Tag: disruptions

Ford Stock Is on Fire. The Reason Isn’t What You’d Expect.

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The outlook for the car market in 2023 is uncertain, but that isn’t stopping investors from piling into

Ford Motor

shares.

Ford

(ticker: F) stock is up 23 cents, or 1.9%, at $13.48 in midday trading Thursday. The

S&P 500

and

Dow Jones Industrial Average

are up about 0.9% and 0.7%, respectively.

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January 12, 2023
Alibaba shares rise in Hong Kong after Jack Ma cedes control of Ant Group

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Shares of Alibaba Group Holdings are higher following news that co-founder Jack Ma is ceding control of affiliate company Ant Group Co., potentially paving the way to revive plans for an initial public offering by the fintech giant.

Alibaba’s Hong Kong-listed shares
9988,
+7.78%
advanced as much as 8.3% in early trade Monday, widening its year-to-date gains to 27%. Shares are outperforming a 1.7% gain in the city’s broader Hang Seng Index
HSI,
+1.65%
and helping lift the city’s tech index by 3.0%. Alibaba is a shareholder of Ant.

Ant, which owns China’s most widely used digital-payment platform, Alipay, has been overhauling its operations amid a government crackdown that began with Beijing calling off the company’s plans for an IPO in late 2020. The new change of control, announced by Ant over the weekend, moves the company a step closer to restructuring.

Alibaba added Sunday that its equity interest in Ant remains unchanged.

Shares of Alibaba were last up 7.6%. Shares of unit Alibaba Health Information Technology Ltd.
241,
+7.27%
were 8.0% higher.

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January 8, 2023
Macy’s stock slides as holiday lulls weigh on sales forecast and execs predict difficulties into 2023

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Shares of department-store chain Macy’s Inc. slid 8% in after-hours trading on Friday after the retailer gave a more downbeat forecast on its fourth-quarter sales, with management citing big “lulls” in the holiday-shopping season and saying customers would likely feel the squeeze from inflation into next year.

Executives said they expected those sales to land in the “low-end to mid-point” of prior expectations for between $8.161 billion to $8.401 billion. They said they expected adjusted earnings per share to be within its previously forecast range of $1.47 to $1.67.

“Black Friday/Cyber Monday sales were in line with our expectations, while the week leading up to and following Christmas were ahead,” Macy’s
M,
+2.64%
Chief Executive Jeff Gennette said in a statement. “However, the lulls of the non-peak holiday weeks were deeper than anticipated.”

“Based on current macro-economic indicators and our proprietary credit card data,” he continued, “we believe the consumer will continue to be pressured in 2023, particularly in the first half, and have planned inventory mix and depth of initial buys accordingly.”

Macy’s issued the sales and profit figures as Wall Street parses consumer behavior during the holiday season. Adobe on Thursday said online sales surpassed $210 billion and beat expectations. Costco Wholesale Corp., a day earlier, reported an increase in December sales, even though online sales fell.

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January 6, 2023
Apple valued below $2 trillion for the first time in more than 21 months as stock slides

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Apple Inc. finished Tuesday with a valuation below $2 trillion for the first time in more than 21 months amid a continued slide in its stock that reflects concerns about the impact of production issues and the sustainability of consumer demand.

The smartphone giant was valued at $1.990 trillion as of the end of Tuesday trading. Prior to that, Apple hadn’t closed with a valuation south of $2 trillion since March 8, 2021, according to Dow Jones Market Data, and its stock price hasn’t implied an intraday valuation below that level since March 30, 2021.

The slide in Apple shares
AAPL,
-3.74%
over the past year has shaved $996.5 billion from the company’s peak closing market capitalization.

The smartphone giant peaked with a closing valuation of $2.986 trillion exactly a year ago, on Jan. 3, 2022. More recently, the company has been dogged by questions about the impact of manufacturing issues in China, where COVID-19 curbs forced production disruptions late last year.

