Stock Indexes Wrap: Tech Charges Higher Alongside Homebuilders; PepsiCo Slips on Earnings Disappointment
April 23, 2024 04:25 PM EDT
The Dow
Verizon (VZ) rose 2.9%, regaining most of what it lost yesterday following a disappointing earnings report.
Tech giants advanced ahead of their earnings reports later this week. Microsoft (MSFT) rose 1.5% and Amazon (AMZN) gained 1.3%.
Apple (AAPL) rose 0.6% as it scheduled a May 7 event at which it is expected to unveil new iPads.
The S&P 500
GE Aerospace (GE) soared 8.3% after reporting better-than-expected earnings and raising its full-year profit outlook. GE Vernova (GEV), which reported earnings with GE’s aerospace unit for the last time, gained 8.2%.
Homebuilder Pulegroup (PHM) jumped 4.6% after handily beating earnings estimates. Data released Tuesday also showed new home sales rose in March to their highest since September. Peers Builders FirstSource (BLDR) and D.R. Horton (DHI) advanced 5.1% and 3.5%, respectively.
General Motors (GM) climbed 4.4% after also topping first-quarter earnings expectations and raising its full-year guidance.
Nvidia (NVDA) rose 3.7%, advancing more than 3% for a second straight day as markets embraced the AI trade after last week’s crushing sell-off. Fellow AI darling Super Micro Computer (SMCI) soared 6.3% Tuesday.
UPS (UPS) gained 2.4% after its first-quarter earnings topped estimates despite revenue coming in below expectations.
Nucor (NUE) tumbled 8.9% after missing earnings estimates and offering disappointing guidance as lower steel prices weighed on performance.
Tapestry (TPR) fell 2.2% after the Federal Trade Commission sued to block its $8.5 billion merger with Capri Holdings (CPRI).
The Nasdaq 100
Tesla (TSLA) added 1.8% ahead of its first-quarter earnings report, in which it is expected to say revenue and profit fell from last year.
PepsiCo (PEP) fell 2.9% after topping first-quarter earnings estimates, but reporting a Quaker Oats recall and sluggish sales in North America hurt total sales.
Cadence Design Systems (CDNS) slipped 1.1% after issuing a softer-than-expected current-quarter outlook.
High Mortgages Rates Are Boosting Homebuilder Sales and Stocks
April 23, 2024 03:14 PM EDT
Shares of U.S. homebuilders rose on Tuesday amid signs a dearth of existing homes for sale and resilient demand in the face of high interest rates are buoying earnings.
Pultegroup (PHM), one of America’s largest homebuilders, reported profit increased 32% to $3.10 per share in the first quarter, well ahead of the $2.37 consensus estimate among analysts surveyed by Visible Alpha. Home sales revenue increased 10% to $3.8 billion, driven by an 11% increase in closing.
“After more than a decade of underbuilding, it is estimated that our country has a structural shortage of several million homes,” said President and CEO Ryan Marshall in the company’s earnings release. “Given PulteGroup’s broad operating platform and deep product portfolio…we are well positioned to expand our market share while helping to provide much needed new housing stock.”
But underbuilding isn’t the only reason buyers are increasingly turning to new homes constructed by builders like Pultegroup. High mortgage rates, currently averaging about 7.5%, have effectively locked homeowners into their existing 3% and 4% mortgages, starving the market of inventory. Plus, homebuilders have been able to offer homebuyers incentives like mortgage rate buy-downs, taking some of the edge off of high rates and keeping new builds selling.
New home sales in March rose to an annualized rate of 693,000, an 8.8% increase from February and the most since September. And the median sales price rose to $430,700 from $406,500 the month before.
Meanwhile, existing home sales fell nearly 4% in March to an annual rate of 4.19 million, according to the National Association of Realtors.
Shares of Pultegroup were up more than 4% Tuesday afternoon, bringing their full-year return to 79%. Peers Builders FirstSource (BLDR) and D.R. Horton (DHI) were up 5.2% and 3.7%, respectively. Builders stock has surged 100% in the last 12 months, while D.R. Horton has gained 39%.
Spotify Stock Soars as Monthly Active Users Jump
April 23, 2024 02:30 PM EDT
Spotify Technology (SPOT) shares skyrocketed in intraday trading Tuesday after the streaming audio provider posted a quarterly profit and strong sales on a big jump in the number of users.
The company reported first-quarter earnings per share (EPS) of 0.97 euro ($1.04), well above estimates, after registering a loss of EUR1.16 ($1.24) a year ago. Revenue increased 19.5% to EUR3.64 billion ($3.89 billion), also more than expected.
Total Monthly Active Users (MAUs) were up 19.4% to 615 million, with ad-supported MAUs climbing 22.4% to 388 million. The number of premium subscribers came in at 239 million, a 13.8% gain. Higher prices helped lift average revenue per user for its premium service 5% to EUR4.55 ($4.87).
Shares of Spotify soared as much as 17% to $319, a more than three-year high, on Tuesday.
GE Aerospace Stock Jumps on Strong Earnings, Guidance Post-Split
April 23, 2024 01:25 PM EDT
GE Aerospace (GE) shares surged in intraday trading Tuesday after it reported its first earnings as a standalone company and boosted its full-year outlook for operating profit.
GE Aerospace reported $8.1 billion in revenue, in line with analyst expectations compiled by Visible Alpha. Its adjusted profit of $900 million or 82 cents per share beat estimates of $883 million or 81 cents per share.
