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Daily Market Report | May 5, 2022

US FINANCIAL MARKET

  • Dow Slides Nearly 1,000 Points as Investors Reassess Fed Comments – Wall Street Journal, 5/5/2022
    • U.S. stocks fell sharply, with technology stocks leading the way, as investors assessed the implications of Federal Reserve’s most aggressive tightening of monetary policy in more than two decades.
    • The S&P 500 dropped 3.4% as losses accelerated in morning trading Thursday. The tech-focused Nasdaq Composite Index plunged 4.6%, and the Dow Jones Industrial Average retreated 2.9%, or 982 points.
    • All three indexes are on track to erase Wednesday’s gains.
    • In the bond market, the yield on the benchmark 10-year Treasury note rose to 3.06%, from 2.914% Wednesday.
    • The pullback came one day after major U.S. stock indexes soared, with the Dow climbing more than 900 points, its biggest one-day gain since 2020. On Wednesday, central bank officials approved a half-percentage-point interest rate increase, lifting the federal-funds rate to a target range between 0.75% and 1%.
    • On Thursday morning, those jitters were seen across the market. Growth stocks were particularly hard hit.
    • Booking Holdings jumped 4.1% after its revenue exceeded expectations and it said it has seen strengthening of global travel trends in the current quarter.
    • Etsy tumbled 14% after the online marketplace released guidance below expectations for the current quarter.
    • Shares of Wayfair also slid, losing 17%, after the online home goods retailer posted a bigger-than-expected quarterly loss.
    • Shopify’s first-quarter earnings missed analysts’ expectations, sending the stock plummeting 17%.
    • The British pound dropped 2% against the dollar to $1.2378 after the Bank of England raised interest rates, but signaled that it is likely to move cautiously in coming months as worries grow over a slide into recession.
    • Overseas, the pan-continental Stoxx Europe 600 rose 0.7%. Banks, technology stocks and transport companies were among those that rallied. Italian bank UniCredit climbed 4% after its revenue came in above analyst expectations.
    • Airbus jumped 6.6% after the plane maker reported an increase in net income and moved to increase production of its bestselling A320 single-aisle airliner.

    Shopify’s revenue growth slowest in seven years, shares plunge – Reuters, 5/5/2022

    • Canada’s Shopify, reported its slowest quarterly revenue growth in about seven years and delivered a big miss on profit, sending the e-commerce giant’s U.S. shares tumbling 15% on Thursday.
    • Shopify’s first-quarter revenue rose 22% to $1.2 billion, a far cry from the nearly 100% growth during the early days of the pandemic. Analysts on average had expected revenue of $1.24 billion, according to Refinitiv IBES data.
    • Gross Merchandise Volume (GMV), a widely watched industry metric, rose 16% to $43.2 billion, but missed expectations of $45.43 billion.
    • Total operating expenses jumped 67.3% to $735.6 million in the quarter.
    • First-quarter adjusted profit per share of 20 cents was well short of expectations of 63 cents.
    • The company on Thursday announced a $2.1 billion cash-and-stock deal to buy logistics firm Deliverr.
    • The U.S.-based firm delivers more than a million orders per month for thousands of merchants across the United States, the company said.

    EBay deepens e-commerce gloom with disappointing forecast – Reuters, 5/5/2022

    • EBay on Wednesday became the latest e-commerce retailer to give a gloomy revenue forecast as growth slows in the sector after two years of rapid expansion during the pandemic, sending its shares down 6% in extended trading.
    • Revenue fell 6% to $2.48 billion, but came in slightly above expectations of $2.46 billion.
    • In the first three months of the year, eBay’s gross merchandise volume – a widely watched figure for the e-commerce industry’s performance – slumped 20% to $19.4 billion.
    • Active buyers on eBay declined 13% to 142 million in the quarter.
    • While the company’s first-quarter adjusted profit was better than estimates, its forecast for earnings in the current period of 87 cents per share to 91 cents per share was below the average analyst view of $1.01 per share.
    • The company projected second-quarter revenue between $2.35 billion and $2.40 billion, compared with the average analyst expectation of $2.54 billion, according to Refinitiv IBES data. Its full-year forecast was also below market estimates.

