Earnings Previews: Constellation Energy, GlobalFoundries

The three major U.S. equity indexes closed lower again Thursday. The Dow Jones industrials ended the day down 0.46%, the S&P 500 closed 1.06% lower and the Nasdaq fell 1.73%. Six of 11 sectors closed lower, with technology (−3.00%) and communications services (−2.83%) posting the biggest losses. Energy (2.04%) was the leading gainer.

Friday morning’s report on nonfarm payrolls for October showed that 261,000 new jobs were added last month, well above the consensus estimate of 220,000 and well below the revised September total of 315,000. The headline unemployment rate rose from 3.5% to 3.7%. All this points to a possible slowing of Fed rate hikes as the economy cools off.

The three major indexes traded up by nearly 2% shortly about 75 minutes after Friday’s opening bell.

After U.S. markets closed Thursday, Block reported better-than-expected earnings per share (EPS) and revenue results. Shares gapped up in Friday’s premarket and traded up nearly 17% in midmorning action Friday.

Carvana missed on both the top and bottom lines. The company did not issue guidance but did say that economic headwinds are likely to continue and that Carvana will have to “rapidly decrease expenses.” Shares traded down about 10.5% early Friday.

Coinbase also missed EPS and revenue estimates, but the company’s outlook for the coming fiscal year included a comment about managing expenses. Shares traded up more than 14% Friday morning.

PayPal beat estimates on both the top and bottom lines but issued revenue guidance below estimates. Shares traded down about 2.8% Friday morning.

Starbucks beat estimates on both the top and bottom lines and reaffirmed full-year guidance. Shares traded up more than 9%.

Before markets opened Friday morning, Cardinal Health reported solid beats on both the top and bottom lines. The outlook for fiscal 2023 (ending in September) was in line with expectations. Shares traded up 5.4%.

DraftKings reported a smaller loss for the quarter than the loss in the prior year quarter, but improved guidance was not good enough. Shares traded down by nearly 23% Friday morning.

We already have previewed Ballard Power, NiSource and Palantir Technologies, all scheduled to report quarterly results first thing Monday morning. Activision Blizzard and Lyft are on deck to report quarterly results later in the day.

Here is a preview of two companies set to report quarterly results before markets open Tuesday morning.

Constellation Energy

Retail power generation company Constellation Energy Corp. (NASDAQ: CEG) has seen its share price increase by more than 125% since completing its spin-off from Exelon about 10 years after Exelon acquired the company for around $7.9 billion. Constellation’s market cap at the time was $17.3 billion; its market cap was almost $31 billion Friday morning. Exelon shares have dipped by nearly 6% since the spin-off, and the regulated utility company’s market cap has dipped from around $42 billion to about $36.9 billion.

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