Mixed US Earnings

While the US markets are alive with possibilities after the recent US CPI data announcement, which showed a decline in both the Core and Headline numbers, let’s not forget that the US economy is still under pressure.

Weak earnings reports are the order of the day despite the US Fed’s aggressive stance on inflation to try to battle rising inflation and the Fed pivot has yet to be reached.

Let’s take a closer look at this week’s most anticipated earnings releases:

The Walt Disney Company (DIS)

Walt Disney reported that they missed their expectations for the fourth quarter. This is attributed to having fewer films in the cinema and their parks and media divisions underperforming.

  • EPS: 30 cents per share adjusted vs. 55 cents expected
  • Revenue: $20.15 billion vs. $21.24 billion expected
  • Disney+ total subscriptions: 164.2 million vs. 160.45 million expected

The company expected its recently launched streaming service, Disney+, to achieve profitability in 2024, and the market believes this will bode well for their future results.

Upstart Holdings, Inc. (UPST)

One of the leading artificial intelligence lending marketplaces announced its results which were a bit of a mixed bag. Upstart CEO stated in response to the results that “We’re eyes wide open to the challenges of the current macro economy, and determined to make the decisions that will optimize for the long-term success of Upstart,”

  • Net Income (Loss) and EPS: GAAP net income (loss) was ($56.2) million, down from $29.1 million in the third quarter of 2021. Adjusted net income (loss) was ($19.3) million, down from $57.4 million in the same quarter of the prior year. Accordingly, GAAP diluted earnings per share were ($0.69), and adjusted earnings per share were ($0.24) based on the weighted-average common shares outstanding during the period.
  • Revenue: Total revenue was $157 million, a decrease of 31% from the third quarter of 2021. Total fee revenue was $179 million, a reduction of 15% year-over-year.

Occidental Petroleum Corporation (OXY)

A Warren Buffet stock, OXY’s earnings are quite interesting in that the oil market has been volatile in recent times; however, OXY is seemingly performing well with the context of the times taken into consideration.

  • EPS: $2.52 vs. $2.41 estimate
  • Revenue: $9.1 billion, which is a 34% increase

OXY has said to have returned $1.8 billion to shareholders through stock buybacks during the third quarter. So far, in 2022, the company reported that OXY had returned $2.6 billion to its stockholders.

Activision Blizzard Inc (ATVI)

Activision has been mired with turbulent acquisition reviews, class action lawsuits, and unionization demands; despite this, the company has exceeded expectations in the market about its earnings report.

  • EPS: $0.55 vs. 0.42 share for the quarter.
  • Revenue: $1.78 vs. $1.7 billion.

The recording-breaking game Call of Duty has supported growth. Modern Warfare II set new records for our largest franchise, becoming the fastest premium Call of Duty release to cross $1 billion in sell-through.