While the company is typically thought to have durable demand on the assumption that customers will delay purchases or put up with long delivery times in order to obtain desired Apple products, some analysts have questioned whether Apple will be able to make up for all of its lost demand in future quarters.

A Nikkei Asia report from earlier this week hinted at demand challenges. The report, which cited anonymous sources, said that Apple has told some of its suppliers to make fewer components for AirPods, Apple Watches and MacBook computers in the first quarter.

Apple didn’t respond to a MarketWatch request for comment.

Apple’s stock was the biggest loser in the Dow Jones Industrial Average
DJIA,
-0.03%
Tuesday.

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January 3, 2023
Chinese EV stocks rise after strong December deliveries

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Shares of Chinese electric-vehicle makers rose Tuesday in Hong Kong, led by Li Auto Inc., after strong December delivery data.

Li Auto’s shares
2015,
+10.16%
rose after it posted record-high monthly delivery figures for December last Friday, rounding out 2022 with a 47% increase in deliveries for the year.

The car maker said December deliveries rose 51% from a year earlier, and said it was “the fastest emerging new energy automaker in China to surpass the 20,000 monthly delivery mark.”

Li Auto’s shares were up by as much as 8.4% in early Tuesday trading. The city’s benchmark Hang Seng Index
HSI,
+1.66%
was last up 0.7%.

Although China’s persistent supply-chain shortages stemming from Covid restrictions slowed production and sales, Chinese electric-vehicle makers capped a wild year with strong delivery results.

NIO Inc.
9866,
+2.36%
delivered 122.486 vehicles for 2022, up about 34%, while XPeng Inc.’s
9868,
+7.04%
deliveries were 23% higher compared with 2021.

BYD Co.
1211,
+4.88%
reported a 150% increase in December sales, despite production being disrupted by the unwinding of COVID-related measures in the final two weeks of the month. Citi analysts said in a note that they consider BYD a key winner of consolidation in the sector, and maintained a buy rating on the stock with a target price of 640 Hong Kong dollars (US$81.98). BYD shares were last up 3.1% at HK$198.4.

Looking ahead, Citi analyst Jeff Chung projects EV sales in China could grow another 33% in 2023.

Shares of Li Auto were last up 8.3% at HK$83.15, while those of XPeng were 5.1% higher at HK$40.3. NIO shares were last 2.6% higher at HK$80.5.

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January 2, 2023
Nike stock jumps more than 10% as earnings, sales destroy expectations

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Nike Inc.’s stock spiked more than 13% in extended trading Tuesday after the sporting-goods retailer reported early holiday earnings and sales are tracking solidly higher than Wall Street expected, though inventories remain high and a forecast could still loom.

Nike
NKE,
+0.16%
reported fiscal second-quarter net earnings of $1.33 billion, or 85 cents a share, compared with net earnings of 83 cents a share in the year-ago quarter. Revenue was $13.32 billion, up 17% from $11.36 billion a year ago for the sneaker maker in the quarter, which ended Nov. 30.

Analysts surveyed by FactSet had expected on average net earnings of 64 cents a share on revenue of $12.58 billion.

Nike executives did not provide a third-quarter forecast in their announcement, though Chief Financial Officer Matthew Friend said in a conference call he expects annual revenue grow in the the “low teens.” In an earlier statement, Chief Executive John Donahoe said the results “give us confidence in delivering the year as our competitive advantages continue to fuel our momentum,” while Friend added, “We are on track to deliver on our operational and financial goals.”

In a conference call late Tuesday, Donahoe noted a rebound of business in China and improving inventory levels because of strong consumer demand.

Nike announced the results amid a daunting confluence of slackening consumer spending, foreign-exchange headwinds and an elevated promotional environment, Jefferies says in a research note. In September, Nike shares tumbled after executives said markdowns on the retailer’s products would squeeze margins, and they expected clothing competitors to keep slicing prices through at least the end of the year.

Read more: Inventory concerns are pounding Nike’s stock

With consumers buying fewer clothes, Nike and other retailers have shouldered swelling inventories, though executives at Nike insist the level of excess goods likely peaked in North America this summer. In Tuesday’s report, Nike reported inventories of $9.3 billion, up 43% from the same quarter a year ago. Analysts on average were projecting inventories of $8.83 billion, according to FactSet.

