicator was $ 73.34 billion. The company showed record revenue figures in all geographic segments and double-digit revenue growth rates in each product category. Net income for the quarter ended June 26 was $ 21.74 billion, up from $ 11.25 billion in the third quarter of the previous fiscal year. Earnings per share increased to $ 1.3 from $ 0.65, beating the market consensus of $ 1.01.
Wine is gaining popularity
We begin coverage of Vintage Wine Estates. We believe that, driven by strong M&A activities, double-digit revenue growth and market share growth will continue in the medium term, allowing the company to invest the generated cash flows in business development. VWE expects to increase its Adjusted EBITDA margin by more than 1,000 basis points to 25.9% between 2020-2023. The increase in gross profitability from capital expenditures will be supported by mergers and acquisitions that increase margins, as the last deal had an adjusted EBITDA margin of 60%.
FDA Approves Intelligent Knee Implant
Zimmer Biomet Holdings announced that the FDA has approved Persona IQ, which will enable ZBH to launch the world’s first intelligent implant that can completely replace the knee joint. Persona IQ will be a significant addition to ZBEdge ZBH’s growing portfolio, contributing to the expected acceleration in Kneefranchise’s revenue growth
Facebook doubled profit for the quarter
Facebook in the second quarter doubled its net profit and revenue by 56%. Net income in April-June was $ 10.394 billion, or $ 3.61 per share, compared to $ 5.178 billion, or $ 1.8 per share, received in the same period last year. Revenue increased to $ 29.077 billion from $ 18.687 billion a year earlier, while advertising revenues increased by 56% – to $ 28.58 billion. The market consensus assumed earnings growth to $ 3.04 per share on revenue of $ 27.85 billion.
Flowserve is in the early stage of a new growth cycle
We believe that growth in corporate capital expenditure in the core industries in which Flowserve operates may accelerate significantly, which could place the company in the early stages of a new growth cycle. Notably, this trend correlates with management efforts to improve operational efficiency to increase cash flow generation. In the first quarter, Flowserve orders rose 15% qoq and management is fairly optimistic that this trend will continue.