Coffee With Greta: TSLA, NFLX Drag
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DJIA Futures: +3 (+0.01%)
SPX Futures: -13 (-0.3%)
NASDAQ Futures: -130 (-0.8%)
Good morning friends!
Futures are mostly lower as tech stocks slide following earnings from giants like Tesla and Netflix.
Let’s get right to it!
Tesla Reports Record Revenue
Tesla (TSLA) shares are falling 4.1% ahead of the open despite beating Q2 expectations on the top and bottom line.
Here’s how the electric automaker’s results compared to analysts’ estimates:
- Adjusted EPS: $0.91 vs $0.82 expected
- Revenue: $24.93 billion vs $24.47 billion expected
Tesla’s automotive revenue jumped 46% year over year to $21.27 billion.
The company’s operating margin dropped to 9.6%, driven by increased incentives and price cuts on its vehicles.
CEO Elon Musk said on the earnings call, “We continue to target 1.8 million vehicle deliveries this year, but expect Q3 production will be a little bit down because we’ve got summer shutdowns for a lot of factory upgrades.”
Tesla reported Q2 deliveries earlier this month which topped expectations.
Netflix Slides On Weak Outlook
Netflix (NFLX) shares are down 6.1% in premarket trade after reporting mixed Q2 results.
Here’s how the streaming giant’s results compared to analysts’ estimates:
- EPS: $3.29 vs $2.86 expected
- Revenue: $8.19 billion vs $8.3 billion expected
Netflix added 5.9 million new subscribers during the quarter as it cracked down on password sharing in the U.S.
That sharply beat expectations for 3 million net new subscribers.
The company said it will now roll out that new policy to the rest of its customers.
Netflix forecast Q3 revenue of $8.52 billion vs $8.67 billion expected, Q3 EPS of $3.52 vs $3.23 expected, and an addition of 4 million new subscribers.
The company reiterated its full-year operating margin outlook.
IBM Misses Q2 Revenue Estimates
International Business Machines (IBM) shares are down 1% ahead of the open after beating Q2 profit expectations but missing on revenue.
Here’s how the company’s results compared to analysts’ estimates:
- Adjusted EPS: $2.18 vs $2.01 expected
- Revenue: $15.48 billion vs $15.58 billion expected
IBM reported an adjusted gross margin of 55.9% vs 54.7% expected.
The CFO attributed those higher margins to a more profitable mix of products and “productivity initiatives” like job cuts.
He said, “The productivity benefits free up spend for reinvestment and contribute to margin expansion.”
IBM reiterated its outlook for between 3% and 5% revenue growth this year and $10.5 billion in free cash flow.
United Airlines Rallies On Record Earnings
United Airlines (UAL) shares are up 2.6% in premarket trade after reporting record Q2 results.
Here’s how the airline’s results compared to analysts’ estimates:
- Adjusted EPS: $5.03 vs $4.03 expected
- Revenue: $14.18 billion vs $13.91 billion expected
United’s fuel bill tumbled 26% year over year which helped boost the bottom line.
Capacity rose 17.5% from a year ago while revenue per available seat mile slipped 0.4%.
For the third quarter, the airline expects capacity to expand 16% from last year with revenue growth of 13%.
United forecast adjusted Q3 EPS between $3.85 and $4.35 vs $3.70 expected.
American Airlines Slips Despite Earnings Beat, Higher Outlook
American Airlines (AAL) shares are falling 1.5% ahead of the open despite beating Q2 expectations on the top and bottom line.
Here’s how the airline’s results compared to analysts’ estimates:
- Adjusted EPS: $1.92 vs $1.59 expected
- Revenue: $14.06 billion vs $13.74 billion expected
Revenue was up 4.7% year over year while flying capacity rose 5.3%.
American hiked its full-year outlook following the beat.
The airline now expects adjusted EPS between $3 and $3.75 this year vs $2.50 to $3.50 previously.
That forecast was in line with analysts’ estimates of $3.10 per share.
Weekly Jobless Claims Tumble To Nine-Week Low
Weekly jobless claims fell unexpectedly last week in the latest sign of strength for the labor market.
The Labor Department reported 228,000 Americans filed initial unemployment claims.
That was down by 9,000 from the week before and lower than expectations for claims to rise to 240,000.
Continuing claims rose by 33,000 to 1.75 million in the week ending July 8.
In Case You Missed It
- Apple (AAPL) shares rose on Wednesday following a Bloomberg report that the company is developing its own equivalent of ChatGPT. That report claims Apple has built a chatbot that some call “Apple GPT”. Some Apple staffers reportedly believe the company is aiming for a significant AI announcement next year.