Monday September 26, 2022
Chevron Quarterly Report
The company reported net revenue of $54.37 billion, up 70% from $32.03 billion during the same quarter last year.
"Chevron is doing its part to grow domestic supply with U.S. oil and gas production up 10 percent over first quarter last year," said Chevron's Chairman and CEO, Mike Wirth. "Chevron's worldwide net oil equivalent production in the first quarter was 3.06 million barrels per day. Permian Basin unconventional production grew to a record 692,000 barrels of oil equivalent per day in the first quarter, as the company raised its 2022 guidance to 700,000 - 750,000 barrels per day, an increase of over 15 percent from 2021."
Chevron reported net income of $6.27 billion during the quarter, or $3.22 per adjusted share, up from $1.39 billion or $0.72 per adjusted share this time last year.
Chevron Corporation announced its acquisition of Renewable Energy Inc. and its signing of definitive transaction agreements with Bunge North America, Inc. in efforts to accelerate the oil titan's plan to grow its renewable fuels business. The company's capital expenditures during the first quarter increased to $2.8 billion, increasing 10% from the prior year. The total of full-year capital spending and announced acquisitions is expected to be more than 50% higher than 2021. The company also closed its agreement with Neste Corporation to acquire its base oil business, strengthening its position as a leading supplier of premium base oils.
Chevron Corp (CVX) shares ended the week at $170.69, up 9.2% for the week.
Big 5 Sporting Goods Corporation Beats Expectations
Big 5 Sporting Goods Corporation (BGFV) released its first quarter earnings report on Tuesday, May 3. The California based sporting goods retailer's stock declined 3% after the earnings release.
The corporation posted quarterly revenue of $241.98 million, down 11.4% from $272.8 million at the same time last year and just missed analysts' expected revenue by $0.3 million.
"We are pleased to report first quarter earnings results that were slightly ahead of the high end of the guidance range that we provided and significantly ahead of any pre-pandemic first quarter in our history," said Big 5's President and CEO, Steven G. Miller. "As we emerge from the pandemic, the foundation of our business remains extremely solid. While our results versus 2021 reflect very difficult comparisons against last year's record first quarter, when sales surged due to COVID-related factors, in this year's first quarter we generated historically strong earnings despite facing a variety of headwinds throughout the period, including unfavorable winter weather, Omicron-related challenges, supply chain disruptions, and inflationary pressures."
For the first quarter, Big 5 reported net income of $9.1 million or $0.41 per diluted share, down from $21.5 million or $0.96 per diluted share reported at this time last year.
Big 5 Sporting Good's overall selling and administrative expense for the quarter increased by $5.2 million from the prior year primarily due to broad-based inflationary impacts, including increased employee labor and benefit-related expenses year-over-year. The company expects second quarter same-store sales to decrease compared to the record sales of $82 million in the second quarter of 2021. Big 5 currently has 431 stores in operation and expects to open approximately four stores and close two in 2022.
Big 5 Sporting Goods Corp. (BGFV) shares closed at $14.23, down 2% for the week.
Amazon Posts Earnings
Amazon.com, Inc. (AMZN) reported its latest quarterly earnings on Thursday, April 28. The online retail giant reported an increase in revenue. The company's stock dropped 10% following the release of the report.
For the fourth quarter, the company's net sales reached $116.4 billion or $7.38 per adjusted share. This was up 7% from $108.5 billion in sales last year at this time and was above analysts' expectation of $116.3 billion.
"The pandemic and subsequent war in Ukraine have brought unusual growth and challenges," said Amazon's CEO Andy Jassy. "With AWS growing 34% annually over the last two years, and 37% year-over-year in the first quarter, AWS has been integral in helping companies weather the pandemic and move more of their workloads into the cloud. Our Consumer business has grown 23% annually over the past two years, with extraordinary growth in 2020 of 39% year-over-year that necessitated doubling the size of our fulfillment network that we'd built over Amazon's first 25 years—and doing so in just 24 months."
The company reported a net loss of $3.8 billion or $6.56 per diluted share. This was down from $8.1 billion or $15.79 per diluted share at the same time last year.
The company reported net product sales of $56.5 billion, falling short of its net service sales of $60.0 billion. The company forecasts net sales to be between $116.0 billion and $121.0 billion, or to grow between 3%-7% compared with second quarter 2021. Amazon attributed its sales increase this quarter to the growth of its AWS cloud service division, with new commitments and migrations from customers across many major industries, its expansion of 'Buy with Prime' that extends several benefits to its Prime members, and the completion of its acquisition with MGM.
Amazon.com, Inc. (AMZN) shares ended the week at $2,295.45, down 6.2% for the week.
Treasury Yields Increase
On Wednesday, the Federal Reserve announced that it had raised its benchmark interest rate by half of a percentage point in an effort to combat inflation. This marks the largest rate increase since 2000.
"Inflation is much too high and we understand the hardship it is causing," said Fed Chairman, Jerome Powell. "We're moving expeditiously to bring it back down...we're strongly committed to restoring price stability."
The benchmark 10-year Treasury note yield opened the week of 5/2 at 2.934% and traded as high as 2.929% on Thursday. The 30-year Treasury bond yield opened the week at 3.003% and traded as high as 3.006% on Wednesday.
On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased to 200,000 for the week. This was 19,000 more than the previous week's revised claims of 180,000 and exceeded market estimates of 182,000.
"The latest level of initial claims filings is still pretty low by broad historical standards, and continuing claims filings kept trending lower through today's report, so overall we believe that the labor market remains strong," said economist at JPMorgan, Daniel Silver.
The 10-year Treasury note yield closed at 3.066% on 5/6, while the 30-year Treasury bond yield was 3.230%.
Mortgage Rates Remain High
This week, the 30-year fixed rate mortgage averaged 5.27%, up from last week's average of 5.10%. Last year at this time, the 30-year fixed rate mortgage averaged 2.96%.
The 15-year fixed rate mortgage averaged 4.52% this week, up from 4.40% last week. During the same week last year, the 15-year fixed rate mortgage averaged 2.30%.
"Mortgage rates resumed their climb this week as the 30-year fixed reached its highest point since 2009," said Freddie Mac's Chief Economist, Sam Khater. "While housing affordability and inflationary pressures pose challenges for potential buyers, house price growth will continue but is expected to decelerate in the coming months."
Based on published national averages, the savings rate was 0.06% as of 4/18. The one-year CD averaged 0.17%.