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Thursday July 25, 2024



Adobe Releases Earnings

Adobe Inc. (ADBE) released its first quarter earnings report on Wednesday, March 15. The San Jose, California-based digital media and marketing software maker reported record revenue, causing shares to rise 5% after the release of the report.

The company posted quarterly net revenue of $4.66 billion, up 9% from reported revenue of $4.26 billion during the same quarter last year. The results exceeded analysts' expectation of $4.62 billion for the quarter.

"Adobe drove record Q1 revenue and we are raising our annual targets based on the tremendous market opportunity and continued confidence in our execution,"said Adobe CEO, Shantanu Narayen. "Creative Cloud, Document Cloud and Experience Cloud are mission-critical in fueling the global digital economy.”

For the quarter, Adobe reported net income of $1.25 billion or $2.71 per adjusted share. This is down slightly from $1.27 billion or $2.66 per adjusted share reported at the same time last year.

Adobe's first quarter net revenues increased year-over-year in all segments of the company. The company's Digital Media segment revenue increased 9% to $3.4 billion for the quarter. The company's Creative segment revenue grew 8% to $2.76 billion. Adobe's Document Cloud segment revenue was $634 million, a 13% increase year-over-year. The company's Digital Experience segment revenue increased 11% to $1.18 billion and Digital Experience subscription revenue was $1.04 billion, a 12% year-over-year growth. The company updated its second quarter revenue target for 2023 to $4.78 billion.

Adobe Inc. (ADBE) shares closed at $358.14, up 9% for the week.

BuzzFeed Earnings Report

BuzzFeed, Inc (BZFD) released its fourth quarter and full-year earnings on Monday, March 13. The American digital media company's stock fell more than 9% following the release of the report.

Revenue for the fourth quarter declined to $134.6 million. This was a decrease of 8% from $145.7 million in the same quarter last year. For the full year, the company reported revenue of $436.7 million, up 10% from $397.6 million in the previous fiscal year.

"There is no denying that 2022 was a tough year for digital media. The challenges we faced in Q4 are also impacting us in Q1 2023, and it is clear we have more work to do to realize the full potential of our combined brand portfolio,"said BuzzFeed Founder and CEO, Jonah Peretti. "As we work to address these challenges, our value proposition continues to resonate strongly in the marketplace.”

BuzzFeed reported a quarterly net loss of $106.2 million for the quarter, down from net income of $41.6 million during the same quarter last year. For the full year, the company reported a full-year net loss of $201.3 million, down from net income of $25.9 million in 2021.

BuzzFeed's Advertising segment revenue decreased 27% over the prior year's quarter to $50.5 million. The company also saw a decline in Content revenue, down 9% year-over-year to $54.8 million in the fourth quarter. Commerce and other revenues grew 76% year-over-year to $29.3 million. The digital platforms' growing YouTube shorts animation channel, Chikn Nuggit, exceeded 1 million YouTube subscribers in the fourth quarter, leading to a launch of a new Shorts channel for its popular brand, A*Pop. For the first quarter of 2023, Buzzfeed expects revenue to be between $61 million to $67 million.

Buzzfeed, Inc. (BZFD) shares ended the week at $1.14, down 7% for the week.

Blue Apron Serves Up Earnings Report

Blue Apron (APRN) released its fourth quarter and full-year earnings report on Thursday March 16. The ingredient-and-recipe meal kit company fell short of analysts' estimated revenue by 1%.

The company reported quarterly revenue of $106.81 million, relatively flat compared to revenue of $107.01 million during the same quarter last year. For the full year, revenue came in at $458.47 million, down 3% from $470.38 million one year ago.

"2022 was a challenging year for our business,"said Blue Apron CEO, Linda Findley. "Our team was tasked with managing through macroeconomic headwinds, continued inflation, funding delays and higher marketing costs as we simultaneously looked for the best pathways to preserve capital. At times, we were not as nimble as we needed to be, but 2022 is not indicative of what we are seeing so far in 2023."

