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Rick Diamond/Getty Images
Modelo Especial has quietly overtaken
Anheuser-Busch InBev
Bud Light as the nation’s top-selling beer, punctuating the impact of a boycott that followed the brand’s controversial promotion by a transgender activist.
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Shares of Oracle Corp. rose after hours Monday after the IT and cloud infrastructure provider reported fiscal fourth-quarter results that topped expectations, helped by a jump in cloud revenue that executives said positioned the company well for the year to come.
The company reported fourth-quarter net income of $3.32 billion, or $1.19 a share, compared with $3.19 billion, or $1.16 a share, in the same quarter last year. Revenue rose 17% to $13.84 billion, compared with $11.84 billion in the prior-year quarter.
Excluding stock-based compensation, amortization and other charges, Oracle earned $1.67 a share, compared with $1.54 a year ago.
Analysts polled by FactSet expected Oracle to report adjusted earnings per share of $1.58, on revenue of $13.74 billion.
Oracle also declared a quarterly cash dividend of 40 cents a share. Revenue from Oracle’s cloud software and infrastructure services rose 54% during the quarter.
“So, both of our two strategic cloud businesses are getting bigger — and growing faster,” Chief Executive Safra Catz said in a statement. “That bodes well for another strong year in FY24.”
Oracle shares
ORCL,
were up 4.8% after hours on Monday. The stock closed regular trading up 5.8% to $116.43, putting it at a record high.
Prior to the results, analysts were focused on Oracle’s cloud business — which has faced concerns about tighter tech budgets in IT departments as inflation raises concerns about the economy — as well as its AI potential, which has catapulted shares of other tech companies higher. More executives inside and outside of tech, hoping for a similar pop from investors, have been talking about AI on earnings calls more this year.
Earlier on Monday, Wolfe Research upgraded Oracle, saying its cloud business could double its market share by 2025 “on the backs of architectural advantages, partnerships” and generative AI.
UBS analysts also said they expected Oracle to highlight its cloud-AI partnership with chip maker Nvidia Corp.
NVDA,
which analysts say is set to benefit from more AI development. Those expectations were confirmed on Monday, when Oracle management name-checked Nvidia in its earnings release.
“Nvidia themselves are using our clusters, including one with more than 4,000 GPUs, for their AI infrastructure,” Larry Ellison, Oracle’s co-founder and chief technology officer, said in the release.
Shares of Oracle have marched 81.7% higher over the past 12 months. The S&P 500 Index
SPX,
has risen 15.7% over that period.
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Shares of Tesla Inc. rose Thursday to a 10th straight gain, as data out of China showed that the electric vehicle giant sold more cars in May than the previous month.
The stock
TSLA,
surged 4.6% to $234.86, for its highest close since Oct. 6, when it closed at $238.13, and its largest one-day percentage increase since May 30, when it rose 4.14%. Shares continued rising around 3% in after-hours trading Thursday.
It has charged up 27.3% over the past 10 days, its longest win streak since the 11-day streak that ended Jan. 8, 2021.
The China Passenger Car Association reported overnight that May retail sales of new-energy vehicles, which includes electric and plug-in hybrids, jumped 60.9% from a year ago to 580,000 vehicles, or 33.3% of the total passenger cars sold of 1.74 million, according to a Dow Jones Newswires report.
Tesla delivered 77,695 cars that were made at its Shanghai facility in May, the DJ report said, which is up from 75,842 cars delivered in April but down from the more than 88,800 EVs delivered in March.
Meanwhile, shares of other China-based EV makers were mixed, as Nio Inc.’s stock
NIO,
dropped 1.5%, but Xpeng Inc. shares
XPEV,
climbed 0.9% and Li Auto Inc.’s stock
LI,
tacked on 0.7%.
See also: Tesla Model 3s now qualify for $7,500 in federal tax credits
Tesla generated $4.89 billion in sales from China during the first quarter, or 21.0% of total sales. In 2022, the company’s China sales totaled $18.15 billion, or 22.2% of total sales for the year.
Separately, the Associated Press reported that late Wednesday that Tesla may face a class-action lawsuit after 240 Black factory workers described racism and discrimination at the company’s plant in the San Francisco Bay Area.
Tesla’s stock has soared 91% year to date, while the Global X Autonomous and Electric Vehicles exchange-traded fund
DRIV,
has run up 25.4% and the S&P 500 index
SPX,
has advanced 11.6%.
