Bundle of investment news: Google, futures and reporting season

Пачка инвестновостей: Google, фьючерсы и сезон отчетности

Google now trading futures. And let's also see the reporting of companies, for which we had investment ideas, - including the problematic ContextLogic.

Disclaimer: when we talk about, that something has grown, we mean comparison with the same quarter a year earlier. Since all US issuers, then all results are in dollars. When creating the material, sources were used, inaccessible to users from the Russian Federation. Hopefully, you know, what to do.

“More deals - more profit, guys!»: Google is now dealing with futures

Google signed an agreement with the financial holding CME Group (NASDAQ: CME): now the cloud division of Google will deal with the processing of operations of the CME marketplaces - the contract is concluded for 10 years. Google also invested $ 1 billion in CME stock..

For CME, the meaning of this contract is to reduce costs., optimizing the operation of their trading systems, and, which is also important, this will help facilitate the process of registering new users.

CME will also work with Google to create a new financial risk management tool - analytical software..

The agreement did not appear out of nowhere: since 2019, data on futures and options from CME platforms has been stored in the Google cloud. So the new agreement, in fact, develops already existing. Google has the biggest finance deal ever.

This deal is beneficial for both companies: CME will be able to squeeze even more out of its business, using the latest technological advances. Google will be able to develop its cloud division: in conditions, when its main advertising business is under attack from antitrust regulators, it is quite reasonable to strengthen the cloud part of the business.

CME is a major customer, and a successful experience with it will strengthen Google's reputation, and its cloud division will be awaiting new large contracts from other companies, working in finance. So, against this background, the lack of information about the cost of services for CME is not so important.. In a similar case with Amazon the status of the client was much more important than the amounts: new clients will be attracted by, that in the specified cloud service such a respectable customer is served. Moreover, so far Google's cloud division is unprofitable, and the path to break-even lies through attracting a huge mass of customers.

  Spy grows on pre-market

However, this agreement also carries certain risks for both companies. Cloud computing is a fragile area, and malfunctions, for example, if the Google servers cannot handle the load during the bidding or are hacked, can lead to huge losses for the CME and, Consequently, to colossal reputational damage for Google itself.

Time to collect stones: how the companies we know reported

Let's analyze the latest company reports, on which we did investment ideas or reviews.

ContextLogic e-commerce platform (NASDAQ: WISH) reported on the results of the last quarter - and these results are not very. Revenue fell by 39%. The decline was in all segments: the main business of the online platform suffered the most - minus 52%, but the logistics segment got off easily - the decline was only 3%. Sure, losses decreased - from 99 up to 64 million, - but only due to a decrease in revenue: total margin decreased from minus 16 to minus 17%. The number of sellers on the platform has also decreased - in general, all indicators fell.

There is no need to look for the causes of these problems.: Removal of the lion's share of coronavirus restrictions in the economy muted user interest in online commerce, but also, which is much more important, affected by logistic problems, who crippled the activity of sellers on the company's platform in China, where most of the company's sellers are located.

The holiday season can breathe new life into the business of the company - although you shouldn't really hope for that., that logistic problems will soon dissipate.

In general, ContextLogic unpleasantly surprised: investors are ready to forgive unprofitable startups in exchange for revenue growth. But when there is no growth, or - even worse - instead of growth, there is a fall, then investors can be extremely ruthless.

However, quotes may be affected by recent personnel changes in the company's management. I think, the management of the company may come out in despair with some statement about the blockchain, metaverse or some other complex word and this will allow you to pump up quotes. Well, or there will be some other positive news.

Surprisingly, on the sad news about the last quarter, quotes rose, because even this result turned out to be better than investors' expectations.

At the manufacturer of 3D printers 3D Systems (NYSE: DDD) revenue increased from 136.2 to 156.1 million, and an operating loss of 67.604 million decreased to 17.208 million. It is important to consider, what has to be compared with 2020, when the company suffered damage from the loss of the value of intangible assets. Technically, the past quarter was profitable, because 3D Systems sold part of the assets, but, in fact, the company is still unprofitable. If you forget about the loss of the value of 3D Systems assets in 2020, then, generally, the operational result she got the same.

  Panic ....

The company's gross margin fell from 43.1 to 41,2%, which led to the sale of shares, as the company's quarterly result was above expectations. The main reasons for the decrease in margin: rising cost of raw materials and problems with logistics.

IT Consulting Company Genpact (NYSE: G) reported the growth of revenue by 9%, and the profit increased by 20%. The company also raised its revenue forecast for this year.. The results were better than expected, but this did not affect the quotes.

At the e-commerce software manufacturer BigCommerce Holdings (NASDAQ: BIG C) revenue increased by 49%, and losses - more than twice. But the investor's heart is a mystery, so the quotes, for some unknown reason, flew into the stratosphere.

Dun software makers & Bradstreet Holdings (NYSE: DNB) pleased investors with news of revenue growth by 21,9% - and the company also made a profit. But since investors' expectations were obscenely high, stocks did not rise on such news, because the company has not exceeded analysts' expectations by much.

At the German industrial enterprise Covestro (ETR: 1COV) things are going very well: revenue increased by 55,9%, and the profit has more than doubled. The company also raised its forecast for this year's results - for the third time.. In this regard, Covestro shareholders can modestly hope for an increase in the company's dividend payments..

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