Prospective OPEC meeting and a sharp fall in PayPal’s stock after the company’s profit announcement

2022-02-03T12:07:25
General Motors opec Paypal Profits stocks
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Prospective OPEC meeting and a sharp fall in PayPal’s stock after the company’s profit announcement

Prospective OPEC meeting and a sharp fall in PayPal’s stock after the company’s profit announcement: Today, market participants are expecting the outcome of the OPEC meeting, scheduled for Wednesday,
when OPEC is expected to maintain its policy of gradually increasing production. 

Evest follows market developments in the following report.

Topics:

Oil rose moderately pending the outcome of the OPEC meeting

OPEC ministers Meeting 

US public debt rose by $7 trillion in two years

PayPal’s stock falls 18% despite the company’s profit that met expectations

PayPal prediction

General Motors car sales declined by 30% in the fourth quarter of 2020

 

Oil rose moderately pending the outcome of the OPEC meeting

Oil prices rose moderately during Wednesday’s dealings,
and the market awaits the results of the OPEC + representatives meeting in February.

The cost of April Brent oil futures on the London Stock Exchange Futures was $89.5 per barrel on Wednesday,
$0.34 (0.38%) higher than the closing price of the previous session.

As a result of Tuesday’s trading, these futures declined by $10 to $89.16 per barrel.

The price of West Texas Intermediate crude futures for March,
in electronic trading on the New York Mercantile Exchange (NYMEX) at this time was $88.51 per barrel,
$0.31 (0.35%) higher than the final value of Tuesday’s session.

The day before, these futures rose by 5 cents to $88.2 per barrel.

OPEC ministers Meeting

OPEC + ministers will meet today, Wednesday.

The whole market expects this meeting to decide to continue the plan,
to increase oil production by 400 thousand barrels per day on a monthly basis in March.

According to an analyst at Commerzbank, many OPEC + countries have not yet been able to increase production,
to the agreed level, so in fact,
the Alliance is over-fulfilling the Agreement on the Reduction of Oil Production.

Market participants are also evaluating weekly US oil inventory data,
presented the night before by the American Petroleum Institute (API).

The data indicated that oil inventories declined by 1.6 million barrels last week.

The official report of the Energy Information Administration of the United States Department of Energy ,
will be published today, Wednesday.

General Motors, the largest U.S. automaker in the fourth quarter of 2021,
cut its net profit by 39%, and the adjusted figure was better than market expectations.

Its net income from October to December was $1.7 billion, or $1.16 per stock,
compared to the net income earned in the same period last year of $2.8 billion,
or $1.93 per stock, according to the company’s press release Adjusted profits fell to $1.35 from $1.93 per stock.

Revenue fell to $33.6 billion from $37.5 billion a year ago.

Analysts surveyed by FactSet projected adjusted profits of $1.16 per stock on revenue of $35.8 billion.

US public debt rose by $7 trillion in two years

The total US public debt at the end of January was $30.01 trillion, the Wall Street Journal wrote,
citing data from the US Treasury.

Within two years, the US national debt rose by $7 trillion as a result of active borrowing,
of various stimulus programs aimed at helping the economy recover from the recession caused by the Coronavirus pandemic.

“This is a horrible number and truly disturbing. This is the result of borrowing for really important purposes.

It was primarily aimed at overcoming the Covid- 19 pandemic,
but also many trillions of dollars have been borrowed for one reason only – the unwillingness of politicians to pay bills,”
said Maya McGuinness, chair of the Committee on Responsible Federal Budget.

The US federal budget deficit in the fiscal year ending September 2021 was $2.8 trillion, or 12.4% of US GDP.

Two years earlier, before the pandemic, the deficit was about 4.7% of GDP.

PayPal’s stock falls 18% despite the company’s profit that met expectations

The PayPal report met overall market expectations for profits and revenue in the fourth quarter of 2021,
but the company’s cautious outlook confused investors, and its stocks fell by about 18%.

From October to December 2021, PayPal’s net income was $801 million, or $0.68 per stock,
compared to $1.57 billion, or $1.32 per stock, a year earlier.

Adjusted profits rose to $1.11 per stock from $1.08 the previous year.

Analysts surveyed by FactSet projected $1.12 per stock on average.

Quarterly revenue rose to $6.9 billion from $6.1 billion, in line with consensus.

PayPal prediction

PayPal predicts revenue growth of about 6% (up 14%) in the quarter that began,
if it does not take into account the impact of the online eBay auction’s transition to its payment system.

Analysts surveyed by FactSet projected revenue growth of about 12%.

The company’s quarterly adjusted profit guidance was USD 0.87 per stock,
well below the consensus estimate of USD 1.16 per share.

The total volume of payments on the company’s platform amounted to 340 billion dollars,
compared to 277 billion dollars in the same period last year. Analysts predicted an average of 345 billion dollars.

The number of new active PayPal accounts at the end of the fourth quarter was 426 million,
compared to 377 million the previous year.

The company expects an adjusted profit in 2022 as a whole of US $4.60-4.75 per stock,
while the analysts surveyed by FactSet expect a profit of US $5.21 per stock.

Total payments are expected to reach $1.5 trillion by the end of the year, with revenues exceeding $29 billion,
and experts expect these figures to reach $1.53 trillion and about $30 billion, respectively.

PayPal stocks fell by 17.9 percent in early trading on Wednesday.

Over the past 12 months, the company’s capitalization has declined by 29% to $ 202 billion.

 

General Motors car sales declined by 30% in the fourth quarter of 2020

Sales of General Motors cars fell 30% in the last quarter – to 1.477 million.

In North America, 511 thousand cars were sold (a decline of 42%),
And in Asia, the Middle East and Africa – 848 thousand (a decline of 22%),
in South America – 118 thousand (a decline of 26%).

And In total, the company sold 6.291 million cars in 2021.

Annual net income of $10.02 billion, adjusted – $7.07 per stock,
higher than General Motors’ forecast of $5.7-6.7 per stock in the previous quarter. Annual revenue is $127 billion.

General Motors expects net income of US $9.4-10.8 billion for the entire 2022 adjusted profit of US $6.25 to US $7.25 per stock.

During a press conference following the fourth-quarter results, the company’s president,
Mary Barra, told reporters that General Motors does not yet plan to resume dividend payments,
but the company “will study all possibilities to return capital to shareholders.”

General Motors’ stock prices rose by 1.05% in additional trading on Tuesday.
Over the past 12 months, the carmaker’s capitalization grew by 4%,
while the S&P stock index has added 20% over the period.

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