Tag: Financial Performance

Big Tech earnings have been strong, but Apple is about to answer the thousand-dollar question

[ad_1]

While the stock market reactions may not prove it, Big Tech is four-for-four so far this earnings reporting season.

Alphabet Inc.
GOOG,
-0.03%

GOOGL,
-0.09%,
Amazon.com Inc.
AMZN,
+6.83%,
Meta Platforms Inc.
META,
+2.91%
and Microsoft Corp.
MSFT,
+0.59%
all beat earnings and revenue expectations for the latest quarter, showing, among other things that the advertising market was healthy in the latest quarter and that software spending is holding up.

But one more major test looms in the week ahead. Apple Inc.
AAPL,
+0.80%
is due to deliver September-quarter results on Thursday and those earnings will answer a key question: Are consumers still so willing to purchase thousand-dollar iPhones in the current economy?

Results from other companies in recent weeks have painted a mixed picture of consumer spending. Visa Inc.
V,
-0.87%,
Mastercard Inc.
MA,
-0.14%
and American Express Co.
AXP,
-1.42%
say that spending remains resilient, but there are also signs that cracks are starting to form in categories deemed non-essential. Just look at Align Technology Inc.
ALGN,
+0.20%,
the maker of Invisalign orthodontic aligners, which saw its stock plunge last week after noting that people seem to be putting off dental and orthodontic visits.

Read: Invisalign maker’s stock craters after soft earnings, but analysts still say it’s a buy

Granted, some might say that iPhones are glorified necessities these days for Apple fans, even with their high price tags. But Apple conducted an effective price increase on its iPhone 15 Pro model when it rolled out its new phones in September, all while delivering a mostly incremental suite of feature upgrades across all its latest models. Will the new phones prove enticing enough in a period of stretched budgets?

Just judging by S&P 500
SPX
results so far in the aggregate, the odds would seem to be in Apple’s favor for a beat this quarter. About half of index components have already reported, and 78% have posted earnings upside, while 62% have surprised positively on the top line, according to FactSet.

Revenue will be the key item for Apple, as consensus expectations call for a small decline on the metric, which would mark the fourth consecutive year-over-year drop. It’s also worth noting that companies on the whole haven’t been topping revenue estimates by their usual margin. S&P 500 components in aggregate have reported revenue 0.8% above expectations, which compares with a five-year average of 2.0%, FactSet Senior Earnings Analyst John Butters wrote in a recent report.

Apple’s report could also highlight the impact of currency on corporate results, as the company generates more than half of its revenue internationally.

“Given the stronger U.S. dollar in recent months, are S&P 500 companies with more international revenue exposure reporting lower (year-over-year) earnings and revenues for Q3 compared to S&P 500 companies with more domestic revenue exposure?” Butters asked. “The answer is yes.”

This week in earnings

Many U.S. investors in financial-technology companies likely hadn’t heard of European payments player Worldline SA
WLN,
+9.06%
before last week, but a warning from the French company about deteriorating conditions in Europe helped send shares of PayPal Holdings Inc.
PYPL,
-2.63%
and Block Inc.
SQ,
-3.98%
sharply lower Wednesday, in a selloff one analyst deemed an overreaction. Those companies will look to reassure Wall Street about the health of their businesses with their own reports this week. Plus, while not a payments name, SoFi Technologies Inc.
SOFI,
-0.43%
will provide another read on the fintech sector. Investors will be watching to see how the end of the student-loan moratorium impacted student lending volumes.

The week ahead will also shed light on how consumers’ dining preferences have evolved in the current economy. Starbucks Corp.
SBUX,
-0.70%,
Dine Brands Global Inc.
DIN,
-0.12%,
Cheesecake Factory Inc.
CAKE,
-0.47%
and Sweetgreen Inc.
SG,
+0.59%
are among names on the docket. Plus, amid concerns about the impact of GLP-1 drugs such as Ozempic and Wegovy on eating habits, Kraft Heinz Co.’s management will be in the spotlight.

Don’t miss: What exactly are patients taking new weight-loss drugs eating and what are they avoiding? Bernstein asked them.

