This week, quarterly reports have been presented by Walmart, Target, and Cisco Systems. There was a massive decline in the retail sector stocks. Paramount Global prepared some interesting news for its investors. Find more details of what happened below.

Paramount shares grew by more than 15%

From the documents supplied to the US Security and Exchange Commission, on Tuesday 17 May, it became known that at the end of Q1 2022, the Berkshire Hathaway corporation owned almost 69 million shares of Paramount Global, which cost $2.6 billion.

The media company owns such channels as MTV, CBS, Nickelodeon, the Paramount+ streaming service, and the Paramount cinema studio. The stock quotes of Paramount Global (NASDAQ: PARA) reacted to this information with a 15.35% rise to $32.32.

Walmart report: profit declined 25%

On 17 May, a report for Q1, financial 2023 was presented by Walmart Inc. which manages the world’s largest chain of wholesale and retail shops. Compared to the statistics of Q1 last financial year, earnings increased 2.4% to $141.57 billion, which is $2.74 billion more than forecast by Wall Street analysts.

Net profit over February–April calendar 2022 recorded a 25.5% drop to $2.1 billion, and EPS slumped 23.7% to $0.74. Moreover, Walmart brought down the forecast for the current financial year: profit is expected to increase by 4% and EPS to decline by 1%.

On the same day, the share price of Walmart Inc. (NYSE: WMT) plummeted 11.38% to $131.35. During the next trading sessions, the stock quotes kept falling but much slower. At the moment this article was being prepared, the share price was $119.07.

Target report: profit dropped by 52%

On Wednesday 18 May, a report for Q1, financial 2022 was shared by one more large retailer – Target Corporation. The report led to a massive sale of the company shares.

Target reported that from February to April, earnings increased 4% to $25.17 billion. Experts questioned by Bloomberg expected it to reach $24.3 billion. Net profit recorded a 51.9% drop to $1.1 billion, and EPS declined by 48.2% to $2.16. Analysts had forecast EPS at $3.06.

Corporation representatives stated that due to the rising fuel costs and logistics services, general spending this year will increase by $1 billion, compared to the previous forecast.

Investors were disappointed by the statistics, which led to the stock quotes of Target Corporation (NYSE: TGT) dropping by 24.93% to $161.61 on 18 May. On the next day, the shares lost 5.06% more, reaching $153.43.

Stock prices of Dollar Tree and other retailers dropped

With such disappointing quarterly reports of Walmart and Target, the shares of other large retail chains also started falling. On 18 May, the stock quotes of Dollar Tree Inc. (NASDAQ: DLTR) dropped by 14.42% to $133.8, the quotes of Dollar General Corporation (NYSE: DG) fell 11.11% to $202.26, and Kohl’s Corp. (NYSE: KSS) plummeted 11.02%, falling to $43.13.

Financial reports for the quarter for Dollar Tree and Dollar General are expected next week, while Kohl’s published its statistics on Thursday 19 May. Its earnings declined by 4.4% to $3.7 billion, net profit remained as it was at $14 million, while EPS increased 22% to $0.11.

Cisco Systems’ report disappointed investors

On 18 May, a report for Q3 financial 2022 was published by Cisco Systems. The company designs and supplies network equipment to large corporations in the IT and telecom spheres.

Earnings of Cisco Systems over February–April 2022 remained as last year – $12.8 billion. This was below the forecast of $13.34 billion. Net profit increased 6% to $3 billion, and EPS by 7% to $0.73.

Cisco Systems lowered its yearly forecast: the expected rise in earnings changed from 5.5-6.5% to 2-3%, and EPS from $3.41-3.46 to $3.29-3.37. Consequently, the report and forecast led to major sales in the market. On 18 May, the shares of Cisco Systems Inc. (NASDAQ: CSCO) dropped by 4.43% to $48.36, and on 19 May they slid down by 13.73% to $41.72.

Summing up

The stock quotes of Paramount surged 15% after the news that a major part of the company’s shares was held by Berkshire Hathaway.

A weak quarterly report and a worsening forecast for this year affected the stock price of Cisco Systems: it lost almost 14%.

Walmart and Target reported a noticeable decline in their quarterly net profit, which sent their stock prices down 11% and 25%, respectively. This caused a consequent decline in the shares of the whole retail sector: Dollar Tree shares plummeted 14%, while Dollar General and Kohl’s quotes plunged 11%.

With the US inflation hitting a 40-year record, consumers choose cheaper goods, mostly necessities, which also affected the profits of retailers.

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Server is the guru of searching for market insights. Since 2019 he writes about everything that might be useful to the investor, focusing on the stock market and its assets.