Coffee With Greta: Earnings Rush, Fed Day
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DJIA Futures: -77 (-0.2%)
SPX Futures: -8 (-0.2%)
NASDAQ Futures: -41 (-0.3%)
Good morning friends!
Futures are pulling back as traders digest a rush of earnings reports and gear up for the Fed decision later today.
Let’s get right to it!
Alphabet Pops
Alphabet (GOOGL) shares are up 6.5% ahead of the open after beating Q2 expectations on the top and bottom line.
Here’s how the tech giant’s results compared to analysts’ estimates:
- Adjusted EPS: $1.44 vs $1.34 expected
- Revenue: $74.6 billion vs $72.82 billion expected
- YouTube ad revenue: $7.67 billion vs $7.43 billion expected
- Google Cloud revenue: $8.03 billion vs $7.87 billion expected
Revenue was up 7% year over year, the fourth straight quarter of growth in the single digits amid a pullback in digital ad spending.
Ad revenue rose just 3.3% from a year ago while Cloud revenue led the gains, up 28% annually.
Microsoft Drops
Microsoft (MSFT) shares are falling 3.4% in premarket trade after missing fiscal Q4 revenue expectations and issuing weak guidance.
Here’s how the tech giant’s results compared to analysts’ estimates:
- EPS: $2.69 vs $2.55 expected
- Revenue: $56.19 billion vs $55.47 billion expected
Revenue rose 8% year over year, the third straight quarter of single-digit growth for the first time since 2017.
Microsoft’s Intelligent Cloud segment brought in $23.99 billion in revenue vs $23.79 billion expected, up 15% annually.
Azure revenue jumped 26% year over year vs 25% growth expected.
Microsoft’s CFO forecast fiscal Q1 revenue between $53.8 billion and $54.8 billion, implying 8% growth and missing expectations for $54.94 billion.
Snap Tumbles
Snap (SNAP) are tumbling 17.1% ahead of the open as a weak forecast overshadows better-than-expected Q2 results.
Here’s how the social media giant’s results compared to analysts’ estimates:
- Loss per share: $0.02 vs $0.04 expected
- Revenue: $1.07 billion vs $1.05 billion expected
- Global Daily Active Users: 397 million vs 394.9 million expected
- Average revenue per user: $2.69 vs $2.68 expected
Revenue was down 4% year over year, the second consecutive quarter of declining sales.
Snap forecast Q3 revenue between $1.07 billion and $1.13 billion, which implies -5% to flat year over year growth.
The company expects daily active users to reach between 405 million and 406 million in the current quarter.
Analysts were projecting Q3 revenue of $1.13 billion and 406 million daily active users.
Coca-Cola Jumps
Coca-Cola (KO) shares are up 1.2% in premarket trade after beating Q2 expectations and hiking its full-year outlook.
Here’s how the beverage giant’s results compared to analysts’ estimates:
- Adjusted EPS: $0.78 vs $0.72 expected
- Revenue: $11.97 billion vs $11.75 billion expected
Organic revenue jumped 11% year over year as customers paid higher prices.
For the full year, Coke now expects comparable EPS growth of 5% to 6% vs 4% to 5% previously.
The company also expects organic revenue growth of 8% to 9% vs 7% to 8% previously.
Boeing Beats
Boeing (BA) shares are 3.2% higher ahead of the open after beating Q2 expectations on the top and bottom line.
Here’s how the planemaker’s results compared to analysts’ estimates:
- Adjusted loss per share: $0.82 vs $0.88 expected
- Revenue: $19.75 billion vs $18.45 billion expected
Boeing’s revenue was up 18% year over year as the company delivered 136 planes in Q2, up from 121 a year ago.
The company also announced it is increasing production of its Max aircraft, to a pace of 38 jets per month from 31 previously.
Boeing said it increased output of its 787 Dreamliner to four per month and still plans to increase that to five per month by the end of the year.
The CEO said, “With demand strong across our key markets, it is important that we stay focused on execution and on driving stability in our factories and supply chain to ensure we meet our customer commitments.”
Boeing reiterated its full-year guidance following the beat.
Fed Decision Day
The Federal Reserve releases its latest interest rate decision at 2:00 p.m. ET.
CME Group’s FedWatch Tool shows 98.9% of traders betting on another 25 basis point rate hike.
That would be the 11th increase since March 2022.
Focus will be on the Fed Chair’s press conference after the meeting to gauge whether this will be the last rate hike.
A 25bps move would put the Federal Funds Rate in a range of 5.25% to 5.5%, the highest level since January 2001.
In Case You Missed It
- Consumer confidence rose to a two-year high this month. The Conference Board’s consumer confidence index rose 6.9 points to 117 vs 112 expected. Confidence about current economic conditions rose 4.7 points to 160, the highest reading since March 2020. The 6-month expectations index jumped 8.3 points to 88.3. The expectations index is now solidly above the 80 threshold that is said to signal a recession ahead.