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Ford (F) earnings Q4 2022

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Ford CEO Jim Farley takes off his mask at the Ford Built for America event at Fords Dearborn Truck Plant on September 17, 2020 in Dearborn, Michigan.

Nic Antaya | Getty Images

DETROIT – Ford Motor is set to report its fourth-quarter earnings after the bell Thursday. Here’s what Wall Street is expecting, according to Refinitiv consensus estimates:

  • Adjusted earnings per share: 62 cents
  • Automotive revenue: $40.37 billion

In October, Ford confirmed its prior full-year guidance of adjusted earnings before interest and taxes of between $11.5 billion and $12.5 billion. Through the first three quarters of the year, its brought in $7.9 billion, led by its North American operations.

If Ford meets or exceeds Wall Street’s top- and bottom-line expectations, EPS would more than double the 26 cents it reported for the same period a year earlier. Revenue would be an increase of 14.5% from the fourth quarter of 2021.

While investors will be monitoring the fourth-quarter results for signs of any waning consumer demand or profit dilution, Ford’s 2023 guidance is expected to be more of a focus.

Wall Street expects Ford’s full-year 2023 adjusted earnings per share outlook to mark a nearly 16% decline from 2022, according to Refinitiv estimates. That’s despite forecasting full-year revenue up 3.4% year over year to more than $151 billion, signaling lower operational profit compared with recent years.

Automakers have posted record or near-record results during the coronavirus pandemic amid a tight supply of new vehicles and resilient consumer demand. But that scenario is slowly normalizing, leaving new vehicle prices and profits in flux.

On Monday, Ford cut the price of its electric Mustang Mach-E, an early sign of a burgeoning EV price war spurred by Tesla.

Earlier Thursday, Ford reported January new vehicles sales that showed slight improvement over the same period last year.

There’s pressure on Ford to deliver a strong fourth quarter and relatively solid guidance. Crosstown rival General Motors on Tuesday significantly outperformed Wall Street’s expectations. The automaker also forecast stronger-than-expected 2023 results, including adjusted earnings before interest and taxes of $10.5 billion to $12.5 billion and adjusted earnings per share of between $6 and $7.

This is breaking news. Please check back for updates.

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Peloton (PTON) Q2 earnings 2023

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Brody Longo works out on his Peloton exercise bike on April 16, 2021 in Brick, New Jersey.

Michael Loccisano | Getty Images

Peloton said Wednesday its net loss narrowed year over year, and, for the third quarter in a row, subscriptions revenue was higher than sales of the company’s connected fitness products.

CEO Barry McCarthy called the results a possible “turning point” for the business, which has spent much of the past year executing an aggressive turnaround strategy. 

The fitness equipment company’s fiscal second quarter revenue beat Wall Street’s expectations, but the company posted wider losses per share than expected. Peloton’s stock jumped about 7% in premarket trading.

Here’s how Peloton did in the three months that ended Dec. 31 compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

  • Loss per share: 98 cents vs. 64 cents expected
  • Revenue: $792.7 million vs. $710 million expected

The company’s reported net loss for the three-month period that ended Dec. 31 was $335.4 million, or 98 cents per share, compared with a loss of $439.4 million, or $1.39 per share, a year earlier. While it’s the eighth quarter in a row the exercise company has reported losses, it’s the narrowest loss Peloton has marked since its 2021 fiscal fourth quarter. 

Revenue dropped 30% compared to the year ago period but exceeded the company’s expected range of $700 to $725 million. Connected fitness product sales, which are typically strong during Peloton’s holiday quarter, dropped 52% year-over-year while subscription revenue jumped 22%. 

“This is the time of year when, if we’re going to sell a lot of hardware, we have so you would expect there to be lots of hardware related revenue, and you would expect that maybe that revenue would exceed subscription,” McCarthy told CNBC. “It didn’t. It’s why in the letter [to investors], I call it out, as it may be a turning point.”

In his letter to investors, McCarthy said he expects the trend to continue. 

The company ended the quarter with 6.7 million total members and 3.03 million connected fitness subscriptions, which is a 10% jump compared to the year ago period. The company counted 852,000 subscribers to its app, a 1% drop compared to the year ago period. It has a goal of getting 1 million people to sign up for trials of its app over the next year.