The call to put on your calendar

You can’t spell Advanced Micro Devices without AI (sort of): Nvidia Corp.
NVDA,
+0.43%
has been ruling the chip world this year thanks to its dominance with the sort of hardware needed to power the corporate AI fervor. Investors will be watching Tuesday afternoon to see how quickly Advanced Micro Devices Inc.’s
AMD,
+2.95%
own AI story is coming together. “The AMD narrative feels all about their data center (and, particularly, their AI story) right now,” Bernstein analyst Stacy Rasgon wrote in a note to clients. “In the near term the achievability of their 2H data-center growth (guided to 50% half-over-half) will be the question.” Rasgon expects AMD to discuss recent customer wins for its MI300X chip, though he thinks it will take time for the company to see “real volume.”

The number to watch

PayPal transaction margins: Shares of the one-time investor darling are trading at their lowest levels since May 2017, and the latest source of anguish for Wall Street is the company’s transaction margins. PayPal’s lower-margin unbranded checkout business has been growing more quickly than its higher-margin branded checkout product, a trend that’s been weighing on overall transaction margins. Barclays analyst Ramsey El-Assal expects the third quarter to mark a bottom on the metric before trends stabilize in the fourth quarter. “We do not believe the stock is crowded on the long or short side into earnings, as investors lack conviction regarding the magnitude of transaction margin headwinds in Q3,” he wrote in a recent preview. “In any case, we view Q3 as a potential clearing event.” PayPal posts results Wednesday afternoon.

[ad_2]

Source link

October 29, 2023
WSJ News Exclusive | UAW Expands Strike With GM After Reaching Tentative Agreement With Stellantis

[ad_1]

Updated Oct. 28, 2023 10:03 pm ET

The United Auto Workers called a fresh strike at a General Motors factory in Tennessee, a surprise walkout after negotiators had been working nearly around the clock to finalize a new contract this weekend.

Workers at GM’s factory in Spring Hill, Tenn., were ordered to go on strike Saturday evening, according to people with knowledge of the union’s plans. The strike came just as the UAW confirmed that it reached a tentative agreement with Chrysler parent Stellantis on a new labor contract.

Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

[ad_2]

Source link

October 28, 2023
Ford’s stock drops 4% after carmaker pulls guidance, EV unit loses $1.3 billion

[ad_1]

Ford Motor Co.’s stock dropped 4% after hours Thursday after the carmaker reported lower-than-expected quarterly earnings and withdrew its guidance for the year, citing the pending agreement with the United Auto Workers.

Ford
F,
-1.65%
also reported an adjusted loss of $1.3 billion for its EV unit, which was wider than Wall Street expected, saying that customers interested in EVs are “unwilling” to pay the vehicles’ premium prices. The company paused billions of long-term investment in EVs due to that disconnect.

“Our business is never short of challenges, especially right now with the evolution of the EV market,” Chief Executive Jim Farley told analysts in a call following results.

Ford earned $1.2 billion, or 30 cents a share, in the third quarter, swinging from a loss of $827 million, or 21 cents a share, in the year-ago period.

Adjusted for one-time items, Ford earned 39 cents a share. Adjustments included a $2.7 billion impairment charge related to the investment in the shuttered, Ford-backed Argo AI driverless-car company.

Revenue rose 11% to $43.8 billion, the carmaker said.

Analysts polled by FactSet expected Ford to report adjusted earnings of 46 cents a share on sales of $43.94 billion.

Ford said that its EV business segment recorded an EBIT loss of $1.3 billion, thanks to “continued investment in next-generation EVs and challenging market dynamics.”

Many customers in North America interested in EVs are “unwilling to pay premiums for them,” which “sharply” flattens EV prices and profit, Ford said.

The carmaker said it was “poised to deliver profitability” within its previous EBIT guidance range of $11 billion to $12 billion before it decided to withdraw the year’s outlook pending the agreement with its workers.

The results come as striking employees at Ford are returning to work after the carmaker and the United Auto Workers reached a tentative agreement, which was announced late Wednesday.

The agreement is going through ratification steps, and negotiations between the union and General Motors Co.
GM,
-1.59%
and Stellantis NV
STLA,
-2.17%
are said to be “active.”

On the call with analysts, Farley said that once the deal is ratified, Ford will provide Wall Street “a deeper look at the contract and its impact on our business.”

Ford, GM and Stellantis each have had several factories and distribution centers offline due to the strike. GM and Stellantis are expected to follow with agreements of their own.

