AMD, Moderna, Lyft, Devon Energy, and Western Digital: Weekly News Digest (2–6 May)
This week, the quarterly reports positively impacted such companies as Devon Energy, Advanced Micro Devices, Lyft, and Moderna. Moreover, Western Digital shared its plans for possible restructuring. This is how the shares of the companies reacted to this week's news.
Devon Energy report: profit rises 4.5 times
On Monday 2 May, a report for Q1 2022 was presented by one of the oil and gas leaders in North America – Devon Energy. The financial statistics exceeded the expectations of Wall Street experts.
Compared to the results of the same quarter of 2021, earnings in January–March recorded an 85.5% growth to $3.8 billion, net profit saw a 364.3% rise to $989 million, and EPS grew 348.5% to $1.48.
Devon Energy reported a 27% increase in dividend payments to an all-time high of $1.27 per share. Moreover, the programme of stock buyback also increased by 25% to $2 billion.
On 3 May, the quotes of Devon Energy Corporation (NYSE: DVN) reacted to the positive quarterly report with a 10.16% growth to $64.28. The next trading session closed with an additional increase of 5.38%, reaching $67.74.
Western Digital might create a new company
Western Digital produces computer electronics, especially outer and inner data storage facilities. On Tuesday 3 May, the market heard that the management was addressed by one of the investors – Elliott Investment Management.
The hedge fund recommended the tech corp split its business into two standalone companies to single out flash memory production, which should bring more value to the business. Moreover, Elliott Investment Management expressed its eagerness to invest more than $1 billion in the flash business of Western Digital. The new company is evaluated for $17–20 billion.
On the same day, the shares of Western Digital Corporation (NASDAQ: WDC) jumped 14.47% to $61.72. When this article was being prepared, they dropped slightly to $61.19. Elliott Investment Management expects the shares of Western Digital to rise over $100 after the split of the business.
AMD report: all-time high quarterly earnings
On 3 May, a Q1 report was presented by Advanced Micro Devices, an American manufacturer of integral microchip electronics. The corporation reported that quarterly earnings had set a new record.
They had seen a 71% growth to $5.9 billion, with net profit rising 42% to $786 million, and revised EPS skyrocketing 117% to $1.13. Experts had forecast that the earnings would be $5.01 billion and EPS $0.91.
The computations and graphics segment earned the company $2.8 billion, recording a 33% growth in earnings; while the segment of corporate, built-in, and ordered products grew 88% to $2.5 billion. At AMD, they expect that in April–June, sales will reach $6.5 billion, and the gross margin will reach 54%.
On 4 May, the quotes of Advanced Micro Devices Inc. (NASDAQ: AMD) leaped up by 9.1% to $99.42. However, on the next day, they lost 5.58%, reaching $93.87.
Lyft report undermined its stock price
On Tuesday, the results of Q1 2022 were shared by Lyft – a public company that provides such services as taxi, car, scooter, bike rentals, and food delivery.
Lyft earnings in Q1 reached $875.6 million, which is 43.8% more than in Q1 2021. The net loss dropped 53.9% to $196.9 million, and the loss per share narrowed by 56.5% to $0.57.
And while the January–March financial results exceeded expectations, the decline in the number of active taxi drivers disappointed market players. The numbers reported only 17.8 million drivers, which is 31.9% less than in Q1 2021 and 4.9% less than in Q4.
On 4 May, the stock quotes of Lyft Inc. (NASDAQ: LYFT) plummeted 29.91% to $21.56. Note that the shares had been falling for three sessions in a row. The decline of almost 30% is the deepest for the company this year.
Moderna report: profit rose three times
On Wednesday, American biopharma company Moderna presented its Q1 report for this year. The positive results impressed investors and market players.
Compared to the dynamics of Q1 2021, earnings skyrocketed 213% to $6.1 billion, net profit rose 199.5% to $3.7 billion, and EPS went up 198% to $9.1 billion. Consensus forecasts were more modest: earnings were $5.4 billion, and EPS increased to $5.7.
As for the forecast for sales of COVID-19 vaccines for this year, Moderna left it to be the same as the previous year – $21 billion. However, experts note that the forecast could increase as it does not take into account any new purchases by the US government.
The shares of Moderna Inc. (NASDAQ: MRNA) reacted to the report by surging 5.8% to $155.05. However, on 5 May, following a three-day growth, the shares dropped 8.4% to $142.02.
The quarterly reports of Devon Energy, Advanced Micro Devices, and Moderna had a good influence on the stock prices of these companies. With Lyft, it was different: its report sent the quotes down almost 30%.
Elliott Investment Management suggested that Western Digital split its business, singling out the production of flash memory in a separate company. This news made the share prices rise by 15%.