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Tag: Financial Performance

  • Facebook earnings cut in half, Meta stock sinks toward lowest prices in more than 6 years

    Facebook earnings cut in half, Meta stock sinks toward lowest prices in more than 6 years

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    Facebook parent Meta Platforms Inc. on Wednesday became the latest tech titan tattooed by a precipitous drop in digital advertising, reporting less than half the profit it had in the same quarter a year ago and sending its stock plummeting toward the lowest prices in more than six years.

    Meta 
    META,
    -5.59%
     posted third-quarter earnings of $4.39 billion, or $1.64 a share, down from $9.2 billion, or $3.22 a share last year. Total sales, most of which come from ads, were $27.17 billion, down from $29 billion a year ago. Both results missed the average forecast for profit of $1.90 a share and sales of $27.44 billion, according to analysts polled by FactSet.

    Meta executives issued a fourth-quarter revenue forecast of $30 billion to $32.5 billion, while analysts were forecasting $32.3 billion.

    Daily active users, which edged up 3% to 1.98 billion, were in line with analysts’ projections of 1.98 billion for the quarter.

    “While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth,” Meta Chief Executive Mark Zuckerberg said in a statement announcing the results. “We’re approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company.”

    In prepared comments, Meta’s departing chief financial officer David Wehner said it is “making significant changes across the board to operate more efficiently. We are holding some teams flat in terms of headcount, shrinking others and investing headcount growth only in our highest priorities. As a result, we expect headcount at the end of 2023 will be approximately in-line with third-quarter 2022 levels.”

    Shares in Meta plunged nearly 20% in after-hours trading, which would put it at levels the stock has not seen since 2016 if the decline were to last into Thursday’s regular trading session. Meta’s stock has been among the worst in tech this year, crashing and burning 61% so far, while the broader S&P 500 index 
    SPX,
    -0.74%
    has declined 19% in 2022.

    After closing with a 5.6% decline at $129.82, Meta shares cratered to less than $115 in after-hours trading; shares have not traded at that level in a regular session since the end of 2016, and have not closed that low since July 2016.

    “Meta is on shaky legs when it comes to the current state of its business,” Insider Intelligence analyst Debra Aho Williamson said in a note late Wednesday. “Mark Zuckerberg’s decision to focus his company on the future promise of the metaverse took his attention away from the unfortunate realities of today: Meta is under incredible pressure from weakening worldwide economic conditions, challenges with Apple’s AppTrackingTransparency policy, and competition from other companies, including TikTok, for users and revenue.”

    In a conference call outlining the results, Wehner pointed out softness in advertising among buyers in online commerce, gaming and financial services.

    Meta’s mess of a quarter came a day after Alphabet Inc.’s
    GOOGL,
    -9.14%

    GOOG,
    -9.63%
    Google reported disappointing ad sales — it missed FactSet analyst estimates by $2 billion — and warned of a deepening pullback in online ad spending. Last week, Snap Inc.
    SNAP,
    -0.21%
    posted slackening ad revenue that sent its shares tumbling more than 25%.

    Read more: Google ad sales take a hit and widely miss estimates, Alphabet stock drops 6%

    Meta announced the results two days after a hellacious Monday, when a major shareholder chastised its metaverse strategy and called for a 20% reduction in payroll costs, as well as a Bank of America note that downgraded the stock.

    Read more: Scathing Meta shareholder’s letter calls for layoffs, less spending on metaverse

    While acknowledging that some people object to Meta’s multibillion-dollar investment in the metaverse, Zuckerberg believes the investment will ultimately prove to be vitally important to Meta’s — and tech’s — future, he said in the conference call.

    Meta executives have blamed inflation, a decline in ad sales, the war in Ukraine, supply-chain issues, increased competition from services such as TikTok, and — most significantly — wrenching changes Apple Inc.  
    AAPL,
    -1.96%
    made to its mobile operating system that make it more difficult for apps to track consumers in ads.

    “We continue to see strategic diversification away from Meta by many advertisers, largely due to stubbornly high CPMs relative to other social platforms and persistent challenges in performance measurement,” Josh Brisco, group vice president of acquisition media at search-engine marketing company Tinuiti, told MarketWatch.

    One factor is a 13% decline in traffic to the Facebook web page in September, year-over-year, according to new report from Similarweb
    SMWB,
    -0.47%    .
    “It’s been down all year, which makes you wonder if they’re going in too many directions — social media, the metaverse, Reels — and whether they are no longer the flavor of the month with competition from TikTok,” David Carr, senior insights manager at Similarweb, told MarketWatch.

    “First and foremost, the discussion needs to pivot to how to build an engaged community of users,” Alex Howland, president and founder of Virbela, which builds virtual worlds, told MarketWatch. “And for that, the metaverse must improve or compliment real-world experiences in some way so that people find value and keep coming back.”

    “Brands have to be focused on what is paying the bills now,” Mike Herrick, senior vice president of technology at Airship, an app-experience platform, told MarketWatch. “Metaverse is going to happen, but not during the life of this recession.”

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  • U.K. fracking stocks slump after Sunak reinstates ban

    U.K. fracking stocks slump after Sunak reinstates ban

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    Shares in London-listed fracking companies slumped on Wednesday after new U.K. Prime Minister Rishi Sunak said he would stick by his party’s manifesto pledge to ban the shale gas extraction process in Britain.

    IGas Energy stock
    IGAS,
    -27.66%
    dropped 28% and the equity of Egdon Resources
    EDR,
    -18.21%
    slumped 11%. The shares of AJ Lucas
    AJL,
    +2.99%    ,
    which owns nearly 50% of U.K. fracker Cuadrilla, are quoted on the Australian stock exchange, which was closed.

    The fracking sector is tiny in the U.K. — the two U.K.-quoted companies have a combined valuation of less than £60 million — with few suitable sites for the process to be viable.

    But the industry’s practices are highly controversial, with campaigners arguing it causes small earth tremors, pollutes water tables and is not compatible with lower carbon production targets.

    The shares of IGas Energy had jumped around ninefold since the start of the year, getting an extra recent boost from previous Prime Minister Liz Truss’s decision to go against the Conservative Party’s wishes and allow fracking.

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  • Heineken shares tumble on cautious outlook, shortfall in beer volumes growth

    Heineken shares tumble on cautious outlook, shortfall in beer volumes growth

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    Heineken NV shares fell Wednesday after it said organic beer volumes rose in the third quarter by 8.9%, missing market consensus expectations of 12% as taken from its website, and that its outlook was cautious.

    Shares at 0730 GMT were down 9% at EUR80.24.