“The market is focused on progress to resolution of FY23 inventory issues as a set up to a strong margin recovery” in fiscal 2024, Stifel analysts said in a note last week.

Shares of Nike have declined 38% this year, while the broader S&P 500 index
SPX,
+0.10%
is down 20%.

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December 20, 2022
Tesla Shares Are Weak. The Reason Why Is in the Stock Chart.

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Tesla stock is weak again despite the likelihood CEO Elon Musk will step down as head of Twitter and earnings estimates for 2023 staying stable.

Investors are perplexed, but traders know why. Investors can’t, or shouldn’t, ignore the stock chart.

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December 20, 2022
Ford Stock Falls. Don’t Let $1.7 Billion Truck Rollover Trial Distract You.

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Ford Motor

has a legal hearing set to start Monday related to a product liability case that resulted in a $1.7 billion punitive award against the auto maker. Investors seem to be a little nervous about the Georgia case. They probably don’t need to be — yet.

The award was part of a jury verdict that held, in part, Ford (ticker: F) was responsible for insufficient roof strength of its super-duty trucks. Two people were killed in 2014 after their super-duty truck rolled over. Ford maintains that its design is sound.

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December 19, 2022
Individual Investors Hang On in Wild Year for Stocks While Pros Sell

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During the wildest year for global markets since 2008, individual investors have been doubling down on stocks. Many professionals, on the other hand, appear to have bailed out.

U.S. equity mutual and exchange-traded funds, which are popular among individual investors, have attracted more than $100 billion in net inflows this year, one of the highest amounts on record in EPFR data going back to 2000.

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December 18, 2022
Tesla stock suffers worst week since 2020 as Elon Musk sells, large shareholder asks for new CEO

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Tesla Inc. shares Friday wrapped up their worst week since 2020, as Chief Executive Elon Musk sold billions in stock and faced a call from a prominent investor to step down from the helm of the electric-vehicle maker.

Tesla
TSLA,
-4.72%
stock fell 4.7% Friday for a weekly decline of 16.1%, the fourth-worst week in history for the shares after a series of three weeks in late February and early March 2020, when investors sold stocks in fear of the COVID-19 pandemic’s effects. Tesla ended the week with a market capitalization of less than $500 billion for the first time since November 2020, and the share price nearly fell lower than $150 for the first time since that month, ending the week at $150.05.

In-depth: Tesla investors await clues on demand, board actions and weigh downside risks in 2023

The decline occurred as Musk sold stock, which he has done repeatedly since November of 2021. Musk disclosed the sale of more than $3.5 billion in Tesla stock late Wednesday, after performing the trades over the three previous trading sessions, when the price declined a cumulative 12.4%. In total, the Tesla CEO has sold $39.3 billion worth of Tesla stock in the past 13 months, according to calculations from Dow Jones Market Data and MarketWatch.

The recent sales have seemed tied to Musk’s acquisition of the social-media platform Twitter, which he bought for roughly $44 billion this year. It is the second time he has sold stock since closing that deal in October.

See also: Elon Musk’s $5.7 billion mystery gift has been revealed

Musk has reportedly been spending much of his time at Twitter, which seems to have angered some prominent Tesla investors. Leo KoGuan, Tesla’s third-largest individual shareholder, publicly called for a new CEO on Twitter this week, as a chorus of previously boosterish accounts on the service expressed dismay at the stock decline and Musk’s actions.

Bullish analysts have also expressed concerns about Musk’s focus and stock sales. Wedbush analyst Daniel Ives, who has an outperform rating and $250 12-month price target on Tesla shares, wrote Thursday that “Musk continues to throw gasoline in the burning fire around the Tesla story by selling more stock and creating Tesla brand deterioration through his actions on Twitter.”

