Earnings Week January 9 - January 20
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Earnings Week January 9 - January 20
US big banks, Netlfix, and Roblox metrics.
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Bank of America
For the transcript and press release click HERE
GAAP EPS of $0.85 beats by $0.08.
Revenue of $24.53B (+11.2% Y/Y) beats by $360M.
Net interest income (NII) up $3.3 billion, or 29%, to $14.7 billion, driven by benefits from higher interest rates, including lower premium amortization expense, and solid loan growth.
Non-interest income of $9.9 billion declined $799 million, or 8%, as declines in investment banking and asset management fees as well as lower service charges more than offset higher sales and trading revenue
Provision for credit losses of $1.1 billion increased $1.6 billion. Net reserve build of $403 million vs. net reserve release of $851 million in Q4 2021. Net charge-offs of $689 million increased compared to prior year but remained well below pre-pandemic levels.
Client balances relatively flat at $1.6 trillion.
Average deposits of more than $1 trillion, up $20 billion, or 2% Combined credit/debit card spend of $223 billion, up 5%.
JPMorgan Chase
For the transcript and press release click HERE
Q4 Non-GAAP EPS of $3.56 beats by $0.46.
Revenue of $34.5B (+17.9% Y/Y) beats by $270M.
Credit costs of $2.3 billion included a $1.4 billion net reserve build and $887 million of net charge-offs.
Average loans up 6%; average deposits down 4%
Average deposits up 3%; client investment assets down 10%
Average loans up 2% YoY and up 1% QoQ; Card Services net charge-off rate of 1.62%
Assets under management (AUM) of $2.8 trillion, down 11%
Citi
For the transcript and press release click HERE
Non-GAAP EPS of $1.10 misses by $0.10.
Revenue of $18B (+5.8% Y/Y) beats by $30M.
Citigroup cost of credit was approximately $1.8 billion in the fourth quarter 2022, compared to $(0.5) billion in the prior-year period, reflecting a net build in the allowance for credit losses (ACL) for loans and unfunded commitments of $640 million, primarily due to the loan growth in PBWM and the deterioration in macroeconomic assumptions, compared to a net ACL release of $(1.4) billion in the prior-year period.
Q4 operating expenses were $13.0B, up 2% Q/Q and down 4% Y/Y.
Q4 net credit losses of $1.18 vs. $887M in Q3 and $866M in the year-ago quarter.
Citigroup’s book value per share of $94.06 and tangible book value per share of $81.65 at quarter end increased 2% and 3%, respectively.
Institutional Clients Group revenue of $9.16B, fell 3% Q/Q and rose 3% Y/Y.
Personal Banking and Wealth Management revenue of $6.10B, slipped 1% Q/Q and rose 5% Y/Y.
Legacy Franchises revenue of $2.10B dropped 20% Q/Q and 6% Y/Y.
Citigroup declares $0.51 dividend
Wells Fargo
For the transcript and press release click HERE
Q4 GAAP EPS of $0.67 beats by $0.06.
Revenue of $19.66B (-5.8% Y/Y) misses by $380M.
($3.3) billion, or ($0.70) per share, of operating losses primarily related to a variety of previously disclosed historical matters, including litigation, regulatory, and customer remediation matters
($1.0) billion impairment of equity securities (($749) million, or ($0.15) per share, net of noncontrolling interests) predominantly in our affiliated venture capital business
($353) million, or ($0.07) per share, of severance expense primarily in Home Lending
$510 million, or $0.13 per share, of discrete tax benefits.
Q4 noninterest income of $6.23B vs. $7.41B in Q3 and $11.6B in Q4 2021.
Net interest income climbed to $13.4B from $12.1B in Q3 and from $9.26B in Q4 2021. Net interest margin on a taxable equivalent basis was 3.14% vs. 2.83% in the previous quarter and 2.11% a year earlier.
Q4 noninterest expense was $16.2B, up from $14.3B in Q3 and from $13.2B in Q4 2021.
Loans of $948.5B vs. $945.5B in Q3; deposits were $1.38T vs. $1.41T in the previous quarter.