    Etsy stock falls as forecast calls for a sales decline amid higher seller fees – MarketWatch, 5/5/2022

    • Etsy shares dropped in extended trading Wednesday after the company rode higher seller fees to stronger first-quarter earnings and revenue than Wall Street had expected, but executives guided for a downturn in the current quarter.
    • Revenue increased to $579.3 million from $551 million last year.
    • Analysts on average expected earnings of 56 cents a share on revenue of $576 million, according to FactSet.
    • Etsy reported first-quarter earnings of $86.1 million, or 60 cents a share, down from $1 a share in the same period a year ago.
    • Etsy executives guided for revenue of $540 million to $590 million in the second quarter on gross merchandise sales of $2.9 billion to $3.2 billion, after gross merchandise sales hit $3.3 billion in the first quarter.
    • Analysts on average were expecting gross merchandise sales of $3.37 billion and net revenue of $627 million, according to FactSet.

    Wayfair loses customers and money in a messy quarter, announces its CFO will retire – CNBC, 5/5/2022

    • Wayfair shares tumbled more than 20% Thursday morning after the online furniture retailer reported larger-than-expected losses in the first quarter as shoppers scaled back their spending on the home category.
    • Sales fell almost 14% to $2.99 billion from $3.48 billion a year earlier. That was in line with analysts’ estimates.
    • Net revenue in the United States dropped 9.9%, to $2.5 billion, while international net revenue declined 31.4%, to $451 million.
    • Wayfair reported its count of active customers in the first quarter of 2022 declined 23.4% from a year ago, to 25.4 million.
    • Orders per customer totaled 1.87, versus 1.98 in the year-ago period.
    • Orders from repeat customers likewise fell from 2021, totaling 8.1 million, 26% lower than the year ago.
    • For the three-month period ended March 31, Wayfair reported a loss of $319 million, or $3.04 per share, compared with net income of $18 million, or 16 cents a share, a year earlier.

    DataDog Had Strong Earnings and an Upbeat Forecast. The Stock Is Still Falling. – Barron’s, 5/5/2022

    • Datadog earned more than expected in the first quarter and its financial forecasts beat Wall Street’s estimates as well.
    • Revenue of $363 million for the quarter was higher than the $339 million Wall Street had anticipated. Datadog had told investors to expect earnings of 10 cents to 12 cents a share on $334 million to $339 million of revenue.
    • The company said that as of the end of March this year, it had 2,250 customers with annual recurring revenue of $100,000 or more, a 60% increase versus last year.
    • Adjusted earnings were 24 cents a share in the first quarter, beating the 11 cents analysts expected, according to FactSet data.
    • The company expects adjusted earnings in the second quarter to be between 13 cents and 15 cents a share from revenue of $376 million to $380 million. Analysts tracked by FactSet expect 12 cents a share from $363 million.
    • Datadog forecast its full-year adjusted earnings will be between 70 cents and 77 cents a share, higher than analysts’ predictions of 51 cents.
    • Revenue in 2022 is expected to be in the range of $1.60 billion and $1.62 billion, higher than the consensus call of $1.53 billion.

    Booking Holdings stock surges on earnings beat as it forecasts ‘busy summer travel season’ – MarketWatch, 5/5/2022

    • Booking Holdings shares surged in the extended session Wednesday after the travel-reservations site operator topped Wall Street expectations and said it expects to benefit from a busy summer travel season.
    • Revenue rose to $2.7 billion from $1.14 billion in the year-ago quarter.
    • Analysts surveyed by FactSet had forecast earnings of 85 cents a share on revenue of $2.53 billion.
    • The company reported a first-quarter loss of $700 million, or $17.10 a share, compared to a loss of $55 million, or $1.34 a share, in the year-ago period. Adjusted earnings were $3.90 a share versus an adjusted loss of $5.26 a share in the year-ago period.

    Twilio’s stock reacts wildly after company issues cautious revenue guidance – MarketWatch, 5/5/2022

    • Twilio’s stock wildly fluctuated in frenzied trading Wednesday after the company issued cautious revenue guidance on better-than-expected results.
    • Revenue jumped 48% to $875.4 million from $589.9 million a year ago.
    • The company reported 268,000 active customer accounts as of March 31, compared to 235,000 a year ago.
    • Twilio announced a net loss of $221.6 million, or $1.23 a share, compared with a net loss of $206.5 million, or $1.24 a share, in the year-ago quarter. Adjusted earnings were break-even, at 0 cents a share.
    • Analysts surveyed by FactSet had expected a net loss of 21 cents a share on revenue of $864 million.
    • Investors were initially spooked, however, when Twilio offered second-quarter revenue guidance of between $912 million and $922 million, at the low end of FactSet estimates of $921 million.

