Wednesday December 1, 2021
Coca-Cola Reports Earnings
Coca-Cola reported first quarter net revenue of $9.02 billion. This exceeded the $8.60 billion reported in the same quarter last year and the $8.60 billion expected by analysts.
"We remain focused on emerging stronger and executing against our growth accelerators during the recovery phase," said Coca Cola CEO James Quincey. "We are pleased with the progress we are making. We are encouraged by improvements in our business, especially in markets where vaccine availability is increasing and economies are opening up, and we remain confident in our full year guidance."
The company reported net income of $2.26 billion or $0.52 per share. This was down from $2.80 billion or $0.65 per share reported in the same quarter last year.
The company reported that sales volume trends remain linked to consumer mobility. The company attributed consumer mobility as being positively impacted by vaccination rates and regions where the COVID-19 pandemic has become less widespread. Volume trends steadily increased in each month of the first quarter, with March reaching pre-pandemic levels. Unit case volume declined by 6% in the North America region and by 2% in the Europe, Middle East and Africa region. Unit case volume growth remained static in the Latin America region, while the Asia-Pacific region saw 9% growth.
The Coca-Cola Company (KO) shares ended the week at $54.47, relatively unchanged for the week.
Johnson & Johnson Posts Earnings
Johnson & Johnson (JNJ) reported its first quarter earnings on Tuesday, April 20. The company reported increased revenue and earnings for the quarter.
Net revenue came in at $22.3 billion for the quarter, up 7.9% from the $20.7 billion reported at the same time last year. This exceeded the $21.82 billion in net revenue that analysts expected.
"Johnson & Johnson delivered a strong first quarter performance led by the above market growth of our Pharmaceutical business and continued recovery in Medical Devices," said CEO of Johnson & Johnson, Alex Gorsky. "The ability to deliver these results while simultaneously advancing our robust pipeline of life-enhancing medicines, products and solutions during these times is a testament to the strength and resilience of our business and the dedication of the 135,000 employees of Johnson & Johnson who strive every day to profoundly change the trajectory of health for humanity and make healthier communities for everyone, everywhere."
Johnson & Johnson reported net earnings of $6.2 billion or $2.32 per share. This was up 6.9% from the $5.8 billion or $2.17 per share reported at this time last year.
On April 13, officials paused administration of the Johnson & Johnson vaccine due to reports of vaccine recipients developing unusual blood clots with low platelet levels. As of April 23, a federal advisory panel recommended that the United States resume use of the Johnson & Johnson vaccine with a warning label of the rare risk of blood clots. For the quarter, the company reported $100 million in sales of the one-dose COVID-19 vaccine. In the report, the company announced updated expected full-year net earnings in the range of $9.42 to $9.57 per share and net revenue in the range of $90.6 to $91.6 billion.
Johnson & Johnson (JNJ) shares ended the week at $165.52, up 1.9% for the week.
Chipotle Releases Earnings Report
Chipotle Mexican Grill, Inc. (CMG) released its first quarter earnings report on Wednesday, April 21. The fast-casual chain restaurant company's shares were up less than 1% in trading following the report's release.
Chipotle reported net revenue for the quarter of $1.7 billion, up 23.4% from $1.4 billion reported at this time last year. Net revenue was on par with Wall Street's expectations of $1.7 billion.
"Chipotle is off to a great start in 2021 thanks to our employees and their incredible level of collaboration and tireless dedication," said Brian Niccol, CEO of Chipotle. "As vaccines roll out and we get closer to moving past this pandemic, I believe Chipotle is well positioned for growth. I'm excited about our future as we remain focused on innovating in culinary, leading in food with integrity, and providing convenient access inside our restaurants and through our expanding digital ecosystem."
The company reported net income of $127.1 million or $4.45 per share, up from $76.4 million or $2.70 per share in the same quarter last year. Costs related to corporate restructuring and closures related to COVID-19 reduced earnings by $0.91 per share.
The California-based restaurant company reported an increase in comparable restaurant sales of 17.2% for the quarter. The digital sales segment increased 133.9% for the quarter and made up 50.1% of net sales. The company believes the successful launch of its new quesadilla product may have caused the increase in digital sales growth. Due to the increase in digital orders, Chipotle announced increases in its delivery fees and menu prices. The company opened 40 new restaurants and closed five during the quarter. Chipotle expects to open approximately 200 new restaurants this year. The company continues to withhold guidance for the year due to the COVID-19 pandemic.
Chipotle Mexican Grill, Inc. (CMG) shares ended the week at $1,468.53, down 3.8% for the week.
The Dow started the week of 4/19 at 34,182 and closed at 34,043 on 4/23. The S&P 500 started the week at 4,180 and closed at 4,180. The NASDAQ started the week at 13,985 and closed at 14,017.
U.S. Treasury Yields Hold Steady
First-time unemployment insurance claims fell to 547,000 for the week ending April 17. This is down from 586,000 new claims reported in the previous week and beat the 610,000 economists expected. This is a new low for the pandemic era.
"This dip in jobless claims looks good in isolation but what really matters is that it confirms that last week's unexpected plunge was no fluke," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. "We expect further declines over the next few months as the reopening continues, while payroll growth will accelerate markedly."
The 10-year Treasury note opened the week of April 19 at 1.584% and hit a low of 1.532% on Thursday, April 22. The 30-year Treasury bond yield opened the week at 2.275% and hit a low of 2.222% on Thursday.
Yields moved only slightly following the home sales reports. New single-family home sales increased 20.7% on a seasonally adjusted rate of 1.021 million units, reaching a peak that was last seen in August 2006. Existing closed home sales fell 3.7%, reaching a seasonally adjusted annualized rate of 6.01 million units. The median price for a new house increased 0.8% year-over-year to $330,800 in March.
"Inventories remain tight and while that should be a positive for home building activity, a lack of availability will likely remain a headwind for sales in the near term," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
The 10-year Treasury note yield closed at 1.562% on 4/23, while the 30-year Treasury bond yield was 2.240%.
Mortgage Rates Continue to Fall
This week, the 30-year fixed rate mortgage averaged 2.97%, down from last week's average of 3.04%. Last year at this time, the 30-year fixed rate mortgage was at 3.33%.
The 15-year fixed rate mortgage averaged 2.29% this week, down from 2.35% last week. During the same time last year, the 15-year fixed rate mortgage averaged 2.86%.
"The drop in mortgage rates is good news for homeowners who are still looking to take advantage of the very low rate environment," said Sam Khater, Freddie Mac's Chief Economist. "Freddie Mac research suggests that lower income and minority homeowners have been less likely to engage in the refinance market. Low and declining mortgage rates provide these homeowners the opportunity to reduce their monthly payment and improve their financial position."
Based on published national averages, the national savings rate was 0.06% as of 4/19. The one-year CD averaged 0.14%.