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Monday August 15, 2022



Clorox Posts Earnings

The Clorox Company (CLX) released its fourth quarter and full-year earnings on Tuesday, August 3. The Oakland, California-based company's stock fell after the earnings' release.

Revenue for the quarter was $1.80 billion, down from $1.98 billion at the same time last year. For the full year, the company reported revenue of $7.34 billion, up 9% from $6.72 billion at the same time last year.

"Fiscal year 2021 was an extraordinary year for Clorox, with the pandemic putting us through the test of volatility, including rapid changes in consumer demand and inflationary pressure, which is reflected in our fourth quarter results," said Clorox CEO Linda Rendle. "It reinforced the strength of our global portfolio, which has never been more relevant to consumers. And it showed the opportunity to accelerate our IGNITE strategy to capitalize on changing consumer trends, differentiate Clorox and win in our categories."

Clorox reported quarterly net earnings of $97 million, down from $310 million at this time last year. For the full year, the company reported net earnings of $710 million, down from $939 million last year.

Clorox is best known as a manufacturer of consumer and professional-grade cleaning products and employs nearly 9,000 people worldwide. Clorox brands include its namesake bleach and cleaning solutions as well as Pine-Sol, Glad, Hidden Valley, Burt's Bees and Brita water products. Shares in the company fell as Clorox indicated an expected decrease in demand between 2% and 6% for the next fiscal year as consumer purchases normalize around the pandemic.

The Clorox Company (CLX) shares ended the week at $162.51, down 10.2% for the week.

Lyft Reports Quarterly Earnings

Lyft, Inc. (LYFT) posted quarterly earnings for the second quarter on Tuesday, August 3. The company reported 125% year-over-year revenue growth.

The rideshare company reported revenue of $765 million for the quarter. This was up from $339 million during the same quarter last year.

"We had a great quarter. We beat our outlook across every metric and we have growing momentum," said Lyft co-founder and CEO Logan Green. "Since our inception, we've worked hard to defy the odds with a deep belief in our mission. We've consistently innovated and made big bets and this is just the beginning. We want to improve people's lives with the world's best transportation and we will continue working to deliver on this goal."

Net losses decreased from $437.1 in the first quarter to $251.9 million. On an earnings per share basis, the company posted a loss of $0.11.

Active riders increased from 8.7 million at this time last year to 17.1 million in the second quarter. Average revenue per active rider was $44.63 for the quarter, up from an average of $39.06 per rider during the same quarter last year. Active riders are defined as all riders who take at least one ride during the quarter where Lyft processes the transaction.

Lyft, Inc. (LYFT) shares ended the week at $52.44, down 4.6% for the week.

CVS Releases Earnings Report

CVS Health Corporation (CVS) reported its latest quarterly earnings on Wednesday, August 4. The drug store company's earnings exceeded Wall Street's expectations.

Revenue for the quarter came in at $72.6 billion, up 11% from $65.3 billion at this time last year. This surpassed analysts' expected revenue of $70.3 billon.

"We delivered another quarter of strong results and once again raised our outlook for the year," said CVS Health President and CEO Karen S. Lynch. "This quarter was highlighted by broad sales and earnings outperformance, as well as sequential operating margin improvement. We continue to play a critical role in helping America prevail against the pandemic while demonstrating the effectiveness of our unique business model, which is focused on meeting customer needs through innovations that make health care more local, affordable and connected."

The company reported net income of $2.78 billion, or $2.10 per share. This is down from net income of $2.98 billion, or $2.26 per share, reported at this time last year.

During the quarter, the company administered nearly 17 million COVID-19 vaccines and over 6 million COVID-19 tests. CVS expects to earn between $6.35 to $6.45 per share in 2021. This is an increase from former guidance indicating earnings between $6.24 to $6.36 per share.

CVS Health Corporation (CVS) shares ended the week at $81.26, down 1.3% for the week.

The Dow started the week at 34,969 and closed at 35,209 on 8/6. The S&P 500 started the week at 4,407 and closed at 4,437. The NASDAQ started the week at 14,759 and closed at 14,836.

Treasury Yields Rise after Strong Jobs Report

Yields on U.S. Treasury bonds rose Thursday after the release of the weekly initial jobs report. On Friday, yields edged higher after the Labor Department released the monthly jobs report for July.

On Thursday, the Department of Labor reported weekly initial jobless claims at 385,000. This is down 14,000 from last week and matched analysts' expectations. The four-week moving average dipped slightly to 394,000. Continuing claims decreased by 181,000 to 13 million for the week ending July 17, the most recent week for which data is available.

"Many people before the pandemic just simply didn't apply for unemployment insurance, even if they were eligible," said Senior Economist at Glassdoor Daniel Zhao. "So we might see permanent higher levels of claims, even if the jobs recovery is continuing. There is a lot of potential for job growth in the coming months."

The benchmark 10-year Treasury note yield hit a low of 1.132% on Wednesday, August 4, but was trading at a weekly high of 1.307% on Friday. The 30-year Treasury bond yield also hit a low on Wednesday of 1.807%, but hit a weekly high of 1.952% during trading Friday.

On Friday, the U.S. Department of Labor reported nonfarm payrolls rose to 943,000 in July. This is up from June's number of 938,000 and exceeded expectations of 845,000. The unemployment rate fell from 5.9% in June to 5.4% in July.

"The nonfarm payroll, unemployment, and hourly earnings numbers remain trapped in the in-between circumstances of a strong recovery, driving increased demand for workers," said Chief Investment Officer at Glenmede, Jason Pride. "The still above-normal unemployment rate and below-normal participation rate point to the lingering mismatch between job openings provided by a recovering economy and the ability and willingness to fill those roles. Such a gap should close over time but still may take months to find its way to normal levels."

The 10-year Treasury note yield closed at 1.31% on 8/6, while the 30-year Treasury bond yield was 1.95%.

30-Year Mortgage Rates Drop

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, August 5. The 30-year fixed mortgage rate dipped for the week.

This week, the 30-year fixed rate mortgage averaged 2.77%, down from 2.80%. Last year at this time, the 30-year fixed rate mortgage averaged 2.88%.

The 15-year fixed rate mortgage averaged 2.10% this week, unchanged from last week. At this time last year, the 15-year fixed rate mortgage averaged 2.44%.

"With global market uncertainty surrounding the Delta variant of COVID-19, we saw 10-year Treasury yields drift lower and consequently mortgage rates followed suit," said Freddie Mac's Chief Economist Sam Khater. "The 30-year fixed-rate mortgage dipped back to where it stood at the beginning of 2021, and the 15-year fixed remained at its historic low. This bodes well for those still looking to refinance, renovate or even purchase a new home."

Based on published national averages, the savings rate was 0.06% as of 7/19. The one-year CD averaged 0.14%.

Published August 6, 2021
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