    The Dutch brewer
    HEIA,
    -9.96%

    HEIO,
    -9.19%
    said said that the weaker than expected results were driven by low-single-digit volume growth in Africa, the Middle East, Europe and the Americas, though the Asia-Pacific region delivered a strong recovery from pandemic-related restrictions with total beer volume growth of 89.6%.

    Net revenue, which excludes excise tax expenses–rose to 7.79 billion euros ($7.76 billion) in the quarter from EUR6.03 billion last year. A company-compiled consensus forecast had seen net revenue at EUR7.88 billion.

    In the nine-month period, net revenue rose 23% to EUR21.27 billion while net profit fell to EUR2.2 billion from EUR3.03 billion. Net profit last year was boosted by an exceptional gain of EUR1.27 billion from the revaluation of a stake in United Breweries in India

    The company backed its guidance for 2022 of a stable-to-modest sequential improvement in adjusted operating profit margin, but didn’t reiterate its previously provided 2023 guidance of adjusted operating profit organic growth in the range of mid- to high-single digits.

    “We increasingly see reasons to be cautious on the macroeconomic outlook, including some signs of softness in consumer demand. We remain vigilant and confident in our EverGreen strategy,” Chairman and Chief Executive Dolf van den Brink said.

    The company said it maintains its efforts to offset input cost inflation with pricing.

    Write to Dominic Chopping at dominic.chopping@wsj.com

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  • Microsoft stock slammed by cloud-growth fears, taking Amazon down with it

    Microsoft stock slammed by cloud-growth fears, taking Amazon down with it

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    Microsoft Corp. shares fell more than 6% in after-hours trading Tuesday as the company’s cloud-computing growth hit a sudden deceleration and executives guided for holiday-season revenue to come in more than $2 billion lower than expectations.

    The Azure cloud-computing business has grown into the largest and most important business for Microsoft
    MSFT,
    +1.38%    ,
    and there have been concerns about cloud growth as the U.S. faces a potential recession for the first time since the technology became ubiquitous. Microsoft executives said that Azure grew by 35% in their fiscal first quarter, a marked slowdown from Azure’s 40% growth rate in the previous quarter, as well as the 50% growth shown in the same quarter last year; analysts on average were expecting 36.5% growth, according to FactSet.

    Opinion: The cloud boom is coming back to Earth, and that could be scary for tech stocks

    In the current quarter, Chief Financial Officer Amy Hood suggested a similar sequential decline is in store for Azure, saying percentage growth should decline by five points on a constant-currency basis. Hood also suggested that more cost cuts could be coming to Microsoft, after the company confirmed layoffs of fewer than 1,000 employees earlier this month.

    “While we continue to help our customers do more with less, we will do the same internally,” she said. “And you should expect to see our operating-expense growth moderate materially through the year while we focus on growing productivity of the significant head-count investments we’ve made over the last year.”

    Microsoft shares slid to declines of more than 6% in after-hours trading following Hood’s forecast, which was provided in a conference call. Shares closed with a 1.4% increase at $250.66.

    Concerns about cloud growth immediately spread to Azure’s biggest competitor, Amazon Web Services, as Amazon.com Inc. stock
    AMZN,
    +0.65%
    fell more than 4% in after-hours trading.

    Microsoft reported fiscal first-quarter earnings of $17.56 billion, or $2.35 a share, down from $2.71 a share in the same quarter a year ago, when the tech giant disclosed a 44 cent-per-share tax benefit. Revenue increased to $50.1 billion from $45.32 billion a year ago. Analysts on average were expecting earnings of $2.31 a share on sales of $49.66 billion, according to FactSet.

    For the fiscal second quarter, Hood guided for revenue of $52.35 billion to $53.35 billion, while analysts on average were expecting sales of $56.16 billion, according to FactSet. Hood said that “Intelligent Cloud” revenue should land from $21.25 billion to $21.55 billion, while analysts on average were projecting $21.82 billion heading into the print; Microsoft’s other revenue-segment forecasts were even further off analysts’ average expectations.

    Microsoft has also suffered from the strengthening dollar, as well as a sharp downturn in personal-computer sales, which spiked during the pandemic but are now showing record regression.

    For more: The pandemic PC boom is over, but its legacy will live on

    Microsoft reported PC revenue of $13.3 billion for the quarter, roughly flat from $13.31 billion a year before and beating the average analyst estimate of $13.12 billion, according to FactSet. While PCs have long been what consumers largely know Microsoft for, their importance to the company’s financials has declined in recent years as cloud computing has grown in importance.

    “Historically, Windows was a very large driver of Microsoft revenue and, given its strong margins, a disproportionate driver of earnings,” Bernstein analysts wrote in a preview of the report, while maintaining an “overweight” rating. “Over time other businesses, especially Microsoft’s commercial Cloud, have grown fast while the Windows business has grown quite slower, decreasing the relative impact of Windows.”

    The “Intelligent Cloud” segment reported first-quarter revenue of $20.3 billion, up from $16.96 billion a year ago but slightly lower than the average analyst estimate tracked by FactSet of $20.46 billion. Azure’s 35% growth was the slowest Microsoft has reported in records dating back through the prior two fiscal years; Microsoft only reports percentage growth for its Azure cloud-computing product, even as main rivals Amazon.com Inc.
    AMZN,
    +0.65%
    and Alphabet Inc.
    GOOGL,
    +1.91%
    GOOG,
    +1.90%
    report revenue and profit margin for their cloud-computing products.

    Microsoft’s other revenue segment, “Productivity and Business Processes,” reported revenue of $16.5 billion, up from $15.04 billion a year ago and higher than the average analyst estimate of $16.13 billion, according to FactSet. That segment includes Microsoft’s core cloud-software properties such as its Office suite of products — which is being officially renamed Microsoft 365 — as well as LinkedIn and some other properties.

    Microsoft stock has declined 25.5% so far this year, as the S&P 500 index
    SPX,
    +1.63%
    has dropped 20.3% and the Dow Jones Industrial Average
    DJIA,
    +1.07%
    — which counts Microsoft as one of its 30 components — has declined 13.3%.

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  • Cash Is the Focus as Boeing Reports Its Earnings

    Cash Is the Focus as Boeing Reports Its Earnings

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    Boeing


    has reported positive free cash flow in only one quarter in more than three years. Whether the company generated more than it burned through in the three months through September, and how much it will produce in coming quarters, holds the key to the stock’s next move.

    Wednesday morning, B


    oeing


    (ticker: BA) is due to report third-quarter numbers. Wall Street is looking for earnings of about 10 cents a share from $17.8 billion in sales, a significant improvement from the second quarter, when


    Boeing


     reported an adjusted loss of 37 cents a share from sales of $16.7 billion.

