The Daily Earnings Reports Podcast

Johnson & Johnson (JNJ) Q4 2024 Earnings Breakdown

Key Highlights:

• Overall Growth: Worldwide sales increased by 5.3% in 4Q24 and 4.3% for the full year. However, when excluding currency impacts, operational growth reached 6.7% for 4Q24 and 5.9% for the full year, showing the strength of underlying business performance.
• "Worldwide 22,520$ 21,395 5.3 % 6.7 (1.4) 88,821$ 85,159 4.3 % 5.9 (1.6)"
• U.S. Strength: The U.S. market demonstrated robust growth, with a 10.0% sales increase in both 4Q24 and the full year.
• "U.S. 13,204$ 12,009 10.0 % 10.0 - 50,302$ 46,444 8.3 % 8.3 -"
• International Headwinds: International sales were negatively impacted by currency fluctuations and saw lower operational growth. Sales declined slightly by 0.7% in 4Q24, but with currency impacts removed, operational growth was 2.5%. For the full year, international sales decreased by 0.5%, with 2.9% operational growth.
• "International 9,316 9,386 (0.7) 2.5 (3.2) 38,519 38,715 (0.5) 2.9 (3.4)"
• COVID-19 Vaccine Impact: Sales from the COVID-19 vaccine are now negligible and have a limited impact on the current reporting. The analysis focuses on performance excluding these sales to reflect core business strength.
• "Worldwide excluding COVID-19 Vaccine (1) 22,520$ 21,351 5.5 % 6.9 (1.4) 88,623$ 84,042 5.5 % 7.0 (1.5)"

General Electric Company (GE) Q4 2024 Earnings Breakdown

Key Highlights:

• Orders: Total orders surged by 46% to $15.5 billion.
• Revenue: GAAP revenue was $10.8 billion, a 14% increase, while adjusted revenue grew by 16% to $9.9 billion.
• Profitability: GAAP profit was $2.3 billion, up 37%, and operating profit saw an impressive 49% jump to $2.0 billion.
• EPS: Continuing GAAP EPS increased by 62% to $1.75, and adjusted EPS more than doubled to $1.32, a 103% increase.
• Cash Flow: Cash from operating activities grew by 5% to $1.3 billion, and free cash flow was up by 21% to $1.5 billion.
• Quote: “GE Aerospace delivered a strong finish to 2024 given robust demand for our services and products with fourth quarter orders up 46%, EPS more than doubling, and free cash flow increasing over 20%.”

Procter & Gamble (P&G) (PG) Q2 FY2025 Earnings Breakdown

Key Highlights

• Net Sales: $21.9 billion, a 2% increase compared to the prior year.
• Organic Sales: 3% increase year-over-year, driven by a 2% increase in volume and a 1% favorable geographic mix. Pricing had a neutral impact on sales growth. "Organic sales, which excludes the impacts of foreign exchange and acquisitions and divestitures, increased three percent versus the prior year."
• Diluted EPS: $1.88, a significant 34% increase year-over-year, primarily due to a non-cash impairment of the Gillette intangible asset in the base year.
• Core EPS: $1.88, a 2% increase compared to the prior year. "Core earnings per share were $1.88, an increase of two percent versus prior year."
• Operating Cash Flow: $4.8 billion for the quarter.
• Net Earnings: $4.7 billion for the quarter.
• Adjusted Free Cash Flow Productivity: 84%.
• Cash Return to Shareholders: Over $4.9 billion returned to shareholders through $2.4 billion in dividend payments and $2.5 billion in share repurchases.

Capital One Financial Corporation (COF) Q4 2024 Earnings Breakdown

Key Highlights:

• Net Income Decline: Capital One's net income for Q4 2024 was $1.1 billion, or $2.67 per diluted common share, a decrease compared to the previous quarter's $1.8 billion, or $4.41 per diluted common share, and up from $706 million, or $1.67 per diluted common share in Q4 2023.
• "Capital One Reports Fourth Quarter 2024 Net Income of $1.1 billion, or $2.67 per share" .
• Adjusted EPS: When accounting for adjusting items such as Discover integration costs and legal reserves, adjusted net income was $3.09 per diluted share, demonstrating underlying earnings strength.
• "Net of adjusting items, Fourth Quarter 2024 Net Income of $3.09 per share" 
• Full Year 2024: Total net revenue increased 6 percent to $39.1 billion, with an increase in net interest margin of 25 basis points.