Peloton is losing money on Bikes, Treads and other machines, but its subscription business has once again kept its overall margins above water. Gross margins for its connected fitness products were negative 11.2%, but gross margins for subscription sales were 67.6%. The total gross margin was 29.7%, up from 24.8% in the year ago period. It declined from the previous quarter, however, driven in part by increased promotions in the holiday quarter.

Peloton expects revenue to be lower but margins higher in the next quarter. The company is forecasting sales between $690 million to $715 million and a total gross margin of about 39%. Wall Street analysts pegged their revenue estimate for the quarter at $692.1 million.

The company is also expecting connected fitness subscribers to be between 3.08 million and 3.09 million. 

Next phase of the turnaround

Peloton, which boomed during the earlier days of the pandemic, has been in the midst of a broad turnaround strategy under McCarthy, who took the helm of the business a year ago. 

The company’s stock is up about 62% so far this year, closing at $12.93 on Tuesday, giving it a market value of about $4.4 billion. Shares are well off their 52-week high of $40.35, which they hit around the time McCarthy became CEO.

“The viability of the business was very much in doubt when I walked in,” said McCarthy, a former Spotify and Netflix executive. “It probably wouldn’t be an overstatement to say there were some people who didn’t expect us to survive this long.”

Since he took over, McCarthy has cut Peloton’s workforce by more than half, expanded its Bike rental program nationwide, started selling certified pre-owned Bikes, debuted a rowing machine and partnered with Amazon and Dick’s Sporting Goods to sell its Bikes and Treads. 

McCarthy’s top priority was to manage cash flow and get the company out of the red, a goal he said the company has nearly accomplished. Free cash flow was negative $94.4 million, compared with negative $246.3 million in the previous quarter and negative $546.7 million in the year-ago period. 

McCarthy said he’s ready to pivot from trying to keep the company alive to growing it, he told CNBC. 

“Now that we’ve addressed the viability issues, let’s get back to thinking about growth and the future of the business, like full stop,” said McCarthy. 

“So there are a bunch of initiatives that we’ve announced that position us to pursue growth,” he added. “And the question we need to answer for investors now that we’re not talking about viability is how fast, how profitable, where’s it coming from, and over time we’ll begin to address some of those questions.”

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Nike (NKE) Q2 earnings 2023

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People walk past a store of the sporting goods retailer Nike Inc. at a shopping complex in Beijing, China March 25, 2021.

Florence Lo | Reuters

Nike on Tuesday reported quarterly results that easily topped Wall Street’s expectations, even as higher costs squeezed the company’s margins.

Shares of Nike rose more than 12% after hours Tuesday.

Here’s how Nike did in its second fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

  • Earnings per share: 85 cents vs. 64 cents expected
  • Revenue: $13.32 billion vs. $12.57 billion expected

The company reported net income for the three-month period ended November 30 of $1.33 billion, or 85 cents per share, compared with $1.34 billion, or 83 cents per share, a year earlier.

Nike reported revenue of $13.32 billion, up 17% from $11.36 billion a year earlier.

Over the past three quarters, Nike has beaten Wall Street’s expectations, but like other retailers, has struggled with inflated inventory levels that arose from supply chain disruptions, rising consumer demand and unpredictable in-transit shipping times.

Inventories were up 43% to $9.3 billion in the quarter, compared to last year. The merchandise glut led to aggressive markdowns, which helped reduce Nike’s gross margin to 42.9% from 45.9% a year ago. However, inventories declined from $9.7 billion in the previous quarter.

The company also saw a 10% year-over-year uptick in selling and administrative expenses to $4.1 billion, mostly led by advertising and marketing costs and investment in Nike Direct as the company continues to move away from wholesalers.

While the focus on Nike Direct was largely to blame for the increased administrative expenses, the investment has paid off. Nike Direct sales were up 16% for the quarter at $5.4 billion and digital sales were up 25%. For the last several quarters, wholesale revenue has been effectively flat but was up 19% for the quarter.

Nike’s sales in China, its third biggest market by revenue, dropped by 3% compared to last year, continuing a trend the retailer has been contending with as the country deals with lingering Covid lockdowns and a slowdown in retail spending. Overall retail sales in the country fell by 5.9% in November compared to a year ago and clothes and shoe sales plunged by 15.6%, according to the National Bureau of Statistics of China.

After earnings from Nike’s fiscal first quarter were released in September, executives said the company’s inventory had grown 65% over the last year in North America alone and as a result, the company enacted an aggressive promotional strategy to liquidate the merchandise and make way for new products.