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  • Microsoft stock slips as Azure growth slows and cloud sales miss projections

    Microsoft stock slips as Azure growth slows and cloud sales miss projections

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    Microsoft Corp. shares slipped in after-hours trading Tuesday despite an earnings beat, as the company’s cloud-computing revenue came in lower than expected and its core cloud product, Azure, grew at a slower rate than projections.

    Microsoft’s
    MSFT,
    +1.38%
    cloud-computing business has grown into the largest and most important business for the company, especially for investors who like Azure’s high margins and strong growth. There have been concerns about cloud growth as the U.S. faces its first possible recession since the technology became ubiquitous, and Azure’s growth in Tuesday’s report was the slowest Microsoft has reported in the past two years, while Microsoft’s cloud division was the only segment to come in lower than estimates.

    The “Intelligent Cloud” segment reported first-quarter revenue of $20.3 billion, up from $16.96 billion a year ago but slightly lower than the average analyst estimate tracked by FactSet of $20.46 billion. Microsoft said that Azure grew by 35%, while analysts on average were expecting 36.5% growth, according to FactSet.

    Opinion: The cloud boom is coming back to Earth, and that could be scary for tech stocks

    That is a marked slowdown from Azure’s 40% growth rate in the previous quarter, as well as the 50% growth shown in the same quarter last year. Microsoft only reports percentage growth for its core cloud-computing product, even as main rivals Amazon.com Inc.
    AMZN,
    +0.65%
    and Alphabet Inc.
    GOOGL,
    +1.91%
    GOOG,
    +1.90%
    report revenue and profit margin for their cloud-computing products.

    Overall, Microsoft
    MSFT,
    +1.38%
    reported fiscal first-quarter earnings of $17.56 billion, or $2.35 a share, down from $2.71 a share in the same quarter a year ago, when Microsoft disclosed a 44 cent-per-share tax benefit. Revenue increased to $50.1 billion from $45.32 billion a year ago. Analysts on average were expecting earnings of $2.31 a share on sales of $49.66 billion, according to FactSet.

    Microsoft shares fell between 1% and 2% in after-hours trading following the release of the results, after closing with a 1.4% increase at $250.66. Microsoft stock tends to react most strongly in after-hours trading following earnings reports after executives share their forecast for the current quarter in their conference call, which is scheduled to begin at 5:30 p.m. Eastern.

    Microsoft has started to show some effects of a weakening macroeconomic climate, confirming layoffs of fewer than 1,000 employees earlier this month. Microsoft has suffered from the strengthening dollar, as well as a sharp downturn in personal-computer sales, which spiked during the pandemic but are now showing record regression.

    For more: The pandemic PC boom is over, but its legacy will live on

    Microsoft reported PC revenue of $13.3 billion for the quarter, roughly flat from $13.31 billion a year before and beating the average analyst estimate of $13.12 billion, according to FactSet. While PCs have long been what consumers largely know Microsoft for, their importance to the company’s financials has declined in recent years as cloud computing has grown in importance.

    “Historically, Windows was a very large driver of Microsoft revenue and, given its strong margins, a disproportionate driver of earnings,” Bernstein analysts wrote in a preview of the report, while maintaining an “overweight” rating. “Over time other businesses, especially Microsoft’s commercial Cloud, have grown fast while the Windows business has grown quite slower, decreasing the relative impact of Windows.”

    Microsoft’s other revenue segment, “Productivity and Business Processes,” reported revenue of $16.5 billion, up from $15.04 billion a year ago and higher than the average analyst estimate of $16.13 billion, according to FactSet. That segment includes Microsoft’s core cloud-software properties such as its Office suite of products — which is being officially renamed Microsoft 365 — as well as LinkedIn and some other properties.

    Microsoft’s second-quarter guidance will be crucial to investors hoping that the tech giant can withstand any economic jolts headed its way and show stronger growth in cloud. Analysts on average were expecting overall second-quarter revenue of $56.16 billion and “Intelligent Cloud” sales of $21.82 billion heading into the print, according to FactSet, while some wrote that they would like to hear more from Microsoft executives about the picture for the full year.

    “Our hope is that management provides a bit more color on full-year fiscal 2023 beyond just the double-digit revenue growth and operating margins being roughly flat commentary from last quarter,” MoffetNathanson analysts, who have a “market perform” rating and $282 price target on the stock, wrote in their preview. “We would expect headcount-related revenue streams like Office to see increasing headwinds in coming quarters, but volume businesses like Azure, which is tied to data, being more resilient.”

    Microsoft stock has declined 25.5% so far this year, as the S&P 500 index
    SPX,
    +1.63%
    has dropped 20.3% and the Dow Jones Industrial Average
    DJIA,
    +1.07%
    — which counts Microsoft as one of its 30 components — has declined 13.3%.

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  • Google ad sales take a hit and widely miss estimates, Alphabet stock drops 6%

    Google ad sales take a hit and widely miss estimates, Alphabet stock drops 6%

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    Alphabet Inc. is feeling the sting of a downturn in digital-ad spending. Google’s parent company reported just 6% sales growth year-over-year Tuesday and missed widely on its advertising revenue, pushing shares down in extended trading.

    Alphabet 
    GOOGL,
    +1.91%
     
    GOOG,
    +1.90%
     reported net income of $13.9 billion, or $1.06 a share, in its fiscal third quarter, compared with net income of $1.40 a share in the same quarter a year ago. Total revenue improved a middling 6% to $69.1 billion from $61.88 billion a year ago, the slowest year-over-year growth since sales declined in June 2020, while revenue after removing traffic-acquisition costs was $57.3 billion, compared with $53.6 billion in the year-ago period.

    Analysts surveyed by FactSet had estimated net income of $1.26 a share on ex-TAC revenue of $58.2 billion and overall revenue of $71 billion. Alphabet shares slipped more than 6% in after-hours trading immediately following the release of the results, after closing with a 2% increase at $104.48.

    The results, which missed in several key product categories, further rattled investors, already spooked by poor quarterly results last week from Snap Inc. 
    SNAP,
    +15.52%    .
    Facebook parent company Meta Platforms Inc. 
    META,
    +6.01%
    is scheduled to report its third-quarter results Wednesday.

    Alphabet Chief Executive Sundar Pichai acknowledged the shortfall in ad revenue during a conference call with analysts. He vowed to take several measures, including a sharpened focus on products that improve search through artificial intelligence and to scale back hiring and other operating expenses.

