2022, thus far, has been a rocky year for the stock market. The recent macroeconomic concerns have pushed the major U.S. indices significantly, with the Dow Jones Industrial Average plunging 5.3% in APril. Two weeks ago, Fed Chairman Jerome Powell warned of a potential interest rate hike of 50 basis points in May to combat surging inflation. Also, the resurgence of COVID-19 cases in China led to economic shutdowns because of strict lockdown measures and further added to the fears of economic slowdown.
Furthermore, the investors remain concerned about the geopolitical crisis linked to Russia's invasion of Ukraine. Last month, the weak corporate earnings of the big tech companies indicated the signs of decelerating growth and triggered a broad sell-off in tech stocks majorly. All these factors are compounding the fears of recession and, therefore, pushing the Dow Jones index lower.
Of the 30 stocks that make up the Dow Jones, Salesforce.com (CRM), Walt Disney (DIS), and Boeing (BA) were the worst performers in April.
Salesforce.com (CRM)
CRM is the provider of customer relationship management technology that brings together the companies and customers worldwide. The company's Customer 360 platform allows its customers to work together. Its service offerings include Sales to store data, gain insights through analytics and relationship intelligence, and deliver quotes and invoices. In addition, it offers marketing offerings, commerce offerings, and professional services.
CRM's total operating expenses increased 32.4% year-over-year to $5.49 billion in the fiscal 2022 fourth quarter ended January 31, 2022. The company's loss from operations grew 191.2% year-over-year to $176 million. The company's net loss and net loss per share came in at $28 million and $0.03, respectively, registering an increase of 110.5% and 110.7% from the prior-year period. Its cash and cash equivalents amounted to $5.46 billion, declining 11.8% year-over-year in fiscal 2022 (ended January 31).
The consensus EPS estimate of $0.95 for the fiscal 2023 first quarter ended April 2022 represents a 21.8% year-over-year decline from the prior-year period. The stock declined 31.1% year-to-date and 21.4% over the past year. It closed Friday's trading session at $175.94.
CRM's POWR Ratings are consistent with this bleak outlook. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
Within the F-rated Software - Application industry, it is ranked #48 of 156 stocks. To see CRM's POWR Ratings for Growth, Momentum, Stability, Sentiment, Quality, and Value, click here.
Walt Disney (DIS)
DIS is a leading entertainment company. The company operates through two segments: Disney Media and Entertainment Distribution; and Disney Parks, Experiences, and Products. It offers film and episodic television content and operates television broadcast networks. It also provides direct-to-consumer streaming services, film and television content sales and licensing, and third-party distribution services. In addition, the company operates theme parks and resorts.
In March, DIS' Disney+ announced the expansion of its offerings by introducing an ad-supported subscription for consumers and its option without ads. Disney+, with an advertising option, will provide marketers with a premium environment in streaming with renowned brands. The offering will be introduced in the U.S. in late 2022 and later expanded internationally in 2023. So, it is expected to take a while to realize gains from the offering.
DIS' costs and expenses increased 22.7% year-over-year to $19.62 billion in the fiscal 2022 first quarter ended January 31, 2022. The company's income taxes on continuing operations grew 2,950% year-over-year to $488 million, while loss from discontinued operations rose 300% year-over-year to $48 million. In addition, loss per share attributable to Disney from discontinued operations increased 200% from the year-ago value to $0.03.
The stock plunged 34.4% over the past six months and 39.8% over the past year. It closed Friday's trading session at $111.63. DIS' year-to-date decline translates to 39.8%.
DIS' POWR Ratings reflect its poor prospects. The stock has a D grade for Value and Quality. It is ranked #10 of 21 stocks in the F-rated Entertainment - Media Producers industry. To see additional POWR Ratings (Growth, Momentum, Stability, and Sentiment) for DIS, click here.
Boeing (BA)
BA designs, develops, manufactures, sells, and supports commercial jetliners, military aircraft, satellites, human space flight systems, and missile defense worldwide. The company operates through four segments: Commercial Airplanes; Defense, Space & Security; Global Services; and Boeing Capital. It offers commercial jet aircraft, manned and unmanned military aircraft and weapons systems, strategic defense and intelligence systems, and financial services.
The company's planned 777x, a twin-engine jet that it claims will be the world's largest and most efficient jet, is going on a temporary production pause. This stall will cost BA $1.5 billion in abnormal costs and further push the planned deliveries to customers from 2023 to 2025. In addition, the company is holding the bag for additional charges due to the fixed-term nature of defense contracts. It incurred a total of $367 million tied to its contract to deliver a military pilot-training program named T-7A Red Hawk.
In the fiscal 2022 first quarter ended March 31, 2022, BA's total revenues decreased 8.1% year-over-year to $13.99 billion. Its loss from operations grew 1,308.4% from the prior-year period to $1.17 billion, while its loss before income taxes rose 182.9% year-over-year to $1.62 billion. The company's net loss and net loss per share came in at $1.24 billion and $2.06, respectively, registering an increase of 121.4% and 123.9% from the prior-year period.
Street expects BA's earnings per share to amount to $0.07 for the fiscal 2022 second quarter ending June 2022, representing an 82.8% decline from the prior-year period. Also, the company has missed the consensus revenue estimates in three of the trailing four quarters.
The stock decreased 28.4% year-to-date and 36.7% over the past year. It closed Friday's trading session at $148.84.
BA's POWR Ratings reflect its weak prospects. The company has an overall rating of D, which translates to Sell in our proprietary rating system.
BA has an F grade for Growth and a D grade for Sentiment and Quality. It is ranked #68 of 76 stocks in the Air/Defense Services industry. To see additional POWR Ratings (Stability, Momentum, and Value) for BA, click here.
CRM shares were trading at $176.48 per share on Monday afternoon, up $0.54 (+0.31%). Year-to-date, CRM has declined -30.56%, versus a -13.14% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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