    Kellogg Posts Higher Profit as Pricing Fights Growing Inflation – Wall Street Journal, 5/5/2022

    • Kellogg posted a 15% increase in first-quarter earnings, while warning of worsening cost inflation and disruptions from the war in Ukraine.
    • Sales rose 2.4% to $3.67 billion, beating analyst estimates of $3.59 billion.
    • On Thursday, Kellogg said it had restored its North American cereal inventory faster than anticipated.
    • For the period ended April 2, Kellogg reported profit of $424 million, or $1.23 a share, versus $371 million, or $1.07, a year earlier.
    • Analysts polled by FactSet recently forecast earnings of 92 cents.
    • Kellogg now expects organic sales, which strips out impacts from currency, acquisitions and divestitures, to rise 4% compared with its prior view of 3%.

    Corteva beats profit estimates on solid demand for crop protection products – Reuters, 5/4/2022

    • Corteva on Wednesday reported a 19.6% jump in first-quarter operating earnings, which beat Wall Street estimates, driven by strong demand for crop protection products such as herbicides and insecticides.
    • The Wilmington, Delaware-based company’s net sales rose 10.12% to $4.6 billion, beating market estimates of $4.5 billion, according to Refinitiv.
    • Sales of Corteva’s crop-protection products rose 23% in the quarter, boosted by strong early demand for herbicides in North America on supply concerns. Corteva said its net seed sales grew 1%, driven by an 8% increase in price.
    • Corteva said adjusted operating earnings stood at $708 million, or 97 cents per share, in the three months ended March 31, compared with $592 million, or 79 cents per share, a year earlier.
    • Analysts, on average, had expected a profit of 82 cents per share.
    • The company also revised its full-year 2022 operating earnings per share forecast to between $2.35 and $2.55 to reflect a lower average share count.

    Nikola posts wider quarterly loss as production costs rise – Reuters, 5/4/2022

    • Nikola reported wider quarterly losses on Thursday, with the electric-truck maker incurring higher costs as it ramped up production of its electric semi-trucks.
    • The company posted revenue in the first quarter of $1.89 million.
    • The company said it shipped 11 Tre battery electric trucks in April, marking its first ever shipment to customers.
    • Net loss widened to $152.9 million, or 37 cents per share, in the quarter ended March 31 from $120.2 million, or 31 cents per share, a year earlier.

    Sunrun shares surge after company reports jump in customers, says higher utility prices are fueling solar – CNBC, 5/5/2022

    • Sunrun shares jumped 11% during extended trading Wednesday after the company posted first-quarter earnings results, including a 39% increase in customer orders over the same time last year.
    • Revenue: $495.8 million, versus $401.3 million expected.
    • Sunrun, which is the largest residential solar installer in the U.S., added 29,463 customers during the first quarter, a 20% increase from the same period in 2021. The company now has roughly 690,000 customers.
    • Loss: 42 cents per share, versus a loss of 17 cents per share expected.
    • The company also raised its guidance, saying it expects installed solar capacity to be 25% or greater for 2022. Sunrun’s prior guidance pegged growth rates at 20%.

    Conoco posts a five-fold profit leap, raises shareholder returns – Reuters, 5/5/2022

    • U.S. oil producer ConocoPhillips on Thursday reported a five-fold increase in profit from a year-ago that exceeded Wall Street estimates on high prices and acquisitions.
    • Conoco’s total output rose about 15% in the quarter to 1.75 million barrels of oil and gas from a year earlier on a large acquisition of Shell Plc’s shale holdings last year.
    • The Houston-based company’s adjusted earnings leapt to $4.29 billion, or $3.27 per share in the quarter through March 31, from $902 million, or 69 cents per share a year earlier, beating Wall Street estimates of $3.03 per share, according to Refinitiv IBES data.
    • Conoco pledged to bump up shareholder returns by 25% to $10 billion this year, but gave a weaker-than-expected outlook for full-year production despite raising capital spending.
    • The company also expects a sequential decrease in the second quarter, with output between 1.67-1.73 million barrels per day, reflecting seasonal turnarounds planned in Europe and Canada, as well as adverse weather in the Bakken.
    • Conoco raised its capital expenditure for 2022 to $7.8 billion from previous guidance of $7.2 billion.

