Netflix, Morgan Stanley, Goldman Sachs and P&G Q4 Results

Morgan Stanley (17 January 2023)

Morgan Stanley reported weak fourth-quarter profits from the prior year, however, it was able to deliver record revenue at its wealth management business and higher revenue at its trading operations. Fourth quarter revenue and net income fell to $12.75 billion and $1.26 per share, from $14.52 billion and $2.01 per share a year ago respectively, but both metrics were higher than Wall Street estimates. Full-year revenue and net income declined to $53.7 billion and $11.0 billion from $59.8 billion and $15.0 billion respectively. Net revenues for the Institutional Securities business for the full year declined to $24.4 billion from $29.8 billion, while Wealth Management full-year revenues remained relatively flat at $24.4 billion from $24.2 billion, and Investment Management full-year net revenue declined to $5.4 billion from $6.2 billion. Provision for credit losses increased significantly to $85 million from $5 million in the same quarter a year ago.


Source: Company website and Infront Terminal 

Goldman Sachs Q4 (17 January 2023)

The bank’s net revenues for the quarter declined by 16% to $10.59 billion year-on-year, while full-year net revenues declined by 20% to $47.37 billion due to lower net revenues in the Asset & Wealth Management, and the Global Banking & Markets segments. Net revenues for Global Banking & Markets declined by 12% and by 14% for the full year and the fourth quarter year-on-year respectively. For the full year, Investment Banking net revenues declined by 48% to $7.36 billion due to lower net revenues in Equity and Debt underwriting, and lower net revenues in Advisory. Net revenues for the Asset & Wealth Management segment declined by 39%  and by 27% for the fourth quarter year-on-year respectively as lower global equity prices and wider credit spreads negatively impacted the performance of the segment. Provisions for credit losses for the full year and the fourth quarter year-on-year increased from $357 million and $344 million to $2.72 billion and $972 million respectively. Quarterly profit plunged by 66% to $1.33 billion or $3.32 per share ($10.81 for 2021), which was approximately 39% below consensus estimates, making these results the largest earnings miss in a decade (since 2011) as the revenue decline and increase in provisions were also impacted by higher expenses.


Source: Company website and Infront Terminal 

Procter & Gamble Q4 (19 January 2023)

Consumer product giant, Procter and Gamble reported lower revenue and profit growth for its second quarter of the 2023 financial year, driven by lower sales volumes and foreign exchange headwinds despite higher prices initiated to offset lower volumes. Sales volumes were not only negatively impacted by consumer demand, but by reduced trading activity in Russia due to its war with Ukraine, and China due to COVID-19-related restrictions.
Net sales contracted by 1% to $20.8 billion y-o-y, while diluted earnings per share contracted by 4% to $1.59. On a constant currency basis, net sales increased by 5%.  The groups Beauty (includes the Head & Shoulders, Pantene, and Olay brands), Grooming (Gillette and Venus brands), Health Care (Oral-B, Neurobion, and Vicks), Fabric & Home Care (Ariel), and Baby Feminine & Family Care (Pampers, Always, and Tampax), segments all reported lower sales volumes despite higher organic sales due to higher pricing.

Diluted net earnings per share for the group decreased by 4% to $1.59 due to the decline in net sales and a decrease in operating margin.


Source: Company website and Infront Terminal 

Netflix Q4 (19 January 2023)

Netflix reported a strong albeit mixed set of quarterly earnings for the fourth quarter of 2022. Quarterly revenue increased by 1.9% year-on-year (YoY) to $7.852 billion, resulting in revenue growth for the full year of 6.46% to $31.616 billion. Quarterly operating profit contracted by 12.9% to $550 million y-o-y which was due to the appreciation of the US dollar. The full-year operating profit contracted by 9.07% to $5.6 billion, with operating margins contracting as well to 17.8% from 20.9% in the prior reporting period. 

Global subscribers for the quarter grew by 4.0% y-o-y to 231 million subscribers, while average revenue per subscriber declined by 2% y-o-y but increased by 5% on a constant currency basis. The company successfully launched its lower-priced ad-supported viewing option in November but did not disclose numbers.

Netflix co-CEO and co-founder Reed Hastings announced that he will be stepping down as co-CEO and will serve as executive chairman, while the current chief operating officer, Greg Peters will replace him as co-CEO and join co-CEO Ted Sarandos in leading the company.


Source: Company website and Infront Terminal