“The nightmare of Musk owning Twitter has been an episode out of the Twilight Zone that never ends and keeps getting worse,” Ives wrote. “In late April Musk said he was done selling Tesla stock, instead the exact opposite has happened and put massive pressure on Tesla shares which have significantly underperformed the market since Musk took over Twitter in late October.”

Opinion: Why Tesla investors are the biggest losers in Elon Musk’s Twitter deal

Tesla shares have now declined 57.4% so far in 2022, as the S&P 500 index
SPX,
-1.11%
has declined 18.3%. Tesla’s market cap was $474.4 billion as of Friday’s close.

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December 16, 2022
Delta Air Lines stock jumps on raised guidance, as carrier cites ‘robust’ demand for air travel

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Delta Air Lines’ stock rose 4.7% before market open on Wednesday after the company raised its earnings guidance.

The carrier
DAL,
-4.00%
said it is executing on its three-year recovery plan, with year-one results ahead of expectations. Delta also highlighted robust demand for air travel as the industry recovers from the widespread disruption caused by the COVID-19 pandemic.

The carrier raised its 2022 adjusted EPS guidance to $3.07 to $3.12. Analysts surveyed by FactSet were looking for earnings of $2.88 a share. For 2023, Delta Air Lines Inc. forecast a near doubling of adjusted earnings to $5 to $6 a share.

See Now: After too little, too much, there are ‘Goldilocks’ conditions for air travel in 2023

Delta also forecast 2023 revenue growth at 15% to 20% compared with 2022 and said it is on track to meet its 2024 earnings target of more than $7 a share. “Demand for air travel remains robust as we exit the year and Delta’s momentum is building,” said Delta CEO Ed Bastian, in a statement.

Delta said it expects to deliver strong topline growth in 2023 and significant operating leverage, boosted by a full restoration of its network and continued improvements in premium and loyalty revenue.

Non-fuel unit costs are expected to decline 5% to 7%, driving Delta’s margin expansion and adjusted earnings growth, the company said. Delta expects to generate more than $2 billion of free cash flow, which it said will enable further debt reduction.

See Now: Delta kicked off airline earnings season with a bang. What does it mean for other carriers?

“2022 is proving to be a pivotal year as we rebuild the world’s best-performing airline,” said Bastian, in the statement.

The company’s robust guidance boosted other airline stocks before market open, with United Airlines Holdings Inc.
UAL,
-6.94%
rising 1.4%, American Airlines Group Inc.
AAL,
-5.21%
gaining 1.3%, and JetBlue Airways Corp.
JBLU,
-7.67%
rising 1.3%.

Delta shares have fallen 14.6% this year, compared with the S&P 500 index’s
SPX,
+0.73%
decline of 15.7% and the U.S Global Jets ETF’s
JETS,
-2.85%
slump of 14.3%.

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December 14, 2022
Oracle stock rises as earnings and revenue beat, but forecast is still to come

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Oracle Corp. topped Wall Street’s expectations for profit and revenue in its most recent quarter, though the software company is still expected to issue a forecast that could be more fraught.

Oracle
ORCL,
+1.78%
on Monday reported fiscal second-quarter net income of $1.74 billion, or 63 cents a share, on revenue of $12.28 billion, up from $10.36 billion a year ago. After adjusting for stock-based compensation and other costs, Oracle reported earnings of $1.21 a share, even with the same quarter a year ago.

Analysts on average expected adjusted earnings of $1.17 a share on sales of $11.96 billion, according to FactSet. Oracle shares gained nearly 3% in after-hours trading immediately after the results were announced, following a 1.8% increase to $81.29 in regular trading.

Oracle executives did not provide guidance for the fiscal third quarter in Monday’s announcement, but Chief Executive Safra Catz does typically provide a forecast in their conference call, which is scheduled for 5 p.m. Eastern time. Those numbers are likely to affect earnings more than the results, as concerns about an increasing slowdown in business spending have rocked a swath of software companies in recent weeks.