    Royal Caribbean misses revenue estimates as Omicron, Ukraine crisis hamper demand – Reuters, 5/5/2022

    • Royal Caribbean on Thursday missed Wall Street estimates for quarterly revenue, as a resurgence in COVID-19 infections in some parts of the world and Russia’s invasion of Ukraine hampered people’s travel plans.
    • The cruise operator’s revenue rose to $1.06 billion in the first quarter from $42.01 million a year earlier, but missed analysts’ average estimate of $1.15 billion, according to IBES data from Refinitiv.
    • The company’s net loss widened to $1.17 billion in the first quarter ended March 31, from $1.13 billion, a year earlier.
    • It said bookings for Europe sailings improved throughout the first quarter, but softened due to the Ukraine crisis that will have a bigger impact on Baltic itineraries.
    • Even though bookings for Europe are now exceeding 2019 levels for the same period, the cruise operator added the situation in Ukraine is expected to cause fewer passenger bookings in Europe this summer.

    Albemarle raises annual outlook on surging lithium prices – Reuters, 5/5/2022

    • Albemarle, one of the world’s biggest producers of lithium, raised its full-year forecasts on Wednesday after surpassing quarterly profit expectations on robust demand and higher prices for the metal used in electric-vehicle batteries.
    • Sales in Albemarle’s lithium unit nearly doubled in the quarter to $550.3 million on the back of higher prices.
    • In the three months ended March 31, the company earned an adjusted profit of $2.38 per share, smashing expectations of $1.63 per share.
    • Albemarle said it expected its average realized lithium price to jump two-fold this year as demand continues to rise and supply remains tight.
    • Albemarle lifted its annual adjusted profit outlook to between $9.25 and $12.25 per share, from $5.65 to $6.65 per share.
    • Analysts were expecting a figure of $6.22 per share.

    OPEC Sticks to Production Plan as High Oil Prices Boost Economies – Wall Street Journal, 5/5/2022

    • OPEC and its allies stuck to a small, planned increase in oil production on Thursday, as windfall revenue from high crude prices boosts the economies of Saudi Arabia and other producers while providing a buffer to Russia against Western sanctions.
    • In its third meeting since Russia invaded Ukraine, sending oil prices above $100 a barrel for the first time in eight years, the Organization of the Petroleum Exporting Countries and a coalition of Moscow-led oil producers said they agreed to continue raising their collective production by 432,000 barrels a day.
    • The incremental boost for June is in line with what the cartel, called OPEC+, agreed to last year as part of a plan to raise output to prepandemic levels.
    • It comes despite repeated calls in recent months from the U.S. and other major oil-consuming nations for Saudi Arabia and other OPEC+ members to tap into the group’s millions of barrels of remaining capacity to pump more oil to help tame prices.

    Facebook Parent Meta Hits the Brakes on Hiring as Growth Stalls – Wall Street Journal, 5/5/2022

    • Facebook parent Meta Platforms on Wednesday announced a sharp slowdown in hiring, ending an extended period in which the tech giant added thousands of jobs a year.
    • “We regularly re-evaluate our talent pipeline according to our business needs and in light of the expense guidance given for this earnings period, we are slowing its growth accordingly,” a Meta spokesperson said in a statement. “However, we will continue to grow our workforce to ensure we focus on long term impact.”
    • Specifically, Meta will be halting, or in some cases slowing, hiring for more mid- to senior-level positions, according to the company. This follows a recent pause on hiring early-career engineers a few weeks back.

