#secfilings

For the week ending May 5, 2023 we processed thousands of filings. On Wednesday alone, we received over 500 earnings releases and nearly 300 10-Qs. Below are a few highlights from last week’s earnings reports.

Both DraftKings and Apple filed an 8-K in the evening (post-close) on May 4th and then filed the 10-Q in the morning (pre-open) on May 5th. Calcbench processed both the earnings report and the quarterly report within minutes of the information being made public. 

With Apple, the press is screaming about iPhone sales, but their services business did $20.9 billion in sales with costs of $6.07 billion. So the gross margin was 71% slightly down from 72.6% a year ago. But if the services business was a stand alone company, it would rank in the top 150 of the S&P 500 in terms of sales. 

DraftKings’ reported an adjusted loss per share of $(0.51) while GAAP EPS was $(0.87). Why the difference? Mostly due to Stock-based compensation expense and Amortization of intangible assets. Note: a year ago the Stock-based compensation expense was higher.

Marriott International reported earnings and overall the numbers look good. Year-over-year Q1 revenue, operating income and net income have increased substantially. But digging into disclosures we found some signs of slower growth in certain hotel brands. See the Ritz Carlton RevPAR (revenue per available room) which was growing fast right after quarantine, but has been limping along more recently.

Garmin also reported this week - both an 8-K and a 10-K in the morning. Overall, sales and profits were down year-over-year. We delved into their operating segments. A look under the covers at the outdoor segment sheds light into where the bulk of losses are coming from.

Kraft Heinz was another where the segments helped tell an interesting story. Organic sales up 9.4%. Remember last week when we shared how to obtain  organic sales growth from Coca-Cola and Pepsico?  

Last but not least from our findings, time series data. Examples included Broadridge which reported current and recurring revenues. Using Calcbench we got a time series of both.  The Income statement, directly below, is a time series of metrics while the bar chart below it is of the recurring revenue from Broadridge.  Please note that the bar chart x-axis reflects most recent information all the way on the right hand side, whereas the income statement reflects most recent information on the left hand side.

Want to learn why investment bankers are cautious?  PJT Partners, a boutique banking advisory firm from the Morgan Stanley family breaks out advisory revenues and note the trend.  It may be a harbinger.

Our latest quarterly snapshot of financial performance is now ready for your review, and the numbers confirm a tale most of us probably suspected already: lots of firms racking up debt so they have enough cash to weather difficult economic circumstances, and lots of other turbulence across most line items on the income statement.

We try to publish these snapshot reports every quarter, collecting and comparing financial data for a large pool of firms. For Q3 2020, we looked at the disclosures of more than 2,500 firms across dozens of industries. Large retailers are excluded because most of them don’t have third quarters that end on Sept. 30; and large financial firms are excluded because that sector’s financial statements are so different from everyone else.

Still, 2,500 firms across dozens of other industries gives us a good look at what happened in Q3 2020, and how that performance compared to Q3 2019. Some of our findings, for all firms as a whole:

Revenue down 4.25 percent

Net Income down 16.7 percent

Operations cashflow down 7.1 percent

Capex down 14 percent

Cash up 38 percent

Total debt up 9.5 percent

Figure 1, below, shows year-over-year changes visually:

None of that should surprise people. Since the pandemic arrived earlier this year, operating expenses have gone up for many firms, while revenue declined. Firms also scrambled for cash to keep themselves liquid, and primarily did so by tapping lines of credit or raising debt. The big pieces of this puzzle all fit together.

And Looking by Industry…

Calcbench also tracked the 2,500 firms in our sample by SIC code, the classification system used to group firms by industry. So our Q3 snapshot report also lets people see how 20 specific industries fared across eight major financial metrics. For example…

The oil & gas and hospitality sectors suffered biggest the revenue declines, as well as sharp declines in SG&A spending;

All sectors had more cash on hand in Q3 2020 except broadcasting & communications, which had a 38 percent decline;

Oil services saw its operating expenses plunge, while the pharma sector saw them rise sharply; all other sectors fluctuated at +/- 10 percent.

Here’s how revenue changed year-over-year for all 20 industry sectors we tracked: