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Friday December 3, 2021



Hasbro Reports Earnings

Hasbro, Inc. (HAS) reported its fourth quarter and full-year earnings on Monday, February 8. The toy company reported an increase in revenue and net earnings for the quarter, but a decrease in revenue and net earnings year-over-year.

The company posted revenue of $1.72 billion for the quarter, up 4% from $1.66 billion during the same quarter last year. For the full year, Hasbro reported $5.5 billion in revenue, down 8% from $5.9 billion the previous year.

"In 2020, we lived our purpose of making the world a better place for all children and all families," said Hasbro Chairman and CEO Brian Goldner. "In what was a most challenging year, the global Hasbro team fully demonstrated its resilience, tenacity, creativity, flexibility, and empathy."

Hasbro reported net income of $105.2 million for the quarter, up 10% from net earnings of $95.5 million. For the full year, the company reported net earnings of $222.5 million, down 36% from $345.9 million during the prior year.

The company's increase in sales for the quarter can be attributed, in part, to the performance of its Hasbro Gaming segment. Hasbro reported a 21% increase in revenue for Hasbro Gaming for the quarter and 15% for the full year. The company noted that revenue was up for its Star Wars products, while its revenue for Disney's Frozen 2 products declined. The company announced in its earnings release that a $0.68 per share quarterly dividend would be payable on May 17, 2021.

Hasbro, Inc. (HAS) shares ended the week at $91.48, down 8.2% for the week.

Twitter Posts Earnings

Twitter, Inc. (TWTR) released its fourth quarter and full-year earnings report on Tuesday, February 9. The company exceeded quarterly earnings estimates, causing shares to increase more than 13% following the report's release.

Twitter reported record quarterly revenue of $1.29 billion. This is up 28% from last year's fourth quarter revenue of $1.01 billion. Revenue for the full year was $3.72 billion, up from $3.46 billion last year.

"2020 was an extraordinary year for Twitter," said Twitter's CEO, Jack Dorsey. "We are more proud than ever to serve the public conversation, especially in these unprecedented times. Our product changes to date are promoting healthier conversations for those who use our service, including advertisers and partners, and we are excited about our plans to continue innovating in 2021."

The company announced earnings of $222.12 million for the quarter, up from earnings of $118.77 million one year ago. On an adjusted earnings per share basis, the company reported earnings of $0.27 per share, up from $0.15 per share at the same time last year. For the full year, Twitter reported a net loss of $1.14 billion, compared to net income of $1.47 billion in the prior year.

Twitter announced that its average monetizable daily active usage (mDAU) totaled 192 million for the quarter, marking substantial growth compared to 152 million in the same quarter last year. The average mDAU in the United States was 37 million, compared to 31 million during the same period last year. Twitter expects to increase its staffing by more than 20% in 2021.

Twitter, Inc. (TWTR) shares closed at $71.90, up 24.4% for the week.

General Motors Beats Earnings Expectations

General Motors Company (GM) reported quarterly and full-year earnings on Wednesday, February 10. The automaker, which manufactures Chevrolet, Cadillac, GMC, Buick and other brands, reported better-than-expected revenue and profit in the fourth quarter.

General Motors announced revenue of $37.52 billion for the quarter, exceeding analysts' projected revenue of $36.90 billion. This was up from $30.83 billion for the same time last year. For the full year, the company reported revenue of $122.49 billion.

"GM's 2020 performance was remarkable by any measure, and even more so in a year when a global pandemic caused companies around the world – including GM – to temporarily suspend manufacturing operations to keep employees safe," said General Motors' CEO, Mary Barra. "Our dealers also took extraordinary steps to protect our customers, such as providing seamless online shopping, purchasing and delivery solutions."

General Motors reported quarterly net income of $2.85 billion, or $1.93 per share, above the $1.62 per share analysts predicted. For the full year, the company's net income was $6.43 billion.

Although the company's profits are currently driven by sales of gas- and diesel-powered trucks and SUVs, General Motors plans to add 30 new electric vehicles to its lineup by 2025. The company will utilize a new battery-electric platform called Ultium. The new technology is expected to reduce battery costs compared to the current Chevy Bolt technology. Despite the strong results in the earnings release, the company acknowledged the current global shortage of semiconductor chips may impact 2021 profits.

General Motors Company (GM) shares ended the week at $53.60, down 4.3% for the week.

The Dow started the week of 2/8 at 31,191 and closed at 31,458 on 2/12. The S&P 500 started the week at 3,893 and closed at 3,935. The NASDAQ started the week at 13,937 and closed at 14,095.

Treasury Yields Tick Upward

U.S. Treasury yields rose late in the week following the release of consumer based economic data. Treasury notes were lower earlier in the week following release of higher than expected unemployment claims.

On Friday, the University of Michigan's preliminary results for February's consumer sentiment index was released. The consumer sentiment index measures consumer confidence or optimism for the U.S. economy. The index fell to 76.2 in mid-February, down from 79 in January. Economists' expectations were for the index to reach 80.8 for the month.

"More surprising was the finding that consumers, despite the expected passage of a massive stimulus bill, viewed prospects for the national economy less favorably in early February than last month," said a statement issued by the University of Michigan. "In contrast, the proposed stimulus is expected to prompt a very strong pace of economic growth, with the differences mainly about the appropriate size and pace of federal spending."

On Thursday, the U.S. Department of Labor released its weekly unemployment claims data for the week ending on February 6. New claims reached 793,000, surpassing the 760,000 expected by economists.

On Wednesday, Federal Reserve Chairman Jerome Powell, spoke to the Economic Club of New York. He noted that the unemployment rate is likely dramatically understated and may be much closer to 10%, than the most recently reported 6.3%.

"Given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the post-pandemic economy, achieving and sustaining maximum employment will require more than supportive monetary policy," said Powell. "It will require a society-wide commitment, with contributions from across government and the private sector."

The 10-year Treasury note yield closed at 1.20% on 2/12, while the 30-year Treasury bond yield was 2.00%.

Mortgage Rates Remain Steady

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, February 11. The report showed rates for 30-year fixed rate mortgages remained flat for the week.

The 30-year fixed rate mortgage averaged 2.73% this week, remaining unmoved from last week's level. Last year at this time, the 30-year fixed rate mortgage averaged 3.47%.

This week, the 15-year fixed rate mortgage averaged 2.19%, down from last week's average of 2.21%. During this time last year, the 15-year fixed rate mortgage averaged 2.97%.

"It's a tale of two economies," said Freddie Mac's Chief Economist Sam Khater. "The services economy remains in the doldrums, but the production side of the economy remains strong. New COVID-19 cases are receding, which is encouraging and that has led to a rise in Treasury rates. But, the run-up in Treasury rates has not impacted mortgage rates yet, which have held firm."

Based on published national averages for the week of 2/8, the national savings rate was 0.05%. The one-year CD averaged 0.15%.

Published February 12, 2021
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