GE Aerospace raised its projected range for full-year operating profit to $6.2 billion to $6.6 billion, up from the $6 billion to $6.5 billion the company said it anticipated last month. It also projected full-year earnings per share (EPS) for the first time, anticipating a range from $3.80 to $4.05 per share.
Tuesday’s report is the first quarterly report as a standalone company for GE Aerospace, after completing its split earlier this month from General Electric’s former energy segment, which spun off to become GE Vernova (GEV), while GE Healthcare (GEHC) was spun off last year. GE Vernova reports earnings Thursday, and GE Healthcare reports next Tuesday.
Shares of GE Aerospace were up 6.7% Tuesday afternoon following the release.
GM Stock Rises on Earnings Beat, Guidance Boost
April 23, 2024 12:13 PM EDT
General Motors (GM) shares surged in intraday trading Tuesday after the biggest U.S. automaker posted better-than-expected quarterly results and raised its guidance on powerful North American sales, driven by demand for gas-powered pickup trucks.
The company reported first-quarter adjusted earnings per share (EPS) of $2.62, with revenue rising 7.6% to $43.01 billion. Both exceeded estimates.
Net income from its North American operations increased 7.4% to $3.84 billion. That helped offset a $10 million loss from its international business, which registered a $347 million profit a year ago.
The market share for GM trucks increased to 31.1% from 29.8% a year earlier.
The company now predicts full-year adjusted profit of $12.5 billion to $14.5 billion, or $9.00 to $10.00 per share, up from its earlier outlook of $12.0 billion to $14.0 billion, or $8.50 to $9.50 per share.
Shares of General Motors were up 4.7% around midday Tuesday, bringing their year-to-date return to 26%.
UPS Rises After Posting Q1 Profit Beat, Revenue Miss
April 23, 2024 11:27 AM EDT
United Parcel Service (UPS) on Tuesday released first-quarter results that surpassed analyst expectations for adjusted profit but fell short of revenue expectations.
UPS reported adjusted earnings per share (EPS) of $1.43 on adjusted net income of $1.22 billion, above the marks of $1.31 per share and $1.12 billion analysts expected, according to estimates compiled by Visible Alpha. However, UPS’s revenue of $21.7 billion came in slightly below analyst estimates of $21.89 billion.
“Our financial performance in the first quarter was in line with our expectations, and average daily volume in the U.S. showed improvement through the quarter,” UPS Chief Executive Officer (CEO) Carol Tomé said in a statement. “Looking ahead, we expect to return to volume and revenue growth.”
UPS shares were up 2.2% late in the morning Monday. Still, the stock is down more than 5% year-to-date and 24% in the last year.
Nucor Stock Drops as Lower Selling Prices Weigh on Steelmaker’s Results and Outlook
April 23, 2024 10:43 AM EDT
Shares of Nucor (NUE) slumped in early trading Tuesday after the steel producer missed Wall Street’s quarterly estimates and issued a weaker-than-expected current-quarter outlook amid lower selling prices.
The Charlotte, North Carolina-based steelmaker posted first-quarter earnings of $3.46 per share, below analysts’ forecast of $3.64 a share. Revenue in the period of $8.14 billion contracted 7% from the prior year’s corresponding quarter and came in short of the $8.26 billion consensus view, in part, due to the company’s steel products unit reporting a 15% year-over-year (YOY) fall in shipments coupled with lower average selling prices.
Looking ahead, the company sees the bottom line declining on a sequential basis in the current quarter due to ongoing lower average selling prices weighing on its steel mills segment.
After climbing to a new all-time high (ATH) of $203 earlier this month, Nucor’s share price has retraced in recent weeks to the 50-day moving average. During today’s earning’s-driven sell-off, investors should monitor if the stock can hold above the key $179 level, an area on the chart that finds a confluence of support from a multi-month horizontal line and the 38.2% Fibonacci retracement level. A breakdown below this crucial region could see lower support tested around $171.
Nucor shares were down 6.4% at $179.37 about 1 hour into Tuesday’s session.
Stocks Making the Biggest Move Premarket
April 23, 2024 09:20 AM EDT
Gains:
- Spotify (SPOT): Shares of the audio streaming company jumped 11% after reporting it swung to a profit in the first quarter and offered current-quarter guidance ahead of Wall Street’s estimates.
- Danaher (DHR): Shares of the medical equipment and services company rose 8% after its first-quarter earnings and revenue topped analyst estimates, overshadowing its forecast that sales will decline in the current quarter and full year.
- GE Aerospace (GE): Shares of the newly independent aircraft manufacturing company rose more than 4% after it narrowly beat earnings estimates and raised its full-year guidance.
Losses:
- Affirm Holdings (AFRM): Shares of the buy now, pay later (BNPL) provider fell 8% amid reports Walmart-backed fintech One had begun offering BNPL loans at some locations, threatening Affirm’s position as the exclusive provider of installment loans for Walmart customers.
- Nucor (NUE): Shares of the steelmaker fell 8% after forecasting earnings would decline in the current quarter as margins come under pressure from lower selling prices.
- Cadence Design Systems (CDNS): Shares of the semiconductor design firm shed more than 5% after its current-quarter guidance was softer than analysts expected, which the company attributed to the roll-out of new products.
U.S. Stock Futures Slightly Higher as Earnings Season Rolls On
April 23, 2024 08:32 AM EDT
Futures contracts connected to the Dow Jones Industrial Average traded less than 0.1% higher on Tuesday morning.
S&P 500 futures were up about 0.1%.
Nasdaq 100 futures were also 0.1% higher about an hour before markets opened.