The plan was a key part of Nike’s strategy to shift its sales directly to consumers and away from wholesalers by improving the in-store experience and enticing customers to shop directly from the company online.

On Friday, Nike announced its new “Jordan World of Flight Milan” store located on Via Torino, a famed shopping district in the Italian locale well known for its designer shoe stores.

The initiative reflects the steps Nike is taking to grow the company as a direct-to-consumer brand.

The store, called a “first-of-its-kind retail experience” by the company in a news release, has a built-in members lounge and will include interactive shopping experiences tailored to fans of the renowned sneaker brand.

Read the company’s earnings release here.

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Peloton (PTON) reports Q1 earnings

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Brody Longo works out on his Peloton exercise bike on April 16, 2021 in Brick, New Jersey.

Michael Loccisano | Getty Images

Peloton posted a wider-than-expected loss for its fiscal first quarter, as a steep decline in connected fitness products revenue outweighed an increase in subscription revenue.

The company’s shares fell more than 17% in premarket trading Thursday. As of Wednesday’s close, Peloton’s stock has dropped about 75% so far this year.

Here’s how the fitness device maker performed compared with Wall Street estimates, according to Refinitiv.

  • Loss per share: $1.20 vs. 64 cents, expected
  • Revenue: $616.5 million vs. $650.1 million, expected.

Revenue fell 23% compared with the same period last year. Peloton’s revenue outlook for the holiday quarter, between $700 million and $725 million, would mark a quarter-to-quarter increase, but it’s well below analysts’ estimates of $874 million.

“Given macro economic uncertainties we believe near-term demand for Connected Fitness hardware is likely to remain challenged,” the company said.

Peloton CEO Barry McCarthy said in an earnings announcement Thursday that the company’s turnaround is a “work in progress.” The company has been struggling with the end of pandemic-era demand, when lockdowns spurred growth in at-home exercise. This year, the company undertook significant leadership changes, mass layoffs and a new business strategy under McCarthy. The company has pushed beyond its direct-to-consumer roots into deals with other retailers and into a model that emphasizes subscriptions.

“The ship is turning,” McCarthy, a former Spotify and Netflix executive, said Thursday.

Co-founder and former CEO John Foley left his board chair position in September along with co-founder and Chief Legal Officer Hisao Kushi, shortly followed by Peloton’s head of marketing, Dara Treseder. Foley had stepped down from his role as CEO in February, when he was succeeded by McCarthy.

McCarthy has helmed a broad turnaround effort for the company. He oversaw thousands of layoffs, including 500 jobs which were culled in early October. The cost-cutting efforts were paired with new initiatives to sell more bikes and increase Peloton’s digital subscribers.

Subscription revenue increased to $412.3 million from $304.1 million last year. Meanwhile, revenue from connected fitness products declined to $204.2 million from $501 million. Peloton’s gross margin, 35.2%, was largely in line with expectations and a drastic improvement from the negative 4.4% in the preceding quarter.

Peloton reported 6.7 million total members, up from 6.3 million last year, but down from 6.9 million the prior quarter. McCarthy has said that the company hopes to someday reach 100 million members.

The company also touted improvement in its free cash flow, which was negative $246.3 million, compared with $411.9 million in the previous quarter and negative $651.9 million in the year-ago period. Peloton has said it hopes to be near break-even on this by the latter half of the fiscal year.

Among McCarthy’s recent initiatives was Peloton’s decision to sell bikes and treads through Amazon and Dick’s Sporting Goods. The company also began certifying pre-owned bikes and expanded its bike rental program nationwide. And, in a partnership with Hilton, the company is set to put bikes in the fitness centers of around 5,400 hotels nationwide.

The first quarter also saw the release of Peloton’s $3,195 rowing machine. More recently, the company extended its refund period for its recalled Tread+ treadmill, which was recalled over multiple user injuries and a death.

The company reported $199 million in first quarter recall reserves, restructuring and impairment expenses as it continues embarking on its turnaround.

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Business

Coca-Cola (KO) Q3 2022 earnings

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Coca-Cola on Tuesday raised its full-year outlook after beating Wall Street’s expectations for its quarterly earnings and revenue.