    “There is no question we are operating in an uncertain environment,” Alphabet Chief Business Officer Philipp Schindler said on the call, noting reductions in ad spending by financial services that deepened during the third quarter.

    Google’s total advertising sales improved to $54.5 billion from $53.13 billion a year ago, but badly missed analysts’ average expectations for $56.58 billion. Search was $39.5 billion, compared with $37.93 billion last year. YouTube ad sales slipped to $7.07 billion from $7.21 billion a year ago.

    “When Google stumbles, it’s a bad omen for digital advertising at large,” Insider Intelligence analyst Evelyn Mitchell said. “Not only did Google miss analyst expectations for topline revenue, YouTube ad revenues shrank for the first time since Google started reporting YouTube earnings separately in Q4 2019, due in large part to persistent competition in streaming and short video.”

    Google’s Cloud revenue did climb to $6.9 billion from $4.99 billion; Google Cloud is believed to be third in cloud sales behind rivals Amazon.com Inc. 
    AMZN,
    +0.65%
    and Microsoft Corp. 
    MSFT,
    +1.38%    .

    As is its customary practice, Alphabet did not disclose fourth-quarter guidance. But Alphabet Chief Financial Officer Ruth Porat cautioned during the analyst call that the company faces “tough comps” in the current fourth quarter. Last year, Alphabet raked in $75.3 billion in Q4 revenue.

    Google’s stock has skidded 28% so far this year. The broader S&P 500 index 
    SPX,
    +1.63%
    is down 19% in 2022.

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  • SAP reports cloud-driven higher revenue, confirms annual profit and sales outlook

    SAP reports cloud-driven higher revenue, confirms annual profit and sales outlook

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    SAP SE, the German business software company, confirmed its profit and sales outlook for the year after posting higher third-quarter revenue led by growth at its cloud business.

    Reporting on a non-IFRS basis, the Walldorf, Germany-based company
    SAP,
    +0.14%

    SAP,
    +4.18%
    said Tuesday that revenue jumped to 7.84 billion euros ($7.74 billion) from EUR6.85 billion, with cloud revenue up to EUR3.29 billion from EUR2.39 billion. Software-licenses revenue fell to EUR406 million from EUR657 million.

    Analysts polled by FactSet had forecast overall revenue of EUR7.65 billion, and cloud revenue of EUR3.19 billion.

    “We have delivered a strong cloud quarter with accelerating momentum across all key cloud indicators,” SAP Chief Financial Officer Luka Mucic said. The company said its cloud business performed strongly in all regions led by the U.S. and Germany, while activity in Brazil, China, India and Switzerland was particularly robust.

    SAP is moving away from software-licenses sales, once its biggest revenue streams, to subscription-based cloud services, banking on a more profitable and predictable model based on recurring revenue.

    “With a recurring revenue share of more than 80%, it’s clear that our transformation has reached an important inflection point, paving the way for continued growth in the future,” SAP Chief Executive Christian Klein said.

    Operating profit for the quarter slipped to EUR2.09 billion from EUR2.10 billion a year earlier, with SAP’s operating margin down to 26.7% from 30.7%. Analysts polled by FactSet had forecast operating profit of EUR2 billion.

    SAP, like other European software companies, presents its figures as two sets of numbers. One set is based on the International Financial Reporting Standards–an international accounting method that seeks to provide a global reporting standard–though analysts and investors tend to follow SAP’s non-IFRS numbers. Those figures exclude share-based compensation, restructuring expenses and acquisition-related charges.

    For the year, SAP continues to expect non-IFRS operating profit at constant currencies between EUR7.6 billion and EUR7.9 billion, and cloud revenue at constant currencies between EUR11.55 billion and EUR11.85 billion. However, free cash flow is now expected at roughly EUR4.5 billion against a previous forecast above EUR4.5 billion.

    Looking ahead, SAP is still targeting double-digit growth in operating profit for 2023, though the company said it expects to update midterm targets in the coming quarters, citing the strong cloud momentum and favorable currency movements.

    Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

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  • Tesla Stock Could Rebound in 3 Months. Here’s What it Would Take.

    Tesla Stock Could Rebound in 3 Months. Here’s What it Would Take.

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    Elon Musk says that


    Tesla


    could someday be worth more than


    Apple


    and Saudi Aramco, combined. First, it needs to get through the next few months.

    Before Tesla (ticker: TSLA) reported third-quarter earnings this past week, investors had been hoping they would allay concerns that had been growing since the company released second-quarter numbers three months earlier. They did no such thing. While earnings topped expectations, third-quarter deliveries, sales, and profit margins all fell short of Street projections. Tesla shares slumped 6.7% following the release, putting them down 22% since the end of September, their second-worst start to a quarter since the first few weeks of 2016.

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  • Boston Beer, Schlumberger rise; Snap, Twitter fall

    Boston Beer, Schlumberger rise; Snap, Twitter fall

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    Stocks that traded heavily or had substantial price changes Friday: Boston Beer, Schlumberger rise; Snap, Twitter fall

    NEW YORK — Stocks that traded heavily or had substantial price changes Friday:

    Snap Inc., down $3.03 to $7.76.

    The owner of Snapchat gave a lackluster forecast for the fourth quarter.

    Twitter Inc., down $2.55 to $49.89.

    Elon Musk could cut almost 75% of the social media company’s workforce, according to a report.

    CSX Corp., up 46 cents to $27.54.

    The railroad’s third-quarter earnings and revenue beat analysts’ forecasts.

    SVB Financial Group, down $72.43 to $230.03.

    The financial services firm gave investors a disappointing financial forecast.

    Boston Beer Co., up $66.12 to $402.28.

    The brewer of Samuel Adams beer beat Wall Street’s third-quarter revenue forecasts.

    Schlumberger NV, up $4.72 to $50.41.

    The world’s largest oilfield services company beat analysts’ third-quarter financial forecasts.

    American Express Co., down $2.38 to $140.04.

    The credit card giant said it is setting aside hundreds of millions of dollars to cover potential losses as the economy continues to deteriorate.

    Robert Half International Inc., down $6.83 to $73.01.

    The staffing firm’s third-quarter earnings and revenue fell short of analysts’ forecasts.

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  • Social media stocks slip amid Musk, Snap news

    Social media stocks slip amid Musk, Snap news

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    Shares of social media companies are tumbling before the market open on Friday after a slew of news in the sector that concerned investors, including a report that Elon Musk may cut almost 75% of Twitter‘s workforce and Snap’s muted fourth-quarter outlook.

