Shell has been an exception to the rule of energy companies generally doing better last year, particularly in the final quarter
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Naturally this week Google, Apple and McDonald's have been the centre of attention, but we shouldn't forget about Shell - one of energy sector companies, which, in 2022, performed really well. However, according to M4Markets, Shell has been an exception...
FXMAG.COM: It's been a good year for energy companies - what do you expect from Shell earnings?
M4Markets: Shell has been an exception to the rule of energy companies generally doing better last year, particularly in the final quarter. The prelude facility suffered an outage that led to a reduction in LNG liquefaction volumes. Additionally, it suffered delays in developing a field in Mexico. Most recently, the company announced a restructuring under its new CEO, Wael Sawwan, to simplify the executive structure and reduce costs, and likely to see some (minor) job cuts. Those moves point towards the company having some cost pressures, particularly in the context of increased windfall taxes from 25% to 35%, which are expected to have a £1.7bn impact on UK and EU profits this quarter but a potentially more prominent impact on the next. Guidance is likely to be in focus, particularly on capital expenditures, as some companies have opted to pass on the windfall gains to their shareholders, helping support stock prices.
Last year's Black Friday was record-breaking, but what about the year 2022 as a whole. Was it good enough to let Amazon exceed earnings expectations?
After Amazon announced several cost-cutting initiatives, including 18000 job cuts, analysts have become less optimistic about the company's sales. Particularly considering retail sales numbers in numerous countries have come in lower than expected in the key holiday month, with growth in North America offset by contraction in its international business; lower expectations means it's easier to have a surprise beat.
Read next: Samsung Demand For Semiconductors And Smartphones Remains Weak| FXMAG.COM
On the other hand, a hefty share of Amazon's revenue now comes from AWS, its cloud division. Towards the end of last year, the cloud saw a significant slowing in demand, which could be 'the' surprise for Amazon's earnings. But maybe - and this is rather unlikely, rivals saw a drop in demand because there was a significant uptake at AWS, which could provide the surprise beat. Amazon's measures to support profit margins recently suggest the earnings won't be all that good, but that might get rescued by improved guidance if the cost-cutting allows for improved profitability later in the year.