The company also provided a look toward 2023, saying that it expects inflation to keep raising its expenses and commodity prices to stay volatile. Foreign currency is also projected to weigh on Coke’s earnings and revenue. However, the company won’t provide its full outlook for next year until early 2023.

Shares of the company rose 3% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 69 cents adjusted vs. 64 cents expected
  • Revenue: $11.05 billion adjusted vs. $10.52 billion expected

The beverage giant reported third-quarter net income of $2.83 billion, or 65 cents per share, up from $2.47 billion, or 57 cents per share, a year earlier.

Excluding items, Coke earned 69 cents per share.

Adjusted net sales rose 10% to $11.05 billion, topping expectations of $10.52 billion. Organic revenue climbed 16%, fueled by higher prices across Coke’s portfolio.

Unit case volume, which strips out the impact of currency and price changes, grew 4% in the quarter. Other consumer giants, like Tide maker Procter & Gamble, have seen their volume fall as consumers feel inflation hit their wallets. Coke said it’s been trying to appeal to budget-conscious consumers through product offerings like value packs in North America.

Coke’s sparkling soft drinks segment, which includes its namesake soda, reported volume growth of 3%. Coke Zero Sugar was once again a standout, with its volume rising 11% in the quarter.

The company’s hydration, sports, coffee and tea division saw volume growth of 5%, fueled by Powerade, Bodyarmor and the expansion of Costa Coffee.

Coke’s nutrition, juice, dairy and plant-based beverages division reported flat volume for the quarter. Coke said the lackluster performance was due to declining demand for local brands in Eastern Europe.

For 2022, Coke now expects comparable earnings per share growth of 6% to 7%, up from its prior range of 5% to 6%. The company also raised its outlook for organic revenue growth to 14% to 15% from a range of 12% to 13%.

In the fourth quarter, Coke is forecasting that foreign currency will weigh on its comparable net sales by 8% and comparable earnings per share by 9%, including the impact of hedged positions.

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Walgreens (WBA) Q4 2022 earnings

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Walgreens Boots Alliance on Thursday exceeded fiscal fourth quarter sales and earnings expectations, as the drugstore chain turns itself into a more health-care focused company.

The company said it anticipates full-year adjusted earnings per share of $4.45 to $4.65 in the coming fiscal year, which is about in line with what Wall Street expected. Yet Walgreens said its business growth will face tough comparisons as it laps strong demand for Covid vaccines and gets hits by the strength of the dollar.

Shares were up about 5% in premarket trading.

Here’s what the company reported compared with what analysts were expecting for the fiscal fourth quarter ended Aug. 31, based on Refinitiv data:

  • Earnings per share: 80 cents, adjusted, vs. 77 cents expected
  • Revenue: $32.45 billion vs. $32.09 billion expected

Sales declined from the previous year’s quarter. Including certain costs, Walgreens swung to a loss in the three-month period. Its net loss was $415 million, or 48 cents per share, compared with a net income of $627 million, or 72 cents per share, a year earlier.

The company said its profits took a hit from a non-cash impairment charge in its Boots UK business and from its long-term cost management program. A year ago, Walgreens laid out a cost savings goal of $3.3 billion by 2024.

Walgreens has made significant investments to transform from a major drugstore chain to a large health-care company. It is opening hundreds of doctor offices with VillageMD. It invested $5.2 billion to become majority owner of the primary-care company. It recently announced plans to accelerate acquisitions of two other companies: CareCentrix, which coordinates care and benefits for at-home care, and Shields Health Solutions, a specialty pharmacy company.

Walgreens CEO Roz Brewer said in a news release that the coming fiscal year “will be a year of accelerating core growth and rapidly scaling our U.S. Healthcare business.”

At the end of the quarter, Walgreens had a total of 334 doctor offices with VillageMD. The clinics, called Village Medical, are located next to its drugstores. It also has 70 stores with Health Corners, a designated space where a registered nurse or pharmacist can schedule a mammogram, screen a patient for high blood pressure or diabetes or help with other health-care needs.

Covid vaccines, which boosted Walgreens’ sales and foot traffic, have fallen off significantly. In the fourth quarter, the drugstore chain administered 2.9 million vaccinations. That’s a decline from 4.7 million vaccines in its fiscal third quarter, and a sharp drop from the 15.6 million vaccines in the first quarter and the 11.8 million in the second quarter.