    Musk has told prospective investors in his Twitter purchase that he plans to cut nearly 75% of Twitter’s employee base of 7,500 workers, leaving the company with a skeleton crew, according to a Thursday report by The Washington Post.

    Wedbush’s Dan Ives said in a client note that Twitter Inc. is due for some job cuts, but that the reported figure may not be the best approach.

    “Musk cannot cut his way to growth with Twitter and a number in the 75% zip code would be way too aggressive in our opinion out of the gates,” he wrote.

    A Delaware judge has given Musk and Twitter until Oct. 28 to work out details of the proposed $44 billion deal. Otherwise, there will be a trial in November.

    Shares of Twitter dropped more than 4% in premarket trading.

    Elsewhere in the sector, Snap Inc.’ stock slid more than 28% after the company behind Snapchat gave a lackluster forecast for the fourth quarter and its third-quarter revenue missed Wall Street’s view.

    Snap reported third-quarter revenue of $1.13 billion, below the $1.15 billion that analysts polled by Zacks Investment Research expected.

    While the Santa Monica, California-based company said in a letter to investors that it wasn’t giving a formal fourth-quarter outlook, it did say that it’s highly likely that year-over-year revenue growth will slow during the period. Snap said its internal forecasts are for year-over-year revenue growth to be about flat.

    A JPMorgan analyst note said that Snap is experiencing weaker demand due to macro pressures, platform policy changes and competition.

    “We appreciate management’s efforts to control what they can—cutting costs & doubling down on more resilient performance-based ads—but trends remain choppy, and the macro backdrop is likely even tougher into 2023,” the note said.

    Adding to the mix are concerns about the way social media platforms are being used as the mid-term elections near. While platforms like Twitter, TikTok, Facebook and YouTube say they’ve expanded their work to detect and stop harmful claims that could suppress the vote or even lead to violent confrontations, a review of some of the sites shows they’re still playing catchup with 2020, when then-President Donald Trump’s lies about the election he lost to Joe Biden helped fuel an insurrection at the U.S. Capitol.

    Shares of Meta Platforms Inc., parent company of Facebook, declined 4.4% before the opening bell.

    The flurry of news weighed on others in the sector as well, including Google parent Alphabet Inc., off 2%, and Pinterest Inc., down 8%.

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  • Twitter shares slump after report that the U.S. mulls national-security reviews for some of Elon Musk’s ventures

    Twitter shares slump after report that the U.S. mulls national-security reviews for some of Elon Musk’s ventures

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    Shares of Twitter plunged in premarket trade on Friday after a report Biden administration officials are considering subjecting some of Elon Musk’s ventures to national-security reviews.

    Twitter
    TWTR,
    +1.18%
    shares plunged 9% to $47.64 in premarket trade, below the $54.20 per share buyout price.

    Bloomberg News reported late Thursday that some U.S. officials have become concerned in recent weeks by Musk’s Russia-friendly tweets and his threat to cut off Starlink satellite internet service to Ukraine. The Tesla
    TSLA,
    -6.65%
    and SpaceX CEO’s pending $44 billion acquisition of Twitter has also reportedly drawn concerns because of its foreign investors, including a Saudi prince, Binance Holdings — a crypto exchange that was initially based in China — and Qatar’s sovereign wealth fund.

    Citing anonymous sources familiar with the matter, Bloomberg said discussions are still in the early stages and officials are trying to figure out what regulatory tools are available to them. One option could be a national-security review by the Committee on Foreign Investment in the United States, the report said.

    Separately, Bloomberg also reported late Thursday that Musk’s lawyers and bankers are preparing paperwork for the Twitter deal to be completed ahead of a Oct. 28 deadline, and that relations between Musk and Twitter have turned cordial rather than adversarial.

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  • Instacart reportedly puts off its long-anticipated IPO

    Instacart reportedly puts off its long-anticipated IPO

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    Grocery-delivery company Instacart Inc. is delaying its long-awaited initial public offering because of poor market conditions, according to news reports Thursday.

    The New York Times first reported Thursday that the San Francisco-based company has halted its IPO plans, and is awaiting more favorable conditions. Later Thursday night, the Wall Street Journal confirmed the report, citing a memo from Instagram CEO Fidji Simo saying an IPO will be “highly unlikely” this year.

    The IPO market has been severely curtailed this year following a record-setting 2021, as the stock market has slid amid high inflation and recession fears. As of September, the number of U.S. IPOs was down 79% year over year, with total proceeds down 95%, according to Renaissance data.

    According to the Times, Instacart had intended to start the IPO process this week by releasing some financial information, but decided not to, for now, due to market volatility.

    The Journal reported that the IPO had received positive feedback from potential investors, but executives came away with the message that the market will not support a tech IPO at this time.

    “Our business has never been stronger,” Instacart said in a statement Thursday. “In Q3, our revenue grew more than 40% year-over-year, and our net income and adjusted EBITDA more than doubled from Q2. We remain focused on building for the long term, and we are excited about the opportunity ahead.” 

    Instacart confidentially filed for its IPO in May. The company has been one of the more anticipated potential IPOs for years. In July, Instacart cut its estimated valuation for the second time in four months, to $15 billion, nearly 40% less than its previous valuation of $24 billion.

    Last month, the Wall Street Journal reported Instacart didn’t plan on raising much capital in its IPO, instead having most of its listing come from the sale of employees’ shares — a move that could greatly benefit current employees.

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  • Snap investors, do you still trust Evan Spiegel?

    Snap investors, do you still trust Evan Spiegel?

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    When Snap Inc. went public in 2017, this column boiled down the entire investment opportunity to one, simple question: Do you trust Evan Spiegel?

    As Snap
    SNAP,
    -0.64%
    stock heads toward its lowest prices since March 2020, and potentially even lower, that question is even more important, and answering “yes” should be even harder.

    Three months ago, amid the beginning of a huge slowdown in the ad business, Snap initiated a unique dividend meant to ensure that the founders maintained control of the company, even if they sold their stock — protecting themselves. Then in August, news came that Snap was laying off one in five employees. As Snap again reported disappointing results Thursday and saw the stock plunge again, the company decided now was the time to initiate a stock buyback plan, promising to spend up to $500 million to offset the dilution from employee stock plans — in the past nine months, Snap has spent $937 million on stock-based compensation.

    On the face of it, this seems like an investor-friendly approach — Barron’s pointed out earlier this year that investors were suffering while employees were faring better with the hefty stock-comp plans. But it’s also worth pointing out who the biggest investors in Snap are: Spiegel and his co-founder Bobby Murphy.

