Coffee With Greta: Microsoft’s Gloomy Outlook Weighs On Tech
DJIA Futures: -273 (-0.8%)
SPX Futures: -42 (-1.0%)
NASDAQ Futures: -194 (-1.6%)
Good morning friends!
Futures are falling as Microsoft’s gloomy forecast drags down the tech sector.
Let’s get right to it!
Microsoft Drops On Weak Forecast
Microsoft (MSFT) shares are falling 3% ahead of the open after weak guidance overshadows a fiscal Q2 earnings beat.
Here’s how the tech giant’s results compared to analysts’ estimates:
- Adjusted EPS: $2.32 vs $2.29 expected
- Revenue: $52.75 billion vs $52.94 billion expected
Total revenue rose just 2% year over year which was the slowest rate since 2016.
Microsoft’s Intelligent Cloud segment brought in $21.51 billion in revenue, up 18% from a year ago and better than analysts’ expectations of $21.44 billion.
But executives told analysts on the conference call that they expect the weakening tech environment to continue.
Microsoft said it expects $50.5 billion to $51.5 billion in fiscal Q3 revenue, falling short of estimates for $52.43 billion.
Boeing Slips After Surprise Q4 Loss
Boeing (BA) shares are down 2.6% in premarket trade after reporting an unexpected Q4 loss.
Here’s how the plane maker’s results compared to analysts’ expectations:
- Adjusted loss per share: $1.26 vs $0.26 EPS expected
- Revenue: $19.98 billion vs $20.38 billion expected
The profit loss was caused by supply chain issues which caused higher costs.
Boeing’s commercial aircraft unit generated $9.2 billion in Q4 sales, up 94% year over year.
The company generated $3.1 billion in free-cash flow last quarter, better than expected.
It had $2.3 billion in cash flow for the full-year, the best since 2018.
Boeing reiterated its forecast to generate between $3 billion and $5 billion in free-cash flow this year.
Kimberly-Clark Falls After Q4 Sales Miss
Kimberly-Clark (KMB) shares are down 4% ahead of the open after reporting mixed Q4 results.
Here’s how the consumer goods giant’s results compared to analysts’ expectations:
- Adjusted EPS: $1.54 vs $1.51 expected
- Revenue: $4.96 billion vs $4.99 billion expected
The drop in revenue came as sales volume declined 7% but pricing rose 10%.
Kimberly-Clark forecast sales will be flat to up 2% in 2023 vs analysts’ expectations for 1% growth.
AT&T Jumps On Earnings Beat
AT&T (T) shares are up 2.4% in premarket trade after beating Q4 profit expectations.
Here’s how the company’s results compared to analysts’ estimates:
- Adjusted EPS: $0.61 vs $0.57 expected
- Revenue: $31.3 billion vs $31.4 billion expected
AT&T added 656,000 monthly cell phone subscribers in the quarter vs 570,000 expected, bringing the 2022 total to nearly 2.9 million.
The company forecast adjusted EPS of $2.35 to $2.45 for the full-year 2023 vs $2.53 expected.
AT&T is targeting $16 billion or more in free-cash flow this year vs $16.2 billion estimates
Mortgage Demand Rises As Rates Hit 4-Month Low
Mortgage demand jumped last week as rates fell for the third week in a row.
The Mortgage Bankers Association reported total application volume rose 7% last week.
Purchase applications rose 3% weekly and were down 39% year over year.
Refinance applications jumped 15% weekly and were down 77% annually.
The jump came as the average 30-year contract rate fell to 6.2% from 6.23%, the lowest since September.
Key Earnings After The Close
Here’s a look at the companies set to report earnings after the close today:
- Tesla (TSLA)
- IBM (IBM)
- ServiceNow (NOW)
- Levi Strauss (LEVI)