Sales in Walgreens’ retail and pharmacy division in the U.S. decreased by 7.2% to $26.7 billion in the fourth quarter compared with the year-ago period. Comparable sales rose 1.6%, however.

Its international business took a big hit from currency headwinds. It had fourth quarter sales of $5.1 billion, a drop of 6.6% from the year-ago period. That included a 13.3% adverse currency impact.

As customers come back to stores, Walgreens also said it is investing in its workforce to return to normal operating hours. However, it has continued to see some changes in shopping habits. Its U.S. digital sales growth grew 14% in the fourth quarter, on top of an 82% increase in the year-ago period.

On Thursday, the company raised its outlook for the health care division. It said it now anticipates a sales target of $12 billion, rather than $11 billion, for fiscal 2025.

As of Wednesday’s close, Walgreens shares are down nearly 39% so far this year. That trails behind the S&P 500, which is down about 25%. Shares of Walgreens closed Wednesday at $31.94, down about 2%.

Read the company’s earnings release here.

This story is developing. Please check back for updates.

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Nike (NKE) earnings Q1 2023

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A woman shops for shoes in the Nike Factory Store at the Outlet Shoppes at El Paso, in El Paso, Texas on November 26, 2021.

Paul Ratje | AFP | Getty Images

Nike on Thursday said it had a strong first fiscal quarter despite supply chain issues, as well as declining sales in Greater China, its third biggest market by revenue.

Like other retailers, Nike has been facing supply chain headwinds, such as a rise in both shipping costs and shipping times in recent quarters. The company said its inventory levels swelled during the quarter compared to the year-ago period.

The company’s shares dropped about 5% in after-hours trading.

Here’s how Nike did in its first fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

  • Earnings per share: 93 cents vs. 92 cents expected
  • Revenue: $12.69 billion vs. $12.27 billion expected

Nike reported net income for the three-month period ended Aug. 31 fell 22% to $1.5 billion, or 93 cents per share, compared with $1.87 billion, or $1.18 per share, a year earlier.

Revenue during the period was up 4% to $12.7 billion, compared with $12.2 billion a year earlier.

Recently, Nike has been shifting its strategy and looking to sell its sneakers and other merchandise directly to customers and scale back on what is sold by wholesale partners like Foot Locker. The company said on Thursday its direct sales grew by 8% to $5.1 billion, and sales for its digital-brand rose 16%. On the flip side, sales for Nike’s wholesale business sales increased by 1%.

In its first fiscal quarter, Nike said its inventory rose 44% to $9.7 billion on its balance sheet from the same period last year, which the company said was driven by supply chain issues and partially offset by strong consumer demand.

Total sales in Greater China were down 16% to about $1.7 billion, compared with nearly $2 billion a year earlier. The company has faced disruption in its business in the region, where Covid lockdowns have affected its business. Nike had said in the previous quarter it expected issues in Greater China to weigh on its business.

Meanwhile, total sales in North America, Nike’s largest market, increased 13% to $5.5 billion in the first fiscal quarter, compared with roughly $4.9 billion in the same period last year. The sneaker giant has continuously said consumer demand, especially in the U.S. market, hasn’t waned despite inflation.

Read the company’s earnings release here.

This story is developing. Please check back for updates.

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GameStop (GME) Q2 2022 earnings

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SAN RAFAEL, CALIFORNIA – DECEMBER 08: Customers enter a GameStop store on December 08, 2021 in San Rafael, California. Video game retailer GameStop will report third quarter earnings today after the closing bell. (Photo by Justin Sullivan/Getty Images)

Justin Sullivan | Getty Images News | Getty Images

GameStop said Wednesday that quarterly sales declined and losses widened, as it burned through cash and inventory swelled.

The video game retailer also disclosed a new partnership with crypto exchange FTX.

Shares of the company rose about 10% in after hours trading.

In the second fiscal quarter ended July 30, the company’s total sales dropped to $1.14 billion from $1.18 billion in the year-ago period. Its losses widened to $108.7 million, or 36 cents per share, compared with a loss of $61.6 million, or 21 cents, a year prior.

GameStop’s results cannot be compared with estimates because too few analysts cover the company. It did not provide a financial outlook and hasn’t provided one since the start of the pandemic.

The brick-and-mortar retailer is trying to adapt its business to a digital world. It’s gotten new leadership, including board chair Ryan Cohen, the founder of Chewy and former activist investor for Bed Bath & Beyond, and CEO Matt Furlong, an Amazon veteran. It’s also looked to new ways to make money, including nonfungible tokens.

