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Omar Venerio
Omar Venerio
Articles (1736) 

2 Stocks to Watch Thursday

Shares of WNS (Holdings) up, United Airlines down

January 21, 2021 | About:

WNS (Holdings)

Shares of WNS (Holdings) Limited (NYSE:WNS) gained more than 1.5% on Thursday morning after reporting its fiscal third quarter 2021 earnings, which included revenue of $224.5 million, down 1.6% year-over-year. Revenue beat analyst estimates by $11.64 million.

In the third quarter, the net profit was $31.0 million, slightly higher than $30.9 million in the same quarter of last year and $29.2 million in the previous quarter. The improvement was the result of reductions in travel, facility-related and discretionary expenditures, favorable foreign exchange impacts and less amortization.

CEO Keshav Murugesh had the following to say:

"Looking forward, while we continue to expect some COVID-related volatility in our business over the next few quarters, we believe the long-term BPM market opportunity continues to improve. Driven by disruption and the need for "hyperautomation", clients are looking to WNS to help them transform their business models and improve competitive positioning."

At the end of September, Ken Fisher (Trades, Portfolio) reduced his holding in the stock by 0.03% to 202,934 shares.

United Airlines

Shares of United Airlines Holdings, Inc. (NASDAQ:UAL) fell almost 6% to change hands at $42.58 each after the company posted its fiscal fourth-quarter 2020 results. Revenue declined 68.7% year over year to $3.41 billion, falling short of analyst's estimations by $60 million. The company posted a net loss of $7.07 billion, or $7.00 per share, falling short of analyst's estimations by 58 cents.

CEO Scott Kirby had the following to say:

"Aggressively managing the challenges of 2020 depended on our innovation and fast-paced decision making. But, the truth is that COVID-19 has changed United Airlines forever. The passion, teamwork and perseverance that the United team showed in 2020 is exactly what will help us build a new United Airlines that's better, stronger and more profitable than ever. I could not be prouder of – and more grateful to – this team, which is going to lead us there."

In the quarter, the total operating revenue was $3.4 billion, down 69% when compared to the fourth quarter of 2019. Operating expenses were also down by 45% versus the fourth quarter of 2019, or 42% when excluding "special charges." The daily cash burn was $23 million and the core cash burn was $19 million per day.

Looking the first quarter of 2021, the company expects total operating revenue to be down 65% to 70% versus the same quarter of 2019. It also projects capacity to be down at half of what it was in the first quarter of 2019. Available liquidity (cash and cash equivalents) is expected to be similar to the end of 2020 at around $19.7 billion.

The stock price has advanced 1% so far this year versus the S&P 500's gain of 2.6%.

During the quarter ended June 30, Joel Greenblatt (Trades, Portfolio) and Warren Buffet sold out of their holdings in the stock.

Disclosure: The author holds no position in any stocks mentioned

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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