Earnings season is slowly coming to an end, but several popular companies published their results last week. XTB analyst Tomáš Vranka summarized the most interesting ones: Berkshire Hathaway, Palantir, Walt Disney and Alibaba. You can find most of the summaries and news from the markets in the section News from the markets.
Berkshire Hathaway
An investment conglomerate led by a legendary investor Warren Buffett has long been one of the most popular companies among investors worldwide. The company achieved profit 10 billion dollars, which is a year-on-year increase of almost 7% more. This company is often used as a mirror of the so-called old American economy, as it includes many companies from the fields of services, trade, industry, insurance, energy and transport. A broad cross-section of this company can therefore reflect what is really happening in the economy. Although the numbers for the last three months have been good, the company is registering signs of decline in several areas – in processing industry, industry and transport. In addition, Berkshire also reported a change in the value of equity positions that increased by tens of billions of dollars. The company mainly contributed to the growth of the portfolio Apple, which is clearly Berkshire's largest equity position. However, Buffett himself states that investors should not attach much importance to this indicator, as the value of stock positions changes depending on the mood of the market. So it makes no sense to evaluate long-term investments on such a quarterly basis. It is also interesting that the company currently holds more than $147 billion in cash and doesn't make any big purchases. So Warren Buffett seems to think that stocks are expensive, and that's why he hasn't increased any positions significantly. The stock responded by rising 4%.
Palantir
The popular growth stock of recent years delivered results that were roughly in line with expectations. Company increased sales by 13%, which looks good at first glance, but for such a growing company, it not an optimal number. However, Palantir grew in virtually every segment – in the private and government sectors in the US and beyond. So the company recruits new customers every quarter, which is key for it. In addition to the numbers themselves, the results brought one interesting piece of information. Palantir is now in profit for the third quarter in a row, with one of the criteria for inclusion in the S&P 500 index being that a company must be profitable for four consecutive quarters. If Palantir had remained profitable this quarter, it would have met the original criteria for inclusion in the index. If the company was indeed listed here over time, it could help it in the future just from the point of view of reputation, not to mention the fact that passive investing would also put the stock in many ETFs, which should increase demand and also its price. Shares fell about 15% in two days after the results were released.
Walt Disney
The results were also brought by the American media and entertainment giant. The results were mixed in this case because the the theme park, ship and hotel segments did well. Disney was helped here by the reopening in China, which brought a pleasant increase in sales. Growth in the domestic market was not nearly as strong, but the segment as a whole did well. However, he fared worse media segment, which includes movie studios, cable TV and streaming platforms. Cable TV has been dying for a long time, as confirmed by the last quarter. In the area streaming, which is key to the future of the company, even Disney lost subscribers. However, if we break down the numbers into small parts, we find that the entire loss is due to the decline in the number of subscribers in India. There, Disney operated a streaming platform that also carried the domestic cricket league, which is very popular there, and the loss of broadcast rights caused many subscribers to cancel the service. The CEO of the company announced another subscription price increase Disney+ services and launch fight against password sharing among users, which all streaming platforms have a problem with. So in the case of Disney, there was something good and something worse. Investors appreciated the price hike and crackdown on password abuse, and shares rose about 2%.
Alibaba
Arguably China's best-known company has had a rough year, with shares down roughly 80% from their highs. The company still can't recover from the slump, and it hasn't been helped recently by problems in the Chinese economy itself. Results, which Alibaba has now achieved, however they are not bad at all. Business increased sales by 14%, which is the biggest increase in about 2 years. Profit it even increased year-on-year by approx by 50%. Online business thrived in China, but also abroad. Their logistics segment also showed good numbers, and the paradox was that the cloud grew the slowest of all segments. For other tech companies (Microsoft, Alphabet, Amazon) it's what drives company-wide growth, but the Chinese market is very specific, so the cloud only grew by 4% in terms of revenue. But the important thing is that here the cloud is finally turning a profit, which is growing nicely, although still relatively small in numbers. So the latest results are very good in this case. Alibaba's shares responded by rising 5%.
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