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Thursday June 20, 2024

Finances

Finances
 

Oracle Reports Earnings

Oracle Corporation (ORCL) released its fourth quarter and full year earnings Tuesday, June 11. The multinational computer technology company’s stock rose by more than 13% after the release of the report.

The company posted net revenue of $14.29 billion for the quarter. This was up 3% from $13.84 billion reported in the same quarter last year but fell short of analysts’ expectations of $14.55 billion. For the full year, revenue came in at $52.96 billion, up 6% from $49.95 billion in the previous fiscal year.

"In Q3 and Q4, Oracle signed the largest sales contracts in our history—driven by enormous demand for training AI large language models in the Oracle Cloud,” said Oracle CEO, Safra Catz. “These record level sales drove RPO up 44% to $98 billion. Throughout fiscal year 2025, I expect continued strong AI demand to push Oracle sales and RPO even higher—and result in double-digit revenue growth this fiscal year. I also expect that each successive quarter should grow faster than the previous quarter—as OCI capacity begins to catch up with demand.”

Oracle reported fourth-quarter net income of $3.14 billion or $1.11 per adjusted share. Last year at this time, the company reported net income of $3.32 billion or $1.19 per adjusted share. For the full year, the company reported net income of $10.47 billion, an increase from net income of $8.50 billion reported last year.

The company’s cloud services and license support segment revenues were up 9% to $10.2 billion in the quarter. Cloud license and on-premise license segment revenues were down 15% to $1.8 billion. Oracle’s fourth-quarter cloud infrastructure revenue climbed 42% to $2.0 billion. Oracle’s board of directors declared a quarterly cash dividend of $0.40 per share of common stock. The cash dividend will be due to the stockholder of record on July 11, 2024, with an anticipated payment date of July 25, 2024.

Oracle Corporation (ORCL) shares closed at $138.38, up 10% for the week

Dave and Buster’s Releases Earnings Report

Dave and Buster’s Entertainment, Inc. (PLAY) announced its first quarter earnings on Wednesday, June 12. The arcade company’s stock fell by almost 11% after the company reported lower than expected revenue.

Revenue reached $588.1 million for the first quarter. This was an approximately 2% decrease from revenue of $597.3 million reported in the same quarter last year and below analysts’ expectations of $621.3 million.

“We continue to make material progress advancing our key organic growth initiatives,” said Dave and Buster’s CEO, Chris Morris. “We have seen meaningful success growing our loyalty database through our new marketing engine, highlighting our enhanced food and beverage offering through compelling promotions, refining our games pricing strategy, driving incremental special events and clear outperformance in our remodel initiative which we expect will lead to substantial improvement in revenue and profitability over the medium term.”

Dave and Buster’s reported quarterly net income of $41.4 million or $0.99 per adjusted share. Last year at this time, the company reported net income of $70.1 million or $1.45 per adjusted share.

Dave and Buster’s comparable store sales decreased 5.6% compared to the same time last year. The company’s entertainment segment reported revenue of $385.7 million and food and beverage revenues of $202.4 million for the quarter. The company opened three new Dave & Buster’s stores and one new Main Event store in the quarter for a total of 224 locations by the end of the first quarter. During the quarter, the company announced that it entered into an international franchise partnership to develop five stores in the Philippines, adding to its existing agreements in seven countries.

Dave and Buster’s Entertainment, Inc. (PLAY) shares closed at $43.77, down 10% for the week.

Lovesac Posts Earnings Report

The Lovesac Company, (LOVE) released its first quarter earnings on Thursday, June 13. The home-furnishing brand exceeded expectations in net sales for the quarter.

The company reported net sales of $132.6 million for the quarter. This was down 6% from $141.2 million in the same quarter last year and exceeded analysts’ expectations of $128.07 million in net sales for the quarter.

