After the profit warning of global retail giant Walmart hit retail stocks on Monday, investors focused on the financial reports of many consumer giants this week, including Coca-Cola , McDonald's and Procter & Gamble , etc. In addition, automotive giants General Motors and 3M also announced their financial reports before the market opened on Tuesday.
financial results are mixed, but almost all companies are warning of the ongoing inflation expectations, , uncertain consumption outlook and other related recession issues. It seems that next quarter is the real test.
Coca-Cola updating its annual performance guidance against the trend
On Tuesday, July 26, global beverage giant Coca-Cola company released its second quarter financial report for 2022, with revenue and earnings per share exceeding expectations and raising its annual performance guidance.
is boosted by financial report, Coca-Cola rose 1%. As of the time of publication, the share price of rose by about 1.93%. Since the beginning of the year, Coca-Cola has risen by more than 5%, steadily outperformed S&P 500 index by more than 18% during the same period.
Specifically, its financial indicators:
- 's second-quarter revenue was US$11.325 billion, and increased by 12% year-on-year, exceeding the market's expectations of US$10.57 billion.
- operating profit was US$2.341 billion; net profit was US$1.90 billion.
- earnings per share was $0.70, up 4% year-on-year, higher than the market expectations of $0.67.
- global single-box sales increased by 8% year-on-year, while single-box sales in the Asia-Pacific market increased by 11% year-on-year.
In addition, Coca-Cola has raised its full-year performance guidance for 2022, and is expected to grow organic revenue in the 2022 range of 12% to 13%, higher than the previously expected range of 7% to 8%; the growth rate of comparable currencies' neutral earnings per share (non-regulated accounting standards ) has been raised to the 14% to 15%, higher than the previously expected range of 8% to 10%.
, Chairman and CEO of Coca-Cola Company, said that
's performance this quarter fully reflects the flexibility of our business, the advantages of further optimizing the brand portfolio, and the effective strategies we have adopted to achieve business growth under the influence of operations and macroeconomic . We will continue to adhere to the original intention of "Fun the world because I am different", unswervingly advance our strategy, and create more value for stakeholders.
analysis pointed out that despite inflationary pressure, Coca-Cola has transferred some of its costs through price increases, since the epidemic recovers, more people have returned to theme parks, cinemas and tourist destinations, so Coca-Cola's sales have increased accordingly. John Murphy, Chief Financial Officer of Coca-Cola, said:
We continue to see recovery and a large amount of demand, not only in the United States, but also in the world.
Earlier this month, Coca-Cola's old rival PepsiCo reported equally strong financial results, with second-quarter revenue up 5.2% from the same period last year, and PepsiCo also benefited from strong sales of its snacks and packaged foods.
McDonald's Q2 revenue was lower than expected, warning of continued risks in the future
Before the market on Tuesday, McDonald's released its second quarter results for 2022 showed that although the price increase strategy helped food giant McDonald's increase sales, due to uncertain consumer outlook, McDonald's warned that there will be continued business risks in the future, especially the rising fuel and food costs.
- 's second quarter revenue was US$5.718 billion, a year-on-year decrease of 3%, lower than market expectations; among which the sales of self-operated restaurants were US$2.113 billion, a year-on-year decrease of 15%; the sales of franchise restaurants were US$3.527 billion, a year-on-year increase of 7%; the revenue of other businesses was US$78.8 million, a year-on-year decrease of 15%.
- 's net profit in the second quarter was US$1.188 billion, a year-on-year decrease of 46%;
- 's second quarter earnings per share was US$2.55 (under non-GAAP), exceeding market expectations.
McDonald's CEO Chris Kempczinski said, "The operating environment of the entire competitive landscape remains challenging."
Given the weakening of consumer sentiment and the possibility of a global economic recession, McDonald's is planning for a broader situation. McDonald's is looking at whether there is a need to offer more value options on the menu in its market.
McDonald's expects commodity and wage inflation and rising energy prices to affect restaurant profit margins in the second half of the year. For example, the company expects food and paper costs in the U.S. to increase by 12% to 14% this year on the 2021 basis, and wages will increase by 10% year-on-year. Executives said they expect inflation in Europe to be more pronounced than in the United States.
