Meta, Alphabet, Walmart, Roku, and SIGA: Weekly Digest (25 – 29 July)
This week, Alphabet, Meta Platforms, and Roku released their Q2 financial statements, while SIGA Technologies reported increased demand for its medicine against smallpox. Walmart revised its forecasts for quarterly and annual profits downwards and announced a retail partnership with Getaway. Let’s take a closer look at this news.
On Monday 25 July, the shares of American pharmaceutical company SIGA Technologies Inc. (NASDAQ:SIGA), whose key product is the oral smallpox antiviral TPOXX, gained 29.03$, reaching $15.69.
This upward movement can be easily explained by the news: the World Health Organisation (WHO) named the monkeypox outbreak a healthcare emergency.
We remind you that the medicine developed by SIGA Technologies named TPOXX has been approved by regulators of the European Union and the United Kingdom for the treatment of monkeypox. As a result, the company reported higher demand for this medicine.
Consequently, the shares of SIGA Technologies have demonstrated positive dynamics throughout the entire week. On Thursday, they rose 24.86% up to $22.35, influenced by the news that on 4 August the company would release its Q2 financial statement.
Roku: a weak report and pessimistic outlook
On Tuesday 26 July, the shares of Roku Inc. (NASDAQ:ROKU), which owns a streaming platform and is involved in digital and video advertising, dropped 7.83% down to $79.91.
The stock declined because Wolfe Research and Raymond James Financial analysts downgraded it to Underperform rating from Peer Perform. Experts believe that the company’s revenue from advertising will drop amid a slumping economy; therefore the number of investments in technologies and content development will follow suit and also decline.
However, on the next day, Ark Invest's CEO Cathie Wood spent almost $47 million to acquire over 584,000 shares of Roku. The stock responded with an 8.73% growth, up to $86.89.
On Thursday, Roku Inc. released its Q2 report that showed revenue growth of 18% growth, up to $764 million, a 52.9% increase in the net loss, up to $112.3 million; and a 57.7% growth in the loss per share, up to $0.82. In addition, the company cut its revenue forecast for the third quarter from $898 million to $700 million. At the end of the trading session, the stock lost 1.91%, down to $85.23 per share.
The Alphabet report: the slowest growth in over two years
On 26 July, Alphabet published its Q2 financial statement too, which turned out to be rather mixed: revenue was a bit higher than predicted, while the net profit fell short of expectations.
Alphabet revenue gained 13%, up to $69.7 billion, which is $190 million more than expected. On the other hand, net profit dropped 13.6%, down to $16 billion, while earnings per share lost 11%, down to $1.21. Experts were expecting the latter indicator to be $1.28.
13% is the slowest growth in quarterly revenue for Alphabet since Q3 2020. The corporation followed the strategy taken by other companies, initiating a hiring freeze. On 26 July, Alphabet’s (NASDAQ:GOOGL) class A shares declined 2.32%, down to $105.02, but on the next day, they added 7.66%, up to $113.06.
Walmart revised its revenue forecast
On Tuesday, America's largest retail chain, Walmart, cut its quarterly and annual profits outlook. The key reason is an intimidating boost to inflation in view of the fact that consumers are cutting back on their durable goods expenses.
Walmart experts say that revised earnings per share will drop 8–9% in the period of May–July, and 11–13% over the whole fiscal year. Earlier, this indicator was expected to remain unchanged in the quarter and to lose just 1% over the year. On 26 July, the shares of Walmart Inc. (NYSE:WMT) declined 7.6%, down to $121.98.
Two days later, Walmart announced a retail partnership with Getaway, the network of modern cabin retreats. The parties will open a retail chain of general stores with seasonal products from local small businesses, and goods for outdoor activities. Walmart shares responded with a 2.5% growth, up to $129.75.
A report from Meta Platforms: profit declined by 36%
Meta Platforms reported on Q2 2022 on Wednesday 27 July. The company’s revenue declined 1%, down to $28.8 billion, against the forecast from Wall Street analysts of $28.94 billion. Net profit plummeted 36%, down to $6.7 billion, while earnings per share plunged 32%, down to $2.46. Experts were expecting the latter indicator to be $2.59.
In the third quarter, Meta Platforms’ revenue is anticipated to be $26–28.5 billion, which is also below the forecast of $30.7 billion. The corporation announced that it would initiate a hiring freeze to reduce expenses.
The key reasons for this disappointing report and the weak outlook are the economic situation as a whole and the negative impact of Apple software updates on the company’s business. On 28 July, the day following the report was published, the shares of Meta Platforms Inc. (NASDAQ:META) lost 5.22%, reaching $160.72.
This week, quarterly reports were published by Roku, Alphabet, and Meta Platforms. The shares of the first two companies dropped about 2% after the data release, while the third one declined 5%.
Amid the growing number of new monkeypox cases and the panic they are causing, SIGA Technologies, the company that produces anti-smallpox medicine, is becoming more popular. Early in the week, its stock surged 29%.
Walmart cut its quarterly and annual profits outlook – as a consequence, its stock plunged 9%. Sometime later, the company announced cooperation with Getaway to open a retail chain of general stores with seasonal products from local small businesses. Following this news, the shares gained almost 3%.