1. Revenue Growth Coupled with Expense Increase:

• Net Revenue: Total net revenue saw a modest increase of 2% quarter-over-quarter, reaching $10.2 billion, driven primarily by net interest income growth. For full year 2024, total net revenue grew by 6%.
• "Total net revenue increased 2 percent to $10.2 billion." 
• Non-Interest Expense Surge: Total non-interest expense rose significantly by 15% to $6.1 billion. This jump was primarily due to a 24% increase in marketing costs and a 12% increase in operating expenses.
• "Total non-interest expense increased 15 percent to $6.1 billion...24 percent increase in marketing...12 percent increase in operating expenses." (Exhibit 99.1)
• For the full year of 2024 total non-interest expense increased by 6% driven by a 14% increase in marketing expense.
• Pre-Provision Earnings Decline: Pre-provision earnings decreased 13% to $4.1 billion, reflecting higher expenses impacting profitability.
• "Pre-provision earnings decreased 13 percent to $4.1 billion."

Charles Schwab Corporation (SCHW) Q4 2024 Earnings Breakdown

Key Highlights:

• Revenue Growth: Schwab's net revenues for Q4 2024 reached $5.3 billion, a 20% increase compared to Q4 2023. Full-year revenue also increased to $19.6 billion, a 4% jump from 2023. This growth was attributed to strong client engagement, increased margin utilization, positive client cash trends, and record net inflows into Managed Investing Solutions. As CEO Rick Wurster stated, "Strong client engagement, increased margin utilization, encouraging client cash trends, and record net inflows into our Managed Investing Solutions helped lift 4Q24 revenue to $5.3 billion, – an increase of 20% year-over-year."
• Earnings Increase: GAAP earnings per share were $0.94, and adjusted earnings per share reached $1.01, representing a 49% increase compared to Q4 2023. GAAP net income hit $1.8 billion, while adjusted net income was $2.0 billion.
• Profitability: The adjusted pre-tax profit margin for Q4 2024 was a robust 46.6%, driven by strong revenue growth and disciplined expense management. According to CFO Mike Verdeschi, "The combination of 20% revenue growth and disciplined expense management resulted in a 4Q24 pre-tax profit margin of 43.3% – 46.6% adjusted – as well as quarterly GAAP and adjusted earnings per share growth of 84% and 49%, respectively.”
• Expense Management: GAAP expenses decreased by 7% compared to Q4 2023, and adjusted expenses remained flat year-over-year, excluding transaction-related and

Netflix (NFLX) Q4 2024 Earnings Breakdown

Key Highlights:

• Netflix successfully executed its plan to re-accelerate growth in 2024.
• Full-year revenue grew by 16%, with operating margin expanding six percentage points to 27%.
• Operating income exceeded $10 billion for the first time.
• Netflix highlights the success of its content slate, including both original and licensed titles.
• Specific content successes mentioned include:
• Squid Game Season 2, on track to be one of their most-watched original series seasons.
• The film Carry-On joined their all-time Top 10 films list.
• The Jake Paul vs. Mike Tyson fight was the most-streamed sporting event ever.
• Two NFL games streamed on Christmas Day became the most streamed NFL games in history.
• Netflix also notes the critical acclaim of its content: “A slate that resonated with critcs and awards bodies alike, as we garnered the most Golden Globe nominatons and wins of any entertainment company…”
• The company emphasizes their goal to be the "first place members go for entertainment" and measures success through engagement metrics (view hours).

