Investing

Morning Blast: Thursday's All About Earnings

Paul Ausick

Published: August 3, 2023 10:07 am

Tech stocks took a beating Wednesday, falling more than 2% after Tuesday’s Fitch Ratings’ downgrade of America’s credit rating from AAA to AA+. Thursday’s premarket trading continued lower, with the slide greased by some weak earnings reports.

Because there are no significant earnings reports due out Friday afternoon or Monday morning, our usual preview story will not appear this morning. Instead, here is a quick look at the earnings reports that were released after U.S. markets closed Wednesday or before they opened on Thursday.

After markets close on Thursday, Airbnb, Amazon and Apple are reporting quarterly results. So are Block, Coinbase and Livent.

After markets closed on Wednesday, Albemarle Corp. (NYSE: ALB) reported better-than-expected earnings per share (EPS) while coming a bit short on revenue, even though year-over-year revenue was up 50%. The lithium miner also issued upside guidance for fiscal year EPS and revenue. The stock traded up 0.8% shortly after Thursday’s opening bell.

MGM Resorts International (NYSE: MGM) beat estimates on both the top and bottom lines. In what must be one of those times when investors sell the news, MGM stock was down about 6.5%.

Occidental Petroleum Corp. (NYSE: OXY) failed to meet expectations on either EPS or revenue. Year over year, revenue fell by more than 37% and missed the consensus estimate by about 3%. EPS fell by 77% and missed the consensus estimate by 6.8%. The company also paid $522 million to Berkshire Hathaway to redeem preferred shares that Warren Buffett’s company received when it supplied $10 billion to support Oxy’s purchase of Anadarko. Buffett has a stake of around 25% in the oil and gas company’s common stock and still holds about 88% of the 8% preferred stock. Shares traded down 1.4%.

PayPal Holdings Inc. (NASDAQ: PYPL) beat the consensus EPS estimate by a penny and the revenue estimate by the moral equivalent of a penny. EPS were up 24.7% year over year, and revenue rose by 7.1%. The company said its adjusted operating margin dropped as PayPal had to set aside more loan-loss capital and tighten its lending standards. The stock traded down 11%.

Qualcomm Inc. (NASDAQ: QCOM) beat the consensus EPS estimate and missed slightly on revenue. Sales dropped by 22% year over year, and profits fell by nearly 37%. Smartphone sales have slowed, and makers are taking lower quantities. Sales in China were called out for showing slow sales growth. The company also said it would have to cut expenses, a comment widely interpreted as suggesting further layoffs. The stock traded down 9.5% Thursday morning.

Before U.S. markets opened on Thursday, Anheuser-Busch InBev S.A./N.V. (NYSE: BUD) reported better-than-expected EPS and revenue. Volume was down, and U.S. sales fell by 10.5%, due in part to a boycott of the company’s Bud Light brand by conservatives upset over an ad featuring transgender influencer Dylan Mulvaney. Shares traded up 0.8%.

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ConocoPhillips (NYSE: COP) fell about 5% short of analysts’ EPS estimate. Revenue totaled $12.88 billion, 12.6% below the consensus estimate and down more than 41% year over year. Shares traded down 1.4% Thursday morning.

Warner Bros. Discovery Inc. (NASDAQ: WBD) reported a slight miss on revenue and a diluted GAAP loss per share of $0.51, substantially better than the year-ago loss per share of $1.50. Free cash flow rose from $789 million a year ago to $1.72 billion, and the company reported cash on hand of $3.1 billion and $47.8 billion in gross debt. Shares traded down 1.1%.