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GameStop Shares Fall as It Terminates CEO and Ryan Cohen Becomes Executive Chairman
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New York
CNN
—
Roughly two months after Bud Light endured a self-induced injury that torpedoed sales, the brand continues to lose ground to its competition. But there are signs the worst might be over.
Sales for the week leading into Memorial Day weekend fell 23.9% from the same period a year ago. That constitutes a slight improvement compared to the week prior when sales were 25.7% lower than a year earlier. That could indicate that the “bottom has been hit and we are seeing a turn-around in performance,” according to Bump Williams, an alcohol industry expert.
For the past several weeks, Bud Light sales declines have hovered around 25% weekly because of customer revolt following an Instagram partnership with transgender influencer Dylan Mulvaney. A single can bearing her face was given to her for a post, but some right-wing media attacked the brand, and some social media posts spewed transphobic comments.
Anheuser-Busch’s tepid statement about the controversy also angered some LGBTQ+ groups.
In response, Anheuser-Busch
(BUD) said it was bolstering marketing on Bud Light and would offer rebates to customers. Last weekend, the company offered $15 back on 15-packs of beer, leading to cases priced as low as $1.50 in some states, which Williams said contributed to part of its minor turnaround.
Still, Bud Light remains the top-selling beer in America, according to NIQ data provided to CNN by Williams. NIQ measures sales at convenience, liquor and grocery stores across the United States. Bud Light has made up 35.1% of domestic beer sales this year (through May 27), according to NIQ. That easily beats No. 2 Coors Light, which controls 21.6% of the market.
Although Bud Light’s share of the domestic beer market has slipped considerably over the past couple months, it remains in the lead. In the week ended May 27, Bud Light controlled 28.8% of the market, compared to Coors Light, which made up 25.6% of overall sales, NIQ reported.
The biggest beneficiaries of Bud Light’s slipping sales continue to be MolsonCoors’ Miller Light and Coors Light, with sales up a whopping 26% and 23% respectively, according to NIQ. Beer Business Daily reported Monday that some distributors are reporting shortages, but a company spokesperson told CNN that its supply is strong for the summer.
Another bright spot is Modelo, distributed by Constellation Brands
(STZ). Sales of its Modelo Especial and its recently launched low-carb beer Modelo Oro are strong, with sales up 9.5% and its share of the total beer category surpassing Bud Light last week, Williams said. He added that it’s “not a surprise” because of a halo effect from Cinco de Mayo and heavy advertising supporting its Oro launch.
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Macy’s Inc.’s stock slid 9% in premarket trading Thursday, after the department-store chain posted weaker-than-expected fiscal first-quarter sales and cut its full-year guidance to reflect a challenged consumer.
The New York-based company M posted net income of $155 million, or 56 cents a share, for the quarter to April 29, down from $286 million, or 98 cents a share, in the year-earlier period. Adjusted per-share earnings were also 56 cents, ahead of the 45-cent FactSet consensus.
…
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By Yifan Wang
Lenovo Group’s net profit fell 72% in its fourth quarter, as personal-computer sales continued to decline amid a deteriorating global economy and soft consumer spending.
Net profit for the three months ended March was $114 million, the world’s largest PC maker said Wednesday. That compared with profit of $412 million a year earlier.
Revenue fell 24% to $12.635 billion, as its main business of PC, smartphone and other device sales fell 21%. The company cited a demand slowdown and exchange-rate fluctuations as reasons for the decline.
Write to Yifan Wang at yifan.wang@wsj.com
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Shares of Lowe’s Companies Inc. dropped Tuesday, after the home-improvement retailer beat fiscal first-quarter profit and sales expectations but cut its full-year outlook, citing lower demand for discretionary items.
Net income for the quarter to May 5 was $2.26 billion, or $3.77 a share, after income of $2.33 billion, or $3.51 a share, in the same period a year ago. Net income fell while earnings per share increased as the number of shares outstanding used to calculate EPS dropped 9.8% to 597 million.
Excluding nonrecurring items, such as an asset-sale gain, adjusted EPS of $3.67 beat the FactSet consensus of $3.44.
Total sales declined 5.5% to $22.35 billion, above the FactSet consensus of $21.60 billion, while the same-store sales decline of 4.3% missed expectations for a 3.4% decline.
