Dow Jones Today: Stock Futures Dip; Arm, Disney Soar on Earnings

Hershey Gains on Earnings Beat, but Warns of Cost of Historic Cocoa Inflation

32 minutes ago

Shares of Hershey (HSY) rose Thursday after the chocolate maker beat earnings estimates, overshadowing weaker-than-expected sales and full-year guidance. 

Hershey reported net income of $349 million, or $1.79 per share, an 11% decrease from the year-ago quarter but better than analysts had estimated. Net sales increased 0.2% to $2.66 billion, slightly less than Wall Street was expecting. 

The company forecast sales would increase 2% to 3% in 2024, driven by higher prices. That increase, though, is expected to be nullified by higher cocoa and sugar costs. 

“While historic cocoa prices are expected to limit earnings growth this year, we believe our strong marketing plans, innovation and brand investments will drive top-line growth and meet consumers’ evolving needs,” said CEO Michele Buck in a statement.

Cocoa futures trading in New York surged to a record high of $5,600 a ton on Thursday. Prices have more than doubled in the last year as West Africa, where the majority of the world’s cocoa is grown, has contended with extreme weather. 

Hershey’s has already raised prices significantly to offset surging input costs. But those price hikes have come at a cost—shoppers are buying less chocolate. Despite prices rising 7.1% in the fourth quarter, confectionery sales increased just 2.1%.

Hershey’s shares were up 5.5% midday Thursday, but they have lost nearly 13% of their value in the past year.

Ralph Lauren Leaps to 9-Year High as China Sales Surprise

1 hr 19 min ago

Ralph Lauren (RL) shares jumped to a 9-year high Thursday morning after the apparel company reported better-than-expected fiscal third-quarter earnings and sales, driven by Chinese sales.

Ralph Lauren reported net income of $277 million, or $4.19 per share, on revenue of $1.9 billion. Both profit and sales exceeded analyst estimates.

The company said sales ran ahead of expectations in every region where it operates. But growth was fastest in China, where revenue increased 30% year-over-year. The company also increased direct-to-consumer sales in every region while shrinking its department store presence. 

Coach and Kate Spade owner Tapestry (TPR) also reported better-than-expected earnings on Thursday. Sales in China grew 19%, making it the company’s fastest-growing region in the quarter.

Shares of Ralph Lauren were up 14% Thursday morning, their largest intraday jump since Nov. 2020. The stock has gained 43% in the past twelve months. Tapestry shares rose 8.2% to an 8-month high of $43.64. 

Arm Rides AI Wave to Record Revenue, Stock Jumps 60%

1 hr 50 min ago

Arm Holdings Plc (ARM) stock soared 60% Thursday after reporting strong earnings and a rosy outlook amid increasing demand for artificial intelligence processing.

The British semiconductor designer reported fiscal 2024 third-quarter adjusted earnings per share of 29 cents, up from 22 cents a year earlier. Revenue rose 14% to $824 million as the company gained market share in the cloud and automotive space, and as AI boosted its licensing revenue. The top and bottom line figures both exceeded the guidance provided by the company in November.

Arm now expects fiscal fourth-quarter revenue of between $850 million and $900 million, which would push full fiscal 2024 revenue to as much as $3.2 billion. In November, the company had projected fiscal 2024 revenue of between $2.96 billion and $3.08 billion.

Arm shares were trading at $122.80 Thursday, putting them up 93% since their IPO in September.

–Taylor Tompkins

Disney Stock Jumps on Earnings Beat, $1.5B Investment in Fortnite Maker Epic Games

2 hr 37 min ago

Disney (DIS) shares surged Thursday after the entertainment giant reported better-than-expected results and said it’s investing $1.5 billion in Fortnite maker Epic Games, in its biggest push into video games yet.

Disney and Epic Games will work together to create a gaming “universe” that uses Disney characters and stories, according to a statement released in tandem with Disney’s earnings Wednesday. This gaming experience will be interconnected with Epic’s popular melee fighting game Fortnite.

The company also reported diluted earnings per share that topped analysts’ expectations and revenue that was just shy of projections.

Disney earnings:

• Revenue: $23.5 billion vs. $23.72 billion expected, according to analyst estimates compiled by Visible Alpha
• Earnings per share: $1.04 vs. $0.84 expected

Iger said that Disney’s cost-cutting initiatives were a key reason for the strong bottom-line performance. He said that Disney is on track to exceed the $7.5 billion cost-cutting target the company set a year ago, noting that cost cuts had a $500 million positive impact on the bottom line during the fourth quarter.

Disney shares jumped 9.8% Thursday morning to a nearly one-year high of $108.80. The stock has lost about 3% in the past year.

–Taylor Tompkins and Stephen Wisnefski

Stocks Making the Biggest Moves Premarket

3 hr 46 min ago

Gains:

• Arm Holdings Plc (ARM): Shares of the British chip designer soared more than 27% after it forecast current quarter earnings of between 28 cents and 32 cents a share on revenue of $850 million to $900 million, both much higher than Wall Street expected.
• The Walt Disney Co. (DIS): Shares of the entertainment giant jumped 8% after it reported better-than-expected earnings and raised its guidance amid shrinking streaming losses. 
• Unilever Plc (UL): Shares of the consumer goods giant rose more than 3% after it said sales volume increased for the first time in two years in the fourth quarter. The company also announced a $1.6 billion share buyback program.
  
  

Losses:

• PayPal Holdings Inc. (PYPL): Shares of the digital payments company fell more than 8% after it offered disappointing current-quarter guidance, overshadowing better-than-expected fourth-quarter earnings. 
• AstraZeneca Plc (AZN): The drug maker’s shares slipped more than 6% after it missed fourth-quarter earnings estimates as higher costs ate into profit. 
• Kenvue Inc. (KVUE): The Johnson & Johnson spin-off reported lower-than-expected fourth-quarter sales and offered disappointing full-year guidance, sending its stock nearly 2% lower. 

Stock Futures Dip Premarket

4 hr 31 min ago

Futures contracts connected to the Dow Jones Industrial Average were little changed in premarket trading Thursday.

S&P 500 futures retreated 0.2%.

Nasdaq 100 futures were also trading about 0.2% lower an hour before markets opened.