Stocks in the news
Global Payments (GPN) has announced that CEO Jeffrey Sloan will step down from his position and board membership next month. Cameron Bready, who has been GPN's COO since 2019, will take over as CEO. While GPN's Q1 report showed a strong 18% increase in year-over-year adjusted EPS and a 6.3% jump in revenues, the CEO's departure has overshadowed the positive results. GPN's Merchant Solutions segment, which generates around 70% of the company's FY22 revenue, is its bread and butter. In the meantime, the company has raised its FY23 projections, targeting an EPS of $10.32-$10.44 and revenue growth of +7-8%.
SoFi Technologies (SOFI), an online banking and lending company, exceeded Q1 EPS and revenue estimates and experienced a surge in personal loans and net interest income. The company's technology platform segment experienced a 15% increase in accounts, and it saw a 51% YoY jump in total products in its financial services segment. SOFI also issued an upside revenue guidance of $470-$480 million for Q1, raised its FY23 adjusted EBITDA outlook to $268-$288 million from $260-$280 million, and reiterated its expectation to reach quarterly GAAP profitability by 4Q23. The strong Q1 results and upbeat outlook caused the stock to rise significantly in pre-market trading. However, the shares have since given up those gains and are now trading in the red.
The Q1 earnings of ON Semiconductor have beaten expectations, leading to a rally of the company's shares. Although its adjusted EPS contracted by 2.5% yr/yr to $1.19, ON Semi's Q1 revenue remained relatively flat yr/yr, expanding by 0.7% to $1.96 bln, and exceeding estimates. Industrial revenue, which climbed 1% higher sequentially in Q1, was a significant factor in ON Semi's sales outperformance. ON Semi expects its Q2 adjusted earnings and revenue forecasts to surpass consensus, with its automotive revs returning to sequential growth in Q2. The company is confident that it can recover its East Fishkill fab cost structure by early 2024. ON Semi's quarterly numbers offer a bullish tone ahead of some of its peers' MarQ reports.
In contrast, Check Point Software's Q1 report showed a rare top-line miss, with the company's Q1 revenue being a bit light. Although the company had a solid EPS beat with in-line Q2 guidance and a reaffirmation for FY23, the commentary on the call seems to be weighing on the shares today. CHKP's first miss in the past five years is likely due to the economic slowdown, resulting in extended product sales cycles and some projects being postponed. Overall, the revenue miss and management's comments about extended product sales cycles and some projects being postponed are weighing on the stock today.
Exxon Mobil, a major oil and gas company, reported strong earnings and cash flow in its 1Q23 earnings report, despite a drop in commodity prices. XOM boosted its production by almost 300,000 barrels per day, mainly from its Permian Basin and Guyana assets. Strong refining margins and the Beaumont refinery expansion start-up also drove profits higher. XOM's cash flow from operations reached $16.3 billion, up 10% year-over-year. Although crude and natural gas realizations were lower, XOM mitigated the impact by increasing production to 3.8 million oil equivalent barrels per day. XOM's CEO has taken a conservative approach to capital allocation, but a major acquisition is not ruled out. XOM may benefit from strong travel demand during the summer months, pushing volume higher for both gasoline and jet fuel. Overall, XOM's results are still strong, and the company may generate another record quarter of earnings in Q2 if the global economy remains stable.