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Thursday June 30, 2022



Micron Reports Earnings

Micron Technology, Inc. (MU) reported quarterly earnings on Wednesday, June 30. Despite strong earnings, the Idaho-based memory-chip maker's stock fell after hours Wednesday.

The company announced net revenue of $7.42 billion for its third quarter. This is up 36% from revenue of $5.44 billion reported in the same quarter last year and above the $7.22 billion analysts predicted.

"Micron set multiple market and product revenue records in our third quarter and achieved the largest sequential earnings improvement in our history," said Micron CEO Sanjay Mehrotra. "Our industry-leading 1α DRAM and 176-layer NAND now represent a meaningful portion of our production, and Micron is in the best position ever to capitalize on the long-term demand trends across the data center, intelligent edge and user devices."

Micron reported earnings for the quarter of $1.74 billion, up from earnings of $805 million a year ago. The company earned an adjusted $1.88 per share, higher than the $0.82 reported last year and beat analysts' expectations of $1.72 per share.

For the fourth quarter, Micron expects between $8 billion and $8.4 billion in revenue and earnings per share of $2.23, plus or minus $0.10. Despite strong earnings and sales, the company noted that it continues to expect higher operating expenses during the second half of its fiscal year.

Micron Technology, Inc. (MU) shares ended at $80.33, down 2.8% for the week.

Bed Bath & Beyond Posts Earnings

Bed Bath & Beyond Inc. (BBBY) announced quarterly earnings on Wednesday, June 30. The home goods retailer's stock rose after the release.

Revenue for the first quarter was at $1.95 billion. This up from $1.31 billion reported during the same quarter last year and greater than the $1.87 billion in revenue that analysts expected.

"We have started the year in a position of strength and are clearly on track to accomplish our goals," said Bed Bath & Beyond's President and CEO Mark Tritton. "2021 marks the first year of our three-year transformation following the groundwork we laid in 2020 – a year of historic and necessary change for this organization against the backdrop of unprecedented challenges due to COVID-19. For the first quarter, we delivered our fourth consecutive quarter of comparable sales growth with gross margin expansion exceeding our expectations. These results demonstrate continued momentum with our strategies as we progress towards the goals we outlined at year-end and at our Investor Day."

Bed Bath & Beyond reported a net loss of $51 million, an improvement from the net loss of $302 million at this time last year. On an adjusted earnings per share basis, the company posted earnings of $0.05.

Bed Bath & Beyond provided guidance for the second quarter and fiscal 2021. For the quarter, the company expects net sales between $2.04 and $2.08 billion and earnings per share between $0.48 and $0.55. For the full year, the company expects net sales of $8.2 to $8.4 billion and earnings per share of $1.40 to $1.55.

Bed Bath & Beyond Inc. (BBBY) shares ended the week at $31.30, up 3% for the week.

Walgreens' Earnings Exceed Expectations

Walgreens Boots Alliance, Inc. (WBA) released its latest quarterly earnings on Thursday, July 1. Despite exceeding analysts' expectations, Walgreens shares fell 7% after the release.

The company reported sales of $34.0 billion for the third quarter. This was up from $30.4 billion reported during the same quarter last year and above analysts' expectations of $33.5 billion.

"This quarter's results demonstrate continued momentum, and while challenges lie ahead, we are in a strong position to grow and innovate our core retail and pharmacy businesses for the future," said CEO Rosalind Brewer. "We are accelerating our investments to advance our operational excellence, including technology innovations that support mass personalization, pharmacy of the future and the next phase of growth in tech-enabled healthcare. These investments are fueled by our Alliance Healthcare divestiture. I remain proud of our team members and the essential role they are playing to help end the pandemic as the communities we serve continue to turn to our trusted brands and expert pharmacists."

Walgreens reported net earnings of $1.17 billion for the quarter. This was up from a net loss of $1.73 billion in net earnings at this time last year.

Walgreens Boots Alliance operates Walgreens and Boots pharmacies in the United States and United Kingdom. The company's stock is up 23% this year, despite the drop after the earnings release. Walgreens raised guidance for growth in earnings per share for the year from mid-to-high single digit growth to 10% growth.

Walgreens Boots Alliance, Inc. (WBA) shares ended the week at $48.17, down 7.5% for the week.

The Dow started the week at 34,428 and closed at 34,786 on 7/2. The S&P 500 started the week at 4,285 and closed at 4,352. The NASDAQ started the week at 14,418 and closed at 14,639.

Treasury Yields Fall Following Jobs Report

Yields on U.S. Treasurys fell on Friday despite a somewhat stronger-than-expected jobs report. More jobs were added in June than in May and April, but the report revealed an increase in the unemployment rate.

On Friday, the U.S. Department of Labor released the Employment Situation Summary for June. The report showed an increase in nonfarm payrolls of 850,000. This is greater than the 583,000 gain in May and the 269,000 gain in April. Analysts expected a gain of 706,000 jobs for the month.

"The labor market jumped into the summer," wrote Lydia Boussour, lead U.S. economist at Oxford Economics. "Higher wages and an improving health situation enticed more workers to accept job offers."

The benchmark 10-year Treasury note yield started the week of 6/28 at 1.528% and reached a high of 1.536% on the same day. The 30-year bond yield started the week at 2.151% and reached a high of 2.165% on the same day.

The unemployment rate rose to 5.9% for June, up slightly from May's rate of 5.8%. Economists expected the unemployment rate to decline to 5.6% for June.

"As enhanced unemployment benefits begin to expire later this summer, this may be a key turning point for the U.S. economy, as it seeks to make the transition from a reliance on fiscal stimulus injections to one that is fueled by a self-sustaining recovery from this extraordinary pandemic environment," said CIO of private wealth at Glenmede Jason Pride.

The 10-year Treasury note yield closed at 1.44% on 7/2, while the 30-year Treasury bond yield was 2.05%.

Mortgage Rates Decrease

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, July 1. Rates dropped this week.

The 30-year fixed rate mortgage averaged 2.98% for the week, down from last week's average of 3.02%. At this time last year, the 30-year fixed rate mortgage averaged 3.07%.

This week, the 15-year fixed rate mortgage averaged 2.26%, down from 2.34% last week at this time. During the same period last year, the 15-year fixed rate mortgage averaged 2.56%.

"Economic growth remains steady and is bolstering more segments of the economy," said Freddie Mac's Chief Economist Sam Khater. "Although low and stable mortgage rates have kept the housing market booming over recent months, a deterioration in affordability and for-sale inventory has led to a market slowdown."

Based on published national averages, the savings rate was 0.06% as of 6/21. The one-year CD averaged 0.14%.

Published July 2, 2021

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