Ford was the first company to face walkouts at a key factory, as workers at Ford’s Kentucky pickup-truck plant walked out on Oct. 11.

GM earlier this week detailed some of the impacts of the strike, particularly through the end of the current quarter, and also withdrew its guidance.

See also: UAW strike moves to GM’s key SUV plant

Ford shares have underperformed the broader equity market, and are losing about 1.6% so far this year, which contrasts with gains of around 8% for the S&P 500 index
SPX.

The underperformance holds for the past three months, with Ford shares down 16% compared with the index’s 8% drop in the period.

The union said that the current four-year deal grants a 25% increase in base wages through April 2028. It will cumulatively raise the top wage at Ford by more than 30% to more than $40 an hour, and starting wages by 68% to over $28 an hour.

[ad_2]

Source link

October 26, 2023
Amazon Stock Jumps on Earnings Beat. Cloud Results Were Good Enough.

[ad_1]

Amazon shares rose in late trading Thursday after the company posted better-than-expected financial results for the September quarter.

[ad_2]
Source link

October 26, 2023
Intel cheers foundry wins, AI traction, and its stock is roaring after earnings

[ad_1]

Intel Corp. shares were popping nearly 8% in Thursday’s extended session after the chip maker delivered a rosy forecast, while talking up new customers for its foundry business and traction related to artificial intelligence.

For the fourth quarter, Intel
INTC,
-0.94%
anticipates $14.6 billion to $15.6 billion in revenue, whereas analysts were looking for $14.4 billion. The company is also modeling 44 cents in adjusted earnings per share, while the FactSet consensus was for 33 cents.

“While the industry has seen some wallet share shifts between CPU and accelerators over the last several quarters, as well as some inventory burn in the server market, we see signs of normalization as we enter Q4,” Chief Executive Pat Gelsinger said on the earnings call.

Gelsinger expressed confidence about Intel’s positioning — and the future of central processing units — as AI becomes more dominant in the technology world.

“Training of these large models is interesting, but the deployment of those models, the inferencing use of those models is what we believe is truly spectacular for the future,” he said. “And…some of that will run on the accelerators, but a huge amount of that is going to run, right, on Xeons.”

He also shared that Intel now has three customers for its 18A foundry process technology that have made commitments. The company previously disclosed one customer made prepayments, but Gelsinger added Thursday that Intel has two other customers.

“The other thing that we saw this quarter, which was a little bit unexpected, was this huge surge in interest for AI customers and Intel’s advanced packaging technology,” he said.

Intel is in the midst of a big push to build a foundry business through which it would manufacture chips for other companies, though not all on Wall Street are sold yet on the move.

The company also delivered an upbeat third-quarter report, easily clearing Wall Street’s bar on profit and topping expectations on revenue as well.

The company reported net income of $297 million, or 7 cents a share, compared with $1.0 billion, or 25 cents a share, in the year-earlier period. On an adjusted basis, Intel earned 41 cents a share, down from 59 cents a share a year prior, while analysts were looking for 22 cents a share.

Revenue dropped to $14.2 billion from $15.3 billion, while the FactSet consensus called for $13.6 billion.

The company saw revenue from its personal-computer segment, known as client-computing, drop 3% to $7.9 billion, whereas analysts were looking for $7.3 billion. Data-center and AI revenue fell 10% to $3.8 billion, narrowly missing the FactSet consensus, which was $3.9 billion.

Intel recorded a 45.8% adjusted gross margin, compared with 39.8% in the second quarter. The company’s forecast had been for about 43%.

Intel shares have climbed 24% so far this year, as the Dow Jones Industrial Average
DJIA
has lost about 1%.

[ad_2]

Source link

October 26, 2023
Hasbro’s stock is having its worst month since the 1980s as toys sales tumble

[ad_1]

Shares of Hasbro Inc. got rocked Thursday, making investors suffer through the worst month in four decades, as a weakening toy market led the company to report disappointing third-quarter results.

Heading into 2023, the toy market was expected to be down in the low-single-digit percentage range for the year, but the market’s performance has been “more challenging that planned,” Chief Executive Chris Cocks said on the post-earnings conference call with analysts.