Cost of sales fell less than sales, down 5.1% to $14.82 billion, as gross margin contracted to 33.7% from 34.0%. The value of merchandise inventory as of May 5 fell 3.5% from a year ago to $19.52 billion.
The stock
LOW,
shed 1.0% ahead of the open, but pared earlier premarket losses of as much as 3.4%.
During the quarter, Lowe’s said it spent $2.1 billion to repurchase 10.6 million shares and paid out $633 million in dividends.
“We are pleased with the performance of our business despite record lumber deflation and unfavorable spring weather,” said Chief Executive Officer Marvin Ellison. “Although we delivered positive comparable sales in Pro and online for the first quarter, we are updating our full-year outlook to reflect softer-than-expected consumer demand for discretionary purchases.”
For fiscal 2023, the company lowered its guidance ranges for adjusted EPS to $13.20 to $13.60 from $13.60 to $14.00 and sales to $87 billion to $89 billion from $88 billion to $90 billion. The outlook for same-store sales was revised to down 2% to down 4% from flat to down 2%.
Meanwhile, Wall Street’s full-year estimates were within the lowered guidance ranges, as the FactSet consensus for EPS was $13.56. The estimate for sales was $88.36 billion and for same-store sales was a decline of 2.2%.
Lowe’s results came less than a week after rival Home Depot Inc.
HD,
reported a first-quarter profit beat — but sales missed expectations. Home Depot also lowered its full-year outlook.
The stock has gained 2.0% year to date through Monday, while Home Depot shares have dropped 8.0% and the S&P 500 index
SPX,
has advanced 9.2%.
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By Anthony O. Goriainoff
Ryanair Holdings said Monday that it swung to a net profit for fiscal 2023 with revenue beating consensus due to a 74% rise in traffic and higher ancillary revenue, and that it was optimistic it would deliver a modest on-year profit increase in fiscal 2024.
The low cost carrier said its guidance was nonetheless dependent on the avoidance of adverse events such as the war in Ukraine or further Boeing delivery delays.
Ryanair said that although it expects traffic to grow to around 185 million in fiscal 2024, recent delivery delays from Boeing may push some of this into its lower-yielding second half, slightly reducing this target.
For the year ended March 31 net profit was 1.31 billion euros ($1.42 billion) compared with a net loss of EUR240.8 million for fiscal 2022 and net profit consensus of EUR1.35 billion, taken from FactSet and based on 17 analysts’ forecasts.
Revenue was EUR10.78 billion, compared with EUR4.80 billion the year before. Ancillary revenue rose to EUR3.84 billion from EUR2.15 billion the year before. Fares for the period were up 10% on prepandemic levels, the company said.
Pre-exceptional profit after tax–its preferred metric–was EUR1.43 billion, compared with a loss of EUR355 million last year. .
The company said its load factor–a measure of how full a plane is–stood at 93%, compared with 82% the year before, and that traffic reached 168.6 million passengers, a 13% increase on the levels seen in fiscal 2020.
Although the fuel bill for the year will increase by more than EUR1 billion on higher fuel prices, the company said it was optimistic that revenue for the year will grow sufficiently to cover this and deliver a modest on-year profit increase.
“While we continue to enjoy a significant cost advantage over competitor airlines, we expect to record a modest increase in unit costs, excluding fuel, as annualized crew pay restoration, higher crew ratios this summer and increased, enroute charges will not be fully offset by Boeing 737 Gamechanger deliveries in the first half,” the company said.
Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com
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Shares of Deere & Co. powered higher Friday after the maker of agricultural, construction and forestry equipment reported fiscal second-quarter results that beat expectations by wide margins and raised its net income outlook, citing “healthy demand” for farm and construction equipment.
Net income for the quarter to April 30 rose to $2.86 billion, or $9.65 a share, from $2.10 billion, or $6.81 a share, in the same period a year ago. That was well above the FactSet consensus for earnings per share of $8.58.
Sales grew 30% to $17.39 billion, to beat the FactSet consensus of $14.89 billion, as production and precision agriculture sales jumped 53%, small agriculture and turf sales increased 16% and construction and forestry sales rose 23%.
The stock
DE,
rallied 3.9% in premarket trading, enough to make it the S&P 500 index’s
SPX,
biggest gainer ahead of the open.
