GM, Johnson & Johnson, FedEx, and Levi’s: Weekly Stock Market Digest (3–7 April)
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General Motors, Johnson & Johnson, FedEx, and Levi Strauss were in the spotlight this week. Below is a review of how their shares reacted to recent developments.
GM reported sales growth in Q1 2023
American automotive giant General Motors Company presented its first-quarter 2023 sales report on Monday 3 April. Sales volume in the US saw an increase of 18% to 603,208 vehicles from the same first quarter in 2022 but lost 3.2% from the previous quarter. The percentage growth in the number of sold cars was as follows: Buick brand vehicles added 99%, Cadillac 28.7%, Chevrolet 15.7%, and GMC 7.6% from Q1 2022.
General Motors sold 20,670 electric vehicles from January to March, reaching such a high number for the first time. This increased the share of electric vehicle sales to 3.4% from 2.6% in the previous quarter. The carmaker plans to produce 50,000 electric vehicles in the first half of this year and 100,000 in the second half.
Moreover, the company has bought back the shares of 5,000 employees, allowing them to leave the corporation voluntarily. The carmaker plans to cut its costs by 2 billion USD by 2024. However, General Motors Company (NYSE: GM) shares reacted to the news with a decline in price to 34.59 USD per unit, losing 5.7% since Monday.
Johnson & Johnson seeks settlement of lawsuits
On Tuesday 4 April, US holding company Johnson & Johnson published an interesting press release. The company owns and manages a group of more than 250 subsidiaries producing pharmaceuticals, sanitary products, and medical devices.
The press release states that Johnson & Johnson is ready to pay 8.9 billion USD to settle the existing and future claims relating to the use of talc in its products. The company had previously planned to allocate up to 2 billion USD for the settlements. Moreover, the LTL Management LLC subsidiary will be reorganised as part of the bankruptcy.
As you might recall, Johnson & Johnson had to stop selling goods with talc in the US and Canadian markets in 2020 due to an avalanche of lawsuits from consumers. The plaintiffs claimed that its products containing talc, which may also contain traces of asbestos, cause cancer.
The day after the press release, Johnson & Johnson (NYSE: JNJ) shares saw an increase of 4.49%, rising to 165.61 USD per unit. The quotes have gained 6.55% since Monday.
FedEx reorganises its business and increases its yearly dividend
FedEx Corporation, the American company providing postal, courier, and other logistics services almost all over the world, shared its plans with investors and shareholders on Wednesday 5 April. The corporation is to merge its operating companies into one to increase efficiency. According to management, this move will have a positive impact on FedEx Corporation’s ability to meet the needs and high demands of its customers.
The company plans to merge FedEx Ground, FedEx Express, FedEx Services, and other operating departments into Federal Express Corporation by June 2024. Meanwhile, FedEx Freight which specialises in cargo transportation will remain an independent company.
Moreover, the company announced a 10% increase in its annual dividend to 5.04 USD per share. Consequently, FedEx Corporation (NYSE: FDX) shares have gained 1.58%, rising to 232.1 USD since the beginning of the week.
Levi Strauss & Co.’s quarterly profit dropped 41%
On Thursday 6 April, US producer of clothing, footwear, and accessories Levi Strauss & Co. released its report for the first quarter of fiscal 2023. Revenue for the December to February period increased 6.09% to 1.69 billion USD, while the consensus forecast was 1.62 billion USD. Quarterly net profit lost 41.33% to 115 million USD or 0.29 USD per share.
Levi Strauss & Co.’s net profit in Europe dropped 2.98% to 455 million USD while growing in North and South America by 7.44% to 823 million USD. In Asia, net profit increased by 12.4% to 290 million USD, and in other regions by 23.47% to 121 million USD.
The company expects this fiscal year’s revenue to amount to 6.3-6.4 billion USD, and adjusted earnings to reach 1.3-1.4 USD per share. Since Monday, Levi Strauss & Co. (NYSE: LEVI) shares lost 16.95%, falling to 15.14 USD.
This week, General Motors Company reported an increase in car sales for the first quarter of 2023, and since Monday the shares dropped 6%.
Johnson & Johnson declared its readiness to pay 8.9 billion USD to settle existing and future claims related to the use of talc in its products. Its stock quotes reacted with a 5% growth.
FedEx Corporation shared the plans to reorganise its business and increase its annual dividend by 10%. The news sent its stock rising 2%.
Levi Strauss & Co. shares have lost 17% since the beginning of the week on the back of its earnings report for the first quarter of fiscal 2023.