Good morning investors!

Every weekend we publish our “Earnings Recap” — an in-depth summary of the earnings reports for stocks that we cover.

Earnings season is winding down but three of the stocks we cover reported quarterly results this week — here is the list of companies we focused on:

• Walmart, Home Depot, Alibaba, Cisco and John Deere

Let’s dive in.

Walmart (WMT)

Walmart exceeded Wall Street expectations for sales and profits in the second quarter, leading the company to raise its full-year forecast.

Walmart's net income fell to $4.5 billion, or 67 cents per share, from $7.89 billion, or 97 cents per share, a year ago, while its revenue increased to $169.34 billion, up from $161.63 billion.

Walmart U.S. saw a 4.2% increase in comparable sales, and Sam's Club had a 5.2% rise, both excluding fuel. E-commerce sales surged 21% globally and 22% in the U.S. 

Walmart now expects full-year sales growth of 3.75% to 4.75% and adjusted earnings per share between $2.35 and $2.43, slightly higher than previous guidance. However, its third-quarter earnings projection of 51 to 52 cents per share is below analysts' expectations, suggesting a potentially weaker second half of the year.

WMT shares +6.8% so far this week.

Home Depot (HD)

Home Depot exceeded quarterly expectations but warned of weaker sales in the second half of the year due to high interest rates and consumer uncertainty.

For the fiscal second quarter, Home Depot's net income slightly decreased to $4.56 billion, or $4.60 per share, while revenue rose slightly to $43.318 billion.

However, comparable sales dropped 3.3% overall and 3.6% in the U.S., marking the seventh consecutive quarter of declining comparable sales and performing worse than analysts expected.

Home Depot now expects full-year comparable sales to decline by 3% to 4%, worse than its previous estimate of a 1% decline.

Despite this, total sales are projected to increase between 2.5% and 3.5%, including a 53rd week in the fiscal year and $6.4 billion in sales from SRS. Without SRS sales, the new forecast would have meant a revenue decline.

HD shares are +3.4% so far this week.

Alibaba (BABA)

Alibaba missed revenue expectations for the June 2024 quarter due to challenges in its core e-commerce business amid rising competition and cautious consumer spending in China.

Revenue grew by 4% year-on-year to $33.5 billion, but net income fell 27% to $3.3 billion, or $2.26 per share, primarily due to decreased income from operations and increased impairment from investments.

Sales in Alibaba's China e-commerce segment, which includes Taobao and Tmall, declined by 1% year-on-year, though the company noted "double-digit" growth in gross merchandise value, indicating continued usage of its platforms by shoppers.

On a positive note, Alibaba's international e-commerce businesses, such as Lazada and Aliexpress, saw a 32% year-on-year sales increase, providing a bright spot for the company.

Additionally, revenue from Alibaba's cloud computing division grew by 6% year-on-year, marking its fastest growth since mid-2022, with profitability in the cloud division significantly improving as EBITA rose 155% year-on-year.

Alibaba did not provide guidance.

BABA shares are +2.0% so far this week.

Cisco (CSCO)

Cisco announced it is cutting 7% of its global workforce, following a previous layoff of 5% earlier in the year, as part of a restructuring plan expected to incur $1 billion in pretax charges.

Despite these cuts, Cisco reported better-than-expected quarterly results, with revenue of $13.64 billion, though this was a 10% decline from the previous year. Net income also dropped 45% to $2.2 billion, or 87 cents per share.

The company saw a sharp 28% decline in networking revenue, but security revenue surged 81% to $1.8 billion, and collaboration revenue remained steady at $1 billion. Cisco's recent $28 billion acquisition of Splunk, which contributed $960 million in revenue, helped boost its results. 

For its fiscal first quarter, Cisco anticipates revenue of $13.65 billion to $13.85 billion, down from $14.7 billion a year earlier.

CSCO shares are +6.2% so far this week.

John Deere (DE)

Deere & Company reported third-quarter earnings that exceeded expectations despite declining year-over-year due to "significant headwinds" in the agriculture and construction sectors.

Deere reported a 17% revenue decline to $13.15 billion, while net sales dropped to $11.39 billion, and net income fell over 40% to $1.73 billion, or $6.29 per share.

Sales decreased across all major categories, with production and precision agriculture sales down 25%, small agriculture and turf sales down 18%, and construction and forestry sales down 13%. However, higher prices on agriculture vehicles helped offset some losses as financial services revenue rose 21% to $1.5 billion.

Deere reiterated its fiscal 2024 net income forecast of approximately $7.0 billion and expects full-year revenue to decline across all segments.

DE shares are +3.0% so far this week.

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Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.