Shares of Home Depot Inc. dropped Tuesday, after the home improvement retail giant reported fiscal first-quarter profit that topped expectations but sales that fell short, and it cut the full-year outlook, citing lumber deflation and bad weather.
Net income for the quarter to April 30 fell to $3.87 billion, or $3.82 a share, from $4.32 billion, or $4.09 a share, in the same period a year ago. That topped the FactSet consensus for earnings per share of $3.80.
Sales declined 4.2% to $37.26 billion, well below the FactSet consensus of $38.31 billion.
“Our sales for the quarter were below our expectations primarily driven by lumber deflation and unfavorable weather, particularly in our Western division as extreme weather in California disproportionately impacted our results,” said Chief Executive Officer Ted Decker.
Overall same-store sales fell 4.5% to miss the FactSet consensus for a 1.6% decline, with same-store sales in the U.S. falling 4.6%.
The stock sank 3.6% toward a seven-month low in premarket trading.
“Given the negative impact to first quarter sales from lumber deflation and weather, further softening of demand relative to our expectations, and continued uncertainty regarding consumer demand, we are updating our guidance to reflect a range of potential outcomes,” said Chief Financial Officer Richard McPhail.
For fiscal 2023, the company cut its EPS outlook to a decline of between 7% and 13% from a decline in the mid-single digit percentage range, and lowered its sales outlook to a decline of between 2% and 5% from approximately flat.
The stock has dropped 10.2% over the past three months through Monday, while the Dow Jones Industrial Average DJIA, +0.14%
has slipped 1.0%.
Nights booked on Airbnb Inc. hit a record high in the first quarter as more guests traveled overseas and returned to cities, leading to the company’s first profitable start to the year on record, executives announced Tuesday.
But executives’ forecast was less bullish, even though they expect a strong summer travel season and second-quarter revenue growth. They cautioned that growth in nights and experiences booked will be “unfavorable” compared with the year-ago quarter, when there was a surge in travel demand as fears about…
Qualcomm Inc. shares fell in the extended session Wednesday after the chip maker said inventory issues will remain past June because of a downturn in handset demand and the company’s outlook disappointed.
After declining 2.8% to close the regular session $112.83, Qualcomm QCOM, -2.82%
shares started sliding after the release of the company’s results at Wednesday’s close, and sank to a deficit of more than 7% after hours by the time the executives’ call with analysts ended. Shares ended the extended trading session down 6.6%.
On the conference call, Qualcomm Chief Executive Cristiano Amon told analysts that the “evolving macroeconomic backdrop has resulted in further demand deterioration, particularly in handsets, at a magnitude greater than we previously forecasted.”
Earlier, Qualcomm had forecast adjusted earnings of $1.70 to $1.90 a share on revenue of $8.1 billion to $8.9 billion for the fiscal third quarter. Analysts had estimated earnings of $2.17 a share on revenue of $9.13 billion for the third quarter.
A drop in handset demand, however, has extended the time frame of inventory drawdowns considerably past the previously forecast end of June, the company said. As its largest business segment, Qualcomm handset sales fell 17% to $6.11 billion from a year ago.
“As a result, we’re operating under the assumption that inventory drawdown dynamics remain a significant factor for at least the next couple quarters,” Amon told analysts. “Additionally, while expectations are for a rebound in China demand in the second half of the calendar year, we have not seen evidence of meaningful recovery and are not incorporating improvements into our planning assumptions.”
The company reported fiscal second-quarter net income of $1.7 billion, or $1.52 a share, compared with $2.93 billion, or $2.57 a share, in the year-ago period. The chip maker reported adjusted earnings, which exclude stock-based compensation expenses and other items, of $2.15 a share, compared with $3.21 a share in the year-ago period. Total revenue for the quarter fell to $9.28 billion from $11.16 billion in the year-ago period.
Analysts surveyed by FactSet had forecast $2.15 a share on revenue of $9.09 billion, based on Qualcomm’s forecast of $2.05 to $2.25 a share on revenue of $8.7 billion to $9.5 billion.
In Qualcomm’s other end-market segments, auto sales rose 20% to $447 million and Internet-of-Things sales fell 24% to $1.39 billion for the second quarter, the company said.
