Marriott, Coca-Cola, Cisco & More: Earnings Recap
Yahoo Finance breaks down this week's recent earnings reports from top companies like Coca-Cola and Marriott.
Morningstar Sector Director Erin Lash discusses Kraft Heinz's third straight miss in quarterly earnings, noting that the company's "volumes have been hurt by a pressured consumer." Lash goes on to explain how Kraft Heinz is focusing on three main things to combat this losing streak: research and development, marketing, and distribution.
Oppenheimer Managing Director Jim Kelly breaks down AirBnB's slight slip, and what investors should and should not be concerned about. Kelly said, "The business is healthy. I think the question for investors right now is we have decelerating room nights but a premium evaluation. So...what's the right entry point."
Wedbush Sr. VP & Equity Research Analyst Gerald Pascarelli talks about Coca-Cola's outstanding performance, noting that Coca-Cola is often able to grow revenue in a way that remains elusive to competitors.
Baird Senior Research Analyst Michael Bellisario says that for Marriott's disappointing Q4 results, there is still hope for the stock, "Underlying trends are somewhere between good to still pretty darn solid."
Yahoo Finance Executive Editor Brian Sozzi talks about how Cisco's most recent earnings encapsulate "everything you don't want to hear from a big cap tech company," including slowing demand, inventory correction, and massive rounds of layoffs.
Key video moments:
00:00:06 - Morningstar Sector Director Erin Lash discusses Kraft Heinz
00:00:45 - Oppenheimer Managing Director Jim Kelly talks about AirBnB's stock slip
00:01:19 - Wedbush Sr. VP & Equity Research Analyst Gerald Pascarelli talks about Coca-Cola's outstanding performance
00:02:23 - Baird Senior Research Analyst Michael Bellisario speaks on Marriott's most recent earnings report
00:02:50 - Yahoo Finance Executive Editor Brian Sozzi discusses Cisco's disappointing earnings report
Video Transcript
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- Kraft Heinz reporting a miss on the top line as the decline in sales volume outweighs price increases. Shares are down more than 5%.
ERIN LASH: Volumes have been hurt by a pressured consumer. Consumers are being much more prudent as it relates to their purchases. And that's impacting some of Kraft Heinz's categories. As a result, we're seeing them continue to invest more as it pertains to research and development, so in terms of innovation, and that which aligns with consumer trends, as well as marketing, making sure that consumers are aware of the products that are out there, while also increasing their distribution in terms of the channels where consumers are shopping.
JED KELLY: From a free cash flow position, right, the business is really healthy and actually on a valuation-- on valuation perspective, or valuation basis, it trades at a favorable free cash flow yield relative to the EBITDA, because they have positive working capital dynamics. So this was a one time tax charge. Doesn't indicate the health of the business. The business is healthy. I think the question for investors right now is, we have decelerating room night, but a premium valuation. So you know, what's the right entry point to get in, get some of the top line KPIs?
- Shares of Coca-Cola shares edging higher this morning. The food and beverage giant, one Americans know very well in their household cupboards, beat the Street's revenue expectations, showing consumers are still buying cans of Coke despite those higher prices.
GERALD PASCARELLI: I just think they're really confident in their ability to execute you know, headed into this print just based on consolidated volume growth where Coke has proven that it can consistently grow volumes at a time where volume growth for many competitors has remained elusive. They're getting that. And they expect to continue to get it.
And so we had thought that they were best positioned going in just given the balance of their revenue to be balanced between volumes and pricing, which they likely get in 2024. And they're always able to generate productivity and operating efficiencies to drive some leverage. So it was a really good guide coming in above the high end of their long-term-- coming in above their long-term algorithm on both the top and bottom line, I think the shares are being rewarded as a result.
MICHAEL BELLISARIO: If you think about the market being down a percent, and Marriott's 2024 EPS guidance being about 3% below street expectations, you add that together, that's 4%. That's kind of roughly what the stock is down. So not totally surprised to see the stock weaker. I think when you peel back all the moving pieces that they had with a bunch of different line items in the fourth quarter, underlying trends are somewhere between good to still pretty darn solid.
- Really, everything you don't want to hear from a big cap tech company, Cisco served up last night on its earnings day. Talked about slowing demand, or worse than expected demand, and ongoing inventory correction, which may not improve in the second half of this year, talk of large telecoms, perhaps, not really aggressively investing in their business until 2025. And then last but not least, Cisco came in here and said they will sack 4,200 employees to improve their profit margins because demand is in fact, slowing.
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