    As the company’s largest individual shareholders, Spiegel and Murphy are among the key beneficiaries of Snap’s plans to buy back stock, which usually leads to a boost in the stock price. Those two still control over 99% of the voting power of the company’s capital stock, and as the parent of Snapchat reminded investors in its annual report, “Mr. Spiegel alone can exercise voting control over a majority of our outstanding capital stock.”

    Shares of Snap tumbled an additional 25% to just under $8 in after-hours trading, putting them near the lowest prices since March 2020. On Thursday, the company ended regular trading hours with a market capitalization of around $17.91 billion, but that was headed toward $13 billion with the after-hours collapse.

    Besides protecting themselves and their investment, Snap’s executives have shown little ability to head off big issues, nor offer any worthwhile solutions to the current ad downturn. In the third quarter, its revenue grew a paltry 6%, down from the most recent second-quarter revenue growth of 13%. Snap appears to be in a steady revenue slowdown, from its peak growth of 116% in the June 2021 quarter.

    Snap has blamed both privacy changes that Apple Inc.
    AAPL,
    -0.33%
    made to the iPhone that affected ad tracking, and more recently, the macroeconomic advertising climate, while avoiding one of the biggest factors — the rise of TikTok. Top executives didn’t seem to see any of those challenges coming early enough, and did not do enough about them once they did.

    “The company was slow to react — or acknowledge — the significant headwinds faced by privacy initiatives, compounded by competition, and more recently macro headwinds,” Colin Sebastian, an analyst at Baird Equity Research, wrote in a note.

    The competition factor, mostly from China’s TikTok, was addressed briefly on the company’s call with analysts, but was not really acknowledged by Snap leaders.

    “We believe that the differentiated nature of our service is what’s contributing to the daily active-user growth, which grew 19% year-over-year to 363 million daily active users,” Spiegel said. “In terms of the content specifically, I think there’s a lot of headroom, of course, to continue to grow content engagement.”

    In the company’s shareholder letter, Spiegel acknowledged that the results were “far from our aspirations,” and that Snap would use this time of reduced demand “to pull forward and accelerate changes to our advertising platform and auction dynamics that we believe will deliver better results for our advertising partner.”

    Spiegel is known for going by his own instincts and not listening to other executives, employees or even market forces, as was noted in a Wall Street Journal report that detailed his push for an unsuccessful product redesign in 2018. While the company appeared to have snapped back from that debacle last year, it is now facing a fiercer rival for young people on social media in the form of TikTok.

    Investors who still have patience to wait and see if this stock ever recovers will also have to stick around with Spiegel — and as our IPO column noted — Snap is unapologetically founder-controlled. No change at the top can ever come unless it is initiated by Spiegel himself. Investors have to make a leap of faith that Spiegel can turn things around, but they need to remember that Spiegel usually thinks about himself first.

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  • American Airlines posts $483 million profit for late summer

    American Airlines posts $483 million profit for late summer

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    DALLAS — The three biggest U.S. airlines enjoyed a boffo summer, reaping a combined profit of more than $2 billion as Americans jammed on to planes despite fares that were sharply higher than a year ago.

    What pandemic?

    American Airlines said Thursday that it earned $483 million on record-breaking revenue that more than offset higher fuel costs in the third quarter. American predicted that profit will continue to exceed Wall Street expectations during the holiday-packed remainder of 2022.

    The results from American, however, weren’t quite as grand as figures from its more prosperous rivals. United Airlines reported a $942 million profit on Tuesday, and Delta Air Lines posted third-quarter earnings of $695 million last week.

    Clearly, many people are eager to travel after most were grounded during the early part of the pandemic. Executives at all three big U.S. airlines said they see no indication that consumer concerns about inflation and the economy are hurting ticket sales.

    “American’s third-quarter results, including our record revenue performance, are significant considering the macroeconomic uncertainty facing so many people,” CEO Robert Isom said on a call with analysts and reporters. “Demand remains strong.”

    American, which is based in Fort Worth, Texas, predicted that fourth-quarter profit will be between 50 cents and 70 cents per share, which would beat Wall Street’s forecast of 19 cents per share.

    U.S. air travel has roared back from pandemic lows in early 2020. Last Sunday, the Transportation Security Administration screened nearly 2.5 million travelers on a single day, the busiest day at the nation’s airports since February 2020.

    Travel is booming despite a 43% leap in airfares in the past year, according to government figures.

    One reason fares are high is that the number of flights has not returned to pre-pandemic levels, leaving consumers vying for fewer seats. American, for example, did nearly 10% less flying in the third quarter than in the same period of 2019.

    American said it plans to run at 95% to 100% of 2019 levels next year. That is in line with Delta, which expects to restore its full schedule by next summer. United recently announced it will expand European flying next summer.

    Isom said American could add more flights next year but will take a cautious approach. American, Delta and others canceled flights earlier this year when they didn’t have enough staff, particularly pilots.

    “We are going to make sure that we don’t outpace what we have, either in terms of aircraft deliveries if that’s the constraint, or if it’s pilots at a regional level or our ability to train pilots” at American, he said.

    For the third quarter, American said its adjusted profit, which excludes certain items, was 69 cents per share, compared with a forecast of 54 cents per share by analysts surveyed by FactSet.

    Revenue rose to $13.46 billion, slightly higher than the $13.36 billion predicted by analysts. American, which has a major hub operation in Miami and operates many flights to the Caribbean, said it lost about $40 million in revenue because of hurricanes Fiona and Ian in September.

    Also Thursday, the parent of Alaska Airlines reported a $40 million third-quarter profit on record revenue of $2.8 billion. The Seattle-based airline said, however, that non-fuel costs in the fourth quarter will be higher than expected because of three new contracts with union labor groups including pilots.

    Shares of American Airlines Group Inc. closed down 4% and Alaska Air Group Inc. dropped 5%, while shares of Delta, United and Southwest dipped by smaller percentages.

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  • Snap stock plummets more than 25% as online advertising continues to struggle

    Snap stock plummets more than 25% as online advertising continues to struggle

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    A bruising year for Snap Inc.’s shares worsened Thursday, as the stock plummeted more than 20% in after-hours trading as executives launched the company’s first major share-repurchase program amid revenue issues in a poor environment for online advertising.

    Snap
    SNAP,
    -0.64%
    executives revealed that revenue increased less than 6% year-over-year in the quarter — its slowest quarterly grow ever recorded — and said that the holiday season is shaping up similarly, with sales increasing 9% so far in the quarter. The social-media company, which laid off roughly 20% of its staff this summer in response to the issues, also declined to provide a full forecast for the important fourth quarter.