But the company has struggled to drive profits, leading it to trim costs and shake up leadership. Last month, it fired chief financial officer Mike Recupero and laid off employees across departments. Accounting chief Diana Jajeh stepped in as the company’s new CFO.

Furlong urged patience on an investor call on Wednesday, saying GameStop must go through a significant transformation to keep up with customers.

“Our path to becoming a more diversified and tech-centric business is one that obviously carries risk and will take time,” he said. “This said, we believe GameStop is a much stronger business than it was 18 months ago.”

GameStop’s new initiatives have come at a high cost. It had $908.9 million in cash and cash equivalents at the end of the quarter — a little more than half of what it had at the end of the year-ago period.

Inventory ballooned to $734.8 million at the close of the quarter. That’s up from $596.4 million at the close of the prior year’s second quarter. The company said in a release that it intentionally bulked up on merchandise to keep up with customer demand and cope with supply chain challenges.

Furlong said on the call that the company had to spend money to modernize its business after years of underinvestment. Among its moves, it hired more than 600 people with talent in areas such as blockchain while it reduced shipping times, so customers get purchases in one to three days.

Changing it up

Now, he said, the company is focused on new priorities: becoming profitable, launching proprietary products and investing in its stores. He said it is lowering costs, too. Expenses decreased by 14% from the first quarter of the year, including some reductions that came from the layoffs.

“We’re going to retain a strong focus on cost containment and continue promoting an ownership mentality across the organization,” he said.

As overall sales fell, he pointed to growth of newer businesses. GameStop launched an NFT marketplace in July, which is open to the public for beta testing. It allows users to connect their own digital asset wallets, including the recently launched GameStop Wallet, so they can buy, sell and trade NFTs for virtual goods.

Sales attributable to collectibles rose from $177.2 million in the prior year’s second quarter to $223.2 million in the most recent one.

NFTs trade on FTX, the retailer’s new partner. “In addition to collaborating with FTX on new ecommerce and online marketing initiatives, GameStop will begin carrying FTX gift cards in select stores,” GameStop said in a release.

FTX was founded by billionaire former Wall Street trader Sam Bankman-Fried, 30. He has become a lender of last resort for crypto firms that have struggled as the assets have declined sharply since late last year.

The agreement with FTX appears to play into GameStop’s status as a meme stock.

The company’s shares have seen sharp fluctuations in value. Over the past year, shares have swung from $19.39 to $63.92. The company’s stock is down about 36% so far this year, bringing the company’s value to $7.31 billion.

Even as the company pivots more to e-commerce, Furlong said that stores remain an important way to connect with customers and to fulfill online orders.

GameStop rolled out a new compensation model for U.S. store leaders, he said. Each store leader can get $21,000 in stock, which vests over three years. They can also get additional pay through company stock on a quarterly basis, depending on their performance.

It is also raising hourly pay for some store employees, but he did not share the specific wage.

Read GameStop’s earnings release here.

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Zoom (ZM) earnings Q2 2023

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Eric Yuan, founder and chief executive officer of Zoom Video Communications Inc., speaks during the BoxWorks 2019 Conference at the Moscone Center in San Francisco, California, U.S., on Thursday, Oct. 3, 2019.

Michael Short | Bloomberg

Zoom Video Communications shares fell as much as 9% in extended trading on Monday after the video-calling software maker pared back its full-year forecast for earnings and revenue.

Here’s how the company did:

  • Earnings: $1.05 per share, adjusted, vs. 94 cents per share as expected by analysts, according to Refinitiv.
  • Revenue: $1.10 billion, vs. $1.12 billion as expected by analysts, according to Refinitiv.

Zoom’s revenue in the second fiscal quarter grew 8% year over year, slowing from 12% growth in the prior quarter, according to a statement. The second fiscal quarter ended on July 31. Zoom’s net income fell to $45.7 million in the quarter from $316.9 million in the year-ago quarter as the company increased spending on sales and marketing.

The strong U.S. dollar, performance in the company’s online business and sales that got weighted toward the end of the quarter negatively impacted revenue in the quarter, Kelly Steckelberg, Zoom’s finance chief, said in the statement.

“We have implemented initiatives focused on driving new online subscriptions, which have shown early promise but were not enough to overcome the macro dynamics in the quarter,” Steckelberg said on a Zoom call with analysts.