Qualcomm shares already lag the broader chip sector and market, and were up only 3% year to date at Wednesday’s close. In comparison, the PHLX Semiconductor Index SOX, -1.32%
has surged 17%, the S&P 500 index SPX, -0.70%
has gained 7%, and the tech-heavy Nasdaq Composite Index COMP, -0.46%
has grown 15%.
Ford Motor Co. late Tuesday swung to a quarterly profit and reported a 20% rise in sales, but the stock fell 1.4% in the extended session as Wall Street seemed to question Ford’s unchanged guidance.
Ford F “delivered a solid quarter while making real progress on our Ford+ growth plan,” Chief Executive Jim Farley said in a call with analysts following results.
Meta Platforms Inc.’s stock soared more than 10% higher in extended trading Wednesday after the social networking company’s profit declined less than expected in the first three months of 2023, and a revenue forecast pointed toward reinvigorated sales growth.
Facebook’s parent company META racked up fiscal first-quarter net earnings of $5.71 billion, or $2.20 a share, compared with earnings of $2.72 a share in the year-ago quarter. Revenue gained less than 3% to $28.65 billion from $27.91 billion a year ago.
Roku Inc. shares moved 2% higher in Wednesday’s after-hours action as the streaming-media company cited continued ad-market pressures but topped expectations for its latest quarter.
The company reported a first-quarter net loss of $193.6 million, or $1.38 a share, compared with a loss of $26.3 million, or 19 cents a share, in the year-earlier quarter. Analysts tracked by FactSet were expecting a $1.47 loss per share.
Microsoft Corp. shares headed toward their highest prices in more than year in Tuesday’s extended session, after the software giant reported better-then-expected profit and revenue and guided for continued strong results in an uncertain economy.
Microsoft MSFT reported fiscal third-quarter profit of $18.3 billion, or $2.45 a share, up from $2.22 a share a year ago. Revenue grew to $52.86 billion from $49.36 billion in the same quarter last year. Analysts on average were expecting earnings of $2.24 a share on sales of $51.02…
missed expectations for sales in its key cloud division and cut its outlook in first-quarter earnings released Friday. But the stock is still rising after the German software giant beat estimates for overall profit and revenue.
(ticker: SAP) reported earnings of €1.27 ($1.39) a share on revenue of €7.44 billion in the first three months of 2023. Analysts surveyed by FactSet had expected profit of €1.10 on sales of €7.30 billion.
Netflix Inc.’s stock initially plunged in after-hours trading Tuesday, after the streaming giant posted weaker subscriber growth and forecast a smaller profit than Wall Street expected. But shares later recovered and crossed into positive territory on company disclosures that its new ad-supported service is a success and its crackdown on shared accounts in the U.S. is coming this quarter.
Netflix NFLX, +0.29%
reported that subscribers increased by 1.75 million in the first quarter of the year, missing analysts’ average estimate of 2.2 million. Netflix reported fiscal first-quarter net earnings of $1.31 billion, or $2.88 a share, compared with $3.53 a share in the year-ago quarter.
Revenue improved to $8.16 billion from $7.87 billion a year ago. Analysts surveyed by FactSet had expected on average net earnings of $2.86 a share on revenue of $8.18 billion.
For the second quarter, Netflix executives guided for earnings of $2.84 a share on $8.24 billion in revenue, while analysts on average were expecting earnings of $3.07 a share on sales of $8.18 billion. Netflix no longer provides guidance on subscriber additions, a sign its years of rapid growth are clearly cooling.
Shares plunged lower than $300 in after-hours trading immediately following the release of the results, after closing with a 0.3% increase at $333.70. But shares had crossed into positive territory and were recently above $335 in the extended session.
Netflix executives have hoped to goose their financial results with cheaper, ad-supported options and a crackdown on password sharing. In a letter to shareholders Tuesday, company executives said the ads plan in the U.S. “already has a total ARM (subscription + ads) greater than our standard plan.”
At the same time, they disclosed a password crackdown in the U.S. will occur in the second quarter, a bit later from previous expectations.
