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Friday April 12, 2024



Goodyear Rolls Out Earnings Report

Goodyear Tire & Rubber Company (GT) released its fourth quarter and full-year results on Monday, February 12. The multinational tire manufacturer's shares fell about 13% after reporting a drop in sales.

The company reported net sales of $5.12 billion during the quarter, missing analysts' expectations of $5.35 billion. This was down 4.8% from $5.37 billion in sales during the same quarter last year. For the full year, revenue came in at $20.07 billion, a 3.6% decrease from $20.81 billion one year ago.

"I am confident Goodyear Forward will drive our Company's next stage of profitable growth and success is clear, and I fully support the plan," said Goodyear CEO, Mark Stewart in an earnings call. "That focus will be centered purely around our Goodyear Forward in the coming months. I am engaged in deep dives on each element of the program, the associated work stream, our amazing teams and committed to delivering the outcomes of the Forward plan."

Goodyear reported a net loss of $291.0 million for the quarter or $1.02 per adjusted share. This is compared to a net loss of $104.0 million or $0.37 per adjusted share in the same quarter last year. For the full year, the company's net loss was $689 million.

The Akron, Ohio-based company reported a 4.8% decrease in sales year-over-year was driven by lower replacement volume and third-party chemical sales. Goodyear's Tire unit volume decreased by 3.8% to 45.4 million units compared to 47.2 million units during the same time last year. Global replacement volume for the quarter within the Tire segment decreased 6.7%, which was attributed to weak demand in its Europe, Middle East and Africa (EMEA) region. Global original equipment (OE) volume in the fourth quarter saw a 6.0% increase driven by a 22.3% gain in Asia Pacific. The company expects to improve profitability with its Goodyear Forward plan which targets annualized cost reductions of $1.0 billion by year end 2025.

Goodyear Tire and Rubber Company (GT) shares ended the week at $12.31, down 9% for the week.

Coca-Cola Serves Up Earnings

Coca-Cola Company (KO) released its fourth quarter and full-year earnings report on Tuesday, February 13. Although the soft drink company reported increased revenue that exceeded expectations, its shares fell 1% following the release of the report.

Coca-Cola posted net revenue of $10.85 billion for the quarter. This is up 7% from $10.13 billion in revenue reported at the same time last year and above Wall Street's expectation of $10.68 billion. For the full year, revenue came in at $45.75 billion, a 6% increase from $43.00 billion last year.

"During the year, our people and partners rose to meet new challenges, allowing us to excel globally and deliver in a dynamic world," said Coca-Cola CEO, James Quincey. "As we begin a new year, we are confident that our all-weather strategy, powerful portfolio and harmonized system will continue to create value for our stakeholders in 2024 and for the long term."

Coca-Cola reported net income of $1.97 billion or $0.46 per adjusted share for the quarter. This was down 3% from $2.03 billion or $0.47 per adjusted share in the same quarter last year. For the full year, the company's net income was $10.71 billion.

The iconic Atlanta-based beverage company reported growth of 2% in their unit case volume for the fourth quarter attributable to growth in developing and emerging markets in Brazil and India. Performance of the company's Trademark Coca-Cola segment and sparkling soft drinks segment grew 2% for the quarter. The juice, dairy and plant-based beverage segments grew 6%. The company's water, sports, coffee and tea segment increased by 1%. The Coca-Cola Zero Sugar segment grew by 4% for the quarter. For fiscal 2024, the company expects to deliver organic revenue growth of 6% to 7%.

Coca-Cola Company (KO) shares closed at $59.39, relatively unchanged for the week.

Airbnb Releases Earnings Report

Airbnb, Inc. (ABNB) released its fourth quarter and full-year earnings report on Tuesday, February 13. Despite the company reporting better-than-expected revenue, shares fell more than 4% following the earnings release.

The company's revenue for the fourth quarter was $2.22 billion. This was up 17% from $1.90 billion during the same quarter last year and above analysts' forecast of $2.17 billion. For the full year, revenue came in at $9.9 billion, an 18% increase from $8.4 billion one year ago.