Among Deere’s business segments:
“As shown by the company’s outstanding second-quarter results, Deere continues to benefit from favorable market conditions and an improving operating environment,” said Chief Executive Officer John May.
The company raised its full-year guidance range for net income to $9.25 billion to $9.50 billion from $8.75 billion to $9.25 billion.
For its business segments, the company affirmed its fiscal 2023 sales growth outlook for Production & Precision Agriculture of up about 20%, lifted its outlook for Small Agriculture & Turf to up about 5% from flat to up 5% and revised higher its guidance for Construction & Forestry to up about 15% from up 10% to 15%.
The stock has dropped 13.6% year to date through Thursday, while the Industrial Select Sector SPDR exchange-traded fund
XLI,
has tacked on 1.8% and the S&P 500 has gained 9.3%.
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Things move quickly in the world of artificial intelligence. It is easy to sit back and complain about developments that could be disruptive, but sometimes investors are best served by putting emotions aside and observing new developments and how they affect markets. Could AI developments and related trends make you a lot of money?
Below is a new screen showing a group of AI-oriented companies expected to increase their sales most rapidly through 2025, based on consensus estimates among analysts polled by FactSet. Then we show expected revenue growth rates for the largest AI-oriented companies in the screen.
Over the long haul, many businesses might perform more efficiently by employing AI. Maybe this technology can create an economic revolution similar to the one that moved the majority of the working population away from agricultural labor during the 19th and 20th centuries.
Back in February, we screened 96 stocks held by five exchange-traded funds focused on AI and related industries and listed the 20 that analysts thought would rise the most over the following 12 months.
Three months is a long time for AI, and the shakeout hasn’t even started.
Read: Congress and tech seem open to regulating AI efforts, but that doesn’t mean it will happen
There is no way to predict how politicians will react to perceived or real threats of AI and machine learning. And the largest U.S. tech players are doing everything they can to employ the new technology and remain dominant. But that doesn’t mean they will grow more quickly than smaller AI-focused players.
Once again we will begin a screen with these five ETFs:
Altogether and removing duplicates, the five ETFs hold 270 stocks of companies in 23 countries. We first narrowed the list to 197 covered by at least nine analysts and for which consensus sales estimates are available through calendar 2025. We used calendar-year estimates because some companies have fiscal years that don’t match the calendar.
Here are the 20 screened AI-related companies expected by analysts to have the highest compound annual growth rates (CAGR) for sales from 2023 through 2025. Sales estimates are in millions of U.S. dollars. The list also shows which of the above five ETFs holds each stocks.
| Company | Ticker | Estimated sales – 2023 ($mil) | Estimated sales – 2024 ($mil) | Estimated sales – 2025 ($mil) | Two-year estimated sales CAGR through 2025 | Held by |
| BioXcel Therapeutics Inc. |
BTAI, |
$5 | $39 | $121 | 411.5% | WTAI |
| Luminar Technologies Inc. Class A |
LAZR, |
$86 | $266 | $588 | 161.0% | ROBT, WTAI |
| BlackBerry Ltd. |
BB, |
$685 | $769 | $1,925 | 67.6% | ROBT |
| Credo Technology Group Holding Ltd. |
CRDO, |
$183 | $259 | $363 | 40.9% | IRBO |
| SentinelOne Inc. Class A |
S, |
$619 | $881 | $1,176 | 37.9% | WTAI |
| Wolfspeed Inc. |
WOLF, |
$982 | $1,323 | $1,860 | 37.6% | WTAI |
| SK hynix Inc. |
000660, |
$18,319 | $27,899 | $34,542 | 37.3% | WTAI |
| Mobileye Global Inc. Class A |
MBLY, |
$2,109 | $2,782 | $3,920 | 36.3% | ROBT, WTAI |
| Snowflake Inc. Class A |
SNOW, |
$2,811 | $3,863 | $5,139 | 35.2% | IRBO, THNQ, WTAI |
| Lemonade Inc. |
LMND, |
$395 | $471 | $712 | 34.2% | THNQ, WTAI |
| Nio Inc. ADR Class A |
NIO, |
$11,874 | $16,733 | $21,304 | 33.9% | ROBT |
| Stem Inc. |
STEM, |
$607 | $833 | $1,055 | 31.8% | WTAI |
| Upstart Holdings Inc. |
UPST, |
$547 | $768 | $938 | 31.0% | BOTZ, WTAI |
| Cloudflare Inc. Class A |
NET, |
$1,284 | $1,669 | $2,194 | 30.7% | THNQ |
| Samsara Inc. Class A |
IOT, |
$830 | $1,062 | $1,364 | 28.2% | THNQ |
| Ambarella Inc. |
AMBA, |
$287 | $355 | $472 | 28.2% | IRBO, ROBT, THNQ, WTAI |
| iflytek Co. Ltd. Class A |
002230, |
$3,561 | $4,582 | $5,851 | 28.2% | THNQ |
| Tesla Inc. |
TSLA, |
$99,558 | $128,412 | $161,061 | 27.2% | ROBT, THNQ, WTAI |
| CrowdStrike Holdings Inc. Class A |
CRWD, |
$2,935 | $3,793 | $4,739 | 27.1% | THNQ, WTAI |
| PB Fintech Ltd. |
543390, |
$358 | $462 | $573 | 26.5% | IRBO |
| Source: FactSet | ||||||
Click the tickers for more about each company or ETF.