3M (MMM) Q4 2024 Earnings Breakdown

Key Highlights:

• Return to Growth: 3M showed a return to positive organic revenue growth in the full year, as highlighted by CEO William Brown: "Our fourth quarter capped a year of strong results as we returned to positive organic revenue growth in the full year." This indicates a positive trend after some previous headwinds.
• Full-year adjusted sales saw 1.3% growth and adjusted organic sales saw 1.2% growth YoY
• Q4 adjusted sales saw 2.2% growth and adjusted organic sales saw 2.1% growth YoY
• Strong Earnings Performance: 3M demonstrated strong earnings growth, particularly on an adjusted basis:
• Full-year adjusted EPS from continuing operations was $7.30, up 21% year-on-year.
• Q4 GAAP EPS from continuing operations of $1.33, up 17% YoY
• "I would like to thank the 3M team for their strong operational execution which helped us deliver double-digit earnings growth and robust free cash flow while returning $3.8 billion to shareholders," said William Brown
• Cash Flow & Shareholder Returns: 3M generated robust free cash flow and returned significant capital to shareholders:
• Full-year adjusted free cash flow was $4.9 billion
• $3.8 billion returned to shareholders via dividends and share repurchases in full-year 2024.
• $1.1 billion returned to shareholders via dividends and share repurchases in Q4 2024
• Impact of Litigation and Special Items: 3M's financials continue to be impacted by significant litigation costs related to PFAS and combat earplugs:
• There are "net costs for significant litigation" included as a special item impacting GAAP earnings. This includes the costs related to the Public Water Systems and Combat Arms Earplugs.
• The full-year report notes a $3.8 billion net after tax payment for significant litigation.
• Portfolio Adjustments: 3M's portfolio adjustments also impacted sales figures, with a "headwind" from product portfolio initiatives and exiting certain small countries.
• The adjusted organic sales increases includes a 70 basis point headwind in Q4 and a 110 basis point headwind in full year.
• 2025 Guidance: 3M provided full-year 2025 guidance, projecting continued growth:
• Adjusted total sales growth in the range of 0.5 to 1.5 percent.
• Adjusted organic sales growth of 2 to 3 percent.
• Adjusted EPS in the range of $7.60 to $7.90.
• Adjusted operating cash flow of $5.2 to $5.3 billion, contributing to approximately 100 percent adjusted free cash flow conversion

United Airlines (UAL) Q4 2024 Earnings Breakdown

Key Highlights:

• Record Profitability: United achieved a record fourth-quarter profit, significantly exceeding expectations. "United Airlines Achieves Record Fourth Quarter Profit Well Ahead Of Expectations."
• Full-Year Success: The company's full-year pre-tax earnings were $4.2 billion, with a 7.3% pre-tax margin. Adjusted pre-tax earnings reached $4.6 billion with an 8.1% margin. “The company had full-year pre-tax earnings of $4.2 billion, with a pre-tax margin of 7.3%; adjusted pre-tax earnings of $4.6 billion, with an adjusted pre-tax margin of 8.1%.”
• EPS Guidance Beat: Adjusted diluted earnings per share (EPS) for the year came in at $10.61, at the higher end of the $9.00 to $11.00 guidance. "…adjusted diluted earnings per share of $10.61, at the better end of the 2024 guidance provided at the start of the year of $9.00 to $11.00."
• Revenue Growth: Total operating revenue for Q4 was $14.7 billion, up 7.8% year-over-year. "Total operating revenue of $14.7 billion, up 7.8% compared to fourth-quarter 2023."
• Improved Margins: Q4 pre-tax margin was up 3.2 points year-over-year, or 3.5 points on an adjusted basis. "Q4 pre-tax margin up 3.2 points year-over-year, 3.5 points on an adjusted basis."
• Net Income: Full-year net income was $3.1 billion ($3.5 billion adjusted).
• Strong Liquidity: The company ended the year with $17.4 billion in available liquidity. "Ending available liquidity of $17.4 billion."
• Debt: Total debt, finance lease obligations and other financial liabilities totaled $28.7 billion at year end, with a net leverage of 2.4x. "Total debt, finance lease obligations and other financial liabilities of $28.7 billion at year end. Net leverage of 2.4x."
• Cash Flow: United generated $9.4 billion of operating cash flow and $3.4 billion of free cash flow. "Generated $9.4 billion of operating cash flow. Generated $3.4 billion of free cash flow."