“We shifted out the timing of the broad launch from late Q1 to Q2,” Netflix executives wrote. “While this means that some of the expected membership growth and revenue benefit will fall in Q3 rather than Q2, we believe this will result in a better outcome for both our members and our business.”
“This a catch-22 environment for streaming companies as they are pivoting from chasing subscribers to chasing profits while at the same time inflation-weary consumers are reassessing their discretionary spending habits,” KPMG U.S. National Media Leader Scott Purdy said, in assessing the results. “Today’s figures, a bellwether for the industry at large, signal that winter is coming for the consumer. All of the subsidies are ending. Consumers can expect to be hit with ads, higher prices, and password sharing crackdown.”
Expectations among investors heading into Netflix’s quarterly report were muted. The focus was on Netflix’s switch toward better monetization with an ad-supported service and a rolling crackdown on shared accounts. Analysts in particular were closely watching the performance of Netflix’s new “Basic with Ads” plan ($6.99 a month) and its effectiveness in stanching the defection of subscribers to competing services from Walt Disney Co. DIS, +0.63%
and Apple Inc. AAPL, +0.75%.
Netflix’s rollout of the ad-supported tier could also have a temporary impact on margins: Netflix reported an operating margin of 21%, compared with about 25% in the year-ago quarter.
At the same time, Netflix put an end to paid shared accounts in some Latin American countries last year, and expanded plans to do so Canada, New Zealand, Portugal and Spain in February.
“In our view, the password-sharing crackdown will result in a greater number of subs as well as revenue because the primary account holder will either pay an additional fee for members who have moved out of the household or those sharing accounts become full subscribers,” Bank of America analysts said in a recent note.
Shares of Netflix have climbed 12% so far this year, while the broader S&P 500 index SPX, +0.09%
has advanced 8%.
STOCKHOLM–Ericsson AB on Tuesday posted a smaller-than-expected drop in first-quarter net profit, but cautioned that the operating environment will remain choppy in 2023 with poor visibility as operators remain cautious with spending plans and continue to adjust inventories.
The Swedish telecommunications-equipment company ERIC.A, +0.58%
ERIC.B, +0.24%
said that customers in early 5G markets have slowed their deployment pace somewhat, while some customers have also lowered the elevated inventory levels built up in a tight supply environment. It expects this inventory adjustment to be mostly completed during the second quarter but might spill into the third quarter.
Overall sales in its key network unit fell 4% on the year in the first quarter, but strong sales mainly in India helped offset a 30% sales drop in North America.
Large roll-out projects weighed on networks gross margins in 1Q and will remain dilutive to gross margin in the short term, while network sales in 2Q are expected to be in line with 1Q, it added.
Ericsson reported net profit attributable to shareholders of 1.52 billion Swedish kronor ($146.9 million) compared with SEK2.94 billion a year earlier, as sales rose 14% to SEK62.55 billion.
Analysts polled by FactSet had expected net profit of SEK1.44 billion on sales of SEK60.95 billion.
Write to Dominic Chopping at dominic.chopping@wsj.com
Shares of Delta Air Lines Inc. surged Thursday, after the air carrier swung to a first-quarter profit as revenue rose above expectations, and said it was “confident” in its full-year projections given a “strong” outlook for the current quarter.
The company reported a net loss that narrowed to $363 million, or 57 cents a share, from $940 million, or $1.48 a share, in the same period a year ago.
Shares of American Airlines Group Inc. were rocked Wednesday, after the air carrier raised its profit outlook, but not by enough to match Wall Street expectations.
The company said before the open that it expects first-quarter adjusted earnings per share of 1 cent to 5 cents, compared with a per-share loss of $2.32 a year ago. While that’s better than previous guidance for an “approximately breakeven” quarter, the average EPS estimate of analysts surveyed by FactSet was 5 cents.
Silicon Valley Bank has been closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (FDIC) has been appointed receiver, becoming the first FDIC-backed institution to fail this year.
The FDIC, which insures deposits of up to $250,000 at eligible banks, said all insured depositors will have full access to their accounts no later than Monday morning. Uninsured depositors will get a receivership certificate and may be entitled to dividends once the FDIC sells the bank’s assets.