“We saw the category soften during [the third quarter] to negative 10%,” Cocks said, according to an AlphaSense transcript.

The stock
HAS,
-11.42%
fell 11.5% toward a seven-month low in afternoon trading and was headed for the biggest one-day selloff since it sank 18.7% on March 16, 2020.

It has fallen in 14 of the 19 trading days in October, to plunge 26.7% in the month to date. That puts it on track for the worst monthly performance since the record 43.1% selloff in October 1987, the month when “Black Monday” occurred.

Overall, third-quarter revenue fell 10.3% to $1.5 billion, to miss the FactSet consensus of $1.62 billion. The company’s consumer-products business, which includes toys, dropped 17.6% to $956.9 million, missing expectations of $1.1 billion.

Sales for Habro’s entertainment segment fell 41.9% to $122.9 million, below Wall Street projections of $127.8 million, but the company was able to blame that weakness on the effects of the writers and actors strikes on film and TV revenue.

It wasn’t all bad for Hasbro, however. Wizards of the Coast and digital-gaming revenue soared 39.6% to $423.6 million, well above expectations of $390.3 million, amid a more than doubling in digital- and licensed-gaming revenue behind “Baldur’s Gate III” from Larian Studios.

For 2023, the company now expects revenue to be down 13% to 15% from 2022, which is much worse than previous guidance for a decline of 3% to 6%. The current FactSet revenue consensus of $5.5 billion implies a 6.1% decline.

Hasbro also reported a net loss of $171.1 million, or $1.23 a share, after recording net income of $129.2 million, or 93 cents a share, in the same period a year ago. Excluding nonrecurring items, such as losses on assets held for sale, adjusted earnings per share rose to $1.64 from $1.42 but missed the FactSet consensus of $1.72.

CFRA analyst Zachary Warring cut his price target on Hasbro’s stock to $68 from $85 but reiterated his strong buy rating, as the new target implied 40% upside from current levels.

“Even though we were caught offside on this quarter’s results, we believe this is a multi-year opportunity to buy shares and expect digital gaming to continue momentum while consumer products has little downside,” Warring wrote in a note to clients.

Meanwhile, shares of Hasbro rival Mattel Inc.
MAT,
-7.63%
also dropped, down 7.1% toward a four-month low, even though the company’s third-quarter profit and sales beat expectations. That’s because strong sales of Barbie, Disney Princess and Disney Frozen dolls offset weakness in toys.

Mattel said it expects toy-industry sales to decline in the mid-single-digit percentage range for the year.

Mattel’s stock was down 15.2% in October, while the S&P 500
SPX
slipped 3.2%.

[ad_2]

Source link

October 26, 2023
U.S. pending home sales stay near record low despite modest pickup in September

[ad_1]

The numbers: U.S. pending home sales rebounded in September but remain near a record low as high mortgage rates and low inventory continue to hurt the real-estate sector.

Pending home sales rose 1.1% in September from the previous month, according to the monthly index released Thursday by the National Association of Realtors.

But pending home sales were still depressed on an annual basis due to the dearth of home listings. The September figure was the second-lowest reading since the NAR began tracking the data in 2001.

Transactions were down 11% from last year.

Nonetheless, the sales pace exceeded expectations on Wall Street. Economists were expecting pending home sales to fall 1.5% in September.

Pending home sales reflect transactions where the contract has been signed for the sale of an existing home, but the sale has not yet closed. Economists view it as an indicator of the direction of existing-home sales in subsequent months.

The NAR also released an updated forecast for existing-home sales on Thursday. The group expects sales to fall 17.5% in 2023 to a pace of 4.15 million, which will be the slowest pace since 2008. Yet due to low inventory, the median home price will increase by 0.1% in 2023, the NAR said, to $386,700.

The group expects home sales to rebound in 2024, rising 13.5% to a rate of 4.71 million. Home prices are expected to rise 0.7% next year, to $389,500.

The NAR also expects the 30-year mortgage rate to fall to 6.9% in 2023 and 6.3% in 2024. The 30-year was averaging 7.98% as of Wednesday, according to Mortgage News Daily.

Big picture: The U.S. housing market is dealing with problems on both the demand and supply sides, but the NAR seems confident that the sector will recover in the new year.