“We are pleased to deliver first quarter performance inline to slightly above the high end of our expectations,” said Lovesac’s CEO, Shawn Nelson. “Our results reflect continued outperformance compared to the industry and demonstrate our commitment to executing against our objectives. We believe through our omni-channel infinity flywheel, designed for life platform and advantaged supply chain we are well positioned to continue to deliver results and capitalize on the tremendous opportunity still ahead.”

Lovesac posted a net loss of $13.0 million or $0.83 per adjusted share for the quarter. This was greater than he reported net losses of $4.1 million or $0.27 per adjusted share reported last year.

The Connecticut-based furniture retailer reported a 14.8% decrease in omni-channel comparable net sales. Internet sales saw a decrease of 9.0% during the first quarter and showroom net sales fell by 2.3%. During the first quarter, the company added 24 showrooms, closed 3 of them and closed 5 kiosks as well. Advertising and marketing expenses increased 6.4% or $1.1 million in the first quarter compared to the year prior. The company expects net sales from the second quarter of fiscal 2025 to be between $152 and $160 million and full year fiscal 2025 net sales to be between $700 million and $770 million.

Lovesac Company (LOVE) shares ended the week at $24.25, down 7% for the week.

The Dow started the week of 6/10 at 38,785 and closed at 38,589 on 6/14. The S&P 500 started the week at 5,341 and closed at 5,432. The NASDAQ started the week at 17,083 and closed at 17,689.

 

Treasury Yields Decrease

U.S. Treasury yields dipped midweek as May’s consumer prices came in below expectations which suggests cooling inflation. Yields continued to drop at the end of the week as the recent job numbers revealed a softening labor market.

On Wednesday, the U.S. Department of Labor announced that the consumer price index (CPI), which measures the cost of dozens of everyday consumer goods, was unchanged for May, and below economists’ expected growth of 0.1%. The CPI year-over-year increased by 3.3%, slightly down from the 3.4% increase in April, just shy of economists’ expectations of a 3.4% year-over-year increase.

“The fact that CPI came in below expectations is the catalyst the market was looking for another leg higher," said chief executive at 50 Park Investments, Adam Sarhan. “It also gives the Fed a lot of room to begin easing and/or leaning toward easing rates in the foreseeable future.”

The benchmark 10-year Treasury note yield opened the week of June 10 at 4.44% and traded as low as 4.23% on Thursday. The 30-year Treasury bond opened the week at 4.56% and traded as low as 4.39% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased 13,000 to 242,000 for the week ending June 8. Continuing unemployment claims increased 30,000, reaching over 1.82 million.

"Initial claims have been drifting up for some time, but the big increase this week leaves the uptrend far harder to dismiss,” said senior U.S. economist at Pantheon Macroeconomics, Oliver Allen. "High long-term rates, tight credit conditions and a gradual softening in demand are starting to weigh more heavily on businesses, and on small companies in particular.""

The 10-year Treasury note yield finished the week of 6/10 at 4.23%, while the 30-year Treasury note yield finished the week at 4.35%.

 

Mortgage Rates Continue to Fall

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, June 13. The survey showed mortgage rates for both the 30-year and 15-year fixed rates decreased for the third week in a row.

This week, the 30-year fixed rate mortgage averaged 6.95%, down from last week’s average of 6.99%. Last year at this time, the 30-year fixed rate mortgage averaged 6.69%.

The 15-year fixed rate mortgage averaged 6.17% this week, down from 6.29% last week. During the same week last year, the 15-year fixed rate mortgage averaged 6.10%.

“Mortgage rates continued to fall back this week as incoming data suggests the economy is cooling to a more sustainable level of growth,” said Freddie Mac’s Chief Economist, Sam Khater. “Top-line inflation numbers were flat but shelter inflation, which measures rent and homeownership costs, increased showing that housing affordability continues to be an ongoing impediment for buyers on the house hunt.”

Based on published national averages, the savings rate was 0.45% as of 05/20. The one-year CD averaged 1.80%.

Editor’s Note: The publicly available financial information is offered as a helpful and informative service to our friends. This article is not an endorsement of any company, product or service.


Published June 14, 2024
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