Tuesday Earnings Roundup

A look at how companies closed out 2020.
Share on facebook
Share on twitter
Share on linkedin
Share on email

Amazon is expected to “cap off its pandemic-fueled 2020 financial performance with record quarterly sales driven by a surge in online holiday shopping with people stuck at home,” WSJ reports.

  • Expected Revenue: $119.7 Billion (+37%)
  • Expected Net Income: $3.7 Billion (+12%)

Thanks to holiday spending driving an acceleration in digital advertising purchases, Alphabet’s Google is expected to post strong fourth-quarter results, WSJ reports.

  • Expected Revenue: $52.67 Billion (+14%)
  • Expected Profit: $11.87 Billion (+28%)

Pfizer expects to do roughly $15 billion in sales for its Covid-19 vaccine this year as it posted high revenue but less-than-expected profit in 2020, WSJ reports.

  • Revenue: $11.68 Billion (+12%)
  • Q4 Net Income: $594 Million (+276%)

UPS notched a 21% increase to record fourth-quarter sales of $24.9 billion after the pandemic “fueled online shopping during the holidays,” WSJ reports.

  • Sales: $24.9 Billion (+21%)
  • Net Loss: $3.26 Billion (-595%)

In one of the most “challenging” years Exxon Mobil experienced, the oil giant posted its fourth consecutive quarterly loss, which amounted to $22 billion in total losses for the fiscal year, WSJ reports.

  • Revenue: $46.54 Billion (-31%)
  • Q4 Loss: $20.07 Billion (-453%)

BP returned to profitability in Q4 but said “the pandemic, which battered the oil-and-gas industry in 2020, would continue to challenge its business this year,” WSJ reports

  • 2019 Q4 Revenue: $71.1 Billion
  • 2020 Q4 Replacement Cost Profit: $825 Million (+20725%)

Justin Oh:

What kind of company makes $380 billion in revenues per year and can grow 35% at the same time? Beastly Bezos and his Amazonians are out to conquer the western world with complete disregard for any Total Addressable Market (TAM) limitations. 

Long-term, it’s best not to bet against Bezos, especially with $AMZN trading at a not-unreasonable 23.8x forward EBITDA. The only thing to look out for is antitrust regulation.

The clear losers of the pandemic are in the oil and gas (O&G) industry. Unfortunately the massive reduction of automobile mobility from quarantine, combined with excess supply issues (remember the Russia/Saudi Arabia spat last year?), has driven demand and prices down, which destroys the economics for the industry.

In the second half of last year, I remember saying that if an investor wanted to bargain hunt in O&G, he or she should err on the side of safety with the large, vertically-integrated players like Exxon ($XOM) or BP ($BP) because of their diversification and capital resources to survive an extended lockdown.

Indeed that is probably still my stance, although $XOM and $BP look less attractive now that their stock prices have recovered about 30% since then. They have recovered to around the same multiples they were at in 2019, except on forward 2021 expectations that include a 20-25% recovery. Any delay in that recovery won’t be great for the stocks. 

Share on facebook
Share on twitter
Share on linkedin
Share on email


Your email address will not be published. Required fields are marked *

Related Posts