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Wednesday June 12, 2024



Zoom Posts Earnings

Zoom Video Communications, Inc. (ZM) released its fourth quarter and full-year earnings report on Monday, February 26. The company beat revenue expectations for the quarter, causing shares to rise by more than 10% following the release.

The videoconferencing technology company reported revenue of $1.15 billion for the quarter, up 3% from $1.12 billion during the same quarter last year. Revenue was above analysts’ expectations of $1.13 billion. Full-year revenue came in at $4.53 billion, up 3% from $4.39 billion the previous year.

“In FY24, we unveiled Zoom AI Companion, our generative AI digital assistant, aimed at boosting productivity, enhancing team effectiveness, and fostering skill development across the Zoom platform,” said Zoom CEO, Eric S. Yuan. “We are committed to democratizing AI accessibility, offering it to all our customers regardless of business size, included at no extra charge with a paid license. Our team is dedicated to platform-wide innovation, introducing hundreds of new features, including those for Zoom Contact Center, which redefine the gold standard for customer experience.”

Zoom posted net income of $298.83 million for the quarter or $0.95 per adjusted share. This was an improvement from a net loss of $104.05 million or $0.36 per adjusted share during the same quarter last year. For the full year, Zoom reported net income of $637.46 million.

Zoom’s Enterprise customers, those who subscribe directly through Zoom’s sales team or partners, now number approximately 220,400, an increase of 4% from 213,000 one year ago. The number of customers spending more than $100,000 increased to 3,810, a 10% increase compared to the same quarter last year. At the end of the fourth quarter, the percentage of total online Monthly Recurring Revenue (MRR) from Online customers with a continuous service term of at least 16 months stood at 74.2%, an increase of 220 basis points year-over-year.

Zoom Video Communications, Inc. (ZM) shares ended the week at $70.91, up 11% for the week.

eBay Releases Earnings Report

eBay Inc. (EBAY) released its fourth quarter and full-year earnings report on Tuesday, February 27. The company reported an increase in revenue, causing its shares to rise approximately 4% following the release of the report.

The company reported quarterly revenue of $2.56 billion, exceeding analysts’ estimates of $2.51 billion. This was up 2% from $2.51 billion at the same time last year. For the full year, revenue was up 3% to $10.11 billion.

“Last year, we made significant progress toward our vision to reinvent the future of ecommerce for enthusiasts,” said eBay CEO, Jamie Iannone. “Our organic GMV growth improved year-over-year during each quarter of 2023, while navigating a challenging macroeconomic environment. Our results demonstrate the strength of our strategy, and I am proud of our accelerated pace of innovation as we work to fundamentally enhance the customer experience on eBay.”

The company reported quarterly net income of $724 million or $1.39 per adjusted share. This was up from $672 million or $1.23 per adjusted share at the same time last year. For the full year, eBay reported net income of $2.77 billion.

The eCommerce company reported 132 million active buyers for the fourth quarter, a 2% decrease compared to this time last year. Advertising products revenue was up 33%, generating $368 million during the quarter. Gross merchandise volume, which measures the value of all goods sold on the company’s website, increased by 2% to $18.6 billion in the fourth quarter. The company foresees first quarter revenue to be between $2.50 to $2.54 and for their adjusted earnings per share to be between $0.86 to $0.90.

eBay Inc. (EBAY) shares ended the week at $48.05, up 9% for the week.

AutoZone Announces Earnings

AutoZone, Inc. (AZO) released its second quarter earnings report on Tuesday, February 27. The auto parts company’s shares rose by almost 6% after the company reported an increase in sales.

The company reported net sales of $3.86 billion during the quarter, above analysts’ expectations of $3.85 billion. This was up almost 5% from $3.69 billion in sales during the same quarter last year.

“I want to thank our AutoZoners for delivering solid earnings in our second fiscal quarter,” said AutoZone CEO, Phil Daniele. “Their commitment to delivering superior customer service again drove our very solid quarterly performance. “We remain committed to prudently investing capital in our business, and we will be steadfast in our long-term, disciplined approach to increasing operating earnings and cash flows while utilizing our balance sheet effectively.”

AutoZone reported net income of $515.03 million for the quarter or $28.89 per adjusted share. This was up from $476.54 million or $24.64 per adjusted share in the same quarter last year.

The Memphis, Tennessee-based company saw a 0.3% increase in their domestic same store sales for the quarter and a 23.9% increase for international same store sales. During the second quarter, AutoZone opened 26 net new stores in the quarter, including 19 stores in the U.S., six new stores in Mexico and four in Brazil. Currently, the company has a combined total of 7,191 stores globally. AutoZone’s store growth drove the company’s inventory to increase by 4.2% over the same period last year.

AutoZone, Inc. (AZO) shares ended the week at $3,036, up 10 % for the week.

The Dow started the week of 2/26 at 39,145 and closed at 39,087 on 3/1. The S&P 500 started the week at 5,093 and closed at 5,137. The NASDAQ started the week at 16,014 and closed at 16,275.

Treasury Yields Tick Down

U.S. Treasury yields reacted throughout the week to the latest consumer spending data. Yields continued to decline towards the end the week as jobless claims rose more than expected.

On Thursday, the Commerce Department announced that the Personal Consumption Expenditure (PCE) index, which measures the cost of goods and services purchased by U.S. households, rose 0.3% in January, building on an increase of 0.1% in December. Core PCE, which excludes food and energy, increased annually by 2.8%. The results were in line with economists’ estimates.

"Fed officials have signaled they do not need better news on inflation to cut rates, just continued good news," said deputy chief US economist at Oxford Economics, Michael Pearce. "With the trend in inflation still downward, gradual rate cuts this year are still on the table."

The benchmark 10-year Treasury note yield opened the week of February 26 at 4.25% and traded as high as 4.34% on Thursday. The 30-year Treasury bond opened the week at 4.37% and traded as high as 4.45% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 13,000 to 215,000 for the week ended February 24. This came in above economists’ forecast of 210,000 claims for the week. Continuing unemployment claims increased by 45,000 to 1.91 million.

"We may see some increase in jobless claims as labor market conditions loosen a bit further, but we expect claims will remain below the level that would be consistent with no net job growth," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

The 10-year Treasury note yield finished the week of 3/1 at 4.19%, while the 30-year Treasury note yield finished the week at 4.34%.

30-Year Mortgage Rate Increases Again

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, February 29. The survey showed the 30-year mortgage rate increased for the fourth consecutive week.

This week, the 30-year fixed rate mortgage averaged 6.94%, up from last week’s average of 6.90%. Last year at this time, the 30-year fixed rate mortgage averaged 6.65%.

The 15-year fixed rate mortgage averaged 6.26% this week, down from last week’s 6.29%. During the same week last year, the 15-year fixed rate mortgage averaged 5.89%.

"Mortgage rates continued their ascent this week, reaching a two-month high and flirting with 7% yet again,” said Freddie Mac’s Chief Economist, Sam Khater. “The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying. While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines.”

Based on published national averages, the savings rate was 0.46% as of 2/20. The one-year CD averaged 1.83%.

Editor’s Note: The publicly available financial information is offered as a helpful and informative service to our friends. This article is not an endorsement of any company, product or service.

Published March 1, 2024

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