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Saturday September 24, 2022



Oracle's Shares Fall Despite Reporting Increased Revenue

Oracle Corporation (ORCL) reported first quarter earnings on Monday, September 13. The company reported quarterly revenues that were up 4% year-over-year but fell shy of analysts' expectations.

Oracle announced revenue of $9.73 billion for the quarter. This is up from revenue of $9.37 billion reported in the same quarter last year but below the $9.76 billion expected by analysts.

'Q1 results were excellent as constant currency revenue beat guidance by $100 million with all revenue segments exceeding forecast, and Non-GAAP earnings per share beating guidance by $0.08,' said Oracle CEO Safra Catz. 'Oracle's two new cloud businesses, IaaS [infrastructure as a service] and SaaS [software as a service], are now over 25% of our total revenue with an annual run rate of $10 billion. Taken together, IaaS and SaaS are Oracle's fastest growing and highest margin new businesses. As these two cloud businesses continue to grow they will help expand our overall profit margins and push earnings per share higher.'

The company reported earnings of $2.46 billion for the quarter, up from earnings of $2.25 billion one year ago. On an earnings per share basis, Oracle posted earnings of $0.86 per share, up from earnings of $0.72 per share at this time last year.

Stock in the company fell nearly 3% after the earnings' release. Oracle reported its cloud services and license support revenues reached $7.4 billion, up 6%. Cloud license and on-premise license revenues dropped to $813 million, down 8%. The company expects operating margins to be at the same or better than pre-pandemic levels over the next year.

Oracle Corporation (ORCL) shares closed at $86.35, down 4.2% for the week.

Coffee Holding Company Posts Earnings

Coffee Holding Company, Inc. (JVA) reported its latest quarterly earnings on Monday, September 13.

The company reported net sales of $13.63 million during the third quarter. This was down 21.3% from $17.34 million in sales last year at this time.

'Although we are disappointed with the results of the last three months, we believe we are extremely well positioned entering the fourth quarter to achieve stronger results,' said Coffee Holding Company President and CEO Andrew Gordon. 'Our sales for the third quarter were consistent with other companies during this timeframe as supermarkets continued to wind down inventory levels which were ramped up over the last year due to COVID-19 and supply chain concerns.'

Coffee Holding Company posted a net loss for the quarter of $127,051, or $0.02 per share. For the prior year's quarter, the company had a net loss of $391,324.

Coffee Holding Company was founded in 1971 and has been publicly traded since 2005. The company holds three main subsidiaries: Harmony Bay, Organic Products Trading Company and Sonofresco. Additionally, the company produces several branded coffees, including Café Caribe, Café Supremo, Via Romano, Premier Roasters and S&W Premium.

Coffee Holding Company, Inc. (JVA) shares ended the week at $4.36, down 10.1% for the week.

Frequency Electronics Reports Earnings

Frequency Electronics, Inc. (FEIM) released its latest earnings report on Monday, September 13. The company reported an increased net loss despite steady revenue.

FEI reported revenue of $12.96 million for the quarter. This was up slightly from revenue of $12.95 million during the same quarter last year.

'Most exciting this quarter is the new technology we have embarked upon, highlighted in our August 18, 2021 press release, that will result in a new and very advanced atomic clock for space, defense and commercial application,' said FEI CEO Stan Sloane. 'This pulsed, optically pumped Rubidium atomic clock will be a game changer in the marketplace. We continue to evaluate other advanced technologies for potential development, as well.'

The company posted a net loss of $1.58 million for the quarter, or $0.17 per share. At this time last year, FEI reported a net loss of $262 million, or $0.03 per share.

The New York-based company specializes in high-precision timing products used for a variety of applications in air, space, sea and on land. The company markets its products for commercial, government and military purposes, including telecommunications, satellite systems and use in military aircraft. FEI's latest development, a digital Rubidium Atomic clock, was awarded a $4.5 million contract in February 2021.

Frequency Electronics, Inc. (FEIM) shares ended the week at $9.98, down 9.3%.

The Dow started the week at 34,665 and closed at 34,585 on 9/17. The S&P 500 started the week at 4,475 and closed at 4,433. The NASDAQ started the week at 15,211 and closed at 15,044.

Yields Increase as Retail Sales Rise

Yields on U.S. Treasuries rose Thursday after a report revealed an unexpected increase in retail sales. Yields continued their upward trend on Friday despite higher-than-expected weekly jobless claims.

On Thursday, the Census Bureau reported an advance estimate of August retail sales gaining 0.7%. Analysts had been expecting sales to decline by 0.8%. In order to provide an early advance estimate of monthly sales the Bureau samples 5,500 retail and food service firms to represent over 3 million total firms.

'The unexpected beat on retail sales certainly sends a signal that the consumer is resilient in the face of inflation and delta fears,' said E*TRADE Financial's managing director of investment strategy Mike Loewengart. 'On the other side of the coin, the slight increase in the jobless claims numbers could cause pause amid continued challenges for the labor market.'

The benchmark 10-year Treasury note yield opened the week of 9/13 at 1.340%, hit a low of 1.263% on Wednesday, but was trading at a weekly high of 1.383% on Friday. The 30-year Treasury bond yield opened the week at 1.934%, hit a low of 1.823% on Wednesday and was trading at 1.922% on Friday.

Jobless claims were up from last week's pandemic low of 312,000 to 332,000 for the week ending on September 11, according to the Department of Labor. The four-week moving average fell to 335,750, while the four-week moving average for continuing claims also declined to 2.81 million.

'Companies want to hire and not fire right now,' said ING's chief international economist James Knightley. 'I'm just a bit worried that we could see a more permanent reduction in the labor supply.'

The 10-year Treasury note yield closed at 1.38% on 9/17, while the 30-year Treasury bond yield was 1.9%.

Mortgage Rates Relatively Stable

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, September 16. The report revealed a slight decrease in mortgage rates from last week.

The 30-year fixed rate mortgage averaged 2.86% this week, a slight decrease from 2.88% last week. During this time last year, the 30-year fixed rate mortgage averaged 2.87%.

This week, the 15-year fixed rate mortgage averaged 2.12%, down from last week when it averaged 2.19%. Last year at this time, the 15-year fixed rate mortgage averaged 2.42%.

'It's Groundhog Day for mortgage rates, as they have remained virtually flat for over two months,' said Freddie Mac's Chief Economist Sam Khater. 'The holding pattern in rates reflects the markets' view that the prospects for the economy have dimmed somewhat due to the rebound in new COVID cases. While our collective attention is on the pandemic, fundamental changes in the economy are occurring, such as increased migration, the extended continuation of remote work, increased use of automation, and the focus on a more energy efficient and resilient economy. These factors will likely lead to significant investment and new post-pandemic economic models that will spur economic growth.'

Based on published national averages, the savings rate was 0.06% as of 8/16. The one-year CD averaged 0.14%.

Published September 17, 2021
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