At present, not only are rates high enough to discourage home buyers, the lack of inventory is also making homes more expensive, which further spooks buyers. The NAR expects the pace of existing-home sales to fall to the slowest in 15 years, when the U.S. was in the midst of a recession caused by the subprime-lending crisis.

What the realtors said: “Because of home builders’ ability to create more inventory, new-home sales could be higher this year despite increasing mortgage rates,” NAR Chief Economist Lawrence Yun said. “This underscores the importance of increased inventory in helping to get the overall housing market moving.”

Market reaction: Stocks
DJIA

SPX
were mixed in early trading on Thursday. The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
rose above 4.9%.

[ad_2]

Source link

October 26, 2023

Danone 3Q Sales EUR6.91B

[ad_1]

By Giulia Petroni

Danone raised its full-year sales growth guidance after recording a sequential improvement in volume/mix in sales in the third quarter.

The French producer of yoghurts, bottled water and infant-nutrition products said Thursday that it now expects like-for-like sales growth between 6% and 7% in 2023 from previous expectations of between 4% and 6%.

It also said it expects to return to a positive volume/mix territory before the end of the year, and confirmed it sees a moderate improvement in the recurring operating margin.

In the third quarter, Danone posted sales of 6.91 billion euros ($7.30 billion), down from EUR7.33 billion in the year earlier, partly due to the depreciation of the majority of currencies against the euro. On a like-for-like basis, sales grew 6.2%, with volume/mix at minus 0.3% from minus 2.3% in the second quarter.

Analysts had forecast sales of EUR6.90 billion and like-for-like growth of 4.7%, according to a company-compiled consensus.

“This quarter is the seventh consecutive quarter of delivery,” said Chief Executive Antoine de Saint-Affrique. “We continue to view our future with confidence, despite a challenging environment.”

Write to Giulia Petroni at giulia.petroni@wsj.com

[ad_2]

Source link

October 25, 2023

Heineken 3Q Revenue Growth 2%

[ad_1]

By Michael Susin

Heineken backed its full-year guidance after reporting a third-quarter revenue increase that was slightly below market expectations.

The Dutch brewer said adjusted net revenue before exceptional items and amortization–one of its preferred metrics–rose to 8.015 billion euros ($8.49 billion) in the quarter from EUR7.79 billion last year.

A company-compiled consensus forecast had seen net revenue before exceptional items and amortization at EUR8.11 billion.

The company backed its expectations for the full year of stable to mid-single digit organic growth in operating profit before exceptional items and amortization.

Write to Michael Susin at michael.susin@wsj.com

[ad_2]

Source link

October 24, 2023

Meta’s Earnings Story Will Be a Good Ol’ Rebound in Ads

[ad_1]

Oct 25, 2023, 1:00 am EDT

In recent quarters, Meta Platforms CEO Mark Zuckerberg has been talking more about artificial intelligence and cost cutting, while focusing less and less on the company’s multibillion-dollar investment in the metaverse. Expect more of the same when the parent of Facebook, Instagram, WhatsApp, and Threads reports results after the close Wednesday.

Continue reading this article with a Barron’s subscription.

View Options

[ad_2]

Source link

October 24, 2023
Microsoft and Alphabet results show Wall Street only cares about AI

[ad_1]

Microsoft Corp. and Alphabet Inc. both reported mostly strong results Tuesday, but the disparate reactions from investors showed that Wall Street only cares about artificial intelligence right now.

While Microsoft shares
MSFT,
+0.37%
rose 4% in after-hours trading following the company’s latest report, Alphabet shares
GOOG,
+1.61%

GOOGL,
+1.69%
dropped 6% as Wall Street got the sense that AI is manifesting differently in the companies’ cloud businesses.

Microsoft surprised investors with 28% constant-currency growth in its Azure cloud-computing business, above the company’s own forecast and the projection for 25.6% growth that analysts were modeling on average. While Microsoft continues to see “optimization” challenges as customers remain conscious about their spending, the company is also benefiting from AI tailwinds in the cloud.

Companies looking to beef up their AI offerings are often looking to add AI services for their customers through additional cloud services, so they don’t have to do as much internal development themselves. In addition, AI offerings ranging from chatbots to tools that can streamline the writing of reports require ever more computing power, and both Azure and Google Cloud are starting to offer new software applications to address those needs.