The bank had 13 branches in California and Massachusetts and will reopen on Monday. As of Dec. 31, it had about $209 billion in total assets, and about $175.4 billion in deposits.
That makes it the biggest bank failure since Washington Mutual Inc. was brought down during the financial crisis of 2008.
“At the time of closing, the amount of deposits in excess of the insurance limits was undetermined,” said the FDIC. “The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.”
Customers with more than $250,000 in their accounts should contact the FDIC at 1-866-799-0959.
The last FDIC-backed bank to close was Almena State Bank, Almena, Kansas, back in October of 2020, said the FDIC.
The bank’s collapse has come swiftly just days after the parent announced a huge loss on bondholdings after it was caught out by interest rate increases. Some venture-capital firms reportedly told their startup clients to pull their money from the bank, triggering a classic run on the bank.
On Friday, employees were told to “work from home today and until further notice,” the Wall Street Journal reported, citing an email it had obtained.
Oracle Corp. shares recouped some of their losses in the extended session Thursday after the forecast revenue range bookended the Wall Street consensus, as the software company’s largest business unit topped forecasts, but its others didn’t.
Oracle ORCL, -1.83%
shares were down about 3.5% after hours following the forecast. Prior to the forecast, shares had dropped more than 5% and were around those levels when a conference call with analysts began. Oracle shares declined 1.8% in the regular session to close at $86.87.
On the call with analysts, Oracle Chief Executive Safra Catz forecast fourth-quarter earnings of $1.56 to $1.60 a share on revenue growth of 15% to 17%, or $13.62 billion to $13.85 billion. Analysts surveyed by FactSet had estimated $1.47 a share on revenue of $13.75 billion.
That followed fiscal third-quarter results in which Oracle reported net income of $1.9 billion, or 68 cents a share, compared with $2.32 billion, or 84 cents a share, a year ago.
Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.22 a share, compared with $1.13 a share in the year-ago period.
Revenue rose to $12.4 billion from $10.51 billion in the year-ago quarter.
Analysts had estimated earnings of $1.20 a share and revenue of $12.43 billion for the third quarter.
Oracle’s largest segment, cloud services and license support, rose 17% to $8.92 billion. Cloud license and on-premise license revenue was flat at $1.29 billion from a year ago, while hardware revenue rose 2% to $811 million, and services revenue jumped 74% to $1.38 billion.
Analysts had forecast cloud services and license support revenue of $8.83 billion, cloud license and on-premise license revenue of $1.39 billion, hardware revenue of $815.5 million and services revenue of $1.43 billion.
“Since June of last year when we acquired Cerner, that business has increased its healthcare contract base by approximately $5 billion,” said Larry Ellison, Oracle’s chairman, in a statement. “While we are pleased with this early success of the Cerner business, we expect the signing of new healthcare contracts to accelerate over the next few quarters.”
Oracle’s board also hiked the quarterly dividend 25% to 40 cents a share. The dividend will be paid April 24 to shareholders of record as of April 11.
Oracle shares are up 14% over the past 12 months, versus a 14% decline by the iShares Expanded Tech-Software Sector ETF IGV, -2.26%,
while the S&P 500 index SPX, -1.85%
has dropped 8% and the tech-heavy Nasdaq Composite Index COMP, -2.05%
has fallen 14% in that time.
beat earnings and revenue estimates in the fourth quarter, driven by higher prices. It increased its annual dividend, sending the stock higher in premarket trading Thursday.
The beverages and snacks giant (ticker:PEP) reported adjusted earnings per share (EPS) of $1.67 on sales of $28 billion. Analysts were expecting EPS of $1.65 on sales of $26.8 billion.
Shares of Under Armour Inc. sprinted higher Wednesday toward a nine-month high, after the athletic apparel and gear seller reported a big beat in fiscal third quarter profit and raised its full-year outlook.
Net income for the quarter to Dec. 31 rose to $121.6 million, or 27 cents a share, from $109.7 million, or 23 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of 16 cents was well above the FactSet consensus of 9 cents.