“We believe the darkest days of this downturn are ahead of us,” Monness Crespi Hardt analyst Brian J. White wrote in a preview of Oracle results, later adding that “results across Big Tech, the leading public clouds, and the enterprise software complex paint an increasingly concerning picture for the software world heading into 2023.”

Oracle stock has outperformed the S&P 500 index
SPX,
+1.43%
since executives hosted an event for financial analysts and investors in October, with shares gaining 4.8% in the past three months while the larger index fell 3.9%. Oracle executives promised to grow adjusted earnings by more than 10% every year as revenue growth accelerates, after years of stagnant sales growth led to large share repurchases and constant cuts to improve the software company’s bottom line.

Oracle is experiencing strong revenue growth thanks to the acquisition of healthcare-focused company Cerner, a $28 billion deal that closed in June. There are hopes for organic growth as well, though, as Oracle’s cloud-computing effort starts to show fruit, including winning part of a recent Defense Department contract after suing to halt an earlier version of that award.

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December 12, 2022
Investors Grow More Confident Fed Will Pull Off a Soft Landing

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Investors Grow More Confident Fed Will Pull Off a Soft Landing

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December 11, 2022
Lululemon stock drops 10% after mixed quarterly results, soaring inventories

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Lululemon Athletica Inc. stock fell more than 10% in the extended session Thursday after the athleisure-wear maker reported mixed quarterly results and saw inventories soar.

Lululemon
LULU,
+0.59%
earned $735 million, or $2 a share, in the third quarter, compared with $541 million, or $1.44 a share, in the same quarter last year. Adjusted for one-time items, Lululemon
LULU,
+0.59%
earned $1.62 a share.

Revenue rose 28% to $1.9 billion, the company said. Same-store sales were up 22%.

Analysts polled by FactSet expected Lululemon to earn $1.97 a share on revenue of $1.81 billion. Same-store sales were expected to rise 19.1%.

“We are proud to have delivered another quarter of strong sales and earnings growth, despite an operating environment that remains dynamic,” Chief Financial Officer Meghan Frank said in a statement.

The retailer said inventories ended the quarter up 85% to $1.7 billion, compared with $900 million at the end of the third quarter of 2021.

“The company believes its inventories are well-positioned to support its expected revenue growth in the fourth quarter,” it said.

Lululemon guided for fourth-quarter revenue between $2.605 billion and $2.655 billion, and adjusted EPS between $4.20 and $4.30.

For the full year, the company expects revenue between $7.944 billion and $7.994 billion, and adjusted EPS between $9.87 and $9.97. FactSet consensus calls for EPS of $9.92 on sales of $7.935 billion.

Analysts were relatively upbeat about Lululemon heading into the results, saying the company was able to keep its prices higher, even as other retailers cut their prices.

Retailers have slashed prices on clothing in an effort to clear shelves and entice customers, following an inflation-induced shift in consumer spending to necessities. But Raymond James analysts, in a note this week, said they found that Lululemon “didn’t have broad-based promotions” in the third quarter, or the fourth quarter so far.

They said that the company leaned on its “We Made Too Much” section to iron out its inventories. And they noted a jump in downloads for Lululemon’s app. However, they said business in China “could be a curveball” amid that nation’s COVID-19 restrictions.

Piper Sandler analysts, in October, also said that Lululemon remained more insulated than other clothing retailers from big markdowns.

Lululemon stock is down 4% so far this year. The S&P 500 Index
SPX,
+0.75%,
by comparison, has slid 17% over that time.

Claudia Assis in San Francisco contributed to this report.

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December 8, 2022

Salesforce co-CEO Bret Taylor leaving, stock falls after lower-than-expected forecast

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Salesforce Inc. performed better than expected in the third quarter, but executives issued a fourth-quarter forecast that fell short of expectations on Wednesday and revealed that co-Chief Executive Bret Taylor is leaving the company.

Salesforce
CRM,
+5.65%
shares fell about 7% after hours, after rising about 5.5% in the regular session to close at $159.97, their fifth gain in the past six sessions.