    Search for Yield Pushes Investors Into Dividend-Paying Stocks – Wall Street Journal, 5/5/2022

    • Investors seeking shelter from volatility are turning to a part of the markets that had largely been overlooked last year: dividend-paying stocks.
    • The iShares Core High Dividend exchange-traded fund, which tracks 75 such stocks, is up 6.4% this year.
    • That puts the fund far ahead of the S&P 500, which is down 9.8% in 2022.
    • But investors have largely shied away from growth stocks this year. The S&P 500 technology sector is down 15%.
    • The communication services sector, which includes technology-driven companies like Netflix, Alphabet and Facebook parent Meta Platforms, is down 21%.

US ECONOMY & POLITICS

Fed Raises Interest Rate By Half Point, Ratcheting Up Its Inflation Fight – Wall Street Journal, 5/4/2022

  • The Federal Reserve approved a rare half-percentage-point interest rate increase and announced plans to shrink its $9 trillion asset portfolio starting next month in a double-barreled effort to reduce inflation that is running at a four-decade high.
  • The moves, announced after a two-day policy meeting Wednesday, will raise the central bank’s benchmark federal-funds rate to a target range between 0.75% and 1%.
  • “Inflation is much too high and we understand the hardship it is causing and we’re moving expeditiously to bring it back down,” Fed Chairman Jerome Powell said at a news conference after the meeting. “We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses.”
  • The rate-setting Federal Open Market Committee approved the decision unanimously.
  • In a statement, the committee said it “anticipates that ongoing increases in the target range will be appropriate,” setting the stage for another large rate rise at the Fed’s meeting next month.
  • Officials will allow up to $30 billion in Treasurys and $17.5 billion in mortgage bonds to roll off every month in June, July and August. After that, they will allow $60 billion in Treasurys and $35 billion in mortgage securities to run off every month.
  • Investors are trying to figure out how quickly the Fed might raise rates to a neutral level designed to slow growth, including what it might take for officials to accelerate rate rises to an even-larger 0.75-percentage-point step.
  • Mr. Powell signaled such a step was highly unlikely barring a dramatic deterioration in the inflation outlook—and that the central bank was instead focused on raising rates in half-point intervals, or 50 basis points, for now.
  • “If we see what we expect to see, then we would have 50 basis point increases on the table for the next two meetings,” Mr. Powell said.

U.S. Productivity Drops Most Since 1947, Driving Up Labor Costs – Bloomberg, 5/5/2022

  • U.S. productivity dropped in the first quarter by the most since 1947 as the economy shrank, while labor costs surged and illustrated an extremely tight job market.
  • Productivity, or nonfarm business employee output per hour, decreased at a 7.5% annual rate from the previous three months, according to Labor Department figures Thursday.
  • That compared to a 6.3% gain in the fourth quarter and the 5.3% projected decline in a Bloomberg survey of economists.
  • Hourly compensation rose 3.2% in the period, but with the drop in productivity, unit labor costs climbed at a 11.6% rate in the first quarter.
  • While the quarterly gain in hourly compensation adjusted for productivity likely overstates the degree of wage pressures, the 7.2% annual gain in labor costs was the largest since 1982.

Unemployment Claims Climbed to 200,000 Last Week – Wall Street Journal, 5/5/2022

  • New applications for unemployment benefits rose last week for the first time since early April amid other signs the U.S. labor market remains unusually tight.
  • Initial jobless claims, a proxy for layoffs, increased by 19,000 to 200,000 last week from the previous week’s revised level of 181,000, the Labor Department said Thursday.
  • Continuing claims, a proxy for the total number of people receiving payments from state unemployment programs, declined to 1.4 million for the week ended April 23 from the previous week’s level—the lowest level since January 1970. Continuing claims are reported with a one-week lag.

U.S. Mortgage Rates Jump to 5.27%, Highest Since 2009 – Bloomberg, 5/5/2022

  • Mortgage rates in the U.S. resumed their upward climb, reaching the highest level since August 2009.
  • The average for a 30-year loan jumped to 5.27% from 5.10% last week, Freddie Mac said in a statement Thursday.
  • Families typically spent 18.7% of their income on mortgage payments in the first quarter, up from 14.2% a year earlier, data from National Association of Realtors showed this week.
  • At the current 30-year average, a borrower with a $300,000 mortgage would pay $1,660 a month, $377 more than at the end of last year.

