Welcome to this week’s edition of top stock highlights, where we feature interesting snippets from corporate earnings or events.
Amazon (NASDAQ: AMZN)
Amazon, the world’s largest e-commerce company, released its fiscal 2022’s first quarter (1Q2022) earnings last week.
Revenue increased by 7.3% year on year to US$116.4 billion.
However, operating profit plunged by 58.6% year on year to US$3.7 billion due to higher expenses.
Amazon reported a net loss of US$3.8 billion for the quarter, a sharp reversal from the US$8.1 billion net profit in the same period last year.
The key reason for the loss is a marked-to-market valuation loss of US$7.6 billion for Amazon’s investment in Rivian Automotive (NASDAQ: RIVN), an electric car manufacturer.
Free cash flow fell for the e-commerce company in 1Q2022, coming in at a negative US$12.2 billion versus a negative free cash inflow of US$7.9 billion a year ago.
CEO Andy Jassy commented that the Russia-Ukraine war has resulted in “challenges” but the company’s teams are focused on improving productivity and enhancing cost efficiencies.
On the shopping front, Amazon announced its new “Buy with Prime” initiative for US customers that extends the convenience of shopping with Prime to other online stores.
For its entertainment division, the company closed its acquisition of MGM, a nearly 100-year-old studio with more than 4,000 movie titles and 17,000 TV episodes.
The teaser trailer for the new “The Lord of the Rings: The Rings of Power” series also broke a global record for the most-watched trailer, with 257 million views within its first 24 hours of release.
Apple (NASDAQ: AAPL)
Apple needs no introduction, being the inventor of the world’s first smartphone, the iPhone.
The technology company released its fiscal 2022 first half (1H2022) earnings for the period ended 26 March 2022, chalking up yet another record for its March quarter.
Total sales rose 10% year on year to US$221.2 billion while gross profit increased by 17.5% year on year.
Gross margin improved to 43.8% from 41% as services revenue hit a new all-time high.
Operating profit climbed by 17.1% year on year to US$71.5 billion while net profit increased by 13.8% year on year to US$59.6 billion.
Free cash flow rose 22.5% year on year to hit US$69.8 billion.
CEO Tim Cook announced a breakthrough with Apple’s M1 Ultra, the world’s most powerful chip for a personal computer.
Another key highlight was the 17% year on year increase in services revenue to US$19.8 billion.
A quarterly dividend of US$0.23 per share was declared, up 5% from a year ago.
However, Apple warned of supply chain disruptions impacting its revenue for the current quarter.
As China remains an important supplier for the company, COVID-related lockdowns along with a chip shortage will reduce revenue by up to US$8 billion during the June quarter.
It didn’t help that China is also Apple’s second-largest market, and the lockdowns will also dampen demand for the company’s products.
StarHub Limited (SGX: CC3)
StarHub has released its 1Q2022 business update and saw higher year on year revenue all around.
Total revenue increased by 5.3% year on year to S$512.7 million, with the maiden contribution from newly-acquired JOS Singapore and Malaysia adding S$27.9 million to the mix.
However, net profit slipped by 2.6% year on year to S$29.7 million due to higher expenses from higher staff costs and investments related to the streamlining of its IT operations and StarHub’s transformation.
The good news is that StarHub saw revenue improvements for all its four divisions.
Mobile revenue edged up 3.8% year on year while broadband and entertainment revenue rose 9.6% and 3.9% year on year, respectively.
The Enterprise division, which houses the company’s network solutions and cybersecurity services sub-segments, saw revenue jump by 18.9% year on year to S$183.3 million.
Mobile churn stayed low at 0.8% and overall data usage increased to 12.9 gigabytes (GB) from 12.7 GB a year ago.
The broadband division saw average revenue per user (ARPU) rise from S$31 to S$33 in 1Q2022 but the Entertainment division’s ARPU continued its decline, falling from S$36 a year ago to S$31.
CEO Nikhil Eapen said that the company will continue rolling out more Infinity Play products and services in 2022.
The launch of StarHub’s Super App platform is also slated for the end of this year.
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Disclaimer: Royston Yang owns shares of Apple.