The cloud-software company said in a news release that founder, co-CEO and Chairman Marc Benioff will resume the sole CEO role on Jan. 31. Taylor is the second executive to be elevated to co-CEO with Benioff, only to leave with Benioff still in charge. Keith Block stepped down in February 2020 after just 18 months in the position, and Taylor lasted exactly a year in the co-CEO position after being promoted Nov. 30 of last year.

“I am grateful for six fantastic years at Salesforce,” Taylor, who was also vice chairman, said in a statement. “Marc was my mentor well before I joined Salesforce and the opportunity to partner with him to lead the most important software company in the world is career-defining. After a lot of reflection, I’ve decided to return to my entrepreneurial roots.”

See more: Opinion: Salesforce better get used to Marc Benioff in charge, because he keeps chasing off his chosen successors

On the company’s earnings call, Benioff said “we’re still in a little bit of shock and extremely sad” about Taylor’s exit, but did not answer an analyst’s question about whether he would fill the co-CEO position.

At least one analyst said he didn’t see the departure coming: “Given that Mr. Taylor was assumed to be the ‘heir apparent’ at CRM, this does bring up a lot of questions in terms of the management team and frankly offsets some of the positive narrative around margins heading into [calendar year 2023],” wrote Kirk Materne, analyst for Evercore ISI, in a note Wednesday.

Salesforce reported that third-quarter net income fell to $210 million, or 21 cents a share, compared with $468 million, or 47 cents a share, in the year-ago period. Adjusted for stock-based compensation and other costs, earnings were $1.40 a share. Revenue rose to $7.84 billion from $6.86 billion in the year-ago quarter.

Analysts, who have been expressing concerns about a slowdown in business-software spending, had forecast adjusted earnings of $1.22 a share on revenue of $7.83 billion, according to FactSet.

“We remain positive on the long-term outlook for Salesforce as front-office applications leader,” Michael Turits, analyst for KeyBanc Capital Markets, wrote ahead of the company’s earnings report. “That said, we remain cautious regarding the near-term outlook given ongoing recession concerns, slowing cloud spend, and weaker conversations we had with a few Salesforce channels this quarter.”

Those concerns sprung up in the company’s forecast, as Salesforce executives’ guidance fell $900 million short of expectations. They expect fourth-quarter earnings of 23 cents to 25 cents a share on revenue in the range of $7.932 billion to $8.032 billion, and adjusted earnings of $1.35 to $1.37 a share. Analysts had forecast adjusted earnings of $1.44 a share on revenue of $8.94 billion.

Chief Financial Officer Amy Weaver said on the earnings call that along with the “unpredictable” macroeconomic environment and some slowing in customer spending, the strong dollar had an impact on the company’s showing. “Foreign exchange continued to be a headwind for our results,” she said.

Still, Weaver said the company remains committed to a goal of operating margins of 25% or above; in the third quarter it was at 22.7%, which she said was a record high. Among the things the company is doing, she said, is taking a measured approach to hiring. Earlier this month, the company confirmed hundreds of layoffs, though it did not address them during the call.

See: Tech layoffs approach Great Recession levels

In response to an analyst’s question about employees working from home and the company’s real-estate footprint, Benioff said the San Francisco-based company will have more employees in the office while maintaining the flexibility of remote work. “We’re never going back to how it was, we all know that,” he said. Meanwhile, Weaver said the company is “looking at every aspect of our real estate .”

Shares of Salesforce have declined about 37% this year. The Dow Jones Industrial Average
DJIA,
+2.18%,
whose 30 components include Salesforce, has fallen about 5% year to date, while the S&P 500 index
SPX,
+3.09%
is down almost 15% this year.

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November 30, 2022
XPeng stock rockets toward record rally as bulls brush off bad results, outlook

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The U.S.-listed shares of China-based electric vehicle maker XPeng Inc. skyrocketed Wednesday, as investors cheered changes in China’s COVID policy while shrugging off weak third-quarter results and a downbeat outlook.

