Netflix, Procter & Gamble, and American Banks: Weekly Digest (16-20 January)
This week, our focus was on such companies as Netflix, Morgan Stanley, Goldman Sachs, and Procter & Gamble. Find out how their shares reacted to the latest events.
Morgan Stanley report: quarterly profit dropped by 40%
On Tuesday 17 January, reports for Q4 and the whole of 2022 were presented by Morgan Stanley (NYSE: MS) – one of the largest American banks –, which sent its stock climbing 5.91% to $97.08 on the same day.
Compared to the results of Q4, 2021, revenue in October - December dropped by 12.22% to $12.74 billion, which is 2.6% higher than analysts had forecast. Net profit in Q4 decreased by 39.51% to $2.24 billion, and EPS dropped by 37.32% to $1.26. Experts had forecast an EPS of $1.19.
Compared to 2021, during the whole of 2022, revenue decreased by 10.18% to $53.66 billion, net profit declined by 26.64% to $11.03 billion, and EPS dropped 23.41% to $6.15.
Goldman Sachs report: quarterly profit dropped by 69%
On 17 January, Goldman Sachs, another large US bank, reported on its performance for Q4 and the whole of 2022: the quotes of Goldman Sachs Group Inc. (NYSE: GS) plunged 6.44%, dropping to $349.92.
Over Q4 last year, revenue dropped by 16.19% to $10.59 billion, which is 1% lower than the consensus forecast. Net profit dropped by 68.77% to $1.19 billion, and EPS by 69% to $3.32. Analysts had forecast an EPS of $5.48.
Over 2022, the revenue of Goldman Sachs Group Inc. reached $47.37 billion, losing 20%, and net profit recorded a decline of 49% to $10.77 billion or $30.06 per share.
P&G report: quarterly revenue dropped for the first time in five years
On Thursday 19 January, one of the leaders of the global consumer goods market, the Procter & Gamble Company, published its report for Q2, financial 2023. The results were in accordance with Wall Street forecasts.
Revenue in October - December recorded a drop of 0.86% to $20.77 billion, which represents the first decline in five years. Net profit decreased by 6.67% to $3.96 billion, and EPS fell 4.22% to $1.59. The 6% decline in sales volume was offset by an average increase of 10% in prices.
As you might remember, P&G raised its product prices several times over 2022 to compensate for the higher manufacturing and transportation expenses, as well as increased employee wages. P&G management announced that it would continue with price rises also in 2023.
The stock price of the Procter & Gamble Company (NYSE: PG) has been falling since the beginning of the week, losing 5.6% since Tuesday, and finally reaching $142.42.
Netflix report: subscriber gains reassure investors
On 19 January, Netflix Inc. which owns a popular streaming service presented its reports for Q4 and the whole of 2022. Moreover, it announced changes in management. One of the co-founders, Reed Hastings, is stepping down as CEO of Netflix but will remain the chairman of the board of directors. The company will be managed by co-directors Ted Sarandos and Greg Peters.
From October to December, Netflix revenue grew by 1.82% to $7.85 billion, net profit lost 90.1%, reaching $55 million, and EPS dropped by 90.88% to $0.12. Over the year, revenue increased by 6.47% to $31.62 billion, net profit dropped by 12.3% to $4.49 billion, and EPS declined by 11.48% to $9.95. The number of subscribers increased by 7.66 million over the quarter, and by 8.91 million over the year, reaching 230.75 million.
Netflix expects Q1 2023 revenue to reach $8.2 billion, operational profit to go up to $1.6 billion, and diluted earnings to reach $2.8. On Thursday, after the report and forecast, Netflix Inc. (NASDAQ: NFLX) stock surged 7.12% to $338.27.
This week, financial reports were presented by Morgan Stanley, Goldman Sachs Group Inc., Procter & Gamble Company, and Netflix Inc. The stocks of the first and the second companies on the list reacted with growth and those of the other two with decline.