In this issue, we continue to analyze the reports of various companies.
Disclaimer: when we talk about that, that something has grown up, we mean a comparison with the same quarter a year ago. Since all issuers from the United States of America, then all indicators in dollars. When developing the material, links were used, which are inaccessible to users from Russia. Putting our hopes on, Do you understand, what to do.
Buffett earns and snaps
Last quarter, the Berkshire Hathaway conglomerate (NYSE: BRK.B) showed significant improvement in business performance: profit was 11.7 billion against a loss of 49.7 billion a year ago. Revenue growth occurred in almost all sectors, excluding leasing (−7,28 %) and cargo transportation (−0,3 %). In addition, dividend and interest income fell: −18,67 %. However, overall revenue growth was 5,44 % by improving the operational performance of the company's insurance business.
At the same time, the head of BRK, Warren Buffett, spoke out against the proposal of the shareholders for the company to disclose information about, how it is working to widen the workforce contrast and how it is tackling climate change. According to Buffett, taking into account the huge degree of decentralization of the conglomerate - about 360 thousand people work at BRK enterprises, despite the fact that at the main office in Omaha only a few 10 people are watching them, - it would be unreasonable to ask management companies to waste time and effort collecting this information.
Given the rapid spread of ESG investment principles, there is an opportunity, that the investor society will start to oppose Buffett. There are even "plausible pretexts" for this.: the head of BRK is ninety years old, and for the past five years, BRK has been growing slower than the market - fourteen percent per year against eighteen percent S&P 500. Actually, Buffett already has a successor Greg Abel, supervising?? energy business line at BRK, so that there will be no disruption in the operational work of the business. However, the question arises: can BRK's shareholders expect Abel to be the highest performer as the head of the organization, or will Buffett never be equaled??
Oil rises and sells
Last week, a number of large energy organizations provided a report on their own results for the last quarter.. And things are going well for some of them, if not so super, that's definitely better, than a year earlier. All thanks to the increase in the cost of oil quotes from negative to more or less profitable: у Exxon (NYSE: XOM) loss of 610 million changed to profit of 2.73 billion. But Chevron (NYSE: CVX) profit fell almost two and a half times - to 1.391 billion due to a decrease in activity in oil refining and fuel trade, due to Texas colds and a new portion of coronacrisis interruptions in oil consumption this year. Basically, Chevron posted a $665 million loss last quarter, so it's still progress.
Houses are being built and increasing profits
Caterpillar Engineering Company Reporting (NYSE: CAT) also amuses financiers. The company presented a report on revenue growth of twelve percent to 11.87 billion. Profit increased by almost one and a half times, up to 1.53 billion. The final result turned out to be better than the expectations of specialists in almost everything therefore, that the US construction boom has led to increased demand for proper CAT products. And almost all sellers in this quarter intensively replenished equipment warehouses, preparing for possible supply disruptions. Difficult to communicate, how CAT shareholders can hope for continued growth going forward, maybe, the dependence of the company's sales on the volatile oil and gas sector makes huge dangers.
Derricks drill and earn
Drilling company Transocean (NYSE: RIG) showed a drop in revenue from 759 to 653 million dollars. Doesn't sound very inspiring, but the losses also decreased: from 391 to 98 million. In my opinion, this outcome is a good illustration of what is happening in the energy sector: On the one side, the size of investments of energy organizations in the development of new deposits decreased, on the other side, moderate rise in oil prices made it more profitable to work on existing fields.
Cats are full and no longer require
Animal food maker Freshpet (Nasdaq: FRPT) showed a thirty-three percent increase in revenue to $93.4 million. Losses, unfortunately, also grew - more than three times, up to 10.9 million. Indicators turned out to be very terrible than market expectations: expected loss 2 cents per share, and there was a loss 26 cents per share. Here I would like to note again that, what we said in almost all our reviews of companies from the animal products sector: financiers greatly overestimate the growth potential of this sector, because the possibility of disappointment is very great.
The lion's share of the attractiveness of the sector is, that this market is growing somewhat faster than the consumer goods sector for people, but the growth rate there is not gigantic, and the market is very limited in size and does not at all justify the inflated capitalization of many companies, working in this area.
The earth is fertilized and richer
From fertilizer manufacturer Mosaic (NYSE: MOC) revenue increased by 28%, and losses in the region of 203 million were replaced by a profit of 156.7 million. The reason is the rise in prices for agricultural products and the increase in the profitability of exporting these products to China.: farmers and holdings invest in fertilizer again. There is reason to believe, that this situation will continue: U.S. agricultural sentiment index up significantly, so Mosaic can look forward to continued growth.
Comcast shows and entertains
Telecom giant Comcast (NASDAQ: CMCSA) showed an increase in revenue by 2,2% and profit growth 55,1%. Profit growth turned out to be a little artificial: there was a lot of spending last year, covered large amounts of debt, and this was a high return on investment in other assets. But even with that, there's growth: operating profit increased by 3,85% and the final results were better than analysts' expectations.
Comcast streaming service Peacock also saw growth from 9 million viewers to 42 million in just a quarter - most likely, this growth was due to the fact, that Peacock now exclusively shows the legendary TV series The Office. But investors should not be too happy: Adjusted EBITDA of the streaming segment negative: −277 million versus 91 million in revenue.
Mattresses are made and bring prosperity
If consider, that Leggett Industrial Company & Platt (NYSE: LEG) receives the lion's share of the money in the production of springs for mattresses and auto parts, then there is nothing surprising, that the boom in these areas led to an increase in revenue by 10%. And here's what's amazing, so it's that, that profits rose by about 2 Times. The company also increased its dividend payout by 2 cent - up to 0,42 $ per quarter.
From the mattress manufacturer Tempur Sealy (NYSE: TPX) everything is going well too: revenue increased by 26,9%, and profit - by 118,6%. With such optics, the idea of u200bu200bkeeping money in a mattress does not seem like the most stupid idea..
Funeral services do not lose relevance and generate income
Funeral Business Service International (NYSE: SCI) showed the expected growth in revenue from 803 million to 1.078 billion in these sad circumstances and profit from 82 million to 228.9 million. In this way, can be calculated on, that a small increase in deaths in the United States will lead to an increase in demand for funeral services. The key words here are "small" and "ritual": the Indian scenario with mass mortality and crematorium furnaces melting from overload will just reduce the demand for funeral arrangements. In 2020, the Service had activity disruptions precisely because, that quarantine has sharply reduced the mobility of the population and negatively affected the organization of funeral ceremonies. So excessive mortality will harm the Service business no less, than low.
? Investor of the Week - Thales
Once the ancient Greek philosopher Thales was asked: "Since you're so smart, why are you so poor?And he decided to prove, that doing science can be beneficial. In winter, predicted from astronomical data, that in the summer there will be a large harvest of olives, and with his modest money he contracted all the oil mills of Chios and Miletus - it was easy, because there was no competition. During the harvest of a large crop, everyone needed oil mills - Thales sold his contracts for a high price and received a solid profit. So he proved, that it is easy for philosophers to get rich if they wish, although this is not the subject of their aspirations.
From Aristotle's Politics
