Reports, reports, reports
Bookkeeping software maker Intuit (NASDAQ: INTU) increased revenue from 3 up to 4.2 billion. Moreover, the growth was in both segments of the company: the consumer sector showed growth by 34%, and the small and medium-sized business division increased its revenue by 20%. Profit increased from 1.084 to 1.464 billion.
Octa (NASDAQ: OKTA) pleased investors with the growth of revenue by 37% - mainly due to an increase in subscription sales. But with a profit, it is quite a disaster: losses increased by almost 2 times - up to 109.232 million. Although, you have to say, this result was better than market expectations.
AutoZone (NYSE: AZO) reported revenue growth on 31,4%. Profit increased by 73,9% mainly due to operational performance. Considering, that in the USA there is a crazy demand for cars, nothing surprising. Furthermore, I would expect "the continuation of the banquet" in the next few quarters.
Another "car dealer" issuer, America’s Car-Mart (NASDAQ: CRMT), increased revenue by 44,6%, and profit grew more than four times - up to 43.497 million.
У Zscaler (NASDAQ: ZS) revenue increased by 60%. But the losses also increased.: from 19.337 to 58.459 million. However, scolding an IT startup for losses is all the same, what to scold the dog for, that she is a dog.
Zuora (NYSE: ZUO) showed revenue growth by 9%, losses increased only slightly: from 17.488 to 17.661 million.
Greens start and win
This week the world of ESG investing has undergone important changes.. Brazen hedge fund Engine No. 1 acquired the right to appoint several of its candidates to the Exxon Board of Directors as part of a shareholder vote, although the fund owns only 0,02% companies.
The fight between Exxon and Engine management wasn't just long, it was very costly.. Exxon spent $35 million on this lawsuit., and Engine - 30 million. Engine stands for something, to transform Exxon from an oil and gas giant into a green energy giant. Exxon is still the only major oil and gas company, that refuses to switch to clean energy. The company, although it is engaged in the study of biofuels and the reduction of emissions from mining, but still puts on oil and gas as the basis of his business. Now you can expect, that under Engine pressure, Exxon's turn to clean energy will begin.
Engine did not act alone - the three largest US pension funds supported the claims of the fund: California State Teachers’ Retirement System, California Public Employees’ Retirement System и New York State Common Retirement Fund. This indicates, that this and similar stocks may continue to enjoy strong support from large institutional investors.
At the same time, in the Netherlands, a court ordered Royal Dutch Shell to reduce emissions by 2030 by 45% - it's much faster, than previously planned. Maybe, other courts will begin to make similar decisions. Take the oil and gas industry seriously, and all non-green companies will be pressed with triple force. It could also mean, that to those oil and gas companies, who follow a progressive agenda, ethical investors will give a carrot - for example, pump up quotes and facilitate access to loans.
Meanwhile, Microsoft announced the formation of a coalition, in which there will be Accenture, to create an NGO, which will deal with the problem of emissions in the IT industry. It's really unexpected., because IT companies are traditionally considered the darlings of "ethical investors", because in the process of coding, at first sight, nothing suffers. But in the supply chains of IT companies, which the companies themselves do not directly control, emissions accumulate enough.
For example, contractor-owned data centers chew a bunch of electricity, a considerable part of which is taken - oh horror! - from coal. Microsoft and partners want to make data centers more energy efficient and reduce emissions. Commendable initiative, but also disturbing: previously, the main target of the ESG-Red Guards attack was "dirty" industries such as oil and gas, but, seem to be, in their plans to take on IT people.
Such news cannot but sadden. It means, that IT stocks will now suffer, among other things, and from previously irrelevant risks of terror from socially concerned investors.
The growth of ESG investing is very similar to the Christianization of the Roman Empire in 4 century AD: active aggressive minority, which is condoned by the authorities, imposes its discourse on the majority. Continuing the analogies, there is also a repetition of leapfrog with the removal and return of the Altar of Victory: periodic outbursts of resistance of conservative investors. So, treasurers more than 10 US states, Republican, of course, threatened to withdraw money from the accounts of those banks, who refuse to provide credit to the coal mining industry, - and we are talking about more than 600 billion in assets. But we will not go deep into analogies., and instead prepare for life in conditions of extreme politicization of investment.
