Coffee With Greta: Inflation Is Still Hot
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Good morning friends!
Futures are mixed as traders digest new inflation data and Amazon’s (AMZN) big Q3 miss puts more pressure on tech stocks.
Let’s get right to it!
PCE Inflation Is Still Hot
U.S. inflation pressures were still running hot in September as the Fed’s rate hikes show no signs of slowing price gains.
The Bureau of Economic Analysis’ personal consumption expenditures (PCE) price index rose 0.3% monthly and 5.1% year over year.
But it’s not just high gas prices fueling those gains anymore.
The core PCE price index – which excludes food and energy prices – rose 0.5% monthly and 5.1% annually.
That was up from the 4.9% annual gain in August and that index is the Fed’s preferred measure of inflation.
Musk Cleans House at Twitter
Twitter (TWTR) shares are up 0.3% in premarket trade after Tesla (TSLA) CEO Elon Musk closed his purchase of the company.
Musk reportedly took over at the social media giant Thursday night and quickly fired top executives.
CEO Parag Agrawal, CFO Ned Segal, and head of legal policy Vijaya Gadde were all reportedly fired upon the deal closing.
Musk named himself CEO after making those moves.
He sent out a tweet after the deal closed, saying “the bird is freed”.
Amazon Craters on Revenue Miss, Disappointing Guidance
Amazon (AMZN) shares are plunging 13.8% ahead of the open after missing Q3 revenue expectations and issuing disappointing Q4 guidance.
Here’s how the tech giant’s results compared to analysts’ expectations:
- EPS: $0.28
- Revenue: $127.10 billion vs $127.46 billion expected
- Amazon Web Services Revenue: $20.5 billion vs $21.1 billion expected
- Ad Revenue: $9.55 billion vs $9.48 billion expected
Amazon expects Q4 revenue between $140 billion and $148 billion vs $155.15 expected.
That’s a disappointing outlook for the company’s key holiday shopping quarter.
Apple Tops Fiscal Q4 Expectations, iPhone Sales Fall Short
Apple (AAPL) shares are up 0.3% in premarket trade after narrowly beating fiscal Q4 expectations.
Here’s how the iPhone maker’s results compared to analysts’ expectations:
- EPS: $1.29 vs. $1.27 expected
- Revenue: $90.15 billion vs. $88.90 billion expected
- iPhone revenue: $42.63 billion vs. $43.21 billion expected
- Mac revenue: $11.51 billion vs. $9.36 billion expected
- iPad revenue: $7.17 billion vs. $7.94 billion expected
- Other Products revenue: $9.65 billion vs. $9.17 billion expected
- Services revenue: $19.19 billion vs. $20.10 billion expected
- Gross margin: 42.3% vs. 42.1% expected
Apple did not provide official guidance for fiscal Q1, which is the company’s biggest sales season of the year.
But the CFO said the company expects slower annual revenue growth with Mac sales expected to decline year over year.
Intel Beats Q3 Expectations
Intel (INTC) shares are rallying 6.7% ahead of the open after beating Q3 expectations on the top and bottom line.
Here’s how the chipmaker’s results compared to analysts’ estimates:
- Adjusted EPS: $0.59 vs $0.32 expected
- Revenue: $15.34 billion vs $15.25 billion expected
Revenue declined 15% year over year, improving from the 22% decline in Q2.
Intel trimmed its full-year forecast, now expecting adjusted EPS of $1.95 and $63 billion to $64 billion in revenue.
That’s down from the prior forecast for $2.30 in adjusted EPS and $65 billion to $68 billion in revenue.
Analysts were expecting guidance for $2.15 in adjusted EPS and $65.26 billion in sales.
Intel’s CEO said, “We are planning for the economic uncertainty to persist into 2023.”
Amid that uncertainty, the company said it’s aiming to reduce its cost of sales and operating expenses by $3 billion in 2023.
Those annual savings are expected to reach $8 billion to $10 billion by the end of 2025.
Pinterest Soars On Earnings Beat
Pinterest (PINS) shares are jumping 9.1% in premarket trade after beating Q3 estimates.
Here’s how the social media company’s results compared to analysts’ expectations:
- Adjusted EPS: $0.11 vs $0.06 expected
- Revenue: $684.6 million vs $666.7 million expected
Revenue was up 8% year over year while monthly average users remained flat.
Pinterest expects Q4 revenue growth in the mid-single digits as it continues to face foreign exchange headwinds.
Exxon Mobil Reports Record Profits
Exxon Mobil (XOM) shares are up 2.1% ahead of the open after reporting record profits in Q3.
Here’s how the oil giant’s results compared to analysts’ expectations:
- EPS: $4.45 vs $3.86 expected
- Revenue: $112 billion vs $105 billion expected
Exxon’s $18.7 billion profit was a new company record.
It’s the second quarter in a row of record earnings which has caused criticism from Democrats as Americans pay high gas prices at the pump.
Chevron Reports Near Record Profits
Chevron (CVX) shares are up 2.1% in premarket trade after reporting its second-highest quarterly profit ever in Q3.
Here’s how the oil company’s results compared to analysts’ estimates:
- Adjusted EPS: $5.56 vs $4.89 expected
- Revenue: $66.6 billion vs $57.4 billion expected
Profits were up 90% year over year to $10.8 billion, down slightly from $11.4 billion in Q2.
Chevron said higher oil and natural gas prices contributed to that surge.