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Friday December 3, 2021



Hyatt Releases Earnings Report

Hyatt Hotels Corporation (H) reported its earnings for the fourth quarter and full year on Wednesday, February 17. The company reported decreased revenue and earnings due to ongoing travel considerations stemming from the COVID-19 pandemic.

Hyatt posted revenue of $424 million for the fourth quarter. This was down from $1.28 billion during the same quarter last year. Revenue for the full year came in at $2.07 billion.

"I am extremely proud of, and grateful for, the achievements of our teams around the world throughout 2020," said Hyatt's CEO Mark Hoplamazian. "The Hyatt family demonstrated resilience in the face of difficult decisions and undertook meaningful action to place Hyatt in a strong position as the recovery unfolds. Amidst a backdrop of challenging operating fundamentals, our net rooms growth was strong, demonstrating the strength of our brands."

Net losses for the quarter came in at $203 million. This was down from net income of $321 million during the prior year's quarter. For the full year, the company posted a net loss of $703 million.

Hyatt opened 23 new hotels in the fourth quarter and 72 new hotels in the fiscal year. The company experienced a 148.5% decrease in revenue from its Owned and Leased Hotels segment to a loss of $48 million in the quarter. As of the end of calendar year 2020, approximately 82% of Hyatt's Owned and Leased Hotels were open, representing 81% of Hyatt's rooms. For the fourth quarter, Hyatt's Owned and Leased Hotels segment revenue per available room (RevPAR) decreased 81.8%.

Hyatt Hotels Corporation (H) shares ended the week at $82.26, up 6.2% for the week.

Jack in the Box Cranks Out Quarterly Earnings

Jack in the Box Inc. (JACK) reported its first quarter earnings on Wednesday, February 17. The fast-food company reported increased revenue and sales for the quarter.

The fast-food chain brought in revenue of $338.5 million for the quarter, exceeding analysts' expected revenue of $335.5 million. This was up from $307.7 million in revenue reported at the same time last year.

"Our ongoing strategy continues to resonate with our guests with same-store sales significantly outperforming our peers," said Jack in the Box CEO Darin Harris. "We saw strong same-store sales growth across all dayparts, with average check driven by premium products, including the launch of our new chicken sandwich and strips. This momentum has continued into the second quarter of 2021, with two-year trends through the first four weeks of the quarter remaining consistent with the first quarter."

The company reported net earnings of $50.9 million for the quarter or $2.21 per share. This is up from $7.9 million or $0.33 per share during the same quarter last year.

Jack in the Box reported increased same-store sales across all segments. Company owned same-store sales increased 7.5% in the quarter, up from a 2.9% increase in the same quarter last year. Franchise owned same-store sales increased 13.0% and system owned same-store sales increased 12.5% in the quarter. Despite the overall increase in same-store sales, the company reported a substantial decline in restaurant traffic. Sales were negatively affected in certain markets due to temporary shutdowns and reduced hours of operation because of the continued COVID-19 pandemic.

Jack in the Box Inc. (JACK) shares ended the week at $99.18, down 2.3% for the week.

CVS Releases Earnings Report

CVS Health Corporation (CVS) reported its latest quarterly earnings on Tuesday, February 16. The drug store company posted sales and profits that beat Wall Street's expectations.

Revenue for the quarter came in at $69.55 billion, up from $66.89 billion at this time last year. For the full year, the company reported revenue of $268.71 billion.

"The COVID-19 pandemic presented unique challenges to our business and to the entire health care industry," said CVS Health President and CEO Karen S. Lynch. "We utilized the full depth and breadth of our capabilities and our presence in local communities across the country, to play a leadership role in COVID-19 testing and vaccine administration. Our ability to deliver 2020 full-year results above expectations is a testament to the strength of our strategy and the flexibility of our diversified health services model."

The company reported net income of $975 million, down 44.1% from last year's fourth quarter net income of $1.74 billion. Net income for the full year increased to $7.19 billion.

CVS Health attributed the 4% rise in revenue to growth in its Health Care benefits and Retail/LTC segments. The company posted a 11.4% increase in its Health Care Benefits segment and a 6.6% increase in its Retail/LTC segment for the quarter. The company's front store sales dipped by 1.6% for the quarter.

CVS Health Corporation (CVS) shares ended the week at $70.42, down 6.4% for the week.

The Dow started the week of 2/16 at 31,472 and closed at 31,494 on 2/19. The S&P 500 started the week at 3,940 and closed at 3,907. The NASDAQ started the week at 14,152 and closed at 13,874.

Treasury Yields Continue Upward Trend

U.S. Treasury yields rose early in the week, reaching a high last seen in February 2020. Treasury yields continued climbing on Friday as investors monitored stimulus package progress.

On Tuesday, the benchmark 10-year Treasury note reached a high of 1.316%. The rise in rates was attributed to continued hope for progress on passage of the $1.9 billion stimulus package.

On Wednesday, the Commerce Department released U.S. retail sales data for January. Retail sales growth reached 5.3%, exceeding analysts' expectations of 1.2%. January spending increases were linked to January's stimulus checks.

"Retail sales surged in January thanks to additional government stimulus," said credit card analyst Ted Rossman of Bankrate.com. "Consumers are learning to adapt and are spending in spite of the virus, not because it has gone away."

On Thursday, the U.S. Department of Labor released its weekly unemployment claims data for the week of February 13. First time filer claims reached 861,000, surpassing economists' expected claims of 773,000.

"We're still at the mercy of the virus, so it's still a bifurcated economy," said chief investment strategist Liz Ann Sonders of Charles Schwab.

The 10-year Treasury note yield closed at 1.34% on 2/19, while the 30-year Treasury bond yield was 2.14%.

Mortgage Rates Increase

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, February 18. The report showed interest rates increased.

The 30-year fixed rate mortgage averaged 2.81% this week, up from last week's average of 2.73%. Last year at this time, the 30-year fixed rate mortgage averaged 3.49%.

This week, the 15-year fixed rate mortgage averaged 2.21%, up from last week's average of 2.19%. During this time last year, the 15-year fixed rate mortgage averaged 2.99%.

"Reaching its highest point since mid-November, the 30-year fixed-rate mortgage averaged 2.81% this week," said Freddie Mac's Chief Economist Sam Khater. "Economic spending has improved, due to the most recent stimulus, but supply chain shortages are causing downstream inflation, leading to higher mortgage rates. While there are multiple temporary factors driving up rates, the underlying economic fundamentals point to rates remaining in the low 3% range for the year."

Based on published national averages for the week of 2/15, the national savings rate was 0.05%. The one-year CD averaged 0.15%.

Published February 19, 2021
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