Microsoft Chief Executive Satya Nadella called AI a “unique and different” factor that was helping Azure trends. “Given our leadership position, we are seeing complete new project starts, which are AI projects,” he said in response to an analyst question about the sustainability of cloud growth rates.

In addition, Microsoft, which has invested heavily in ChatGPT-creator OpenAI, offers an Azure OpenAI service that more than 18,000 organizations are now using. Some of these customers are new to Azure.

Microsoft Chief Financial Officer Amy Hood forecast that Azure revenue growth should be around 26% in constant currency in the fiscal second quarter, driven by new workload trends and with the growing contributions from AI.

Investors seem less confident that Alphabet is seeing the same tailwinds in its Google Cloud business, especially as that segment showed its slowest quarterly growth since Google began breaking out results that way back in 2019. Cloud revenue of $8.4 billion, with growth of 22%, was $250 million shy of consensus estimates on Wall Street, according to Colin Sebastian, an analyst with Baird. That overshadowed an upbeat performance in the company’s advertising business.

When one analyst asked Alphabet executives about the deceleration in the revenue growth of its cloud business, Chief Executive Sundar Pichai was vague but said that customers are being selective of where they are spending their IT budgets.

“On cloud, what I would say is overall, we have definitely started seeing customers looking to optimize spend,” Pichai said. “We leaned into it to help customers, given some other challenges they were facing, and so that was a factor.”

Alphabet is seeing “a lot of interest in AI,” but it remains to be seen whether that’s contributing materially to its financial performance just yet.

“Google Cloud missed consensus revenue expectations (although in line with Baird) on slowing growth, and we believe consistent with the view that newer Gen-AI workloads will take time to move the needle,” Sebastian wrote in a note to clients.

Insider Intelligence senior analyst Max Willens added that Google Cloud is facing tough competition, and while the business seems to have traction with AI startups that “may bear fruit in the long run, it is not currently helping Google Cloud enough to satisfy investors.”

Wall Street clearly is looking to AI to fuel better growth rates and help offset sluggish macroeconomic trends. The poster child for that dynamic is Nvidia Corp.
NVDA,
+1.60%,
which is expected to single-handedly drive earnings growth for the information technology sector thanks to booming demand for its AI hardware.

Read: Big-tech results will decide ‘where we go from here’ amid investor caution. They would fall if it weren’t for this one company

Given economic pressures, it’s becoming obvious that companies without much of an AI story to contribute this quarter will continue to fall out of favor with investors.

[ad_2]

Source link

October 24, 2023
Microsoft Tops Estimates, Powered by Cloud Business

[ad_1]

Microsoft shares were trading higher after the company posted better-than-expected financial results for its September quarter, aided by better performance than expected from the company’s cloud computing business.

[ad_2]
Source link

October 24, 2023

Novartis Raises 2023 View

[ad_1]

By Adria Calatayud

Novartis raised its full-year earnings guidance for the third time this year after it reported higher net profit and sales for the third quarter, boosted by strong sales of key drugs.

The Swiss pharmaceutical giant said Tuesday that it now expects core operating profit to grow this year by a percentage in the mid to high teens range. It had previously anticipated a growth rate from low double percentage digits to mid teens excluding Sandoz, the generics unit that was spun off earlier this month.

Novartis reiterated its expectation for net sales growth of a high single digit in 2023.

For the third quarter, the company made a net profit of $1.76 billion compared with $1.57 billion for the same period last year.

Net sales for the quarter grew to $11.78 billion from $10.49 billion.

“Our growth drivers, including Kesimpta, Entresto, Kisqali and Pluvicto, continue to perform well in the market,” Chief Executive Vas Narasimhan said.

Excluding exceptional items, core operating income from continuing operations was up 21% at $4.41 billion.

Write to Adria Calatayud at adria.calatayud@dowjones.com

[ad_2]

Source link

October 23, 2023

HP Enterprise stock drops following disappointing 2024 earnings forecast

[ad_1]

Hewlett Packard Enterprise Co. shares fell in the extended session Thursday after the company’s forecast for fiscal 2024 fell short of expectations.

HPE
HPE,
-2.28%
shares dropped as much as 4% after hours, following a 2.3% decline to close Thursday’s regular session at $16.30.

