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Friday May 20, 2022

Finance News


AMC Reports Earnings

AMC Entertainment Holdings, Inc. (AMC) released its first quarter earnings report on Monday, May 9. The company experienced a rise in revenue resulting in its stock increasing 4% following the earnings release.

The company reported revenue of $785.7 million during the quarter. This was up from $148.3 million in revenue during the same quarter last year and exceeded analysts' estimates of $743 million.

"Our results for the first quarter of 2022 represent AMC's strongest first quarter in two full years," said AMC CEO, Adam Aron. "We continue on our pandemic recovery trajectory, more than quintupling revenues and improving adjusted EBITDA by nearly eighty percent compared to a year ago. The significant progress AMC has made is very rewarding, as our guests continue to recognize the unparalleled movie-going experience offered by AMC."

AMC reported a quarterly net loss of $337.4 million, posting an improvement from a net loss of $567.2 million last year at this time. The net loss was $0.65 on an adjusted per share basis, compared to a net loss of $1.42 per share in the prior year's quarter.

The Leawood, Kansas-based movie theater operator attributed its growth to its increase in both attendance and concession revenue as slates of new movie releases comes with more theaters returning to full capacity. The company reported over 25 million attendees at its domestic and international theaters for the quarter compared to 6.2 million attendees in the prior year's first quarter. Nearly all of the company's locations were open for the duration of the quarter. Food and beverage revenue came in at $252.5 million, up from $50.1 million last year.

AMC Entertainment Holdings, Inc. (AMC) shares ended the week at $11.81, down 13.4% for the week.

Hyatt Releases Earnings Report

Hyatt Hotels Corporation (H) reported its earnings for the first quarter on Tuesday, May 10. The hotel operator reported increased revenue for the quarter, causing its stock to climb almost 3% following the release of the report.

Hyatt posted revenue of $1.28 billion for the first quarter. This was up from $438 million during the same quarter last year. Revenue exceeded analysts' estimates of $1.11 billion for the quarter.

"We are optimally positioned at this stage in the recovery as demonstrated by the momentum in our results this quarter," said Hyatt's CEO, Mark Hoplamazian. "Record levels of leisure demand fueled nearly 60% of our rooms revenue in the quarter with continued outperformance at our resorts and all-inclusive properties. We expect the rate of recovery to broaden and strengthen in the months ahead as evidenced by the strong pace of actualized and future bookings for business and group travel."

Net losses for the quarter came in at $73 million or $0.67 per adjusted share. This was down from net income loss of $304 million or $2.99 per adjusted share during the prior year's quarter.

Hyatt opened 13 new hotels in the first quarter of 2022. Additionally, the company executed management or franchise agreements with 540 new hotels. For the first quarter, Hyatt's Owned and Leased Hotels segment revenue per available room (RevPAR) increased 217% totaling $271 million compared with $104 million during the same quarter last year. During the quarter, the average daily rate (ADR) increased 56.8% while the occupancy rate rose 27.8% as compared to the first quarter in 2021.

Hyatt Hotels Corporation (H) shares ended the week at $83.60, down 1% for the week.

Callaway Golf Posts Record First Quarter Earnings

Callaway Golf Co. (ELY) reported its earnings for the first quarter on Tuesday, May 10. The golf company reported record first quarter revenue causing its shares to rise more than 7% following the release of its earnings report.

Callaway posted revenue of $1.04 billion for the first quarter. This was up 59.6% from $651.6 million during the same quarter last year. This slightly exceeded analysts' expectations of $1.02 billion.

"Our first quarter results reflect strong performance across all segments, as demand for our golf equipment and soft goods lines remained very strong, and Topgolf finished the quarter on a high note," said Callaway CEO, Chip Brewer. "Our strong start this year, together with continued strong demand across all of our business segments, gives us the confidence to raise our full year 2022 outlook expectations. I could not be more pleased with how our business is operating or more confident in our ability to create long-term shareholder value."

Net income for the quarter came in at $86.7 million or $0.44 per adjusted share. This was down from net income of $272.5 million, or $2.19 per adjusted share during the same quarter last year.

Callaway's multiple subsidiary companies including TopGolf, a popular driving range entertainment complex contributed $322 million in revenue while opening two new locations during the first quarter. As part of the company's record earnings, golf equipment accounted for $91.1 million of revenue, a 24.2% increase from the previous year. Additionally, Callaway's apparel helped the company's total revenue by $68.1 million, a 37.4% increase from the same quarter one year ago.

Callaway Golf Co. (ELY) shares ended the week at $21.65, up 9.1% for the week.

The Dow started the week of 5/9 at 32,685 and closed at 32,197 on 5/13. The S&P 500 started the week at 4,081 and ended at 4,024. The NASDAQ started the week at 11,923 and finished at 11,805.

Treasury Yields Fell

U.S. Treasury yields fell throughout the week as markets experienced slowing inflation pressures for the first time in almost nine months. Yields continued to fall on Friday despite unemployment numbers returning worse than expected.

On Wednesday, the U.S. Department of Labor announced that the consumer price index, which measures the costs of dozens of everyday consumer goods, rose 8.3% year-on-year in April, a slowdown from 8.5% seen in March. This was higher than analysts' estimates of 8.1% growth in inflation for April.

"While it is heartening to see that annual inflation moderated in April, the fact remains that inflation is unacceptably high," said President Biden. "Inflation is a challenge for families across the country, and bringing it down is my top economic priority."

The benchmark 10-year Treasury note yield opened the week of 5/9 at 3.140% and traded as low as 2.816% on Thursday. The 30-year Treasury bond yield opened the week at 3.230% and traded as low as 2.955% on Thursday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased to 203,000 for the week. This was 1,000 more than the previous week's revised claims of 202,000 and exceeded market estimates of 195,000.

"There is no change in the underlying message of a very tight labor market and employers unwilling to lay off existing workers in the face of extreme labor scarcity," said senior economic advisor at Brean Capital in New York, Conrad DeQuadros.

The 10-year Treasury note yield closed at 2.92% on 5/13, while the 30-year Treasury bond yield was 3.08%.

Mortgage Rates Continue to Climb

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, May 12. Mortgage rates for the 30-year fixed continued to increase this week.

This week, the 30-year fixed rate mortgage averaged 5.30%, up from last week's average of 5.27%. Last year at this time, the 30-year fixed rate mortgage averaged 2.94%.

The 15-year fixed rate mortgage averaged 4.48% this week, down from 4.52% last week. During the same week last year, the 15-year fixed rate mortgage averaged 2.26%.

"Homebuyers continue to show resilience even though rising mortgage rates are causing monthly payments to increase by about one-third as compared to a year ago," said Freddie Mac's Chief Economist, Sam Khater. "Several factors are contributing to this dynamic, including the large wave of first-time homebuyers looking to realize the dream of homeownership. In the months ahead, we expect monetary policy and inflation to discourage many consumers, weakening purchase demand and decelerating home price growth."

Based on published national averages, the savings rate was 0.06% as of 4/18. The one-year CD averaged 0.17%.

Published May 13, 2022
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