Tuesday's Headlines: GM Posts Mixed Numbers For Q2
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
2U (TWOU) 17.0%
Etsy (ETSY) 9.0%
Redfin (RDFN) 8.7%
Duolingo (DUOL) 8.6%
DocuSign (DOCU) 6.7%
Moving Down ⬇️
Pure Storage (PSTG) -3.77%
Lululemon (LULU) -3.39%
Nordstrom (JWN) -1.84%
FedEx (FDX) -1.21%
Nautilus (NLS) -1.14%
Here are the stories that you need to know ahead of market-open today, Tuesday, the 5th of July.
GM Posts Mixed Numbers For Q2 🚘
General Motors reported sliding sales for the Q2, down 15% on the year-ago quarter. While this may appear worrying for the automaker, this still marks a 14% improvement on the first quarter of 2022, indicating that the worst could be in the rearview mirror for the firm.
GM and the wider auto industry have been hit hard by supply chain issues and, in particular, global semiconductor shortages over the last number of months. The company even announced prior to its sales report that it currently has close to 95,000 vehicles in its inventory that have been made without certain components due to the immense shortages currently rife within the industry.
GM sold 582,041 vehicles for the quarter despite these issues. GM North America President Steve Carlisle praised the “patience and loyalty of our dealers and customers as we strive to meet significant pent-up demand for our products.”
Vehicle inventory is also down for GM, with it currently holding just under 10% fewer vehicles than it did at the end of the first quarter. Despite this, the company hasn’t budged on its guidance for the full year, still expecting a net income of up to $11.2 billion and earnings per share of up to $7.50 at the high end.
While it’s certainly a tough time to be an automaker, GM appears confident in its ability to serve the still lofty demand for its products. If it can deliver on these goals, it will certainly be in a competitive position going forward.
Tesla Misses Q2 Sales Estimates 🔌
GM wasn’t the only automaker to report its Q2 sales recently. Electric vehicle manufacturer Tesla (TSLA) also gave us an insight into how it fared last quarter, and it certainly made for interesting reading.
The Elon Musk-led company delivered 254,695 vehicles, coming in just shy of analyst estimates of 256,520. Tesla’s fortunes appear to be the inverse of GM, with year-over-year sales growth coming in at 26.5%, but sales actually down 17.9% compared with the first quarter of 2022.
Tesla had previously announced in its first-quarter shareholder deck that it expected “50% average annual growth in vehicle deliveries” over the long term. While this is still very much attainable for the firm, it won’t be helped by the plethora of issues that the auto industry currently finds itself mired in.
Supply chain issues and semiconductor shortages are still abundant, but Tesla also had to contend with the lasting impact of COVID as its factories in China were forced to close as lockdowns gripped the country once again. In addition to this, the company is trying to deal with the high costs associated with developing new factories in Texas and Berlin — both of which Elon Musk has described as “gigantic money furnaces.”
Electric vehicles are still very much the future of transport, and Tesla is certainly the market leader. However, that doesn’t protect it from all of the same issues that the wider auto industry has to face. These headwinds will likely pass but expect a difficult number of months for the industry at large.
AstraZeneca Snaps Up A US BioTech 🤝
AstraZeneca has announced that it will purchase the US-based biotech firm TeneoTwo in a deal worth an estimated $1.27 billion.
TeneoTwo was originally spun out from the larger company Teneobio, which itself was bought over by Amgen last year. This smaller company focuses primarily on experimental treatments for blood cancers, targeting a specific type of non-Hodgkin lymphoma.
This acquisition makes sense for a company like AstraZeneca, that saw sales of over $1.2 billion for its own blood cancer drug — Calquence — last year. In the statement, AstraZeneca said that TeneoTwo’s treatment “further diversifies AstraZeneca’s haematology pipeline that spans multiple therapeutic modalities and mechanisms to address a broad spectrum of blood cancers.”
Though not listed on the U.S. stock market, AstraZeneca is a giant of the pharmaceutical and biotech world.
Most recently, the British-Swedish company became known globally for its work in developing the Oxford-AstraZeneca COVID-19 vaccine. Although it ran into early difficulty due to reported side-effects with its drug, the vaccine roll-out was still a massive success for the company, pulling in $4 billion in revenue from the vaccine for 2021 and $1.8 billion in the last quarter alone.
Of course, investing in biotech and pharmaceutical companies requires a deep understanding of the industry, not to mention a strong stomach. Given the highly-regulated nature of the industry, it can take years for a drug to come to market, while any safety concerns or failed tests can bring extreme volatility to a company’s stock price.