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Weekly Recap: $HAS, $GM and $LMT

The Good:

Hasbro

Hasbro was up a whopping 10% following a second quarter earning results which more than doubled analysts’ expectations. Sales of $1.32 billion were up 54% compared to last year’s pandemic-stunted period. The stock is up 37% from its 52-week low last July 27th, 2020. Hasbro performed strongly in nearly all parts of its portfolio. The gaming category was up 63% year over year. The entertainment segment—which oversees children’s shows like My Little Pony—was up 47%. Big name partner brands, including Marvel, Star Wars and Disney princesses, grew 53%. The company’s CEO pointed to growth by the Wizards of the Coast brand, which includes Magic: The Gathering, as a spot of particular strength. Despite the potential of supply chain issues, the toy manufacturer should see continued growth throughout the year.


The Bad:

GM

As GM pushes aggressively into its electric vehicle future, an upcoming recall of the Chevy Volt threatens to put a speed bump in the stock’s earnings. The recall affects Chevy Bolts manufactured between 2017 and 2019, which had already been recalled due to battery defects that may cause fires. The issue impacted over 50,000 Volts. Earlier this month, GM advised owners of these affected Volts to avoid parking their vehicles inside following another fire-related recall from 2019. GM deployed a software update to try to fix the most recent issues, but it seems the update was insufficient in addressing the safety risk in all vehicles. The exactitudes of the financial ramifications are still unclear. While the Volt fleet is a small part of the GM portfolio, Hyundai’s recall of Kona electric vehicles from earlier this year cost the company $900 million. The Konas also needed a battery replacement. GM ended the day down over 1%.


The Ugly:

Lockheed Martin

Despite a second-quarter earnings report that exceeded Wall Street’s expectations, Lockheed Martin, the titan of defense, fell over 3% today. The one fault in the earnings report was a $.61 per-share charge due to “performance issues experienced on a classified program” at its jet division, Aeronautics. The obscurity of the project makes it hard for analysts to see if this kind of charge will repeat, though it rarely does. Sales grew in each of the company’s segments, from aeronautics to missiles to space systems. Total sales were up 5%. However, year to date, Lockheed is up 4% compared to the 17.5% S+P 500 gain.

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