Click here for Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote pages.
We have screened for expected revenue growth, rather than for earnings or cash flow, because in a newer tech-oriented business area, investors are most likely to consider the top line as companies sacrifice profits to build market share.
It is important to do your own research if you consider purchasing any individual stock, to form your own opinion about a company’s ability to remain competitive over the long term. Starting from the top of the list, BioXcel Therapeutics Inc.
BTAI,
is expected to show exponential sales growth, but that is from a low expected baseline this year.
What about the largest AI-related companies held by these ETFs?
Here are the largest 20 companies in the screen by market capitalization, ranked by expected sales CAGR from 2022 through 2025. Once again the sales estimates are in millions of U.S. dollars, but the market caps are in billions.
| Company | Ticker | Estimated sales – 2023 ($mil) | Estimated sales – 2024 ($mil) | Estimated sales – 2025 $mil) | Two-year estimated sales CAGR through 2025 | Market Cap ($bil) | Held by |
| Tesla Inc. |
TSLA, |
$99,558 | $128,412 | $161,061 | 27.2% | $528 | ROBT, THNQ, WTAI |
| Nvidia Corp. |
NVDA, |
$29,839 | $36,877 | $46,154 | 24.4% | $722 | BOTZ, IRBO, ROBT, THNQ, WTAI |
| Taiwan Semiconductor Manufacturing Co. Ltd. ADR |
TSM, |
$71,434 | $86,284 | $101,112 | 19.0% | $445 | ROBT, WTAI |
| Advanced Micro Devices Inc. |
AMD, |
$22,976 | $26,823 | $30,359 | 15.0% | $163 | IRBO, ROBT, THNQ, WTAI |
| ASML Holding NV ADR |
ASML, |
$28,974 | $32,374 | $37,796 | 14.2% | $263 | THNQ, WTAI |
| Microsoft Corp. |
MSFT, |
$223,438 | $251,028 | $282,397 | 12.4% | $2,318 | IRBO, ROBT, THNQ, WTAI |
| Samsung Electronics Co. Ltd. |
005930, |
$200,595 | $227,286 | $252,129 | 12.1% | $292 | IRBO, WTAI |
| Amazon.com Inc. |
AMZN, |
$559,438 | $626,549 | $702,395 | 12.1% | $1,164 | IRBO, ROBT, THNQ, WTAI |
| Adobe Inc. |
ADBE, |
$19,470 | $21,784 | $24,276 | 11.7% | $158 | IRBO, THNQ |
| Netflix Inc. |
NFLX, |
$33,915 | $38,067 | $42,275 | 11.6% | $148 | IRBO, THNQ |
| Tencent Holdings Ltd. |
700, |
$88,727 | $99,212 | $110,556 | 11.6% | $422 | IRBO, ROBT |
| Salesforce Inc. |
CRM, |
$34,392 | $38,273 | $42,786 | 11.5% | $205 | IRBO, THNQ |
| Alphabet Inc. Class A |
GOOGL, |
$299,810 | $333,077 | $369,195 | 11.0% | $710 | IRBO, ROBT, THNQ, WTAI |
| Intel Corp. |
INTC, |
$51,060 | $57,799 | $62,675 | 10.8% | $122 | IRBO, ROBT |
| Meta Platforms Inc. Class A |
META, |
$125,901 | $139,545 | $154,259 | 10.7% | $528 | IRBO, WTAI |
| Alibaba Group Holding Ltd. ADR |
BABA, |
$134,140 | $148,206 | $162,199 | 10.0% | $235 | ROBT, THNQ |
| Texas Instruments Inc. |
TXN, |
$17,941 | $19,433 | $20,799 | 7.7% | $148 | IRBO |
| Apple Inc. |
AAPL, |
$390,845 | $416,761 | $445,956 | 6.8% | $2,706 | IRBO, WTAI |
| Siemens Aktiengesellschaft |
SIE, |
$84,681 | $89,145 | $93,925 | 5.3% | $130 | ROBT |
| Johnson & Johnson |
JNJ, |
$98,761 | $100,990 | $103,870 | 2.6% | $414 | ROBT |
| Source: FactSet | |||||||
Tech-stock picks that are small and focused: This fund invests in unsung innovators. Here are 2 top choices.
