物 Tesla Misses Earnings

1) Tesla Q1 Earnings 2) Consumer Spending Helps Visa, 3) Norway's $1.6T Wealth Fund and more!

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Some key data bites you should know:

In todays newsletter:

  • Tesla Misses Earnings

  • Consumer Spending Boosts Visa

  • 喫朝Norways $1.6T Wealth Fund

Lets dive right in!

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Elon got Tesla investors excited last night.

The company surged 12% in after hours following the release of its Q1 FY24 earnings.

Heres a rundown of the key figures:

  • Earnings: $0.45 (-47% YoY, vs. $0.51 Est. from LSEG)

  • Revenue: $21.30B (-9% YoY, vs. $22.15B Est. from LSEG)

Automotive revenues fell 13% YoY to $17.4B, and operating marginshalved from 11.4% to 5.5%.

The company ramped up capital expenditures by 34% to $2.8B, while free cash flow dropped to -$2.5B, impacted by increases in inventory and AI infrastructure investments.

The downturn in revenue and profitability can be traced back to lower average vehicle selling prices, a decrease in vehicle deliveries, and the costs associated with ramping up Cybertruck production.

So why did the stock jump after hours? It all comes down to the outlook.

In 2024, Tesla expects the growth rates of energy storage deployments and revenue from its Energy Generation and Storage business to exceed the Automotive business.

And perhaps the most important reason - the company plans to launch new, more affordable models ahead of the previously scheduled second half of 2025.

These vehicles will be produced using the same manufacturing lines as current models, maximizing the current capacity of approximately 3M vehicles.

Consumers are still spending like theres no tomorrow.

Despite sticky inflation, Visa outpaced earnings estimates thanks to robust travel and spending patterns in its Q2 FY 2024 earnings.

Heres a rundown of the key figures:

  • Earnings: $2.51 (+20% YoY, vs. $2.44 Est. from FactSet)

  • Net Revenue: $8.78B (+10% YoY, $8.62B Est. from FactSet)

As we see, the company reported strong double-digit growth in earnings alongside a 10% rise in net revenue, with all business segments experiencing growth.

This performance was driven by a 16% increase in total cross-border volume, an 8% increase in payments volume, and an 11% increase in processed transactions, compared to last year.

The company also generated $4.3B in free cash flow and returned $3.8B to shareholders through share repurchases and dividends.

And perhaps most importantly, Visa reaffirmed its 2024 expectations for low double-digit net revenue growth and low teens growth in earnings per share, demonstrating its ability to navigate the current macro environment.

The worlds largest sovereign wealth fund just got bigger.

Norways wealth fund recently reported a staggering first-quarter profit of $110B, thanks to its investment in technology stocks.

During Q1, equity investments increased by 9.1%, whereas its fixed income and real estate investments saw declines of 0.4% and 0.5%, respectively.

The funds investments in renewable energy fell -11.4%, but this component makes up just 0.1% of the total fund.

For those of you that dont know, Norway created its sovereign wealth fund in 1990 to protect the economy from the cyclical nature of its oil revenue.

It functions both as a financial buffer and a savings plan for current and future generations of Norwegians.

The fund is invested in nearly 9,000 companies across 72 countries.

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TikTok Ban. Both the Senate and House have approved legislation that would ban TikTok if its not sold within a year -CBS

Owl Addition. Duolingo $DUOL joins the S&P MidCap 400 and is now up 56% over the last year -IBD

Upgraded Llama. Meta $META released Llama 3, its next generation AI large language model -META

Movie Studio Takeover. Sony is in talks with PE firm Apollo to bid for Paramount Global $PARA-WSJ

Citadel vs Trump Media. Citadel calls Trump Media CEO a proverbial loser -CNBC

Around The Clock. The NYSE is considering implementing 24/7 trading, similar to to the crypto markets -FT

Notable Companies Reporting Earnings Next Week:

  • Monday (4/22):

    • SAP $SAP, Verizon $VZ, Cadence Design Systems $CDNS, Truist Financial $TFC

  • Tuesday (4/23):

    • Tesla $TSLA, Visa $V, Pepsico $PEP, GE Aerospace $GE, Danaher $DHR, Texas Instruments $TXN, Philip Morris $PM, UPS $UPS, Lockheed Martin $LMT, Spotify $SPOT, General Motors $GM

  • Wednesday (4/24):

    • Meta Platforms $META, Thermo Fisher $TMO, IBM $IBM, ServiceNow $NOW, Lam Research $LRCX, AT&T $T, Boeing $BA, Waste Management $WM, Chipotle Mexican Grill $CMG, Ford $F

  • Thursday (4/25):

    • Microsoft $MSFT, Alphabet $GOOG, Merck & Co $MRK, Astrazeneca $AZN, T-Mobile $TMUS, Caterpillar $CAT, Intel $INTC, Altria $MO, Snap $SNAP

  • Friday (4/26):

    • Exxon Mobil $XOM, Chevron $CVX, AbbVie $ABBV, Colgate-Palmolive $CL, Phillips 66 $PSX, AON $AON

All of the companies that are reporting earnings next week can be viewed here.

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Buys

  • Biohaven ($BHVN)

    • Insider: John Childs (Director)

      • # of Shares Purchased: 195,121

      • $ Amount: $7,999,961

      • SEC Forms: [1]

    • Insider: Vlad Coric (CEO)

      • # of Shares Purchased: 121,951

      • $ Amount: $4,999,991

      • SEC Forms: [1]

    • Insider: Gregory Bailey (Director)

      • # of Shares Purchased: 48,780

      • $ Amount: $1,999,980

      • SEC Forms: [1]

Sells

  • Abercrombie & Fitch Co. ($ANF)

    • Insider: Fran Horowitz (CEO)

      • # of Shares Sold: 400,000

      • $ Amount: $44,244,000

      • SEC Forms: [1]

  • DoorDash ($DASH)

    • Insider: Tony Xu (CEO)

      • # of Shares Sold: 132,300

      • $ Amount: $17,663,909

      • SEC Forms: [1]

  • e.l.f. Beauty ($ELF)

    • Insider: Tarang Amin (CEO)

      • # of Shares Sold: 74,451

      • $ Amount: $12,388,646

      • SEC Forms: [1]

  • Coinbase ($COIN)

    • Insider: Brian Armstrong (Chairman and CEO)

      • # of Shares Sold: 23,075

      • $ Amount: $5,497,933

      • SEC Forms: [1]

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