    “Our revenue growth continued to decelerate in Q3 and continues to be impacted by a number of factors we have noted throughout the past year, including platform policy changes, macroeconomic headwinds, and increased competition,” executives said in a letter to shareholders, outlining the results. “We are finding that our advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures, and rising costs of capital.”

    “Forward-looking revenue visibility remains incredibly challenging, and this is compounded by the fact that revenue in Q4 is typically disproportionately generated in the back half of the quarter, which further reduces our visibility,” executives explained about the lack of guidance in a letter to investors.

    The board did approve a $500 million share repurchase, a first for the young company. In a news release, executives said that the move was meant “to opportunistically offset a portion of the dilution related to the issuance of restricted stock units to employees as part of the overall compensation program designed to foster an ownership culture.”

    Snap’s results — the first among the major tech companies who rely heavily on digital advertising — likely portend even more turbulent times ahead for Alphabet Inc.’s 
    GOOGL,
    +0.34%
     
    GOOG,
    +0.24%
    Google, Facebook parent company Meta Platforms Inc. 
    META,
    -1.28%    ,
     Twitter Inc. 
    TWTR,
    +1.18%    ,
     Pinterest Inc. 
    PINS,
    -0.30%
    and others in the grip of inflation, a war in Ukraine, foreign-exchange worries and a widening recession.

    Snap’s desultory news sent shares tumbling in extended trading for Pinterest (-8%), Trade Desk Inc.
    TTD,
    +2.26%
    (-5), Meta (-4%) and Google (-3%).

    Deteriorating macroeconomic conditions have left advertisers with little choice but to delay or cancel buys. At the same time, intensifying competition from the likes of TikTok and others has deepened headwinds.

    “As a smaller player, Snap is more susceptible but no platform is immune,” Insider Intelligence analyst Jasmine Enberg told MarketWatch. “I expect more of the same results next week” when Google and Meta report, she added.

    Snap reported a third-quarter net loss of $359.5 million, or 22 cents a share, compared with a loss of 5 cents a share a year ago. Analysts on average were expecting a loss of 24 cents a share.

    Snap’s sales increased less than 6% to $1.13 billion, barely falling short of Street estimates of $1.14 billion. Daily active users rose 19% to 363 million. FactSet analysts had modeled 358.2 million.

    Snap shares initially fell more than 20% in after-hours trading. They closed the regular trading session down 0.6% to $10.79. Shares of Snap have nosedived 77% this year, while the S&P 500 index 
    SPX,
    -0.80%
    is down 23%.

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  • AT&T stock surges toward best day since 2020 as earnings mark a ‘step forward’

    AT&T stock surges toward best day since 2020 as earnings mark a ‘step forward’

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    Shares of AT&T Inc. were up more than 9% in morning trading Thursday after the telecommunications company topped profit expectations and posted another quarter of sizable subscriber gains.

    The company saw 708,000 postpaid phone net additions during the period, building on the 1.5 billion such net additions it saw during the first half of the year. Postpaid phone churn in the latest quarter was 0.84%.

    The subscriber traction reflected “more of the same,” AT&T’s
    T,
    +9.01%
    investor relations head Amir Rozwadowski told MarketWatch. While he said that some wireless competitors have been adjusting their promotions every few weeks, he added that AT&T has stayed more consistent with its strategy, something he saw as beneficial for consumers, who understand what the company is offering, and store associates, who don’t have to make major adjustments to their messaging.

    AT&T also added 338,000 net fiber subscribers in the third quarter.

    Shares were up 9.5% in Wednesday morning trading and on track to log their best single-day performance since March 13, 2020, when they rose 10.0%. The stock is also on track to log its best post-earnings gain since at least 1997, according to Dow Jones Market Data.

    Revenue came in at $30.0 billion, down from $31.3 billion a year before, though up from $29.1 billion in revenue for standalone AT&T when adjusting for business divestments. The FactSet consensus was $29.8 billion in revenue.

    AT&T attributed the drop in headline revenue during the latest quarter to the divestment of its U.S. video business last July as well as lower business wireline revenue. Those trends were partially offset by higher mobility revenue.

    AT&T expects growth in mobility service revenues at the “upper end” of the 4.5% to 5% range for the full year. It gave a target of 4.5% to 5% growth in its second-quarter report.

    “Our results demonstrate that the strategy we put forward more than two years ago is the right strategy for not only the future of our business, but for the future of the communications industry,” Chief Executive John Stankey said on the company’s earnings call.

    The current inflationary backdrop impacts both consumers and AT&T, and the company recently raised prices on some legacy plans recently as it dealt with its own inflationary costs. Despite financial pressures on consumers, Rozwadowski said that AT&T has seen consumers trade up to higher-tier plans more generally because they see more value in those plans.

    While he said that AT&T was “certainly seeing signs of inflation across our business,” he also emphasized that consumers seem to have a strong appreciation for connectivity services as they evaluate their expenses. “You need phone and broadband probably more now than in the last recession,” Rozwadowski said.

    AT&T executives highlighted last quarter that some consumers were taking a bit longer to pay their bills, though they ultimately were still paying them. The company is “not seeing any material change relative to what we saw last quarter,” Rozwadowski said, as customer payment cycles are holding steady at pre-pandemic levels.

    The company posted third-quarter income from continuing operations of $6.3 billion, or 79 cents a share, compared with $5.0 billion, or 63 cents a share, in the year-prior quarter.

    After adjustments for actuarial gains on benefit plans and some other factors, AT&T notched 68 cents a share in earnings from continuing operations, up from 66 cents a share a year earlier, and also above the 62 cents a share in earnings from continuing operations for standalone AT&T during that year-ago period. The standalone number accounts for the fact that the company divested its U.S. video business last summer.

    Analysts tracked by FactSet were modeling 61 cents a share in adjusted earnings for AT&T’s third quarter.

    Citi Research analyst Michael Rollins called AT&T’s latest earnings a “step forward,” highlighting that they “reflect a better balance of profitability relative to its revenue growth.”

    “Results show that AT&T remains highly-competitive in wireless, while showing forward progress on improving fiber net adds with its expanding footprint,” he continued in a note to clients.

    AT&T generated $3.8 billion in free-cash flow from continuing operations during the September quarter, and Chief Financial Officer Pascal Desroches shared on the earnings call that AT&T felt “good about our line of sight to achieving our free-cash flow target in the $14 billion range for the year.”

    Rozwadowski said that the company was focused on putting cash back into the network.

    “The business is generating a healthy amount of cash,” he said, and by investing that money in network improvements, AT&T hopes to achieve a “flywheel effect” since an enhanced network can help the company retain customers and convince them to pay up for more expensive plans.