The company said at the end of the quarter it had about 204,100 enterprise customers, which are business units that Zoom’s direct sales teams, resellers or partners work with. That’s up less than 3% from 198,900 three months earlier. Enterprise customers deliver 54% of total revenue. Online business customers are Zoom customers that don’t work directly with Zoom salespeople, resellers or partners.

With respect to guidance, Zoom called for adjusted fiscal third quarter earnings of 82 cents per share to 83 cents per share on $1.095 billion to $1.100 billion in revenue. Analysts polled by Refinitiv had been looking for 91 cents in adjusted earnings per share and $1.15 billion in revenue.

Management lowered its projections for the full 2023 fiscal year, calling for $3.66 to $3.69 in adjusted earnings per share and $4.385 billion to $4.395 billion in revenue, implying 7% growth at the middle of the revenue range. Analysts whom Refinitiv surveyed had expected $3.76 per share in adjusted earnings and revenue of $4.54 billion. The view three months ago was $3.70 and $3.77 in adjusted earnings per share and revenue ranging from $4.530 billion to $4.550 billion. Economic conditions primarily caused executives to revise their view.

“As the majority of our revenue has shifted back to the enterprise and we have moved beyond the pandemic buying patterns, we are returning to more normalized enterprise sales cycles with linearity weighted towards the backend of the quarter,” Steckelberg said on the Zoom call. “This contributed to higher than expected deferred revenue in Q2, and as we believe this customer behavior will persist, we have factored it into our outlook.”

The company expects the online business to be down 7% to 8% in the full fiscal year, compared with its forecast for no growth in that part of the business earlier. Zoom has changed its spending expectations for the second half to prioritize areas with a high return on investment, such as research and development and sales operations, Steckelberg said.

In the quarter, Zoom announced a new pricing structure called Zoom One and said it had agreed to acquire conversational artificial-intelligence software startup Solvvy. Citi lowered its rating on Zoom stock to sell from the equivalent of hold last week, citing rising competition and economic pressure on small and medium-sized businesses and spending on less essential categories.

Excluding the after-hours move, Zoom shares have fallen 47% so far this year, while the S&P 500 index is down 13% during the same period.

This story is developing. Please check back for updates.

WATCH: Here’s why Citi’s Tyler Radke sees downside ahead for Snowflake and Zoom

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McDonald’s (MCD) Q2 2022 earnings

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A sign is posted in front of a McDonald’s restaurant on April 28, 2022 in San Leandro, California.

Justin Sullivan | Getty Images

McDonald’s on Tuesday said both higher prices and value items fueled U.S. same-store sales growth, which was higher than expected during its second quarter.

However, CEO Chris Kempczinski said the environment is still “challenging” as inflation and the war in Ukraine weighed on its quarterly results.

Shares of the company were roughly flat in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: $2.55 adjusted 
  • Revenue: $5.72 billion vs. $5.81 billion expected

McDonald’s reported second-quarter net income of $1.19 billion, or $1.60 per share, down from $2.22 billion, or $2.95 per share, a year earlier. The company reported a $1.2 billion charge related to the sale of its Russian business due to the war in Ukraine.

Excluding that charge, a French tax settlement and other items, the fast-food giant earned $2.55 cents per share. Wall Street was expected the company to report earnings per share of $2.47, according to Refinitiv estimates. It is unclear if those numbers are comparable.

Net sales fell 3% to $5.72 billion, hurt in part by the closure of McDonald’s Russian and Ukrainian restaurants.

Global same-store sales rose 9.7% in the quarter, fueled by strong international growth. Russian locations were excluded from the company’s same-store sales calculations, but Ukrainian restaurants were included.

U.S. same-store sales increased 3.7% in the quarter, topping StreetAccount estimates of 2.8%. The company credited strategic price hikes and its value offerings for its strong performance. Last quarter, McDonald’s executives said some low-income consumers were trading down to cheaper options in response to inflation.

The company’s international developmental licensed markets division saw its same-store sales climb 16% in the quarter. Same-store sales shrank in China as the government reimposed Covid restrictions, but growth in Brazil and Japan more than offset the market’s weak performance.

McDonald’s international operated markets segment reported same-store sales growth of 13%, fueled by strong demand in France and Germany.

Read the full earnings report here.

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