In today’s briefing:
- Alphabet 2Q’23 Earnings Update
- APLD – 4Q Review
- Lockheed Martin Corporation: 4 Reasons Behind Lockheed Martin’s Successful Quarter! – Financial Forecasts
- Omnicom Group Inc.: Acquisition of Grabarz & Partner
- W&T Offshore, Inc. – Adjusting Realized 2Q23 Commodity Price Estimates
- The Energy Cable #30 – Progress for The Bulls
- Conagra Brands Inc.: Summer 2023 Product Launches & Other Drivers
- Aflac Incorporated: Initiation of Coverage – Business Structure and Competitive Edge
- J.B. Hunt Transport Services Inc.: 4 Factors Why The Company Is Thriving in an Uncertain Environment! – Financial Forecasts
Alphabet 2Q’23 Earnings Update
- Topline grew +9% FXN. While Google Services revenue growth was flat in 1Q’23, it was 5.5% YoY in 2Q’23, with growth re-accelerating in every component of Google Services.
- Despite cost optimization efforts by customers, Google Cloud maintained its momentum with ~28% YoY growth (same as it was in 1Q’23).
- So, on an apple-to-apple basis, Google Services margin would be slightly lower this quarter than reported (say, ~$500 Mn opex for Google Brain).
APLD – 4Q Review
- APLD released 4Q earnings last night. The stock performed well, +14%.
- The key highlight was the huge guidance. In this post I will run through how the numbers make no sense.
Jamestown, North Dakota (JT) – 100MW – JT has been operating since 2022. It has ~100MW of capacity and has been running at full capacity over the past two quarters, according to comments made on the company’s 3Q and 4Q earnings calls. Here is a snip for the 3Q call.
Lockheed Martin Corporation: 4 Reasons Behind Lockheed Martin’s Successful Quarter! – Financial Forecasts
- Lockheed Martin Corporation delivered a positive result and managed an all-around beat in the last quarter.
- Lockheed had revenues of $16.7 billion, an increase of 8% year on year, and double-digit growth in both Aeronautics and Space.
- We give Lockheed Martin Corporation a ‘Hold’ rating with a revised target price.
Omnicom Group Inc.: Acquisition of Grabarz & Partner
- Omnicom Group delivered a mixed set of results for the previous quarter, with revenues below analyst expectations but managed earnings beat.
- Organic growth for the quarter was impressive and the company’s liquidity is strong while its cash flow supports its principal cash uses, including dividends, purchases, and share repurchases.
- Omnicom made considerable headway on its AI strategy by incorporating generative AI into Omni, their market-leading technology platform, and forming important first-of-their-kind technological partnerships.
W&T Offshore, Inc. – Adjusting Realized 2Q23 Commodity Price Estimates
We are updating our 2Q23 commodity prices and realizations.
Our NYMEX reference prices averaged $73.78/barrel of oil and $2.32/MMBtu for natural gas.
Our previous estimates were $75/bbl and $2.50/Mcf.
The Energy Cable #30 – Progress for The Bulls
- Stars are aligning and both Steno Research and 3Fourteen research are now energy bullish.
- Last week at Steno Research we looked at the potential for a bounce in Manufacturing PMI numbers and we thought it would be natural to look at both hard and soft data through the lens of one of the most important signals in the energy markets, namely the flip from contango to backwardation.
- In general it can be said that the flip brings more volatility to soft data than hard data. Given PMIs general tendency to converge with hard data and its current levels (Almost GFC bearishness) we feel like there are plenty of reasons for betting on higher Manufacturing PMI numbers.
Conagra Brands Inc.: Summer 2023 Product Launches & Other Drivers
- Conagra Brands delivered a mixed set of results in its most recent quarter, with revenues falling short of Wall Street expectations.
- As Conagra made significant headway on its cost-saving initiatives and consequently saw a significant rise in service standards, its supply chain kept becoming better.
- Conagra Brands further expanded its product line by introducing more than 50 new items across its frozen, grocery, and snacking divisions.
Aflac Incorporated: Initiation of Coverage – Business Structure and Competitive Edge
- This is our first report on Aflac Incorporated, a prominent player in the American insurance industry.
- The year’s first quarter proved promising for Aflac, as the company reported solid earnings results despite a material yen weakening.
- The operations in Japan saw continued sales improvements, driven by the rollout of new and refreshed products, particularly the cancer insurance policy.
J.B. Hunt Transport Services Inc.: 4 Factors Why The Company Is Thriving in an Uncertain Environment! – Financial Forecasts
- J.B.
- Hunt Transport Services delivered a disappointing set of results as the company was unable to meet the revenue as well as the earnings expectations of Wall Street.
- Revenue for the quarter decreased 18% from the prior year on a consolidated GAAP basis.
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