For fiscal 2024, HPE said it expects adjusted earnings of $1.82 to $2.02 a share, while analysts surveyed by FactSet had forecast, on average, $2.15 a share.

The company also forecast revenue growth of 2% to 4% in 2024, while analysts expect $29.63 billion, or 1.6% above their current consensus estimate for 2023 of $29.15 billion.

For the current fiscal year, HPE forecasts revenue to growth 4% to 6%, and adjusted earnings of $2.11 to $2.15 a share. Analysts expect $2.14 a share.

In August, HPE’s third-quarter earnings results came in slightly above expectations.

As of Thursday’s close, HPE shares were up 2.1% for the year, while the S&P 500 index
SPX
is up 11.4% over the same period.

[ad_2]

Source link

October 19, 2023
U.S. home sales fell in September to the lowest level since the Great Recession

[ad_1]

The numbers: Home sales in September fell to the lowest level since 2010, as high mortgage rates continue to hammer the housing market.

Aside from low inventory, rising rates are eroding buyers’ purchasing power, and drying up demand. Sales of previously owned homes fell by 2% to an annual rate of 3.96 million in September, the National Association of Realtors said Thursday.

That’s the number of homes that would be sold over an entire year if sales took place at the same rate every month as they did in September. The numbers are seasonally adjusted.

The drop in sales was slightly better than what Wall Street was expecting. They forecasted existing-home sales to total 3.9 million in September.

Compared to September 2022, home sales are down by 15.4%.

Key details: The median price for an existing home in September rose for the third month in a row to $394,300. Prices are up 2.8% from a year ago. That was the highest price for the month of September since NAR began tracking the data.

Home prices peaked in June 2022, when the median price of a resale home hit $413,800.

Around 26% of properties are being sold above list price, the NAR noted.

The total number of homes for sale in September fell by 8.1% from last year, to 1.13 million units. Housing inventory for the month of September was the lowest since 1999, when the NAR began tracking the data.

Homes listed for sale remained on the market for 21 days on average, up from the previous month. Last September, homes were only on the market for 19 days.

Sales of existing homes rose only in the Northeast in September, as compared with the previous month, by 4.2%. The median price of a home in the region was $439,900.

All-cash buyers made up 29% of sales, highest since January 2023. The share of individual investors or second-home buyers was 18%. About 27% of homes were sold to first-time home buyers.

Big picture: The U.S. housing market is in the midst of a serious slowdown that is primarily driven by high mortgage rates. High rates spook home buyers, drying up demand, and high rates also deter homeowners from selling since they may have to purchase another home. For a homeowner with a 3% mortgage rate for the next few decades, there’s little incentive to move.

And the residential sector is likely to see sales fall further in October’s data, as the 30-year mortgage inches even higher. Demand for mortgages has collapsed, and some outlets like Mortgage News Daily are quoting a rate of 8% for the 30-year.

Existing-home sales in 2023 could fall to the slowest pace since the housing bubble burst in 2008, real-estate brokerage Redfin said on Thursday, at a 4.1 million pace.

What the realtors said: “Mortgage rates and limited inventory has been the story throughout this year — no different this month, other than the fact that interest rates are moving higher,” said Lawrence Yun, chief economist at the National Association of Realtors.

“The Federal Reserve simply cannot keep raising interest rates in light of softening inflation and weakening job gains,” he added. “We don’t want the Fed to overdo it and cause great harm to real estate.”

Yun also questioned whether there will be a “fundamental change” or a temporary one to the “American way of life” due to the slowdown in sales.

Market reaction: Stocks were down in early trading on Thursday. The yield on the 10-year note
BX:TMUBMUSD10Y
rose above 4.9%.

[ad_2]

Source link

October 19, 2023

Nestle 9-Mos Sales CHF68.83B

[ad_1]

By Giulia Petroni

Nestle reported a 7.8% organic sales growth in the first nine months of the year driven by price increases amid high inflation levels, and backed its full-year outlook.

The Swiss food and beverage giant said sales stood at 68.83 billion Swiss francs ($76.57 billion) in the period from CHF69.13 billion a year earlier, driven by pricing at 8.4%. Real internal growth was minus 0.6%, but the company said the recovery of volume and mix is underway.

A company-compiled consensus estimate had forecast organic sales growth of 8.1%.