Wells Fargo pares back mortgage operations to focus on existing customers
BlackRock
For the transcript and press release click HERE
Q4 Non-GAAP EPS of $8.93 beats by $0.86.
Revenue of $4.34B (-15.1% Y/Y) beats by $70M.
$146 billion of quarterly long-term net inflows, including $61 billion of active net inflows, with total net inflows of $114 billion reflecting net outflows from cash management
AUM of $8.59T up from AUM of $7.96T at the end of Q3, average AUM of $8.42T down from $8.48T at the end of Q3.
BlackRock said Q4 total expense of $2.91B rose from $2.79B in Q3 and dropped from $3.07B in Q4 2021. Employee compensation and benefit costs rose to $1.43B from $1.34B in Q3 and declined from $1.56B in Q4 2021.
Morgan Stanley
For the transcript and press release click HERE
Q4 Non-GAAP EPS of $1.31 in-line.
Revenue of $12.7B (-12.5% Y/Y) beats by $100M.
The firm delivered ROTCE of 12.6% for the quarter.
Revenue by segment:
Investment Banking — $1.32B, down 4% Q/Q and 49% Y/Y.
Trading — $3.02B, down 9% Q/Q and up 26% Y/Y.
Investments — $85M vs. -$168M in Q3 and down 87% Y/Y.
Commissions and fees — $1.17B rose 3% Q/Q and dropped 11% Y/Y.
Asset Management — $4.80B, up 1% Q/Q and down 11% Y/Y.
Morgan Stanley declares $0.775 dividend.
Goldman Sachs
For the transcript and press release click HERE
Q4 GAAP EPS of $3.32 misses by $2.65.
Revenue of $10.59B (-16.2% Y/Y) misses by $320M.
Return on average common shareholders’ equity was 10.2% for 2022 and annualized ROE was 4.4% for the fourth quarter of 2022.
Book value per common share increased by 6.7% during the year to $303.55.
The company was reported to make as many as 4,000 job cuts in January to offset sliding profit and revenue.
Global Banking & Markets generated net revenues of $32.49 billion, driven by strong performances across Fixed Income, Currency and Commodities (FICC), Equities, and Advisory, including the second-highest net revenues in both FICC and Advisory.
Goldman Sachs declares $2.50 dividend.
Roblox
For the press release click HERE and for the video on my channel HERE
Daily active users (DAUs) were 61.5 million, up 18% year-over-year.
Hours engaged were 4.7 billion, up 21% year-over-year.
Estimated revenue was between $189 million and $199 million, a decline of between 1% - 6% year-over-year.
Estimated bookings were between $430 million and $439 million, up 17% - 20% year-over-year.1
Estimated average bookings per daily active user (ABPDAU) were between $6.99 and $7.14, which represents a year-over-year change of -1% - +1%.
April 2023 will be the last time the company will issue a monthly update.
Netflix
For the transcript and press release click HERE and for the video on my channel HERE
Q4 GAAP EPS of $0.12 misses by $0.24 due to a $462M non-cash unrealized loss from the F/X remeasurement on our Euro-denominated debt as a result of the depreciation of the US dollar vs. the Euro during Q4’22.
Revenue of $7.85B (+1.8% Y/Y) in-line.
Added 7.66M global streaming paid net additions, above their 4.5M guidance.
ARM declined 2% year over year, but grew 5% on a F/X neutral basis.
Q1 2023 Outlook: Revenue growth of 4% (8% on a F/X neutral basis).
This translates into modest positive paid net adds in Q1 ‘23 (vs. paid net adds of -0.2M in Q1’22).
Expect to roll out paid sharing more broadly later in Q1’23.
2023 Outlook: We continue to improve our service, grow our advertising business and launch paid sharing, we expect constant currency revenue growth to accelerate over the course of the year.
In 2023, the company expect at least $3B of FCF, assuming no material swings in F/X.
Expect to deliver roughly 21%-22% operating margin on this basis (above the 19%-20% range).
CEO Reed Hastings steps down (becomes Executive Chairman), and Ted Sarandos and Greg Peters are now co-CEOs of Netflix.