In addition, from Kraft Heinz to Campbell Soup, some of the largest food suppliers and restaurants in the United States have recently stated that they will continue to raise prices due to higher costs. Casual restaurant chain BJ's Restaurants Inc. said last week it will continue to rise by 2% next month after a 1.4% increase in June. Domino's Pizza said prices rose by nearly 6% in the latest quarter as it also increased the prices of menu prices, offers and delivery fees.
As of the end of publication, McDonald's US stock rose by more than 3% in the early trading on Tuesday.
General Motors is troubled by supply chain, and net profit dropped by more than 40% in Q2
General Motors also announced its second-quarter financial report. GM maintained its full-year profit outlook due to surge in demand, but said it was controlling spending and limiting hiring ahead of a potential economic slowdown.
was hit by a 40% net profit general, and General 's stock price fell 3.9% before the market, fell nearly 3% in the early trading on Tuesday, and has a cumulative decline of 45% since the beginning of the year.
Specifically, its core financial indicators:
- 's revenue in the second quarter reached US$35.759 billion, a year-on-year increase of 4.6%, higher than the expected US$34.2 billion;
- 's net profit attributable to shareholders in the second quarter was US$1.692 billion, a sharp decline of 40.3% year-on-year, compared with US$2.836 billion in the same period last year;
- 's adjusted earnings per share was US$1.14, compared with US$1.9 per share in the same period last year, lower than market expectations.
In addition, GM maintained its previous performance guidance, but also stated that it was preparing for a potential economic slowdown:
- expects full-year net profit of $9.6 billion to $11.2 billion; adjusted EBIT to $13 billion to $15 billion; adjusted EPS of $5.76 to $6.76; adjusted automotive business free cash flow between $7 billion and $9 billion.
GM warned as early as early July that its decline in North America's automobile production will affect second-quarter results. The company also noted that it could not deliver 95,000 vehicles to dealers due to shortages of chips and other components. However, GM also said on Tuesday that it signed a multi-year cooperation agreement with LG Chem and lithium technology company Liven to achieve its goal of producing 1 million electric vehicles in North America by the end of 2025. “Looking forward, we will continue to mitigate risks and reduce costs to help us achieve $90 billion in annual EV revenue by 2030,” said Mary Barra, CEO of General Motors. “We are already taking positive steps to manage costs and cash flow before the economy may slow down.
In addition, we have simulated several economic downturns and we are ready to take more cautious actions when necessary. GM simulates a moderate recession in its planning, not a severe recession.
In addition, the impact of the global chip shortage will continue until next year.
3M will split the health care business and establish two listed companies
On the same day, M company announced its second-quarter financial report, with revenue and earnings per share exceeding expectations but net profit far lower than expected. Specifically:
- 's net revenue in the second quarter was US$8.7 billion, exceeding the market's expectations of US$8.63 billion;
- 's second-quarter financial report, adjusted earnings per share was US$2.48, exceeding the market's expectations of US$2.44;
- 's net profit in the second quarter was US$78 million, far lower than the US$1.5 billion in the second quarter of last year.
In addition, 3M also announced that it will split its healthcare business and set up two listed companies to promote their respective growth plans. Previously, 3M split its food safety business and merged with food safety testing company Neogen, which is expected to be completed in September this year.
It is reported that the new 3M company will be a global materials science company with a range of industrial and consumer markets, and the spin-off healthcare company will focus on wound care, medical information technology, oral care and biopharmaceutical filtration. The spin-off is expected to be completed by the end of 2023. Data shows that 3M's healthcare business has sales exceeding US$8 billion in 2021.
was boosted by this news, and the 3M company's stock price rose by more than 6% in the early trading.
In addition to the impact of the economic outlook, Wall Street News earlier article also pointed out that the strong dollar is eroding the performance of US stock companies, and this is also reflected in the second quarter report. USD index has risen by more than 10% this year and has now risen to its highest level since 2002.
This article comes from Wall Street News, welcome to download the APP to view more
