An early morning stock rally, sparked by a January inflation report that tracked with expectations, lost some steam Thursday while bond yields fell.
The Nasdaq Composite traded 0.6% higher Thursday afternoon, while the S&P 500 ticked up 0.3% and the Dow Jones Industrial Average was little changed.
Personal Consumption Expenditures (PCE) data showed prices rose 2.4% in the year through January, down from 2.6% in December. Core inflation, which excludes volatile food and energy prices, decelerated to 2.8% from 2.9%. Both figures were in line with expectations. Recent data have raised questions about the Fed’s progress toward its goal of returning inflation to its 2% target.
Treasury yields, which were climbing before the report, plummeted. The 10-year yield sat at about 4.24% on Thursday afternoon.
Salesforce (CRM) rebounded from a post-earnings sell-off in extended trading yesterday after the software maker topped earnings estimates but offered disappointing full-year guidance.
Stocks fell yesterday as the price of Bitcoin soared above $63,000, just about $5,000 off its all-time high.
Chemours Plummets as Top Executives Put on Leave Amid Accounting Investigation
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Shares of Chemours (CC) tumbled Thursday after the chemical maker put three top executives soon administrative leave and delayed its quarterly earnings report while it investigates its accounting practices.
Chief Executive Mark Newman, Chief Financial Officer Jonathan Lock, and accounting officer Camela Wisel were put on administrative leave pending the completion of an internal review of the company’s accounting and its handling of reports to the Chemours Ethics Hotline.
The company also delayed the release of its fourth-quarter and full-year 2023 results, which were scheduled to be released after the bell on Wednesday. It did, however, release unaudited preliminary results, which suggested sales declined more than 11% to $6 billion in 2023. Chemours also expects it will report a net loss of between $225 million and $235 million after reporting a net income of $578 million in 2022.
Shares sank as much as 47% Thursday morning before paring losses to trade about 32% lower in the afternoon.
Best Buy Stock Rises as Retailer Reports Better-Than-Expected Q4 Sales and Earnings
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Best Buy (BBY) shares gained ground Thursday after the retailer posted better-than-expected results as the post-pandemic slump in demand for its electronics eased.
Best Buy reported fourth-quarter fiscal 2024 earnings per share of $2.72, versus $2.61 a year earlier, and revenue of $14.65 billion, which was down 0.6%. The top and bottom lines for the quarter through Feb. 3 were both above analysts’ estimates.
Same-store sales fell 4.8%, which was a smaller decline than analysts anticipated. The company got a boost from its international segment, which had a sales increase of 2.7% to $1.24 billion. Domestic revenue dropped 0.9% to $13.41 billion.
Best Buy predicted fiscal year 2025 EPS of $5.75 to $6.20, with revenue in the range of $41.3 billion to $42.6 billion. Those were basically in line with analysts’ forecasts.
The news sent shares of Best Buy to their highest level since July in early trading. The stock was up 1.5% at $80.92 Thursday afternoon after rising as high as $86.11 early in the session.
Pure Storage Jumps to Record on Earnings, Outlook Beat
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Shares of Pure Storage (PSTG) soared Thursday after the data storage solutions provider reported better-than-expected earnings and offered upbeat full-year guidance.
Pure Storage reported an adjusted net income of $166 million, or 50 cents a share, down slightly from last year’s 53 cents-per-share profit but better than expected. Total revenue declined 3% to $790 million, but subscription revenue increased 24% to $329 million. Subscription revenue is often preferable to other types because it is recurring and predictable.
For its 2025 fiscal year, which corresponds to the 2024 calendar year, Pure Storage expects revenue to increase 10.5% to $3.1 billion. I also forecast an adjusted operating income of $532 million, representing a margin of 17%.
The company also increased its share repurchase authorization by $250 million, bringing its total to $395 million.
Pure Storage shares were up more than 23% at a record $51.86 Thursday afternoon. They have more than 80% in the past 12 months.
Birkenstock Tumbles as Earnings Disappoint
2 hr 59 min ago
Shares of Birkenstock (BIRK) fell Thursday after the German sandal maker’s fiscal 2024 first-quarter earnings met expectations despite revenue blowing past estimates.
Birkenstock reported an adjusted net income of 16.7 million euros ($18.1 million), or 9 euro cents per share, for the last three months of 2023. That was down from 26.5 million euros ($28.6 million) in the year-ago quarter but in line with analysts’ expectations. Meanwhile, revenue increased 22% to 303 million euros ($327 million), outpacing the Wall Street consensus.
Gross profit margin contracted to 61% from 61.7% in the same period in 2022 amid increased spending on the expansion of its production capacity and retail footprint.
The company stood by its full-year guidance, issued just last month. It is still forecasting revenue to grow 17% to 18% this year, and adjusted EBITDA margin to be about 30%.
Birkenstock shares plummeted at the open Thursday before recovering somewhat. Early in the afternoon, they were down 6.7% at $47.83, just slightly above their October IPO price of $46.
Snowflake Stock Plunges After Company Names New CEO, Issues Disappointing Guidance
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Snowflake (SNOW) shares plunged 20% Thursday morning after the company named Sridhar Ramaswamy as chief executive officer (CEO), replacing Frank Slootman, and issued earnings guidance that fell short of Wall Street expectations.