EUROPE & WORLD

JD.com, Pinduoduo Added to Chinese Companies Facing Delisting in U.S. – Bloomberg, 5/4/2022

  • U.S. regulators added more than 80 companies, including JD.com, Pinduoduo and Bilibili, to a expanding list of firms that face possible expulsion from American exchanges because of Beijing’s refusal to allow access to the businesses’ financial audits.
  • The Securities and Exchange Commission on Wednesday put the corporations on a provisional lineup of U.S.-listed Chinese entities that face delisting under a 2020 law, starting a three-year clock to comply with inspection requirements.
  • Some of the largest Chinese companies traded on U.S. exchanges, including China Petroleum & Chemical, JinkoSolar Holding Co., NetEase, and NIO were also added.
  • Firms face removal if they shirk requirements for three straight years, meaning they could be kicked off the New York Stock Exchange and Nasdaq as soon as 2024.

China’s services activity falls at second sharpest rate on record – Caixin PMI – Reuters, 5/5/2022

  • China’s services sector activity contracted at the second-steepest rate on record in April, as tighter COVID curbs halted the industry, leading to sharper reductions in new business and employment, a private-sector survey showed on Thursday.
  • The Caixin services purchasing managers’ index (PMI) fell to 36.2 in April, the second-lowest since the survey begun in November 2005 and down from 42 in March.
  • A sub-index for new business stood at 38.4, also the second-lowest on record and down from 45.9 the previous month, with services firms reporting the escalation of measures to contain the spread of COVID cases weighed heavily on customer demand at the start of the second quarter.

BoE flags risk of recession and 10% inflation as it raises rates again – Reuters, 5/5/2022

  • The Bank of England sent a stark warning that Britain risks a double-whammy of a recession and inflation above 10% as it raised interest rates on Thursday to their highest since 2009, hiking by quarter of a percentage point to 1%.
  • The pound fell by more than a cent against the U.S. dollar to hit its lowest level since mid-2020, below $1.24, as the gloominess of the BoE’s new forecasts for the world’s fifth-largest economy caught investors by surprise.
  • The BoE’s nine rate-setters voted 6-3 for the rise in Bank Rate from 0.75%, with Catherine Mann, Jonathan Haskel and Michael Saunders calling for a bigger increase to 1.25%.
  • The BoE’s rate rise was its fourth since December, the fastest pace of policy tightening in 25 years.

Shell Takes $3.9 Billion Charge Related to Russia Exit – Wall Street Journal, 5/5/2022

  • Shell said it took a $3.9 billion posttax charge related to its decision to exit Russia, only slightly denting an otherwise strong quarter bolstered by soaring commodity prices.
  • Shell’s first-quarter profit on a net current-cost-of-supplies basis—a figure similar to the net income that U.S. oil companies report—was $5 billion, compared with $4.3 billion a year earlier when performance rebounded from low pandemic energy demands.
  • Shell’s renewable-energy unit contributed $344 million to the company’s overall $9.1 billion in adjusted earnings in the first quarter, compared with $4.1 billion in its largest division, integrated gas.
  • Shell said Thursday it had completed $4 billion of $8.5 billion in share buybacks it plans through the first half of this year.

Bud Brewer Is Buoyed by Pricier Beer – Wall Street Journal, 5/5/2022

  • Budweiser owner Anheuser-Busch InBev said Thursday it sold more beer at higher prices in the first quarter, helping the world’s biggest brewer report better-than-expected earnings.
  • AB InBev reported a 7.8% jump in revenue per hectoliter in the first three months of the year from a year earlier. Despite this, the company said volumes rose 2.8%, helping the brewer log a rise in sales to $13.24 billion, from $12.29 billion a year earlier.
  • In North America—where drinkers have for years been moving away from AB InBev’s two blockbuster brands Bud and Bud Light—the brewer said volumes declined 4.2%.
  • Volumes also declined in China, with demand hit by Covid-19 lockdowns. Across the rest of the Americas and in Europe, volumes grew.
  • On a reported basis, profit fell to $95 million from $595 million as the company took a $1.14 billion impairment charge tied to its decision to exit Russia.