The stock
XPEV,
+45.44%
charged up 45.0% in midday trading, enough to pace all gainers on the New York Stock Exchange. It was also headed for the biggest one-day gain since going public in August 2020, surpassing the previous record advance of 33.9% on Nov. 23, 2020.

The rally comes even after XPeng reported a wider-than-expected loss for the third-straight quarter, missed on revenue for the first time and said it expected fourth-quarter revenue to fall 40% to 44% from a year ago while the FactSet consensus called for just a 4.4 decline.

Instead, investors seemed China appeared to move toward easing its zero-COVID policy, amid growing social unrest and a slowing economy. China’s government said Tuesday that it would renew its push to vaccinate the elderly, and said it would amend COVID control measures.

XPeng’s stock rally also comes at a time when investor sentiment had soured. Earlier this week, Jefferies analyst Johnson Wan downgraded the EV maker, citing recent “missteps” by the company at a time that the “honeymoon stage” for EVs in China was coming to an end.

In addition, short interest, or bearish bets on XPeng’s stock, was 5.7% of the public float, or freely tradable shares, based on the latest available exchange data. That compares with short interest as a percent of float for China-based rivals Nio Inc.
NIO,
+20.14%
at 4.1% and Li Auto Inc.
LI,
+18.35%
at 4.7%.

For Tesla Inc.
TSLA,
+2.12%,
which generated $5.13 billion in revenue from China in its latest quarter, or about 24% of total revenue, short interest as a percent of float was 2.9%.

XPeng’s stock has soared 60.7% in November but has still tumbled 41.7% over the past three months. In comparison, the Invesco Golden Dragon China exchange-traded fund
PGJ,
+8.98%
has shed 11.7% the past three months while the S&P 500 index
SPX,
+0.62%
has slipped 1.1%.

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November 30, 2022
CrowdStrike stock drops nearly 20% as elongating sales cycle slows new subscriptions

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CrowdStrike Holdings Inc. shares dropped in the extended session Tuesday after the cybersecurity company said new subscriptions came in below expectations amid macro headwinds and longer customer buying cycles.

Given concern that businesses are cutting back on spending, CrowdStrike
CRWD,
-1.04%
shares plummeted nearly 20% after hours, following a 1% decline in the regular session to close at $138.

George Kurtz, CrowdStrike’s co-founder and chief executive, told analysts on a conference call that the company reported $198.1 million in net new annual recurring revenue, or ARR, in the quarter, not as much as it had hoped.

ARR is a software-as-a-service metric that shows how much revenue the company can expect based on subscriptions. That grew 54% to $2.34 billion from the year-ago quarter, while the Street expected $2.35 billion. Kurtz said that about $10 million was deferred to future quarters.

“We expect these macro headwinds to persist through Q4,” Kurtz told analysts.

Burt Podbere, CrowdStrike’s chief financial officer, explained that the company relies on ARR because it’s “an X-ray into the contract sales.”

“As George mentioned, even though we entered Q2 with a record pipeline, and we are expecting the elongated sales cycles due to macro concerns to continue, we’re not expecting to see the typical Q4 budget flush given the increased scrutiny on budgets.”

Podbere said it is “prudent to assume” fourth-quarter net new ARR will be up to 10% below the third quarter’s. That would mean about a 10% year-over-year headwind going into the first half of next year, and “full-year net new ARR would be roughly flat to modestly up year over year.”

“This would imply a low 30s ending ARR growth rate and a subscription revenue growth rate in the low to mid-30s for FY 2024,” Podbere said.

Read: Cloud software is suffering a cold November rain. Can Snowflake and Salesforce turn things around?

The company expects adjusted fiscal fourth-quarter earnings of 42 cents to 45 cents a share on revenue of $619.1 million to $628.2 million, while analysts surveyed by FactSet forecast earnings of 34 cents a share on revenue of $633.9 million, according to analysts.

CrowdStrike expects full-year earnings of $1.49 to $1.52 a share on revenue of $2.22 billion to $2.23 billion. Wall Street expects $1.33 a share on revenue of $2.23 billion.

