Wall Street hesitates before the market this Thursday, with the S&P 500 gaining 0.3%, the Dow Jones 0.1% and the Nasdaq 0.4%. Operators remain uncertain following recent records, and despite good inflation figures across the Atlantic. A barrel of WTI crude gained 0.3% to $78.8. An ounce of gold advances 0.4% to $2,050. The dollar index stabilizes against a basket of currencies.
American household income for the month of January 2024 increased by 1%, compared to a consensus of +0.5% measured by FactSet and a reading of +0.3% a month earlier. Personal household expenditure increased by 0.2%, compared to +0.2% consensus and +0.7% a month earlier. The ‘core PCE’ price index for the month of January increased by 0.4% compared to the previous month and by 2.8% year-on-year, in line with specialist estimates.
Unemployment claims started to rise again last week in the United States. The US Department of Labor revealed, for the week ending February 24, unemployment claims numbering 215,000, an increase of 13,000 compared to the previous week. The consensus was positioned at 209,000. The four-week average stands at 212,500, down 3,000. Finally, the number of unemployed people receiving compensation for the week ending February 17 stood at 1.905 million, an increase of 45,000 over seven days (1.874 million consensus).
The Chicago PMI index for the month of February and the National Association of Realtors’ US housing sales promise indicator for January will be known within an hour. The Kansas City Fed’s manufacturing index will be announced at 5 p.m.
Raphael Bostic, president of the Atlanta Fed, speaks again today. Austan Goolsbee, head of the Chicago Fed, Loretta Mester, head of the Cleveland branch, and John Williams, of the New York Fed, will also have their say.
According to the CME Group’s FedWatch tool, the probability of an additional monetary status quo leaving the range on the fed funds rate between 5.25 and 5.50% on March 20, at the end of the next monetary meeting, is over 97%. The probability that rates will still remain unchanged on May 1 after the next meeting reaches 77%. The first monetary easing could take place on June 12.
Values
Salesforce.com, provider of CRM software solutions, revealed accounts above expectations last night on Wall Street, but also more cautious outlooks than expected. For its fourth quarter, Marc Benioff’s group posted adjusted earnings per share of $2.29 versus a consensus of $2.27, while its revenues totaled $9.29 billion (+11%) versus $9. 22 billion consensus. Adjusted earnings per share guidance for the just-started fiscal first quarter and fiscal 2025 are better than expected, but revenue guidance disappoints somewhat. Salesforce also announced last night that it would begin paying a quarterly dividend of 40 cents per share.
For the financial year ending in January 2025, the group expects revenues of $38 billion, an increase of 9%, compared to a consensus of $38.6 billion. Adjusted earnings per share are anticipated between $9.68 and $9.76 over the period, compared to a consensus of $9.63. The adjusted operating margin is estimated at 32.5% for the financial year started, compared to 31.4% consensus and 31.4% also in the last fiscal quarter of 2024. The group has significantly reduced its workforce, which explains this good performance. margins despite investments in artificial intelligence.
Snowflake, the cloud data hosting group, plunges on Wall Street following its publication of the fourth fiscal quarter 2024. For the period, product revenues increased 33% to $738 million. Total quarterly revenues increased 32% to $774 million, compared to $589 million a year earlier. Adjusted operating profit was $71 million. Adjusted free cash flow was $324 million. Adjusted earnings per share were 35 cents, compared to the consensus estimate of 17 cents. The stock nevertheless falls as Frank Slootman will step down as CEO, effective immediately. He had been CEO since 2019. The revenue guidance is also considered disappointing, with the group considering product revenues ranging from 745 to 750 million in the first quarter, compared to 770 million consensus. The annual guidance is also below expectations.
HP Inc. For its first fiscal quarter, the group saw its sales decline in the personal systems and printer divisions. Total revenue was $13.2 billion, about 3 percent below analysts’ estimates of $13.58 billion. A year earlier, revenues were 13.83 billion. The full-year forecast for earnings per share of $3.25 also fell short of expectations. For the closed quarter, adjusted earnings per share were 81 cents, in line with expectations, compared to 75 cents a year earlier. Management hopes for growth in the PC market in 2024, with a second half stronger than the first. Adjusted earnings per share for the fiscal second quarter are expected to be between 76 and 86 cents, compared to a consensus of 81 cents.
Paramount Global posted fiscal fourth-quarter adjusted earnings per share of 4 cents, compared to consensus of -5 cents and positive adjusted EPS of 8 cents a year earlier. Revenues totaled $7.64 billion, missing the market consensus by 2%, while they stood at $8.13 billion a year earlier. The group’s unexpected profit for the quarter comes from a positive surprise on streaming. Bob Bakish, CEO, now estimates that Paramount+ will reach profitability in the domestic market in 2025. The streaming platform added 4.1 million subscribers in the quarter compared to 2.7 million in the prior period. The consensus was 4 million.
