Yahoo Finance 2 Stocks to Watch Thursday
Shares of Workday Inc. (NASDAQ:WDAY) jumped almost 10% on Thursday after reporting first-quarter revenue of $1.02 billion and earnings of 44 cents per share. It fell 5 cents short of analysts' earnings estimates but beat revenue expectations by $20 million.
"Despite a challenging environment, we reported solid first-quarter results, which we believe are a direct reflection of the mission-critical nature of our solutions," Chief Financial Officer Robynne Sisco said. "While we believe we remain well-positioned for the long term, we are reducing our fiscal 2021 subscription revenue guidance to account for the near-term impact from COVID-19. We now expect fiscal 2021 subscription revenue in a range of $3.67 billion to $3.69 billion. We expect second-quarter subscription revenue of $913.0 million to $915.0 million. We are raising our fiscal 2021 non-GAAP operating margin guidance to 16.0%. We remain confident in the fundamental strength of our business model, and we plan to operate with agility while continuing to drive innovation to support sustainable, long-term growth."
Subscription revenue for the quarter was $882 million, up 25.8% from the prior-year quarter. Further, the operating loss reached $144.5 million, or -14.2% of revenue, compared to an operating loss of $123.4 million, or -15% of revenue, in the year-ago quarter.
Moreover, the non-GAAP operating income was $130.5 million, or 12.8% of revenue, compared to a non-GAAP operating income of $107.7 million, or 13.1% of revenue, in the same quarter last year.
Looking at the financial position, the company had cash, cash equivalents and marketable securities of $2.60 billion as of April 30, while the operating cash flows were $263.7 million compared to $209.2 million last year.
At the end of March, Ken Fisher (Trades, Portfolio) boosted his holding by 159% to 3,716 shares, while Al Gore (Trades, Portfolio) initiated a new stake of 1,134,380 shares. Philippe Laffont and First Pacific Advisors (Trades, Portfolio) sold out.
Shares of HP Inc. (HPQ) fell more than 11% on Thursday after the company posted second-quarter results. Revenue declined 10.7% from the prior-year quarter to $12.5 billion, falling $240 million short of projections. The company posted earnings of 51 cents per share, beating estimates by 7 cents.
"The strength of HP's diversified portfolio, go-to-market capabilities and balance sheet position us well to navigate macroeconomic challenges and drive long-term value creation," President and CEO Enrique Lores said.
By segment, Personal Systems net revenue declined 7% year over year and registered a 6.6% operating margin. Commercial net revenue was down 7% and Consumer net revenue decreased 7%. Total units were down 5%, but Notebooks units were up 5% and Desktops units fell 23%. Revenue in the printing business was down 19% year over year, registering a 13.2% operating margin. Total hardware units declined 23% with commercial hardware units down 25% and consumer hardware units down 22%. Finally, net revenue was down 15% in the supplies division.
The company had a cash conversion cycle of minus 34 days, with accounts receivable up seven days quarter over quarter to 37 days. Inventory was up 19 days quarter over quarter to 57 days and accounts payable up 30 days quarter over quarter to 128 days.
However, the cash generation was negative, it generated -$0.6 billion in free cash flow.
During the quarter ended March 31, Dodge & Cox boosted its stake by 30% to 154,328,296 shares. Paul Tudor Jones (Trades, Portfolio) boosted his holding by 195% to 161,636 shares. Jeremy Grantham (Trades, Portfolio) reduced his position 71% to 329,135 shares, while Fisher, Steven Cohen (Trades, Portfolio) and Ray Dalio (Trades, Portfolio) sold out of the stock.
Disclosure: The author holds no position in any stocks mentioned.
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This article first appeared on GuruFocus.
