AMC Entertainment Q4 22 – 28/02 – AMC Entertainment has gone from being a flavour of the month meme stock to a business which has seen its share price undergo a slow decline from the levels we saw back in August last year.
In November the cinema chain saw Q3 revenues increase by 27% to $968.4m while losses also increased to $226.9m. The decision to split its shares and dilute its shareholders appears to have precipitated a wholesale cash out and while it has been able to cash in on the pick up in footfall from a summer of blockbuster films it is still carrying huge levels of debt. Furthermore, AMC is still spending more money than it is taking in revenue, to the tune of a cash burn of $179m in Q3. While this is expected to improve in this week's Q4 numbers, with increased footfall as a result of the new Avatar film, as well as Wakanda Forever, the company is still expected to see losses of $0.20c a share.
HP Q1 23 – 28/02 – when HP reported its full year results back in November the shares saw an initial bounce after it announced the loss of 6,000 jobs over 3 years, due to a slowdown in the PC and laptops market.
HP hasn't been alone in this regard with Dell also announcing similar reductions in headcount in recent weeks. In Q3, revenues came in well below expectations due to weaker demand for PCs with that trend continuing into Q4, revenues coming in at $14.8bn, although profits did beat slightly at $0.85c a share. For the new fiscal year 2023 the company offered an uncertain outlook with Q1 profits expected to come in at $0.70c a share, and full year adj. EPS between $3.20 and $3.60c a share. Will Q1 offer more of the same in terms of further downgrades?
Target Q4 23 – 01/03 – having warned on profits back in May last year, when it published its Q1 numbers, Target shares have struggled to recover their lost ground in subsequent quarters since then.
In Q3 the underperformance continued with Q3 profits coming in at $1.54c a share, well below expectations of $2.13c a share. On revenues the company was able to beat expectations, with $26.52bn, however profits halved from the $3.04c a year ago. Inventory levels were also high, as consumers pared back spending on discretionary items like apparel and electrical items. Having missed on profits Target also cut its guidance for Q4, projecting a modest single digit decline in sales, while expecting operating margin of around 3%.
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Rivian Q4 22 – 28/02 – when Rivian reported back in Q3 there was optimism that the share price had stabilised as the business started to ramp up its output capacity.
In Q3 the electric car company managed to produce 7,363 vehicles, delivering 6,584 of them. This put its total production year to date to over 15k, which means Q4 will need to deliver at least 10k vehicles to meet its 25k annual target. The addition of a second manufacturing shift at Normal should go some way to help achieve that, and will need to be given that the company has 114k pre-orders which it needs to meet. Q3 revenues did fall slightly short of expectations, coming in at $536m, while the net loss for the quarter was $1.7bn, or $1.57c a share. Full year losses are still expected to be in the region of $5.4bn, and while it still has plenty of cash, the rise in costs is likely to be a problem, unless they look at raising prices in the months ahead. Since those November numbers were released the share price has fallen sharply to new record lows, not for any other reason that with US interest rates on the rise the case for investing in loss-making businesses has become less compelling. Q4 losses are expected to come in at $1.91c a share.
