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Friday June 21, 2024

Finances

Finances
 

Tyson Posts Quarterly Earnings

Tyson Foods, Inc. (TSN) released its quarterly earnings report on Monday, May 6. The company missed analysts’ revenue estimates, causing the food company’s stock to drop 6% following the release of the report.

Tyson posted revenue of $13.07 billion for the quarter. This is down 0.5% from $13.13 billion reported in the same quarter last year and less than the $13.15 billion in revenue that analysts expected.

“During the second quarter, we continued our positive momentum and made progress on our key initiatives.” said Tyson Foods CEO, Donnie King. “The strategies we have implemented are delivering tangible results, as evidenced by our return to year-over-year bottom line growth. Looking to the back half of the year, we will continue to focus on executing the fundamentals and leveraging our multi-protein portfolio. We are energized by our progress to-date and laser-focused on driving long-term value.”

For the second quarter, the company posted net income of $145 million or $0.41 per adjusted share. This is an increase from a net loss of $97 million or $0.28 per adjusted share this time last year.

The Arkansas-based food company includes brands such as Jimmy Dean, Hillshire Farm and Ball Park. The company experienced a sales volume increase in some segments: 2.8% in Beef, 2.9% in Pork and 0.7% in Prepared Foods. The company, however, had a 6.1% decline in sales of Chicken. Operating income was up 3.9% in Chicken while decreasing 0.7% in Beef. Tyson raised its full year outlook and expects adjusted operating income of $1.4 billion to $1.8 billion.

Tyson Foods, Inc. (TSN) shares ended the week at $59.65, down 2% for the week.

Rivian Rolls Out First Quarter Earnings

Rivian Automotive Inc. (RIVN) posted its first quarter earnings report on Tuesday, May 7. Despite the electric automotive company reporting better-than-expected revenue, its stock fell 5% following the release of the report.

Rivian reported revenue of $1.20 billion for the quarter, significantly up from the $661 million reported during the same quarter last year. Quarterly revenue exceeded analysts’ expectations of $1.17 billion.

“First-quarter results exceeded our outlook and set a strong foundation for the remainder of the year as we focus on continued demand generation, delivering cost and plant efficiency improvements, advancing R2 development, and driving towards profitability,” said Rivian CEO, RJ Scaringe. “We hit several milestones this quarter, including producing our 100,000th vehicle in Normal, successfully navigating the retooling upgrade, and unveiling our new midsize platform which underpins the R2, R3, and R3X.”

The company posted net losses of $1.45 billion or $1.48 per adjusted share for the quarter. This was a decline compared to net losses of $1.35 billion or $1.45 per adjusted share during the same quarter last year.

Rivian announced that it produced 13,980 EVs and delivered 13,588 vehicles during the first quarter, an increase of 49% and 71% respectively from the same period the prior year. The company also announced plans to reduce capital expenditures and costs by moving production of the recently announced R2 product lines to its Illinois facility. The gross loss per vehicle for the quarter was $38,784 which was attributed to supplier cost increases and retooling upgrades. Rivian is partnering with Amazon to provide 100,000 electric delivery vans. The company reaffirmed its full-year production guidance and plans to produce 57,000 vehicles by the end of 2024. 

Rivian Automotive Inc. (RIVN) shares ended the week at $9.99, down 2% for the week.

Cheesecake Factory Serves Up Earnings

Cheesecake Factory, Inc. (CAKE) released its first quarter earnings report on Wednesday, May 8. The restaurant company reported increased revenue and income for the quarter causing shares to rise 7% following the release of the report.

Cheesecake Factory posted quarterly revenue of $891.2 million. This was up from $866.1 million reported at the same time last year and above analysts’ expectations of $890.5 million.

“The Cheesecake Factory restaurants comparable sales and traffic once again meaningfully outperformed the industry,” said Cheesecake Factory CEO, David Overton. “Our first quarter sales improved throughout the quarter culminating at the high-end of our expectations. Our operators continued to deliver improvements in labor productivity, food efficiency, and hourly staff and manager retention, all of which contributed to significant growth in profitability.”

For the first quarter, Cheesecake Factory reported net income of $33.2 million or $0.68 per adjusted share. This is up from $28.1 million or $0.56 per adjusted share reported at this time last year.

Cheesecake Factory’s comparable restaurant sales in the first quarter decreased 0.6% year-over-year. The company expects to open at least 22 new restaurants in 2024 including as many as four Cheesecake Factory restaurants, seven North Italia restaurants, seven Flower Child locations and seven FRC restaurants. Currently, the company has a total of 336 restaurants. The company’s Board of Directors declared a quarterly dividend of $0.27 per share payable on June 4, 2024, for stockholders of record of May 22, 2024.

Cheesecake Factory, Inc. (CAKE) shares closed at $37.65, up 11% for the week.

The Dow started the week at 38,762 and closed at 39,513 on 5/10. The S&P 500 started the week at 5,142 and closed at 5,223. The NASDAQ started the week at 16,209 and closed at 16,341.

 

Treasury Yields Vary

U.S. Treasury yields were lower this week as investors digested the latest commentary on the Federal Reserve’s monetary policy. Yields fluctuated toward the end of the week as the market reacted to signs the labor market may be cooling and consumer sentiment was falling.

On Friday, the University of Michigan’s consumer sentiment index was released. The index for May came in at 67.4, down from 77.2 in April. This is below analysts’ expectations of 76.0. The survey also showed that consumers expect inflation over the next year to reach 3.5%, ahead of the Fed’s inflation target and an increase from 3.2% the prior month.

“This 10 index-point decline is statistically significant and brings sentiment to its lowest reading in about six months,” said Director of University of Michigan’s Surveys of Consumers, Joanne Hsu. “This month’s trend in sentiment is characterized by a broad consensus across consumers, with decreases across age, income, and education groups.”

The benchmark 10-year Treasury note yield opened the week of May 6 at 4.52% and traded as low as 4.42% on Tuesday. The 30-year Treasury bond opened the week at 4.67% and traded as low as 4.57% on Tuesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased by 22,000 to 231,000 for the week ended May 4. Continuing unemployment claims increased by 17,000 to reach 1.79 million.

“This still very low level of continuing claims is further evidence that the big jump in initial claims in early May is not the start of a persistent rise in laid-off workers but bears close watching," said senior economic advisor at PNC Financial, Stuart Hoffman. “The labor market is becoming better balanced between demand for and supply of workers which will help moderate upward wages pressures, especially as legal immigration has risen by over one million in each of the past two years.”

The 10-year Treasury note yield finished the week of 5/6 at 4.50%, while the 30-year Treasury note yield finished the week at 4.64%.

 

Mortgage Rates Move Lower

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, May 9. The survey showed mortgage rates declining after five weeks of increases.

This week, the 30-year fixed rate mortgage averaged 7.09%, down from last week’s average of 7.22%. Last year at this time, the 30-year fixed rate mortgage averaged 6.35%.

The 15-year fixed rate mortgage averaged 6.38% this week, down from 6.47% last week. During the same week last year, the 15-year fixed rate mortgage averaged 5.75%.

“An environment where rates continue to hover above 7% impacts both sellers and buyers,” said Freddie Mac’s Chief Economist, Sam Khater. “Many potential sellers remain hesitant to list their home and part with lower mortgage rates from years prior, adversely impacting supply and keeping house prices elevated. These elevated house prices add to the overall affordability challenges that potential buyers face in this high-rate environment.”

Based on published national averages, the savings rate was 0.46% as of 04/15. The one-year CD averaged 1.81%.

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 May 10, 2024
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