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Shares of Target Corp. seesawed to a gain early Wednesday, after the discount retailer reported fiscal first-quarter results that beat expectations and reiterated its full-year outlook, but provided a downbeat second-quarter profit view due to “softening sales trends.”
Net income for the quarter to April 29 fell to $950 million, or $2.05 a share, from $1.01 billion, or $2.16 a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per share fell to $2.05 from $2.19 but beat the FactSet consensus of $1.77.
Total revenue increased 0.6% to $25.32 billion, above the FactSet consensus of $25.26 billion, while same-store sales grew 0.7% to exceed the FactSet consensus for a 0.2% rise, as traffic rose 0.9%.
The stock rose 0.9% in premarket trading, but has swung from a loss of as much as 3.6% to a gain of as much as 2.4% after the results were reported.
“We came into the year clear-eyed about the challenges consumers are facing, and we were determined to build on the trust we’ve established with our guests,” said Chief Executive Officer Brian Cornell. “It’s required agility and the ability to flex across our multi-category portfolio as we lean into value and the product categories our guests need most right now.”
Cost of sales declined 0.4% to $18.39 billion, as gross margin improved to 27.4% from 26.7%.
The value of inventory fell 6.5% from the sequential fourth quarter, and dropped 16.4% from a year ago, to $12.62 billion as of April 29.
“[W]e now expect shrink will reduce this year’s profitability by more than $500 million compared with last year,” said CEO Cornell. “While there are many potential sources of inventory shrink, theft and organized retail crime are increasingly important drivers of the issue.
Looking ahead, Target said it was planning for a wide range of sales outcomes, given “softening sales trends” in the first quarter.
For the second quarter, the company expects same-store sales to be down in the low-single digit percentage range, compared with the FactSet consensus for a 0.1% increase. And adjusted EPS for the current quarter is expected to be $1.30 to $1.70, below expectations of $1.95.
For the full year, Target reiterated its guidance for same-store sales growth of 0.7% and for adjusted EPS of $7.75 to $8.75. That compares with the FactSet consensus for same-store sales growth of 0.6% and for adjusted EPS of $8.36.
The stock has gained 5.3% year to date through Tuesday, while the Consumer Discretionary Select Sector SPDR exchange-traded fund
XLY,
has run up 14.1% and the S&P 500 index
SPX,
has advanced 7.0%.
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Shares of Home Depot Inc. dropped Tuesday, after the home improvement retail giant reported fiscal first-quarter profit that topped expectations but sales that fell short, and it cut the full-year outlook, citing lumber deflation and bad weather.
Net income for the quarter to April 30 fell to $3.87 billion, or $3.82 a share, from $4.32 billion, or $4.09 a share, in the same period a year ago. That topped the FactSet consensus for earnings per share of $3.80.
Sales declined 4.2% to $37.26 billion, well below the FactSet consensus of $38.31 billion.
“Our sales for the quarter were below our expectations primarily driven by lumber deflation and unfavorable weather, particularly in our Western division as extreme weather in California disproportionately impacted our results,” said Chief Executive Officer Ted Decker.
Overall same-store sales fell 4.5% to miss the FactSet consensus for a 1.6% decline, with same-store sales in the U.S. falling 4.6%.
The stock sank 3.6% toward a seven-month low in premarket trading.