Revenue grew 3.4% to $1.58 billion, above the FactSet consensus of $1.55 billion, as a 25% jump in footwear revenue offset 2% declines in apparel and accessories revenue. Meanwhile, a 2% decline in North America revenue was offset by a 14% increase in international revenue.
The Class C shares UA, +0.09%
shot up 6.8% in premarket trading, which puts them on track to open at the highest price seen during regular-sessions hours since May 5, 2022. The Class A shares UAA, -0.08%
jumped 6.9%.
Gross margin contracted by 6.5 percentage points, due primarily to higher promotions, sales mix impacts and the negative impact of currency fluctuations.
For fiscal 2023, the company raised its adjusted EPS guidance range to 52 cents to 56 cents from 44 cents to 48 cents, but kept its revenue growth guidance at a low single-digit percentage range. The FactSet consensus for EPS was 46 cents, and the FactSet revenue consensus of $5.86 billion implied 2.7% growth.
The Class C shares have soared 53.5% over the past three months through Tuesday, while the S&P 500 SPX, +1.29%
has gained 8.8%.
Tyson Foods Inc. stock slid 5.5% in premarket trade Monday, after the meat processor and parent to brands including Jimmy Dean and Hillshire Farm missed consensus estimates for its fiscal first quarter by a wide margin.
“We faced some challenges in the first quarter,” Chief Executive Donnie King said in a statement. “Market dynamics and some operational inefficiencies impacted our profitability. We expect to improve our performance through the back half of fiscal 2023 and into the future, as we strive to execute with excellence and work to become best in class in our industry.”
Springdale, Arkansas-based Tyson posted net income of $316 million, or 88 cents a share, for the quarter to Dec. 31, down from $1.121 billion, or $3.07 a share, in the year-earlier period. Adjusted per-share earnings came to 85 cents, well below the $1.31 FactSet consensus.
Sales rose to $13.260 billion from $12.933 billion, also below the $13.515 billion FactSet consensus.
The company, the biggest U.S. meat supplier measured by sales, said beef prices fell by an average of 8.5% in the quarter, while chicken prices rose 7.1% and pork prices were up 1.4%. The company’s prepared foods division’s sales rose 7.6% and international and other food sales were up 4.9%.
Beef sales rose 2.9% to $4.723 billion, while pork sales fell 7.4% to $1.529 billion. Sales of chicken rose 2.5% to $4.263 billion, while prepared foods sales rose 1.2% to $2.538 billion. International and other food sales were up 6.4% to $612 million.
The U.S. Department of Agriculture is expecting domestic protein production — beef, pork, chicken and turkey — to be flat in fiscal 2023 versus year-earlier levels, said Tyson.
Tyson said it is expecting fiscal 2023 sales of $55 billion to $57 billion, while FactSet expects $55.2 billion. Tyson expects capex of about $2.5 billion and net interest costs of about $330 million.
The stock has fallen 27% in the last 12 months, while the S&P 500 SPX, -1.04%
has fallen 8%.
Wall Street’s expectations for 2023 have been diving as forecasts for the new year come in light, and the news could get worse once they factor in disappointing results from Big Tech. But at least Bob Iger is coming back for a sequel.
Google, Facebook, Amazon and Apple all disappointed with holiday earnings this week. Their forecasts ranged from nonexistent to piecemeal to meh, and the fallout will only add to the biggest dive in Wall Street’s expectations through the beginning of a year since 2016.
Analysts’ average forecast for 2023 earnings from the S&P 500 index SPX, -1.04%
dropped by 2.5% in January, according to FactSet Senior Earnings Analyst John Butters, the worst in seven years. Those projections began heading lower last year, and the decline is only steepening — analysts are now projecting 3% earnings growth in 2023, and that is contingent on a big holiday rebound from the results being released this quarter.
Uncredited
The news was even worse for the first quarter, for which projections declined 3.3% in January as companies whiffed on their forecasts at a rapid pace: 86% of the 43 companies that have guided for first-quarter earnings have missed projections, Butters reported. Earnings are now expected to decline 4.2%, which would be the first year-over-year earnings decline since the third quarter of 2020, when the COVID-19 pandemic write-offs started to come in.
