Money Masters Market Pulse: Week 29 Recap

Global Cyber Outage and Earnings Season Continues

July 19, 2024

In partnership with

Dear Money Master,

Today, we focus continue to focus on earnings season. We will look at Netflix, American Express, and TSMC. Additionally, we cover the global cyber outage, the European Central Bank's rate decision, and more. Stay tuned for our deep dive on decoding earnings per share (EPS).

👆 Please support us by clicking on our partners' ads. 🙏

What's New🎉

July's competition is heating up. Meanwhile, we would like to congratulate our June winners. We are happy to announce that for our August competition, we will be increasing the rewards and the number of winners! We will announce the rewards next Tuesday!

📰Your Daily Financial Digest - July 19th, 2024

🌍 Economics:

  1. Global Cyber Outage Disrupts Multiple Industries 🌐A software update by CrowdStrike caused a massive tech outage, grounding flights and impacting services from healthcare to banking. CrowdStrike CEO apologized for the disruption, and a fix was deployed. Experts highlighted the fragility of the world's interconnected systems. Read More

  2. European Central Bank Holds Interest Rates Steady 📉The European Central Bank kept its interest rate at 3.75%, citing persistent domestic price pressures and high services inflation. The ECB left the possibility of a September rate cut open, emphasizing a data-dependent approach. Read More

  3. UK Inflation Holds Steady at 2% in June 🇬🇧UK inflation remained at the Bank of England's 2% target in June, driven by higher restaurant and hotel prices, despite a drop in clothing and footwear costs. Services inflation, a key focus for the BOE, stayed at 5.7%, influencing cautious rate cut expectations. Read More

💼 Finance:

  1. SunPower Stock Plummets Amid Operational Halt 💡SunPower's stock fell 70% as the company halted new leases, installations, and shipments, leading analysts to speculate on its potential bankruptcy. The company struggles with cash flow and high debt, with some predicting asset liquidation and delisting. Read More

  2. U.S. Mid-Sized Banks Report Dip in Q2 Profits 💸

    Several U.S. mid-sized and regional banks, including Fifth Third Bancorp, reported lower Q2 profits due to higher deposit costs and weakened loan demand. Net interest margins contracted across the industry for the third consecutive quarter. Read More

💹Earnings:

  1. American Express Raises Full-Year Profit Forecast 💳 American Express increased its profit forecast for 2024 due to continued spending on travel, dining, and entertainment by its affluent customers. The company reported a 39% increase in Q2 profit, with earnings per share beating expectations. Read More

  2. United Airlines Reports Strong Q2 Profit but Lowers Q3 Forecast ✈️ United Airlines reported a Q2 profit increase of over 20%, driven by strong demand for international travel. However, the airline's Q3 forecast fell short of expectations due to an oversupply of flights affecting fares. Read More

  3. Netflix Surpasses Expectations with Strong Q2 Performance 📺 Netflix reported earnings per share of $4.88 and revenue of $9.56 billion, exceeding expectations. The company saw a 34% increase in ad-supported memberships and strong subscriber growth, though it plans to shift focus to monetizing its ad inventory in the future. Read More

  4. Volvo Cars' Shares Surge on Record Q2 Operating Profit 🚗Volvo Cars reported a 28% increase in core operating profit for Q2, reaching 8.2 billion SEK, the highest for any quarter in its history. The company saw a 15% rise in global retail sales, driven by hybrid and electric vehicle sales. Read More

  5. TSMC Beats Q2 Revenue and Profit Expectations 💾Taiwan Semiconductor Manufacturing Company (TSMC) reported Q2 revenue of NT$673.51 billion and net income of NT$247.85 billion, driven by strong demand for its advanced chips used in AI applications. The company plans to start mass production of 2-nanometer chips in 2025. Read More

  6. ASML Exceeds Q2 Sales and Profit Estimates 🛠️ ASML reported better-than-expected Q2 earnings and sales, fueled by high demand for its semiconductor equipment. Despite beating estimates, shares dropped 11% due to concerns over potential export curbs to China. Read More

Deep Dive: Decoding a Company's Earnings Report 📊🔍

Understanding Earnings Per Share (EPS)

Earnings per share (EPS) is a key metric in a company's earnings report, reflecting the company's profitability on a per-share basis. EPS is calculated by dividing the company's net income by the number of outstanding shares. This metric helps investors understand how much profit is attributed to each share they own, making it easier to compare profitability across companies and industries.

Components of an Earnings Report

  1. Income Statement: Shows revenue, expenses, and net income over a specific period.

  2. Balance Sheet: Provides a snapshot of the company’s assets, liabilities, and shareholders' equity.

  3. Cash Flow Statement: Illustrates how cash is generated and used in operations, investing, and financing activities.

  4. Management’s Discussion and Analysis (MD&A): Offers insights into the company’s financial condition, including risks and future outlook.

  5. Disclosures: Highlights any significant risks or uncertainties, such as ongoing litigation.

How to Calculate EPS

  1. Net Income: Find the company's net income, which is the profit after all expenses, taxes, and costs have been deducted from total revenue.

  2. Outstanding Shares: Determine the number of outstanding shares, which can be found in the company’s balance sheet.

  3. EPS Formula: Divide the net income by the number of outstanding shares.

Example Calculation

If a company has a net income of $10 million and 5 million outstanding shares, the EPS would be:

Why EPS Matters

EPS is important for investors as it indicates the company’s profitability on a per-share basis. A higher EPS often suggests better profitability and can lead to higher stock prices. However, it's important to consider EPS alongside other financial metrics and qualitative factors, such as market conditions and management’s effectiveness.

Interpreting Earnings Reports

When reviewing earnings reports, consider the following:

  • Quarterly Performance: Compare the current quarter’s performance to previous quarters and the same quarter in previous years.

  • Revenue Trends: Analyze if revenues are improving or declining over time.

  • Cost of Sales: Check if the cost to generate revenue is increasing, which could impact profitability.

  • Cash Flow: Ensure the company is generating positive cash flow from its core operations.

  • Risk Factors: Assess any legal proceedings or financial risks disclosed in the report.

This cannabis startup pioneered “rapid onset” gummies

Most people prefer to smoke cannabis but that isn’t an option if you’re at work or in public.

That’s why we were so excited when we found out about Mood’s new Rapid Onset THC Gummies. They can take effect in as little as 5 minutes without the need for a lighter, lingering smells or any coughing.

Nobody will ever know you’re enjoying some THC.

We recommend you try them out because they offer a 100% money-back guarantee. And for a limited time, you can receive 20% off with code FIRST20.

To your financial empowerment, The Money Masters Team

P.S. Stay connected! Don't forget to follow us on social media!📱🌐

Disclaimer: This information is for educational purposes only and should not be construed as financial advice. Always conduct your own research or consult with a financial advisor before making investment decisions.