Thursday November 30, 2023
Zoom Posts Earnings
Zoom Video Communications, Inc. (ZM) released its third quarter earnings on Monday, November 20. The company beat revenue expectations for the quarter, causing shares to rise nearly 3% following the release.
The videoconferencing technology company reported revenue of $1.14 billion for the quarter, up 3% from $1.10 billion during the same quarter last year. Revenue was above analysts’ expectations of $1.12 billion.
“In Q3, revenue came in ahead of guidance as we bolstered Zoom’s all-in-one intelligent collaboration platform with advanced new capabilities like Zoom AI Companion and continued to evolve our customer and employee engagement solutions,” said Zoom CEO, Eric S. Yuan. “Our strong performance across a number of metrics has enabled us to increase our full year outlook for revenue and non-GAAP profitability, as well as for free cash flow, which we now expect to be in the range of $1.34 billion to $1.35 billion, up approximately 13% year over year.”
Zoom posted net income of $141.21 million for the quarter or $0.45 per adjusted share. This was an increase from $48.35 million or $0.16 per adjusted share during the same quarter last year.
Zoom’s Enterprise customers, those who subscribe directly through Zoom’s sales team or partners, now number approximately 219,700, an increase of 5% from 209,300 one year ago. The number of customers spending more than $100,000 increased to 3,731, a 13.5% increase compared to the same quarter last year. Zoom reached 7 million paid Zoom Phone Seats and 700 Contact Center customers as of quarter-end. Zoom One bundles that include Zoom Phone grew with an approximately 330% year-over-year.
Zoom Video Communications, Inc. (ZM) shares closed on Wednesday, 11/22 at $63.83, down 1% for the week.
Best Buy Releases Earnings Report
Best Buy Co., Inc. (BBY) posted its third quarter earnings on Tuesday, November 21. The company’s shares fell more than 4% despite reporting revenue that fell short of analysts’ expectations.
The company’s quarterly revenue came in at $9.76 billion, down 8% from $10.59 billion during the same quarter last year. This was below analysts’ expected revenue of $9.88 billion.
“Today we are reporting better-than-expected profitability on slightly softer-than-expected revenue for the third quarter," said Best Buy CEO, Corie Barry. “These results demonstrate our ongoing, strong operational execution as we navigate through the near-term sales pressure our industry has been experiencing for the past several quarters.”
For the quarter, Best Buy reported net earnings of $263 million or $1.21 per adjusted share. This was down from $277 million or $1.22 per share reported last year at this time.
The electronics retailer’s sales fell year-over-year across domestic and international categories. In the Domestic revenue segment, revenue fell by 8.2% and came in at $9 billion, a decline attributable to a decrease in domestic comparable sales of 7.3%. International revenue fell by 3.4% to $760 million stemming from a comparable sales decline of 1.9%. Best Buy announced it authorized payment of a regular quarterly cash dividend of $0.92 per common share payable on January 2, 2024, to shareholders of record on December 12, 2023.
Best Buy Co., Inc. (BBY) shares ended on Wednesday, 11/22 at $68.03, relatively unchanged for the week.
Urban Outfitters Reports Record Revenue
Urban Outfitters, Inc. (URBN) released third quarter earnings on Tuesday, November 21. Despite record sales for the quarter, the company’s shares fell by almost 7% after the release of the report.
The company’s revenue for the third quarter was $1.28 billion. This was up 9% from $1.18 billion in the same quarter last year and beat analysts’ forecast of $1.26 billion.
“We are proud to report record third quarter sales that helped drive a 120% increase in EPS,” said Urban Outfitters CEO, Richard A. Hayne. “As we enter the holiday season the consumer continues to react positively to our assortments and marketing campaigns at four out of five of our brands which leaves us confident we can continue to drive revenue and earnings growth in the fourth quarter.”
Urban Outfitters reported net income of $83.01 million for the quarter or $0.88 per adjusted share. This was up from $37.23 million or $0.40 per adjusted share reported in the same quarter last year.
Urban Outfitters’ portfolio of brands includes Anthropologie, Free People, Nuuly and others. Anthropologie’s sales increased 13.6% and accounted for $549.82 million in net sales, while Free People’s net sales increased 18.2% over last year to $331.78 million. Urban Outfitters namesake stores, which caters to young adult customers, saw a 11.7% decline in sales and brought in $324.38 million in net sales. During the first three quarters of the year, the company opened 21 new retail locations and closed 10 stores.
Urban Outfitters, Inc. (URBN) shares ended on Wednesday, 11/22 at $31.82, down 13% for the week.
The Dow started the holiday week at 34,932 and closed at 35,273 on 11/22. The S&P 500 started the week at 4,512 and closed at 4,557 on 11/22. The NASDAQ started the week at 14,135 and closed at 14,266 on 11/22.
Treasury Yields Vary
U.S. Treasury yields inched higher heading into the Thanksgiving holiday after dropping to the lowest level in two months on Wednesday. During the week, Federal Reserve officials gave no indication of interest rate cuts as inflation remains well above target.
On Tuesday, the Federal Reserve released the minutes from its November meeting, in which the Federal Reserve made no comments for a potential interest rate reduction in the near future. Federal Reserve officials held the key federal funds rate between 5.25% and 5.5% and indicated that the policy will need to stay restrictive until inflation eases back to the central bank’s 2% goal.
“In discussing the policy outlook, participants continued to judge that it was critical that the stance of monetary policy be kept sufficiently restrictive to return inflation to the Committee’s 2% objective over time,” noted the minutes. “[W]hatever the source of the rise in longer-term yields, persistent changes in financial conditions could have implications for the path of monetary policy and that it would therefore be important to continue to monitor market developments closely.”
The benchmark 10-year Treasury note yield opened the week of November 20 at 4.44% and traded as low as 4.36% on Wednesday. The 30-year Treasury bond opened the week at 4.59% and traded as low as 4.52% on Wednesday.
On Wednesday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 24,000 to 209,000 for the week ending November 18. This came below analysts’ expectations of 226,000 claims for the week. Continuing unemployment claims decreased by 22,000, reaching 1.84 million.
“Looking past seasonal noise, we think the claims data are consistent with a job market that is cooling enough to keep rate hikes off the table, but too strong to make rate cuts a consideration any time soon,” said Lead U.S. Economist at Oxford Economics, Nancy Vanden Houten.
The 10-year Treasury note yield ended on Wednesday 11/22 at 4.41%, while the 30-year Treasury note yield closed on Wednesday at 4.54%.
Mortgage Rates Edge Lower
Freddie Mac released its latest Primary Mortgage Market Survey on Wednesday, November 22. The report showed mortgage rates falling for the fourth consecutive week.
This week, the 30-year fixed rate mortgage averaged 7.29%, down from last week’s average 7.44%. Last year at this time, the 30-year fixed rate mortgage averaged 6.58%.
The 15-year fixed rate mortgage averaged 6.67% this week, down from 6.76% last week. At this time last year, the 15-year fixed rate mortgage averaged 5.90%.
“Mortgage rates continued to decrease heading into the Thanksgiving holiday,” said Freddie Mac’s Chief Economist, Sam Khater. “In recent weeks, rates have dropped by half a percent, but potential homebuyers continue to hold out for lower rates and more inventory. This dynamic is reflected in the latest data showing that existing home sales have fallen to a thirteen-year low.”
Based on published national averages for the week of 11/20, the national savings rate was 0.46%. The one-year CD finished at 1.85%.
Editor’s Note: The publicly available financial information is offered as a helpful and informative service to our friends. This article is not an endorsement of any company, product or service.
Published November 24, 2023
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