Duolingo is jumping on Wall Street, as the language learning platform forecasts 2024 revenues in a range of $790 million to $802 million, well above the consensus which was $699 million. For the closed quarter, the group posted revenues of $151 million, up 45% year-on-year and compared to a market consensus of $147 million. Quarterly adjusted earnings per share represented 26 cents, compared to 21 cents consensus and -35 cents a year before.
AMC, the American cinema chain which continues to dilute its shareholders, drops again before market on Wall Street the day after its quarterly publication. AMC posted a heavier-than-expected quarterly loss, with increased spending on distribution of Taylor Swift and Beyoncé concert films and the absence of major Hollywood releases. The group posted a turnover of 1.10 billion dollars for the quarter against 1.05 billion consensus. Major titles, including the second part of ‘Dune’, were pushed back to this first quarter due to strikes which interrupted numerous American productions at the end of last year. AMC thus focused on the concert films ‘Taylor Swift: The Eras Tour’ and ‘Renaissance: A Film by Beyonce’, but operating expenses climbed to 1.25 billion in the closed quarter. The group reported a loss per share of 83 cents.
Anheuser-Busch InBev, the Wall Street-listed Belgian brewing giant, posted better-than-expected profit for its fourth quarter and fiscal 2023. For the quarter ended, revenue rose 8% to $14.5 billion with the rise in prices, and despite the lackluster performance of Bud Light in the United States. Volumes fell by 2.6% over the quarter compared to -1.5% consensus. Over the financial year, these volumes declined by 1.7% compared to -1.3% expected. Quarterly adjusted earnings per share were 82 cents versus 81 cents consensus. For the year, revenues totaled $59.4 billion, for adjusted earnings per share of $3.05. The group with the Budweiser, Bud Light, Stella Artois and Corona brands posted an annual profit of 6.89 billion dollars, compared to 7.6 billion a year before.
Best Buy, the American giant in the distribution of consumer electronics products, announced revenues of $14.65 billion for its fourth fiscal quarter of 2024, compared to $14.73 billion a year earlier. The change in comparable sales is negative -4.8%. GAAP diluted earnings per share were $2.12, while adjusted earnings per share were $2.72. The consensus was for $2.51 in adjusted earnings per share on $14.53 billion in revenue. The group now expects, for the 2025 financial year, adjusted earnings per share ranging from $5.75 to $6.20, the range surrounding the consensus. Like-for-like sales are expected to be stable or declining by up to -3%.
C3.ai, one of the leading American artificial intelligence groups, which offers a comprehensive enterprise AI application development platform and a turnkey enterprise AI application family, goes back on Wall Street this Thursday. The group published results that exceeded market expectations, posting revenues of $78.4 million, an increase of 18%, subscription revenues of $70.4 million and an adjusted gross margin of 54. 7 million (70% margin). The adjusted loss per share was 13 cents. Hitesh Lath, accounting director, will take over as financial director tomorrow in place of Juho Parkkinen.
Hormel Foods, the American food group known for its precooked meats, climbs on Wall Street following quarterly results. For its first fiscal quarter of 2024, the group posted stable revenues of $3 billion, compared to a consensus of around $2.9 billion. Adjusted earnings per share were 41 cents versus 34 cents consensus. For fiscal 2024, the group forecasts net sales growth of 1-3%, which assumes volume growth in key categories. Adjusted diluted net income per share is still expected between $1.51 and $1.65.
Electronic Arts, the American video game publisher, plans to cut around 5% of its global workforce as part of a restructuring plan that also includes a reduction in real estate footprint. The group expects to record corresponding charges ranging from $125 million to $165 million. Most of the actions under this plan should be finalized before the end of the year. Last year, the group had around 13,400 employees, two thirds of whom were international.
Apple should unveil its generative artificial intelligence projects this year, said Apple group CEO Tim Cook at the annual general meeting of shareholders yesterday. Cook said the Cupertino, California-based group saw incredible potential for progress in generative AI. “That’s why we’re currently investing significantly in this area. We believe it will unlock transformative opportunities for users in terms of productivity, problem solving and much more,” said the Apple executive, which nevertheless seems to have for the moment been a little slower than the competition in the deployment of such tools, in the face of visible progress from Microsoft – with OpenAI – and Alphabet.
Cook, however, claims that AI was already at work “behind the scenes” on Apple products. It promises more new features and explicit AI features later this year. Bloomberg for its part clarified that Apple plans to use AI to improve the searchability of data stored on its devices. Cook says that every Mac powered by Apple silicon is in fact already “an extraordinarily capable AI machine. In fact, there is no better computer for AI on the market today.”
