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Good evening investors! |
Every weekend we publish our "Earnings Recap" — an in-depth summary of the earnings reports for stocks that we cover. |
Earnings season may be over but three of the stocks we cover reported quarterly results this week — here is the list of companies we focused on: |
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Let's dive in. |
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Micron Technology (MU) |
Micron Technology reported record Q1 earnings driven by robust AI demand, with revenue meeting expectations and EPS exceeding estimates. |
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The company achieved net income of $1.9 billion and revenue of $8.71 billion, representing an 84% year-over-year increase. |
Key highlights include a 46% YoY rise in networking revenue, reaching $4.4 billion, while mobile revenue declined 19% YoY to $1.5 billion. Operating income was $2.2 billion, recovering from a loss of $1.1 billion in Q1 FY24, and operating cash flow surged 131% YoY to $3.2 billion. Data center revenue accounted for 50% of total sales, reflecting strong growth in high-margin segments. |
Looking ahead, Micron provided Q2 2025 guidance with revenue projected between $7.7 billion and $8.1 billion, gross margins of 36.5% to 38.5%, and EPS in the range of $1.33 to $1.53. |
MU shares are -17.2% so far this week. |
👉 EDGE TAKEAWAY: Micron's Q2 guidance was a significant disappointment, falling well short of Wall Street expectations and…upgrade to Edge+ to read the Full Edge Takeaway. | |
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Nike (NKE) |
Nike reported mixed second-quarter results as earnings and revenue beat expectations but profits declined year-over-year, reflecting continued operational challenges and a weak consumer environment. |
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The company posted revenue of $12.35 billion, down 8% YoY, and net income of $1.2 billion, a 26% decline YoY, with diluted EPS of $0.78 (beating estimates by 23.8%). |
Key highlights include a 13% decline in Nike Direct revenue and a 7% decrease in Nike Brand revenue, driven by weakness in Greater China (-8% YoY) and North America (-8% YoY). |
Despite challenges, operating expenses declined by 4% YoY due to lower wage-related and administrative costs, and inventory levels were flat at $8.0 billion, reflecting improved operational efficiency. Shareholder returns remained strong, with $1.1 billion in share buybacks and a 7% increase in dividends to $557 million. |
Looking ahead, Nike expects Q3 revenue to decline by low double digits, reflecting foreign exchange headwinds and shifting holiday timing. Gross margins are forecasted to contract by 300 to 350 basis points due to restructuring efforts and ongoing marketplace resets. SG&A expenses are expected to be slightly down year-over-year, reflecting disciplined cost management amidst strategic investments. |
NKE shares are -6.6% so far this week. |
👉 EDGE TAKEAWAY: Nike's Q2 earnings initially appeared stronger than anticipated, however,…upgrade to Edge+ to read the Full Edge Takeaway. | |
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FedEx (FDX) |
FedEx reported mixed results for Q2, with earnings exceeding expectations but revenue slightly missing due to persistent headwinds in its Freight segment and weaker industrial production. |
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The company posted adjusted net income of $990 million, or $4.05 per share, beating estimates by 1%, while revenue declined 1% YoY to $21.97 billion, missing the $22.14 billion consensus estimate. |
Key highlights include FedEx Express revenue holding steady YoY at $18.8 billion, supported by cost management through its DRIVE program, while FedEx Freight revenue fell 11% YoY to $2.2 billion, with operating margins contracting to 14.3% amid reduced shipments and lower fuel surcharges. Operating income declined 18% YoY to $1.1 billion, and operating cash flow fell 37% YoY to $2.5 billion. |
The company repurchased $1 billion in shares during the quarter and announced plans to spin off its Freight segment into a new publicly traded company within 18 months. |
Looking ahead, FedEx expects flat revenue growth for FY 2025, revising its prior forecast of low single-digit growth, and adjusted EPS in the range of $19.00 to $20.00, below its earlier guidance. The company remains committed to achieving $2.2 billion in cost reductions through its DRIVE program and maintaining $5.2 billion in capital expenditures to optimize its network. |
FDX shares are +5.5% so far this week. |
👉 EDGE TAKEAWAY: FedEx's decision to spin off its Freight segment into a separate publicly traded company is a.…upgrade to Edge+ to read the Full Edge Takeaway. | |
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Thank you for reading this week's Earnings Recap. |
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Thank you, and until next time investors! |
Mark & Chris |
The Investor's Edge |
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Disclosure |
This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance. |
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