Lowe’s (LOW) lowers its full-year guidance; media executive Edgar Bronfman Jr. has reportedly submitted a formal $4.3 billion bid for control of Paramount Global (PARA); shares of Hawaiian Airlines parent Hawaiian Holdings (HA) are jumping after the Department of Justice (DOJ) cleared Alaska Air Group’s (ALK) $1.9 billion purchase of the carrier; Boeing (BA) reportedly found cracks in the structure of its 777X jetliner in initial test flights; the European Union (EU) cuts tariffs on imports of China-made Tesla (TSLA) electric vehicles (EVs). U.S. stock futures are little changed after stocks ended higher yesterday, with the S&P 500 nearing its all-time closing high. Here’s what investors need to know today.
1. Lowe’s Follows Rival Home Depot, Slashes Full-Year Outlook
Lowe’s (LOW) cut its full-year outlook for sales and profit on soft do-it-yourself (DIY) spending, while reporting quarterly revenue that missed analysts’ forecasts. Lowe’s posted second-quarter revenue of $23.59 billion, below Visible Alpha expectations of $23.90 billion, though adjusted earnings per share (EPS) of $4.10 beat forecasts. The company attributed the quarterly sales slump to “continued pressure in DIY bigger ticket discretionary spending and unfavorable weather adversely impacting sales.” Lowe’s said comparable sales for its full year would fall by 3.5% to 4%, versus its prior forecast of a decline of 2% to 3%, and guided total sales of $82.7 billion to $83.2 billion, down from $84 billion to $85 billion. The home improvement chain’s reduced outlook follows lower guidance from rival Home Depot (HD) last week. Shares are edging higher in premarket trading.
2. Bronfman Reportedly Bids $4.3B for Control of Paramount
Media executive Edgar Bronfman Jr. has reportedly submitted a formal $4.3 billion bid for National Amusements, the controlling shareholder of Paramount Global (PARA), after Skydance Media struck a deal for Shari Redstone’s media empire last month. According to The Wall Street Journal, Bronfman’s offer for National Amusements is similar in price to Skydance’s, but apart from a $400 million breakup fee, a key difference is that there is no dilution for Paramount shareholders, as it isn’t an all-stock bid. Bronfman has secured financing from high-net-worth individuals and family offices, and is teaming up with movie producer Steven Paul, the report said. Paramount shares are down about 3% in premarket trading.
3. Hawaiian Holdings Stock Surges as Alaska Air Merger Clears Hurdle
Shares of Hawaiian Airlines parent Hawaiian Holdings (HA) are jumping 11% in premarket trading after the Department of Justice (DOJ) cleared Alaska Air Group’s (ALK) $1.9 billion purchase of the carrier. Alaska Airlines, whose shares are up 2%, said the DOJ had allowed the review period to expire without challenging the merger, which was announced last December. The two airlines now have to win approval from the U.S. Transportation Department before the merger can close. In February, the DOJ asked for more information in order to evaluate the possible antitrust implications, but continuing negotiations led the deadline for the deal to be extended several times.
4. Boeing’s Latest Mishap: Cracks in New 777X Jetliner
Boeing (BA) has reportedly found cracks in the structure of its 777X jetliner in initial test flights, another mishap for the carrier this year. According to trade publication The Air Current, the company is grounding its 777X test fleet after an inspection showed the failure of a key engine mounting structure. Boeing shares, which are falling 1% in premarket trading, are down more than 30% this year as the airplane maker grapples with a series of setbacks since a door plug detached during an Alaska Airlines flight and led the Federal Aviation Administration (FAA) to ground expansion plans for its best-selling 737 MAX.
5. EU Cuts Tariffs on China-Made EV Imports From Tesla
The European Union (EU) has cut tariffs on Tesla’s (TSLA) China-made electric vehicles (EV) imported into the region. The European Commission (EC), the EU’s enforcement arm, said Tesla vehicles imported from China would see tariffs cut to 9% from a provisional 20.8%. In June, the EU said it would provisionally impose extra tariffs of up to 38.1% on imported Chinese EVs because they benefited “from unfair subsidisation” that threatens domestic producers of battery electric vehicles (BEVs). The European decision comes around three months after U.S. President Joe Biden boosted tariffs on Chinese EV imports to 100% from 25%, saying the move was aimed at protecting American workers from “China’s unfair trade practices.” Tesla shares are up 1% in premarket trading.