Ramaswamy was previously the cloud data company’s senior vice president of AI, joining the team in 2023 after Snowflake acquired Neeva, an AI-powered search engine that Ramsaswa co-founded. Before joining Snowflake, Ramaswamy led Alphabet’s (GOOGL) Google advertising products for 15 years.
The announcement of the CEO change coincided with the release of Snowflake’s fiscal 2024 fourth-quarter earnings report. The company said product revenue in the quarter ending Jan. 31 rose 33% to $738.1 million, which topped analysts’ consensus view. The company recorded a net loss of $169.9 million, which was narrower than the $207.5 million loss a year earlier and also better than Wall Street anticipated.
However, the company’s forecast of product revenue for the current fiscal year of $3.25 billion, which would represent a 22% increase over fiscal 2024, fell well short of expectations. Product revenue grew 38% in fiscal 2024.
Salesforce Stock Climbs Following Earnings Beat, Dividend Announcement
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Shares of Salesforce (CRM) ticked up 1% Thursday morning, rebounding from a sell-off in extended trading yesterday after its fourth-quarter earnings beat was overshadowed by a lower-than-expected sales forecast.
The company’s net income for the three months ended Jan. 31 came in at $1.45 billion or $1.47 per diluted share. This was better than the $1.26 billion or $1.29 per diluted share forecast by analysts. Revenue grew nearly 11% to $9.29 billion.
The company’s shares fell in after-hours trading as investors focused on the guidance provided. Salesforce projected revenue of $9.12 billion to $9.17 billion in the first quarter of fiscal year 2025. Full-year fiscal 2025 revenue is pegged at between $37.7 billion and $38 billion, which would represent a 9% increase over fiscal 2024. Both fell slightly short of Wall Street’s estimates.
The company, however, initiated its first-ever dividend of 40 cents and authorized an additional $10 billion for its share repurchase program. On Salesforce’s earnings call, chief financial officer Amy Weaver said the dividend and buyback program reflected “the confidence we have in the future of our business, and our ability to drive long-term cash flow.”
Okta Stock Surges on Strong Earnings, Raised Outlook
5 hr 19 min ago
Okta (OKTA) shares surged 27% Thursday morning after the cloud identity software maker topped quarterly estimates and raised its annual sales outlook on growing momentum from enterprise customers.
For the fiscal fourth quarter ended Jan. 31, the identity management company posted a 19% jump in revenue from the prior year to $605 million, comfortably ahead of the $587 million figure estimated by analysts. Adjusted earnings came in at 63 cents per share, above the 51 cents-per-share consensus.
Looking ahead, the San Francisco, California-based company said it sees current-quarter revenue ranging between $603 million and $605 million, with the lower end of that band sitting comfortably ahead of the $584 million expected by analysts. Okta projects adjusted earnings in the period of 54 cents to 55 cents, whereas Wall Street had forecast 41 cents.
Taking a look at the weekly chart, Okta shares have traded within an orderly range since early April last year. Amid an earnings-driven breakout, it’s worth keeping an eye on two key areas on the chart that may provide overhead resistance. Firstly, monitor how the price responds to the $108 region, an area where the stock may find selling pressure from a prior countertrend peak. Also watch the $145 level, where the price could run into resistance from the July 2019 swing high and downward sloping 200-week moving average.
Stocks Making the Biggest Moves Premarket
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Gains:
- Okta Inc. (OKTA): Shares of the identity management software company jumped more than 23% after reporting better-than-expected quarterly earnings and guidance.
- Pure Storage Inc. (PSTG): Shares of the data storage company surged more than 13% on its stronger-than-expected report and guidance.
- Best Buy Co. (BBY): Shares of the consumer tech retailer rose 4% after its quarterly earnings and full-year forecast topped Wall Street’s estimates.
Losses:
- Snowflake Inc. (SNOW): Shares of the cloud software company tumbled more than 20% after its current-quarter guidance fell short of expectations. It also announced that CEO Frank Slootman would retire.
- Celsius Holdings Inc. (CELH): Shares of the energy drink maker slid more than 5% despite reporting better-than-expected earnings of 17 cents per share.
- Anheuser-Busch InBev (BUD): The brewer’s shares slipped about 2% after it reported a 17% decline in U.S. revenue in the fourth quarter, with the declines led by Bud Light.
Futures Jump on Slowing Inflation
6 hr 33 min ago
Stock futures, down earlier in the morning, jumped after PCE data came in as expected, a relief after a surprising Consumer Price Index (CPI) report earlier in the month.
Dow futures popped to trade about in line with yesterday’s close.
S&P 500 futures traded 0.3% higher.
And Nasdaq 100 futures soared to trade up about 0.5%.
Stock Futures Fall Ahead of January PCE
6 hr 57 min ago
Futures contracts connected to the Dow Jones Industrial Average were down 0.3% in early trading on Thursday.
S&P 500 futures were also 0.3% lower about an hour before markets opened.
Nasdaq 100 futures lost 0.2%.