“Given the negative impact to first quarter sales from lumber deflation and weather, further softening of demand relative to our expectations, and continued uncertainty regarding consumer demand, we are updating our guidance to reflect a range of potential outcomes,” said Chief Financial Officer Richard McPhail.
For fiscal 2023, the company cut its EPS outlook to a decline of between 7% and 13% from a decline in the mid-single digit percentage range, and lowered its sales outlook to a decline of between 2% and 5% from approximately flat.
The stock has dropped 10.2% over the past three months through Monday, while the Dow Jones Industrial Average
DJIA,
has slipped 1.0%.
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Apple Inc. on Thursday revealed surprise growth in its iPhone business during the first three months of the year, overcoming a shortfall in Mac revenue as the company promised investors billions more in dividends and stock repurchases.
Apple shares
AAPL,
rose 2.5% in extended trading.
The company reported fiscal second-quarter revenue of $94.8 billion, down from $97.3 billion a year before, while analysts had been expecting $92.9 billion. Revenue for the iPhone category rose to $51.3 billion from $50.6 billion, with analysts surveyed by FactSet expecting a decline to $48.7 billion.
Chief Financial Officer Luca Maestri said on the earnings call that the iPhone growth was driven by “strong performance in emerging markets from South Asia and India to Latin America and the Middle East.”
The company recently opened its first two Apple stores in India, and Chief Executive Tim Cook noted opportunity in India.
“What I do see in India is a lot of people entering the middle class, and I’m hopeful that we can convince some number of them to buy an iPhone,” he said.
Apple logged net income of $24.2 billion, or $1.52 a share, compared with $25 billion, or $1.52 a share, in the year-prior quarter. Analysts were modeling $1.43 a share in earnings on average, according to FactSet.
Apple’s results arrived amid concern about the state of consumer-electronics spending, given worrisome third-party data points and cautious signals from players like Qualcomm Inc.
QCOM,
and DuPont de Nemours Inc.
DD,
See also: Qualcomm stock falls as backed up Apple iPhone inventory contributes to weak outlook
The company saw steep revenue declines in both the iPad and Mac categories. Sales of iPads fell to $6.7 billion from $7.6 billion a year ago and matched the FactSet consensus. Mac revenue sank to $7.2 billion from $10.4 billion, while analysts were looking for $7.8 billion.
The Mac segment was up against tough comparisons to a year-ago period that saw the “incredibly successful rollout of our M1 chips,” Cook noted. It’s “facing some macroeconomic and foreign exchange headwinds as well.”
Apple’s wearables, home and accessories category was essentially flat, with sales of $8.8 billion. The FactSet consensus called for $8.4 billion. The services segment showed growth, with revenue up to $20.9 billion from $19.8 billion, roughly in line with the FactSet consensus of $21.0 billion.
Maestri noted that “certain services offerings, such as digital advertising and mobile gaming, continue to be affected by the current macroeconomic environment,” though advertising, Apple Care and video set revenue records for the March quarter.
Executives shared some very big-picture views on recent financial-services initiatives, though without any financial specifics. Apple’s recently launched savings account, which has a 4.15% yield, has had an “incredible” initial response, while Apple Pay Later, a buy-now-pay-later product, has received “really good” feedback as well, they said.
Apple also announced Thursday that it was boosting its buyback program by $90 billion while upping its quarterly dividend by 4% to 24 cents a share. That compares to a $90 billion increase to the share-repurchase authorization and 5% dividend hike a year ago.
While Apple stopped giving traditional guidance at the start of the pandemic, Maestri said on the call that he expects June-quarter revenue growth to be similar to what was seen in the March quarter on a year-over-year basis, assuming a stable macroeconomic climate.
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The stock of TOP Financial Group Ltd., a Hong Kong-based broker that went public last year, soared more than 890% Friday to a fresh record high with no apparent news to drive the move.
Volume of 2.4 million shares traded in the first two hours of trading far exceeded the average daily volume of 872,000 over the last 65 days. The stock TOP was halted for volatility several times in early trade.
TOP…
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The stock of TOP Financial Group Ltd., a Hong Kong-based broker that went public last year, soared more than 890% Friday to a fresh record high with no apparent news to drive the move.
Volume of 5.5 million shares traded by early afternoon far exceeded the average daily volume of 872,000 over the last 65 days. The stock TOP was halted for volatility multiple times during the session.
The…
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