It was a familiar story this week for US markets with interest rate concerns dominating proceedings, as they have done for much of 2022 to date. This followed the highest US inflation number in 40 years with consumer prices increasing by 7.5% year-on-year in January.
Fears this will lead to faster rate hikes from the US Federal Reserve limited gains from the major US stock indices.
Airlines flew higher as Delta kicked off the fourth quarter earnings season for the sector in fine fettle - boosted by strong trading over the holiday period and a suggestion that any disruption from Omicron will be short-lived.
WALT DISNEY
Entertainment colossus Walt Disney enjoyed strong share price gains off the back of quarterly earnings on 9 February. These suggested the company had rekindled the magic after a tricky period marked by slowing subscriber growth, delays to major releases and a Covid impact on its parks and resorts.
These results showed a revival in subscriber growth and saw visitor numbers to its US sites hit pre-pandemic levels. Adjusted earnings per share smashed expectations, coming in at $1.06 versus the 63 cents pencilled in by analysts.
Disney theme parks are extremely lucrative in their own right but they also help strengthen the connection between people and their favourite franchises, characters and worlds, whether that's Pixar, Star Wars, Disney Animation or Marvel.
International sites are lagging behind thanks to tighter Covid restrictions and the company warned of a continuing impact here and the consumer products division saw an 8.5% drop in revenue linked to the closure of a substantial number of Disney-branded retail outlets in the second half of last year.
COKE/PEPSICO
The two soft drinks giants Coca-Cola and PepsiCo went head to head on 10 February with their latest results and there was a common theme across both sets of numbers, namely strong revenue growth but pressure bubbling up from rising costs.
While both companies enjoy a strong roster of brands, their pricing power is likely to be sorely tested in 2022 as they look to keep up with the increased price of inputs like aluminium, labour and shipping.
Profitability is already under pressure with Coke seeing its margin fall from 27.3% to 22.1% for the fourth quarter and Pepsico seeing its margins dip 1.85% over the same time-frame.
This didn't entirely detract for the strength in recovery in revenue as restrictions were lifted and people consumed more of both firm's products on-the-go and in bars and restaurants as well as at home.
This mix of bad and good news was reflected in a largely indifferent market response, though Coke held up slightly better than its bitter rival.
ENPHASE ENERGY
Outstanding fourth quarter results shone a bright light on solar energy tech specialist Enphase Energy on 8 February.
Earnings came in at 73 cents per share against the 58 cents expected and revenue was also ahead of the $397 million consensus forecast at $412.7 million.
The shares gained more than 20% in the wake of the release, helping to erase some of its year-to-date losses. Enphase having been caught up in the wider sell-off in technology and growth stocks.
Notably the company was able to lift prices and reported ‘huge demand’ for its microinvertors (devices which convert the direct current from solar panels into alternating current so the electricity can go into the grid) and back-up storage kit.
This demand helped it achieve strong growth despite the ongoing challenges created by issues in the global supply chain and underpinned a highly encouraging outlook for the business in 2022.
