Weekly Stock Market Overview: Spotlight on Microsoft, Meta, UPS, and First Republic (April 24-28)

Microsoft, Meta Platforms, UPS, and First Republic Bank were in the spotlight this week. Let's find out how their stocks reacted to the latest events.

First Republic Bank’s report: the stock lost 49%

First Republic Bank reported its Q1 2023 results after the close of trading on Monday 24 April. Revenue decreased by 13.4% to 1.21 billion USD, net profit fell 32.92% to 269 million USD, and EPS was down 38.5% to 1.23 USD. 

Deposits at First Republic Bank amounted to 104.5 billion USD, including 30 billion USD from the bailouts of the eleven largest US banks. Compared with the Q4 2022 data, the figure decreased by 41%.    

First Republic Bank’s stock (NYSE: FRC) plummeted 49.37% to 8.10 USD per unit on 25 April following the release of a negative quarterly report, and lost another 29.75% the next day, dropping to 5.69 USD. The quotes managed to rise 8.79% to 6.19 USD by the end of the week.  

First Republic Bank is working together with US regulators to find ways to stabilise the business. According to the Financial Times, the main options under consideration include getting help from the leaders in the banking sector and taking control of the Federal Deposit Insurance Corporation (FDIC). The latter option is possible if the FDIC provides refund guarantees to all depositors, as was the case with Silicon Valley Bank.  

Bloomberg reports that First Republic Bank is considering selling 50-100 billion USD worth of assets, including long-term mortgage loans and bonds, to get out of the crisis.  

Microsoft report: data exceeded expectations

US tech giant Microsoft Corporation released its Q3 2023 report on Tuesday 25 April. Revenue for January - March increased 7.08% to 52.86 billion USD, and net profit was up 9.39% to 18.30 billion USD or 2.46 USD per share. Experts had expected revenue to rise by 4% and EPS to remain unchanged.   

Azure and other cloud services revenue added 27%, while sales of Windows licence dropped 28%. As for AI-related products, the number of Azure OpenAI users increased ten times compared with the previous quarter, and the Github AI Copilot for Business audience grew by 10,000 organisations.

Moreover, it was reported that the UK Competition and Markets Authority (CMA), which is the UK's competition regulator, has blocked a deal between Microsoft Corporation and Activision Blizzard Inc. Recall that the acquisition was valued at 68.7 billion USD.   

This news sent Microsoft Corporation’s stock (NASDAQ: MSFT) up rising 7.24% to 295.37 USD per unit on 26 April and gaining another 3.20% to 304.83 USD the next day. On the other hand, Activision Blizzard Inc.’s quotes (NASDAQ: ATVI) tumbled 11.45% to $76.81 on Wednesday.

UPS report: profit fell 29%

United Parcel Service, the US company engaged in express delivery and logistics, shared its Q1 2023 results on Tuesday. Its revenue for the first three months of this year fell 5.96% to 22.93 billion USD, and net profit plunged 28.76% to $1.90 billion or 2.19 USD per share.

Revenue of United Parcel Service Inc.’s US segment declined by 0.9% to 14.99 billion USD, and international revenue fell by 6.8%, to 4.54 billion USD with Supply Chain Solutions revenue decreasing by 22.5% to 3.40 billion USD.

Furthermore, the corporation’s management lowered its full-year revenue forecast from 99.4 billion USD to 97 billion USD. The data supplied had a negative impact on United Parcel Service Inc.’s stock price (NYSE: UPS). The indicator dropped 9.99% to 176.29 USD per unit on Tuesday, and 2.11% to 172.57 USD on Wednesday.

Meta Platforms report: long-awaited revenue increase

Meta Platforms Inc., the owner of popular platforms Facebook, Instagram, and WhatsApp, reported its Q1 2023 results on Wednesday 26 April. Revenue increased 2.64% to 28.65 billion USD, while net profit dropped 23.52% to 5.71 billion USD or 2.20 USD per share. Note that the corporation recorded revenue growth for the first time in the last 12 months.

Meta Platforms Inc.’s CEO, Mark Zuckerberg, believes that the Reels short-form video service is one of the successful contributors to the increase in the company’s quarterly sales. In addition, he noted the positive impact of generative artificial intelligence on the development of all applications and services of the corporation.  

Meta Platforms Inc. said that the Q1 2023 operating margin would have been higher if not for the restructuring costs. Management expects this year's expenses not to exceed 90 billion USD; a quarter ago expenses were forecasted at 89-95 billion USD. On 27 April, the reports triggered a 13.93% increase in Meta Platforms Inc.’s stock price (NASDAQ: META) to 238.56 USD per unit.

Summing up

First Republic Bank, United Parcel Service Inc., Microsoft Corporation, and Meta Platforms Inc. released their quarterly statistics this week. The shares of the first two companies reacted with a decline in value, while the other two corporations' stock went up.