Novavax falls short of quarterly expectations, yet the vaccine manufacturer reduces losses by cutting expenses.

Novavax, the vaccine manufacturer, reported Q4 revenue and earnings below Wall Street estimates on Wednesday, emphasizing its ongoing efforts to cut costs and remain financially stable. Despite a decline in demand for its Covid vaccine and other virus-related products worldwide, the company managed to narrow losses compared to the same quarter last year.

Here are Novavax’s Q4 results compared to Wall Street expectations, based on an LSEG analyst survey:

  • Loss per share: $1.44 (actual) vs. expected loss of 45 cents
  • Revenue: $291.3 million (actual) vs. expected $322 million

The company recorded a net loss of $178.4 million, or $1.44 per share, for the quarter, an improvement from the $182.2 million loss, or $2.28 per share, in the same quarter the previous year. Novavax’s Q4 sales were $291.3 million, down from $357.4 million in the corresponding period in the previous year.

Novavax CEO John Jacobs explained that some revenue had shifted from 2023 to 2024 due to the timing of advance purchase agreements for its Covid shot, clarifying it as a timing element rather than lost sales.

Looking ahead, Novavax anticipates full-year 2024 revenue between $800 million and $1 billion. This projection includes expected revenue from dose delivery schedules and commercial market product sales. Analysts surveyed by LSEG, however, expect 2024 revenue to be around $969.6 million.

For Q1 2024, Novavax forecasts revenue of $100 million, reflecting the conclusion of the current Covid vaccination season, a decrease from the previously expected $300 million.

The company reiterated its commitment to cost-cutting and plans to reduce combined research, development, selling, general, and administrative expenses to a range of $700 million to $800 million in 2024. Novavax had already reduced these expenses to $1.21 billion last year, down from $1.69 billion in 2022. Operating expenses in 2023 were cut by $1.1 billion (41%) compared to 2022, and the workforce was reduced by 30% compared to Q1 2023.

These financial results follow concerns raised by Novavax about its financial stability a year ago, with shares falling more than 50% in the previous year. However, the stock received a significant boost last week when the company resolved a dispute with Gavi, a global vaccine organization, regarding a canceled Covid vaccine purchase agreement. Novavax may pay $300 to $400 million, depending on Gavi’s future vaccine orders over the next five years.

Boeing is poised to announce its fourth-quarter results against the backdrop of the 737 Max 9 crisis.

On Wednesday, Boeing is scheduled to disclose its fourth-quarter results, addressing investors’ concerns about the repercussions of a midair incident involving one of its new 737 Max 9 aircraft. Although the impact of this event won’t be reflected in the earnings report, it is expected to be discussed in Boeing’s outlook. Analysts surveyed by LSEG, formerly known as Refinitiv, anticipate the following performance metrics for the last three months of 2023:

  • Adjusted loss per share: 78 cents
  • Revenue: $21.1 billion

Boeing’s CEO, Dave Calhoun, who assumed leadership four years ago following two fatal crashes of the Max, is once again facing pressure to restore the company’s reputation with airlines, regulators, and the public. This follows a January 5th incident on Alaska Flight 1282, where a panel blew out as the plane ascended from Portland, Oregon, causing a significant breach in the aircraft’s side.

Federal investigators are currently examining whether the door plug was improperly installed before the Max 9 was delivered to Alaska Airlines late last year. The incident is part of a series of production flaws that have impacted the timely delivery of new planes, causing dissatisfaction among major airline customers. Meanwhile, Boeing’s main competitor, Airbus, continues to outpace Boeing in new aircraft deliveries.

Although the Federal Aviation Administration recently cleared the Max 9 to resume flights, it announced a halt to Boeing’s planned production ramp-up. Boeing had aimed to reach approximately 50 planes per month in 2025 or 2026. The Boeing 737 Max, the company’s best-selling plane, is crucial to its financial targets. Any delay in production increases could impact Boeing’s financial goals and affect suppliers preparing for higher output, as well as customers anticipating new planes to meet post-COVID travel demand.

In response to the incident, Calhoun has undertaken visits to company and supplier production lines, as well as engagements with lawmakers on Capitol Hill. He has committed to transparency and addressing any deficiencies in manufacturing. The company conducted the first of several production stand-downs last week to discuss manufacturing issues with workers and explore potential improvements to Boeing’s processes.

General Motors is scheduled to disclose its earnings ahead of the market opening. Here’s the anticipated forecast from Wall Street.

General Motors is poised to announce its fourth-quarter earnings before the opening bell on Tuesday. According to average estimates compiled by LSEG (formerly Refinitiv), Wall Street is anticipating the following:

  • Adjusted earnings per share: $1.16
  • Revenue: $38.67 billion

If these projections hold, it would signify a 10.3% decline in revenue compared to the previous year and a substantial 45.3% drop in adjusted earnings per share. GM’s fourth-quarter results for 2022 included $43.11 billion in revenue, net income attributable to stockholders of $2 billion, and adjusted earnings before interest and taxes amounting to $3.8 billion.

In addition to quarterly earnings, investors are keenly observing for any residual or unforeseen costs stemming from the company’s new labor contract, negotiated last year with the United Auto Workers union. Moreover, the focus is on GM’s 2024 guidance.

Analysts on Wall Street anticipate a “flattish” forecast from GM compared to the previous year’s earnings. The normalization of favorable vehicle pricing, which has led to record profits in recent years, is expected. Simultaneously, cost-cutting measures are projected to help offset higher labor costs resulting from the UAW deal.

In November, GM CEO Mary Barra stated that the company is finalizing a budget for 2024 to “fully offset the incremental costs of our new labor agreements.”

GM reinstated its 2023 guidance in November, encompassing net income attributable to stockholders of $9.1 billion to $9.7 billion, or EPS of $6.52 to $7.02; adjusted earnings before interest and taxes of $11.7 billion to $12.7 billion, or $7.20 to $7.70 adjusted EPS; and adjusted automotive free cash flow of $10.5 billion to $11.5 billion.

The guidance factored in an estimated $1.1 billion EBIT-adjusted effect from approximately six weeks of U.S. labor strikes and some costs associated with an accelerated $10 billion share repurchase program announced in November.

Investors are also eager for updates on GM’s new electric vehicles and Cruise, GM’s majority-owned autonomous vehicle subsidiary currently under investigation following an October pedestrian accident in San Francisco. Cruise and GM released findings of internal investigations last week, highlighting cultural issues, regulatory challenges, and leadership shortcomings at the company but concluding that officials did not intentionally deceive regulators. Cruise remains under investigation by various entities, including the U.S. Department of Justice and the U.S. Securities and Exchange Commission.