"Our strong results from 2023 were driven by our focus on three strategic priorities: making hosting mainstream, perfecting our core service and expanding beyond the core," said Airbnb's CEO, Brian Chesky in a shareholder's call. "Over the past three years, we have launched more than 430 new features and upgrades to our core service. We have made significant improvements to make Airbnb a more affordable and reliable option, and we are already seeing a positive impact."

Airbnb reported a net loss of $349 million during the quarter or $0.55 per adjusted share. This was down from net income of $319 million or $0.48 per adjusted share reported last year. For the full year, the company's net income was $4.79 billion.

The San Francisco-based company serves as an online platform for vacation rentals and lodging. Airbnb's Nights and Experiences Booked category reached 98.8 million bookings during the quarter, a 12% increase from the same quarter in 2022. Airbnb's gross bookings value was $15.5 billion, up 15% from last year at this time. Stays of 28 days or more made up 19% of bookings in the fourth quarter, up 1% from the same period a year earlier. For the full year, the company ended with more than 7.7 million active listings, up 18% from 2022. In the first quarter of fiscal 2024, the company expects revenue of $2.03 billion to $2.07 billion.

Airbnb, Inc. (ABNB) shares ended the week at $152.51, up 3% for the week.

The Dow started the week of 2/12 at 38,657 and closed at 38,628 on 2/16. The S&P 500 started the week at 5,027 and ended at 5,006. The NASDAQ started the week at 15,981 and finished at 15,776.

Treasury Yields Fluctuate

U.S. Treasury yields trended lower early in the week as investors digested the latest economic data reflecting higher costs for consumer goods. Yields fluctuated later in the week after reports that inflation rose more than expected.

On Tuesday, the U.S. Bureau of Labor Statistics announced that the consumer price index (CPI), which measures the cost of dozens of everyday consumer goods, increased 0.3% in January and was slightly above economists' forecast of 0.2%. The CPI year-over-year fell to 3.1%, down from 3.4% in December but came in higher than economists' projections of 2.9%.

"The much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later," noted Chief Global Strategist at LPL Financial, Quincy Krosby. "Across the board numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle."

The benchmark 10-year Treasury note yield opened the week of February 12 at 4.17% and traded as high as 4.34% on Wednesday. The 30-year Treasury bond opened the week at 4.37% and traded as high as 4.49% on Wednesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 8,000 to 212,000 for the week ended February 10. This came in lower than economists' forecast of 219,000 claims for the week. Continuing unemployment claims increased by 30,000, reaching 1.90 million.

"The dichotomy between exceptionally low initial claims and the recent rise in continuing claims suggests that the U.S. labor market is slowing, and that workers who lose their jobs are having a more difficult time finding new work," said senior economic advisor at PNC Financial Services, Stuart Hoffman.

The 10-year Treasury note yield finished the week of 2/12 at 4.28%, while the 30-year Treasury note yield finished the week at 4.34%.

Mortgage Rates Move Higher

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, February 15. The survey showed mortgage rates increased following economic reports of higher inflation earlier in the week.

This week, the 30-year fixed rate mortgage averaged 6.77%, up from last week's average of 6.64%. Last year at this time, the 30-year fixed rate mortgage averaged 6.32%.

The 15-year fixed rate mortgage averaged 6.12% this week, up from last week's 5.90%. During the same week last year, the 15-year fixed rate mortgage averaged 5.51%.

"On the heels of consumer prices rising more than expected, mortgage rates increased this week," said Freddie Mac's Chief Economist, Sam Khater. "The economy has been performing well so far this year and rates may stay higher for longer, potentially slowing the spring homebuying season. According to our data, mortgage applications to buy a home so far in 2024 are down in more than half of all states compared to a year earlier."

Based on published national averages, the savings rate was 0.47% as of 1/16. The one-year CD averaged 1.86%.

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 February 16, 2024
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