Blue Apron reported a quarterly net loss of $21.78 million or $0.49 per adjusted share. During the same quarter last year, the company reported a quarterly net loss of $26.44 million or $0.93 per adjusted share. For the full year, the company reported a net loss of $109.73 million.

Blue Apron's fourth quarter net revenues increased in several segments. The company's Average Revenue per Customer was up from $319 to $358 for the quarter, an increase of 12.4% year-over-year. Average Order Value rose 14.7% from $63.78 to $73.15 in the fourth quarter. Orders per customer fell 2% for the quarter to 4.9. The meal-kit company launched Blue Apron PLUS this week, a savings program exclusively on Verizon's +play platform for customers to shop, manage and save on their meal-kit subscription.

Blue Apron (APRN) shares ended the week at $0.86, up 20% for the week.

The Dow started the week of 3/13 at 31,820 and closed at 31,862 on 3/17. The S&P 500 started the week at 3,835 and closed at 3,917. The NASDAQ started the week at 11,041 and closed at 11,631.

Treasury Yields Fluctuate

U.S. Treasury yields fell drastically this week as investors reacted to the collapse of Silicon Valley Bank and Signature Bank and its impact on the banking sector. Yields were mixed on Friday as investors contemplate the Federal Reserve's policy moves.

On Thursday, Treasury yields leveled out from an earlier decline in the week due to the uncertainty of the markets. US Central bankers anticipate a 25-point basis interest rate hike in the Federal Reserve's policy meeting set to take place on March 21. This would bring the Fed's benchmark rate to a 4.75% to 5% range, following the European Central Bank's decision to stand by its own rate hike as concern over high inflation overshadowed fears of a global banking crisis.

"To pause here would provide no relief to the idiosyncratic issues for banks, and the Fed would risk losing all of the hard-fought progress made in getting inflation expectations reanchored," said Jefferies & Company economist, Thomas Simons. "It is important to keep in mind that these expectations are predicated on the expectation that the Fed maintains its stance on fighting inflation."

The benchmark 10-year Treasury note yield opened the week of March 13 at 3.71% and traded as low as 3.37% on Thursday. The 30-year Treasury bond opened the week at 3.71% and traded as low as 3.58% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 20,000 to 192,000 for the week ending March 11. Continuing unemployment claims decreased 29,000 to 1.68 million, above analysts' estimates of a 25,000 decline. The four-week moving average of claims fell to 196,500, remaining below the 200,000 threshold for the eighth straight week.

"Jobless claims fell back below 200k last week but we still expect layoffs to rise sharply ahead, spreading from tech and finance to other sectors,"said economist at Bloomberg, Eliza Winger. "Many businesses have planned for a downturn this year, and layoff announcements will rise in the face of growing recessionary risks.”

The 10-year Treasury note yield finished the week of 3/17 at 3.43%, while the 30-year Treasury note yield finished the week at 3.63%.

Mortgage Rates Fall

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, March 16. Mortgage rates fell for the first time in 6 weeks following the collapse of multiple banking institutions earlier this week.

This week, the 30-year fixed rate mortgage averaged 6.60%, down from last week's average of 6.73%. Last year at this time, the 30-year fixed rate mortgage averaged 4.16%.

The 15-year fixed rate mortgage averaged 5.90% this week, down from 5.95% last week. During the same week last year, the 15-year fixed rate mortgage averaged 3.39%.

"Mortgage rates are down following an increase of more than half a percent over five consecutive weeks,"said Freddie Mac's Chief Economist, Sam Khater. "Turbulence in the financial markets is putting significant downward pressure on rates, which should benefit borrowers in the short-term. During times of high mortgage rate volatility, homebuyers would greatly benefit from shopping for additional rate quotes. Our research concludes that homebuyers can potentially save $600 to $1,200 annually by taking the time to shop among multiple lenders.”

Based on published national averages, the savings rate was 0.35% as of 2/21. The one-year CD averaged 1.36%.

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 17, 2023

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