Google parent Alphabet Inc. GOOGL, -2.75% GOOG, -3.29%
and Facebook parent Meta Platforms Inc. META, -1.19%
also missed their respective earnings targets amid problems with the digital-advertising industry, leading to the communications-services sector having the worst earnings season in the S&P 500. Profit has declined 25.2% in that sector so far, the worst among the 11 S&P 500 sectors, but would be down just 6.5% without the effects of Meta and Alphabet, Butters reported.
After the busiest week in earnings season wrapped up, don’t expect much of a breather — 95 S&P 500 companies are expected to report in the week ahead, the third consecutive week with at least 90 companies reporting. There will be plenty of intrigue among companies not in the S&P 500 too, including Robinhood Markets Inc. HOOD, -3.59%
and Affirm Holdings Inc. AFRM, -14.14%
reporting together on Wednesday afternoon.
Only one Dow Jones Industrial Average DJIA, -0.38%
stock will report, but that is the Wednesday call you will want to tune in for: Bob Iger’s return to the Walt Disney Co. DIS, -2.21%
earnings show.
Ride-hailing prices and demand: In their most recent results, Lyft Inc. LYFT, -0.97%
disappointed with its number of rides, but showed much higher revenue per ride, while Uber Technologies Inc. UBER, +0.12%
rides increased 19% as gross bookings ran up 45% on a constant-currency basis. Both of those suggest rising prices, which could affect demand that has been steadily growing in the third year of the COVID-19 pandemic. Compare bookings and revenue growth with riders and rides growths when Uber reports Wednesday morning and Lyft on Thursday afternoon. Read more: Food prices keep rising. Food-company execs are betting Americans will keep paying.
Alphabet Inc.’s stock slipped nearly 5% in extended trading Thursday after the tech giant missed slightly on revenue and earnings in ho-hum quarterly results.
Google’s parent company reported fiscal fourth-quarter total revenue of $76.05 billion, up from $75.3 billion a year ago. Earnings were $13.62 billion, or $1.05 per share, compared with $20.64 billion, or $1.53 per share, last year. Alphabet’s revenue, minus traffic-acquisition costs (TAC), was $63.12 billion, vs. $61.9 billion a year ago.
“We’re on an important journey to re-engineer our cost structure in a durable way and to build financially sustainable, vibrant, growing businesses across Alphabet,” Chief Executive Sundar Pichai said in a statement announcing the results. The company recently announced 12,000 layoffs and has scaled back hires.
In a conference call later with analysts, Google Chief Business Officer Philipp Schindler said a “pullback” in spending by advertisers amid a more challenging economy as well as foreign-exchange headwinds impacted sales.
Analysts polled by FactSet expected Alphabet GOOG, +7.27%
GOOGL, +7.28%
to report total revenue of $76.2 billion and earnings of $1.18 per share, with sales expected to be in line with last year’s results and profit declining from the holiday season a year ago. Revenue, minus TAC, were modeled at $63.2 billion, which also suggests little to no growth from last year.
Google’s total advertising sales slid to $59 billion from $61.2 billion a year ago, missing analysts’ average expectations of $60.44 billion. Google Cloud brought in $7.32 billion, compared with $5.54 billion last year. YouTube ad sales slipped to $7.96 billion from $8.63 billion a year ago.
“The search giant underperformed our expectations across almost all business units, most importantly its core ad-search segment,” Jesse Cohen, senior analyst at Investing.com, said. “Once again, YouTube growth slowed to a crawl amid tough competition from TikTok and other players in the video-streaming space.”
“After Alphabet’s advertising revenue cycle reached peak growth” in the second quarter of 2021, revenue for this part of the business is set to decelerate for the sixth quarter in a row, said Monness, Crespi, Hardt analyst Brian White, who forecast a 3% drop in the recently completed quarter.
On Thursday, Alphabet Chief Financial Officer Ruth Porat said that beginning in the current quarter, AI subsidiary DeepMind will be included in Alphabet’s corporate costs rather than in Other Bets.
Alphabet’s stock has declined 24.7% over the past 12 months. The S&P 500 index SPX, +1.47%
is down 6.7% over the past year.