Write to Giulia Petroni at giulia.petroni@wsj.com

[ad_2]

Source link

October 18, 2023

Nokia to cut as many as 14,000 jobs as profit drops by 69%

[ad_1]

Nokia on Thursday set out plans to cut its workforce by up to 14,000 as it reported a steep drop in third-quarter profit.

The telecom equipment maker said it’s looking to reduce its workforce to between 72,000 and 77,000 workers, from 86,000 now, by the end of 2026. Nokia
NOKIA,
-4.14%

NOK,
-2.87%
said that could save the company as much as €1.2 billion ($1.3 billion), or up to 15% of personnel expenses.

“We continue to believe in the mid to long term attractiveness of our markets. Cloud Computing and AI revolutions will not materialize without significant investments in networks that have vastly improved capabilities. However, given the uncertain timing of the market recovery, we are now taking decisive action on three levels: strategic, operational and cost. I believe these actions will make us stronger and deliver significant value for our shareholders,” said Pekka Lundmark, president and chief executive, in a statement.

The company didn’t provide a regional breakdown of the job cuts but said it will “act quickly” as it targeted mobile networks, cloud and network services, as well as its corporate function, for cuts.

Nokia’s profit dropped by 69% to €133 million, or 2 cents a share, as revenue fell 20% to €4.98 billion. Analysts polled by Visible Alpha forecast earnings of €395 million on revenue of €5.66 billion.

Nokia shares dropped 4%, and have fallen by 28% this year.

In echoes of what rival Ericsson
ERIC.B,
-1.21%
said on Tuesday, Nokia said a slowdown in India’s 5G deployment could not offset the situation in North America.

Nokia said it’s tracking toward the lower end of its net sales range for 2023 and toward the mid-point of its comparable operating margin range.

[ad_2]

Source link

October 18, 2023
Disney reveals ESPN’s financials, proving its sports business isn’t ‘imploding’

[ad_1]

Walt Disney Co. offered investors their first glimpse at ESPN’s financials Wednesday with disclosures that struck one analyst as a “relief.”

ESPN generated $12.6 billion in revenue during the nine months that ran through July 1, up from $12.3 billion in the comparable period a year before. The business brought in $1.9 billion in operating income during the same span, down from about $2.1 billion in the year-earlier span.

The ESPN breakout includes financials from Disney’s
DIS,
-1.76%
eight domestic ESPN-branded television channels, along with ESPN on ABC, the ESPN+ streaming service and ESPN-branded international channels.

The business sits within the sports segment of Disney’s newly recast financials. On the whole, the sports unit, which also includes Star-branded sports networks in India, brought in $13.2 billion in revenue for the nine months through July 1, compared with $13.4 billion in the same period a year prior. Operating income for the sports segment came in at $1.5 billion over the nine-month period, versus $1.8 billion a year earlier.

“There’s perhaps more durability in ESPN’s top-line growth than expected,” Wells Fargo analyst Steven Cahall wrote. “The real test comes when ESPN launches DTC,” meaning the long-awaited streaming service for the flagship network.

Don’t miss: ESPN’s ‘melting iceberg’ is yet another challenge for Disney, analyst says

Cahall further noted that excluding Star, the sports business “is not declining at an overly precipitous rate.” Disney still has to navigate the eventual move of sports programming from linear television to streaming against the backdrop of soaring rights fees, but the latest financial disclosures “may provide some semblance of relief that the main Sports biz isn’t imploding as we speak,” he noted.

Disney Chief Executive Bob Iger said earlier this year that traditional TV was near “obsolescence” as he teased a potential sale of linear assets. He also mentioned looking for a strategic partner for ESPN.

Read: Should the NFL buy ABC from Disney? One analyst makes the case.

[ad_2]

Source link

October 18, 2023
Tesla’s Misses on Earnings. CEO Musk Frets About Growth and the Economy.

[ad_1]

Electric-vehicle giant reported third-quarter results on Wednesday evening that missed Wall Street estimates, underscoring that the pain of price cuts isn’t over. Tesla’s travails show that it will be tough going for traditional auto makers trying to build competing EV businesses.

[ad_2]
Source link

October 18, 2023

Tag: Financial Performance

This week in earnings

The call to put on your calendar

The number to watch