Eron-don-don
On Wednesday, Ford announced an increase in its EV investment plans.: now the company plans to invest in this adventure no longer 22 billion, and all 30. The company expects, that by 2030 already 40% cars it sells will be electric. Without questioning the sincerity of these plans, still would venture to guess, that the path to this will be thorny: modern cars are voracious in terms of electronics - and electric cars are doubly voracious. And that's the problem, because there is a shortage of semiconductors in the world today, which may take a couple of years.. Actually, Ford is already suffering from this.: due to a shortage of components, the company stopped work for as long as 8 factories and reduced the production of a number of cars.
But I wouldn't be too happy about the company's turn to electric cars.. As we know from the example of Tata Motors, electric cars are not a particularly lucrative business. Even so.: completely unprofitable - only losses. And many learn this "on the go": so, loss-making electric car startup Lordstown Motors, faced with higher, than expected, Costs, cut production plans for this year by 50% and plans to seek additional funding to continue his art.
Conspiracy to set classes
Schools in New York plan to completely abandon distance learning by this fall and return all children to classes. Now, out of a million children in the region, almost 61% study remotely.
Return to classrooms in one of the key US cities could be an example for other regions of America and around the world. This could lead to fluctuations in issuer revenues., dealing with the topic of distance education. Although not all, but only those, who is directly involved in school education. But I think, that, in principle, this news could lead to an outflow of investor money from all stocks, related to online education, purely reflexive.
Two news about Google
This week Alphabet entered into an agreement with a large chain of hospitals to develop an algorithm, which will allow staff and doctors to use data from patients' hospital records and offer more effective treatment. We are talking about data from approximately 32 million patient visits annually., so, taking into account the company's competencies in the field of machine learning and programming, i would expect, what will come out of the program.
The biggest positive from this news awaits the company, making medical software. Usually, these are very small businesses and they already have considerable experience in working with medical data. Obviously, what forGoogle the development of the medical business is of great importance, as the company tries to diversify its overly advertising-driven business. So the shareholders of these companies may well hope., that Google will buy them as part of the development of its medical direction.
The second news is not so good: German regulators launch antitrust investigation against Google, as well as Facebook and Amazon. Given the history of similar cases for Google in the Old World, don't expect anything particularly positive here.. Recall the fine of 2.42 billion euros in 2017 for preferences in search queries. Furthermore, other major EU economies may follow the example of the Germans, at the same time, in France, Google is preparing to pay a fine for an as yet unknown amount.. It's still too early to talk about the outcome of the investigation., but the need to constantly fight off the attacks of European regulators clearly does not contribute to the growth of the company's quotes.
Business Drain
Cabot Oil Gas Company & Gas and oil producer Cimarex prepare to become one. New company, which does not yet have a name, will combine the assets of both enterprises. Cabot shareholders will receive 49,5% shares of the new company, and Cimarex shareholders will get 50,5% Shares.
Therein, as for the transaction, analysts show a lot of skepticism due to the apparent difference in the operating activity of both companies: Cimarex produces oil, and Cabot specializes in gas. Furthermore, they work in different regions: Cimarex operates in Texas, New Mexico and Oklahoma, and Cabot is in the Appalachians.
Another reason for doubt is the not entirely fair distribution of shares.. Cimarex will give 58% EBITDA of the combined entity, while the shareholders of the company will receive less proportional representation in the ownership structure of the new company.
But I think, that this skepticism is inappropriate against the backdrop of the troubles of the oil and gas sector. Together, it will be easier for both companies to survive: together they can save up to 100 million a year. In addition, in the long term, a larger and more efficient player in terms of accounting increases its chances, that someone bigger will buy it, for example Chevron.