    Desroches added on the earnings call that AT&T was “very comfortable with our cash levels after paying our dividend commitment” and said that “this should only increase in future years as we expect cash conversion to improve from here.”

    The company models adjusted earnings per share from continuing operations of “$2.50 or higher” for the full year, while analysts tracked by FactSet were looking for $2.53.

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  • AT&T stock gains after earnings beat, driven by continued subscriber rush

    AT&T stock gains after earnings beat, driven by continued subscriber rush

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    Shares of AT&T Inc. were up 2% in premarket trading Thursday after the telecommunications company topped profit expectations for its latest quarter.

    The company posted third-quarter income from continuing operations of $6.3 billion, or 79 cents a share, compared with $5.0 billion, or 63 cents a share, in the year-prior quarter.

    After adjustments for actuarial gains on benefit plans and some other factors, AT&T
    T,
    -0.38%
    notched 68 cents a share in earnings from continuing operations, up from 66 cents a share a year earlier, and alone above the 62 cents a share in earnings from continuing operations for standalone AT&T during that year-ago period. The standalone number accounts for the fact that the company divested its U.S. video business last summer.

    Analysts tracked by FactSet were modeling 61 cents a share in adjusted earnings for AT&T’s third quarter.

    Revenue came in at $30.0 billion, down from $31.3 billion a year before, though up from $29.1 billion in revenue for standalone AT&T. The FactSet consensus was for $29.8 billion in revenue.

    AT&T attributed the drop in headline revenue during the latest quarter to the divestment of its U.S. video business last July as well as lower business wireline revenue. Those trends were partially offset by higher mobility revenue.

    The company saw 708,000 postpaid phone net additions during the period, while postpaid phone churn was 0.84%.

    AT&T expects growth in mobility service revenues at the “upper end” of the 4.5% to 5% range for the full year. It gave a target of 4.5% to 5% growth in its second-quarter report. The company also models adjusted earnings per share from continuing operations of “$2.50 or higher” for the full year, while analysts tracked by FactSet were looking for $2.53.

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  • Global stocks lower amid British political turmoil

    Global stocks lower amid British political turmoil

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    BANGKOK — Global stock markets declined Thursday as the British prime minister faced demands to quit and Japan reported its 14th straight monthly trade deficit.

    London and Frankfurt opened lower and Shanghai, Tokyo and Hong Kong declined. Oil rose more than $1 per barrel.

    British Prime Minister Liz Truss faced demands to resign following chaotic scenes in Parliament during a vote on a fracking ban. Truss has been defiant despite financial market turmoil caused by multiple policy U-turns.

    Truss “precipitated this political crisis by triggering the market crisis,” said Michael Every of Rabobank in a report. Britain is “deep in an emerging-market rut.”

    In early trading, the FTSE 100 in London was off 0.2% at 6,914.12 and the DAX in Frankfurt fell 0.7% to 12,655.08. The CAC 40 in Paris was little-changed at 6,041.18.

    On Wall Street, the future for the benchmark S&P 500 index was off 0.3%. That for the Dow Jones Industrial Average was up less than 0.1%.

    On Wednesday, the S&P fell 0.7%, breaking two days of gains. The Dow slipped 0.3% and the Nasdaq composite sank 0.9%.

    In Asia, the Nikkei 225 in Tokyo tumbled 0.9% to 27,006.96 after September imports ballooned 46% over a year earlier due to a surging oil prices and a weak yen. The Japanese currency is trading at a 32-year low against the dollar.

    The yen weakened to 149.82 to the dollar from Wednesday’s 149.81 yen.

    The dollar has gained against other currencies following repeated interest rate hikes by the Federal Reserve, which increases the return on assets valued in dollars. Investors also see the U.S. currency as a stable haven amid global uncertainty.

    “Rising U.S. yields and the strong U.S. dollar are the sledgehammers pounding global equities lower,” said Stephen Innes of SPI Asset Management in a report.

    The Shanghai Composite Index lost 0.3% to 3,035.05 and the Hang Seng in Hong Kong fell 1.4% to 16,280.22.

    The Kospi in Seoul retreated 0.9% to 2,218.09 and Sydney’s S&P-ASX 200 sank 1% to 6,730.70.

    On Wednesday, Wall Street pulled back as investors reviewed earnings and Treasury yields climbed to multiyear highs.

    Netflix soared 13% and United Airlines rose 5% after releasing quarterly results. Abbott Laboratories, M&T Bank and others sank.

    The yield on the 10-year Treasury, which influences mortgage rates, climbed to 4.13%, its highest level since June 2008. It was at 4.02% late Tuesday.

    The yield on the two-year Treasury, which responds to expectations of future Fed action, rose to 4.54% from 4.43%.

    The Fed and central banks in Europe and Asia have been raising interest rates to cool inflation that is at multi-decade highs. Investors worry they might tip the global economy into recession.

    Inflation in Britain hit a 40-year high of 10.1% over a year earlier in September.

    In energy markets, benchmark U.S. crude rose $1.56 to $86.08 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oil trading, advanced $1.34 to $93.75 per barrel in London.

    The euro gained to 97.83 cents from Wednesday’s 97.68 cents.

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  • Nokia posts forecast-beating net profit

    Nokia posts forecast-beating net profit

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    Nokia Corp. on Thursday posted a forecast-beating third-quarter net profit as demand for mobile networks and network infrastructure remained strong and supply-chain constraints eased.

    Nokia
    NOK,
    -1.94%

    NOKIA,
    -6.26%
    said it still expects to deliver net sales growth in mobile networks on a constant-currency basis in 2022 after strong sales growth in North America during the quarter, while sales in Europe, Latin America and Greater China also grew.

    Comparable net profit for the quarter rose to 550 million euros ($537.6 million) from EUR454 million a year earlier as sales rose 16% to EUR6.24 billion, it said.

    Analysts polled by FactSet had expected comparable net profit of EUR510 million on sales of EUR6.05 billion.

    On a reported basis, Nokia posted a net profit of EUR427 million from EUR342 million a year earlier.

    Nokia lifted full-year sales guidance to between EUR23.9 billion and EUR25.1 billion from EUR23.5 billion and EUR24.7 billion, adjusted for currency. It still sees the full-year comparable operating margin at 11%-13.5%.

    “While risks around timing of outstanding deals in Nokia Technologies remain, assuming these close we continue tracking towards the high-end of our net sales guidance for 2022 and towards the mid-point of our operating margin guidance,” Chief Executive Pekka Lundmark said.

    Write to Dominic Chopping at dominic.chopping@wsj.com

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