BMW profit gets lift from Chinese joint venture, strong prices – Reuters, 5/5/2022

  • BMW posted a rise in first-quarter profit on Thursday, boosted by a reevaluation of the German car maker’s stake in its Chinese joint venture and strong pricing, and kept its 2022 outlook, despite volatile prices for commodities and energy.
  • The company reported net profit of 10.2 billion euros versus 2.8 billion euros a year earlier. Excluding the impact of the stake in its Chinese joint venture, BMW made an operating profit of 3.4 billion euros, up from 3 billion.
  • BMW said the reevaluation of its stake in its joint venture with Brilliance Auto Group had resulted in a preliminary one-off profit of 7.7 billion euros ($8.2 billion).
  • Stripping out the impact of the stake, BMW posted a 16.3% increase in revenue for the quarter, despite a drop of 6.2% in car sales, as higher pricing helped.

Air France-KLM beats earnings forecasts as summer bookings take off – Reuters, 5/5/2022

  • Air France-KLM posted a first-quarter core profit that landed ahead of its own forecasts, fuelled by a recovery in ticket sales and lower unit costs, the Franco-Dutch airline group said on Thursday.
  • Air France-KLM reported a net loss of 552 million euros from revenues that more than doubled.
  • The company posted a third straight quarter of positive earnings before interest, taxes, depreciation and amortization, (EBITDA), reaching 221 million euros ($234.64 million) compared to the 628 million euros loss it recorded last year.
  • Air France-KLM, which has announced sweeping pandemic job cuts and taken on government wage support, said staff costs in the first quarter were down 23% compared to the same period in 2019.

Lufthansa sees return to profit this quarter as air travel rebounds – Reuters, 5/5/2022

  • Germany’s Lufthansa is looking to return to an operating profit this quarter as demand for travel rises with the easing of COVID-19 curbs and the airline raises ticket prices to offset higher costs.
  • The airline reported that first quarter revenue doubled from a year earlier to 5.36 billion euros ($5.68 billion), exceeding analysts’ average forecast for sales of 5.12 billion euros, though it was not able to reduce losses as much as expected due to skyrocketing fuel prices amid Russia’s war in Ukraine.
  • Lufthansa’s adjusted loss before interest and taxes (EBIT) narrowed to 591 million euros in the first quarter, from a loss of 1.05 billion euros for the same period of 2021.
  • Analysts had on average expected the loss to narrow to 558 million euros according to a company-provided consensus.

Bombardier reports smaller adjusted loss as private flying soars – Reuters, 5/5/2022

  • Bombardier on Thursday reported a smaller quarterly adjusted loss as the Montreal-based business jet maker improved margins on its flagship plane but delivered fewer aircraft.
  • First quarter revenue fell 7% to $1.2 billion due to fewer plane deliveries compared with the first three months of 2021.
  • Bombardier reported an adjusted loss of 3 cents per share in the reported quarter, compared with a loss of 7 cents per share, a year earlier.
  • Analysts on average were expecting an adjusted loss of 3 cents per share and revenues of $1.33 billion according to data from Refinitiv.
  • Adjusted EBITDA rose 36% in the first quarter on higher profits from sales of its flagship Global 7500 jet and cost-cutting measures.
  • Chief Executive Eric Martel told analysts Bombardier would look to reassess 2022 free cash flow guidance of greater than $50 million later this year, after generating $173 million from continuing operations during the first quarter.

ArcelorMittal increases buyback program, sees global steel dip – Reuters, 5/5/2022

  • ArcelorMittal reported higher-than-expected core profit in the first quarter on Thursday, but said it now forecast a slight contraction in global steel demand this year, with a sharp decline in the former Soviet Union countries.
  • The change in global steel demand in 2022 will be between 0% and -1%, the company said. For the Russia and Ukraine region, demand will be 10% lower.
  • The world’s second-largest steelmaker said earnings before interest, tax, depreciation and amortisation were $5.08 billion, against the average forecast of $4.57 billion in a company-compiled poll.
  • The Luxembourg-based company also increased its buyback program for 2022 to $2.0 billion, from $1.0 billion previously completed.

Factmonster – TODAY in HISTORY

  • Napoleon Bonaparte died on the island of St. Helena. (1821)
  • John Scopes was arrested in Tennessee for teaching Darwinism. (1925)
  • Bobby Sands of the Irish Republican Army died in a prison hospital on the 66th day of his hunger strike. (1981)
  • Pablo Picasso’s “Boy with a Pipe” became the most expensive painting ever sold. (2004)

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