The company reported a fiscal third-quarter loss of $55 million, or 24 cents a share, compared with a loss of $50.5 million, or 22 cents a share, in the year-ago period. Adjusted net income, which excludes stock-based compensation and other items, was 40 cents a share, compared with 17 cents a share in the year-ago period.

Revenue rose to $580.9 million from $380.1 million in the year-ago quarter.

Analysts expected CrowdStrike to report earnings of 28 cents a share on revenue of $516 million, based on the company’s outlook of 30 cents to 32 cents a share on revenue of $569.1 million to $575.9 million.

So far in November, cloud software stocks have been getting trashed. While the S&P 500
SPX,
-0.16%
has gained 2%, and the tech-heavy Nasdaq Composite
COMP,
-0.59%
is flat, the iShares Expanded Tech-Software Sector ETF
IGV,
-0.78%
has fallen more than 2%, the Global X Cloud Computing ETF
CLOU,
-1.12%
has declined more than 4%, the First Trust Cloud Computing ETF
SKYY,
-0.74%
has fallen more than 6%, and the WisdomTree Cloud Computing Fund
WCLD,
-1.05%
has dropped more than 11%.

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November 29, 2022
Credit Suisse shares tumble after flagging $1.6 billion 4Q loss amid strain for wealth management comes

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Credit Suisse Group AG shares tumbled in Wednesday morning trading after the bank said asset outflows at its wealth-management business would lead to a fifth consecutive quarterly loss.

Shares
CS,
-1.45%

CSGN,
-4.64%
at 0830 GMT were down 4.9% to CHF3.66.

The Swiss lender said it expects to post a loss before taxes of around 1.5 billion Swiss francs ($1.58 billion) in the fourth quarter, after lower deposits and assets under management led to reduced commissions and fees.

The bank, Switzerland’s second-largest by assets, said that it net-asset outflows in the quarter to Nov. 11 were around 6%, or $88.3 billion of its total $1.47 trillion assets under management.

At the bank’s wealth-management arm, its key business serving the world’s rich, customers removed $66.7 billion.

It came after the Zurich-based company experienced deposit and net-asset outflows in the first two weeks of October, it said, after social-media reports and a spike in credit-default swaps caused a frenzy over the bank’s financial position.

The bank said the outflows led its liquidity to fall below some local-level legal requirements, but it maintained its required group-level liquidity and funding ratios at all times.

Write to Ed Frankl at edward.frankl@dowjones.com

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November 22, 2022
Tesla stock at two-year low, other EV-maker shares plunge as concerns simmer about China, oil futures

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Tesla Inc. shares on Monday were poised to end at a fresh two-year low, with shares of other electric-vehicle makers also underperforming the broader equity market as worries about China’s COVID-19 lockdowns re-emerged and oil futures prices dropped to their lowest level since January.

Shares of Tesla
TSLA,
-6.84%
extended their losing streak to a fourth session and were on track for their lowest close since Nov. 20, 2020, when they closed at $163.20. The stock was the 10th worst performer in the S&P 500 index
SPX,
-0.39%
and fourth worst in the Nasdaq 100
COMP,
-1.09%
— and the most active stock on both exchanges.

American depositary shares of several China-based EV makers, including Nio Inc.
NIO,
-4.30%
and XPeng Inc.
XPEV,
-5.67%,
also underperformed the broader market. In contrast, shares of General Motors Co.
GM,
-0.63%
and Ford Motor Co.
F,
-0.29%
merely edged lower.

The energy sector was taking a broad beating as well, with the SPDR Energy Select Sector ETF
XLE,
-1.35%
looking at a four-week low.

Related: GM’s EV roadmap is ‘ambitious,’ but Wall Street doesn’t give it full credit just yet

Tesla’s underperformance as compared with the broader indexes holds on a monthly and yearly basis as well. The stock is down more than 25% so far in November and 52% this year.

If the trend continues, this would be the worst yearly performance for the stock on record.

The S&P has lost about 17% year to date and has clawed back to a 2% gain so far in November.

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November 21, 2022