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This fortnight was all about company earnings. Intel, Ford Motor, and Apple, which have taken the first, second, and fourth place in the list, respectively, have all posted disappointing results. The only exception is Exxon Mobil, which took the third place and reported blockbuster results thanks to higher energy prices.
Don’t forget to read our previous edition of trends here.
Intel Sees Revenue Decline and Big Loss
Semiconductor company Intel (INTC) has taken the first place in the list this fortnight, seeing its viewership rise 53%. Intel has been in the news after it posted shockingly weak results.
Revenues for the fourth quarter declined 32% to $14 billion, while the company posted a net income loss of $664 million. For the full year, Intel revenues declined 20% to $63 billion. The bad results were both due to a weakening economy and structural issues as Intel has been facing fleeing customers like Apple.
The weak results puts Intel’s juicy dividend at risk. The company pays an annual dividend of $1.46 per share, resulting in an annual yield of 5%. Intel has been increasing its dividend for the past eight consecutive years, but with results weakening and growing investments in semiconductor factories, a cut has become a likely possibility.
For now, investors can only find solace in the fact that CEO Pat Gelsinger is pursuing a strategy to improve focus on semiconductors by divesting non-core assets like Mobileye. The management team seems confident in the company’s prospects as they have recently bought stock.
Source: Barchart.com
Ford Motor Reports Weak Results Due to Supply Chain and Execution Issues
Ford Motor (F) has taken the second position in the list with an increase in traffic of 50%. Ford has also had a weak quarter and year. Although revenues were higher, net income of $1.3 billion was lower than last year. For the full year, the company also reported higher revenues than 2021, but it switched to a loss of $2 billion from a gain of $17.9 billion.
The company said the weak results were due to execution issues, arguing that its profits should have been at least $2 billion higher. The company also hinted that its cost structure is bloated, indicating that job cuts might be on the horizon.
Ford also said it will make around $6 billion in free cash flow in the next year, lower than $9 billion last year, and will return about 50% of that to shareholders.
Ford shares have declined 48% since reaching a peak at the start of 2022. Its dividend yields a handsome 4.6%.
Source: Barchart.com
Exxon Mobil Records Blockbuster Results on High Oil Prices
Exxon Mobil (XOM) is third in the list with an advance in viewership of 39%.
The oil exploration juggernaut has been among the few large firms on Wall Street that have reported strong results. For the fourth quarter, Exxon reported revenues of $93 billion, $12 billion higher than the same period last year. Meanwhile, full-year revenues were around $122 billion higher at $398 billion.
Exxon’s blockbuster results have increased the dissatisfaction in the White House, which has deemed the performance “outrageous.” President Joe Biden has been pushing oil majors to invest their earnings in oil production to secure the country’s energy supply and reduce prices.
Oil prices have been rising due to Russia’s invasion of Ukraine and higher demand following the removal of COVID-19 restrictions. Exxon Mobil pays a dividend of $3.64 per year, or a yield of 3.26%.
Source: Barchart.com
Apple Posts Disappointing Results
Apple (AAPL) has placed fourth with an increase in traffic of 34%. Apple too has reported disappointing first quarter fiscal revenue, which came in at around $117.2 billion, $4 billion lower than analysts had expected. Net income, meanwhile, declined $4.6 billion to $30 billion.
Apple has been plagued by supply chain issues at its factories in China, largely stemming from the COVID-19 pandemic. iPhone sales declined, but iPad sales and services have been strong, although not enough to offset weaker revenues from iPhone, which remains its key generator of income.
Apple shares have fallen slightly following the results, but its performance remains relatively strong. Apple has beaten the broad technology sector by about 3 percentage points. Apple’s dividend yields 0.6%.
Source: Barchart.com
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The Bottom Line
Intel has posted thoroughly disappointing results, although investors can take solace for now in the fact that management has confidence in the turnaround plan. Ford has also posted weak results due to supply chain and execution issues. Exxon Mobil recorded the best results in a long time, which triggered the ire of the Joe Biden administration, which has been asking oil firms to invest profits in oil exploration. Apple also disclosed weak results due to falling demand.
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