Stocks in the news
DuPont reported better-than-expected 1Q23 results with strong performances from its water and safety solutions businesses. However, the company's exposure to the consumer electronics market, which is currently undergoing inventory corrections, weighed heavily on its Q2 and FY23 outlook, causing shares to drop. DuPont has cut its EPS forecast for FY23 to $3.55-$3.70, from $3.50-$4.00, and has lowered the high end of its revenue outlook to $12.5 billion from $12.9 billion. In contrast to the weak outlook in the Electronics and Industrial segment, DuPont's Water & Protection segment is expected to remain strong, buoyed by the pricing actions the company took to offset inflation last year.
Meanwhile, Uber reported strong 1Q23 results, beating estimates across the board with record profitability and free cash flow. The Mobility segment, which saw 40% YoY growth in gross bookings to $15 billion, was the primary driver of these results. Uber's Delivery segment also reported solid results, with YoY gross bookings up 8% to $15 billion, and adjusted EBITDA reaching $288 million compared to just $30 million in the same period last year. The Freight segment was the only weak point, posting a loss of ($564) million. Despite this, the company is poised to capitalize on the healthy rideshare market and resilient delivery business, with gross bookings of $33-$34 billion.
Woodward, a supplier of control systems for the aerospace and industrial markets, saw a significant increase in stock value after reporting better than expected earnings and providing optimistic guidance for FY23. The company experienced a 40% increase in adjusted EPS and a 22% increase in revenue, both surpassing analyst expectations. The industrial segment, in particular, saw a sales increase of 31% due to higher demand for power generation, LNG growth, and continued demand for backup power. Woodward also announced its alignment of the cost structure of its industrial segment and pared down its industrial SKUs by 5%. In the aerospace segment, revenue increased by 17% due to increasing global passenger traffic. Despite its volatile end markets and lack of quarterly guidance, investors were surprised and pleased with the positive outlook for Woodward, and the company's stock is now at a new 52-week high.
NXP Semiconductors also saw a boost in stock value after reporting better than expected Q1 results and providing an encouraging Q2 outlook. Although many of its peers had underwhelming reports last week, NXP Semiconductors' Q1 revenue fell just 0.5% yr/yr to $3.12 billion, much less than analysts feared. The automotive segment remained strong in Q1, with a 17% YoY increase in revenue. NXPI predicts continued revenue growth in the high single-digit percentage range YoY for Q2 due to ongoing adoption of electrified drivetrains and advanced driver assistance systems. Communication infrastructure saw a 7% increase YoY and is predicted to experience double-digit YoY growth in Q2. Although the industrial and IoT and mobile segments experienced declines, NXPI predicts the markets will either bottom or maintain their upward momentum. NXPI projects a mid-single-digit increase in industrial and flat revenue in mobile for Q2.
Despite Global Payments (GPN) reporting positive Q1 results, including an increase in adjusted EPS of 18% and a 6.3% rise in revenue, the stock is down 8% due to the announcement of CEO Jeffrey Sloan's departure next month. Current COO Cameron Bready will replace him. The Merchant Solutions division, which generates around 70% of GPN's revenue, had a 10% increase in revenue, and GPN raised its FY23 projections, targeting EPS of $10.32-10.44 and revenue growth of +7-8%. However, the uncertainty surrounding the CEO departure is overshadowing the positive results.