Wall Street is losing ground for the hour before market this Thursday, the S&P 500 falling by 0.2% after its historic records recorded yesterday evening at 4,995 pts. The Dow Jones dropped a few points, while the Nasdaq is expected to fall by 0.2%. Operators took note of a new series of quarterly results, with some pleasant surprises on the Walt Disney and Arm files.
On the economic front, operators took note of weekly unemployment registrations for the week ending February 3, numbering 218,000, compared to around 220,000 market consensus according to FactSet and 227,000 a week earlier. Stocks and wholesale sales are expected at 4 p.m.
Many members of the Fed spoke yesterday, with interventions from Adriana Kugler, Susan Collins, Thomas Barkin and Michelle Bowman. Governor Kugler presented her optimistic view that inflation will continue to fall, while emphasizing that there is no rush to cut rates. Collins, president of the Boston Fed, said it was necessary to have more evidence of easing inflation before easing monetary policy. Barkin, president of the Richmond Fed, also said it made sense to be patient with rates. Governor Bowman, in the same spirit, indicated that it was not yet time to reduce rates, while recognizing the decline in inflation… Note that Thomas Barkin speaks again this Thursday.
According to the CME Group’s FedWatch tool, the probability of a new monetary status quo from the Fed on March 20, at the end of its next meeting, stands at nearly 84%, compared to a 16% probability of a relaxation of a quarter of a point. The same tool shows a 52% probability of a quarter-point rate cut on May 1, the date which corresponds to the next monetary meeting.
Walt Disney, Arm Holdings, PayPal, McKesson and Allstate published their quarterly reports last night. S&P Global, Philip Morris International, ConocoPhillips, Duke Energy, Intercontinental Exchange, Thomson Reuters, Apollo Global Management, Motorola Solutions, Hershey, Archer-Daniels-Midland, Zimmer Biomet, Pinterest, Expedia, Take-Two Interactive and Interpublic, reveal their latest figures today.
PepsiCo, Newell Brands and Catalent will finally announce Friday, before market.
On the Nymex, a barrel of WTI crude rose 1.5% to $75. An ounce of fine gold lost 0.7% to $2,038. The dollar index advances 0.3% against a basket of currencies.
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Arm Holdings, the British chip designer controlled by the Japanese group SoftBank and listed on Wall Street in September, more than convinced last night with its quarterly results. The stock soars by… almost 30% before market. It must be said that the group’s forecasts are surprisingly strong, with Arm forecasting revenues for the fourth fiscal quarter ended at the end of March ranging from 850 to 900 million dollars, against around 780 million consensus. Adjusted earnings per share are expected at 30 cents, compared to a consensus of 21 cents. Revenue for the 2024 fiscal year ending in March is now anticipated to be between $3.16 billion and $3.21 billion, an upward adjustment. For the just-ended fiscal third quarter, revenue increased 14% to $824 million, while adjusted EPS was 29 cents. The consensus was for 25 cents quarterly adjusted EPS on $760 million in revenue. Licensing revenues increased by 18% to 354 million, while royalty revenues increased by 11% to 470 million.
Market capitalization is expected to be around $100 billion today. The file therefore weighs more than 30 times its forecast turnover, which is not necessarily reasonable… After an IPO at $51 coldly received in September, investors are now snapping up shares at twice the price!
Walt Disney climbs 8% before market on Wall Street. The American entertainment giant exceeded expectations for the first fiscal quarter in terms of earnings per share and reduced its losses in streaming, announcing in the process a 50% increase in its dividend. The group thus posted adjusted quarterly earnings per share of $1.22, well above the consensus which was 99 cents. Revenues were $23.5 billion versus the consensus of $23.8 billion. The Burbank group revealed a cash dividend of 45 cents per share, 50% better than the previous coupon in January. It will be payable on July 25 to shareholders registered on July 8 at the close. The board of directors also approved a new $3 billion share repurchase program for fiscal 2024.
Walt Disney is now forecasting earnings per share of $4.60 for fiscal 2024, which would represent an increase of more than 20% compared to 2023. The Bloomberg consensus was at $4.27. Bob Iger, the company’s chief executive, said last night that the group was on track to meet or exceed its annualized savings target of $7.5 billion for the end of fiscal 2024. Disney+ streaming, however, is still struggling. The number of subscribers fell below 150 million during the quarter, compared to 151 million consensus. The loss of streaming operations, including Disney+, but also Hulu and ESPN+, was nevertheless largely reduced to $216 million, compared to more than a billion dollars a year earlier.
PayPal takes off on Wall Street. The group’s forecasts were timid last night. Profits should therefore be stable this year, while the payment services giant continues its spending reductions. American fintech posted payment volumes in the fourth fiscal quarter that grew by 15% to around $410 billion, compared to a consensus of $404 billion. Revenue rose 9% to more than $8 billion. Quarterly adjusted earnings per share were $1.48, versus $1.36 consensus. For the 2024 financial year, this adjusted EPS is expected at $5.10, with no change compared to last year. The San Jose group announced last month its intention to cut around 9% of the workforce in order to restore profitability. Management also announced last night a share buyback program involving at least $5 billion this year.
McKesson, the American specialist in pharmaceutical and medical distribution, as well as health care technologies, announced last night for its third fiscal quarter ended in December revenues of $80.9 billion, an increase of 15%, as well as adjusted earnings per share of $7.74 compared to $6.90 last year. Thus, revenues and profits clearly exceeded market expectations. The group also revised its annual estimates upwards. It forecasts adjusted earnings per share ranging from $27.25 to $27.65 for the year.
Allstate, the American insurer, published last night for its fourth fiscal quarter ended in December revenues of 14.91 billion dollars, up 10% year-on-year, slightly lower than the consensus of analysts. Quarterly adjusted earnings per share were $5.82, compared to a loss a year earlier, at the same time, and a consensus of around $3.9.
Thomson Reuters announced revenues of $1.82 billion for its fourth fiscal quarter, up 3% year-on-year, in line with market expectations. Adjusted Ebitda increased 12% to $707 million, representing a margin rate of 38.9%. Adjusted earnings per share were 98 cents, up 28% from last year. The consensus was for 91 cents in adjusted earnings per share on $1.82 billion in revenue. Quarterly free cash flow represented $613 million, up 16% on an adjusted basis.
Philip Morris International announced for its fourth fiscal quarter revenues of $9 billion, up 11%, operating profit down 3% to $2.9 billion and diluted earnings per share of $1.41 in drop of 8%. Adjusted earnings per share were $1.36, an increase of 12%. For the year ended, revenues were $35.2 billion, an increase of 11%, while adjusted diluted earnings per share were $6.01.
ConocoPhillips, the American specialist in oil extraction and production, announced a profit of $3 billion or $2.52 per share for its fourth fiscal quarter, compared to $3.2 billion or $2.61 per share. one year before. Adjusted profit was $2.9 billion or $2.40 per share, compared to $3.4 billion for the comparable period last year. The consensus was $2.09 adjusted EPS. The company’s total capital expenditure forecast for 2024 is between $11 billion and $11.5 billion. Production forecasts for 2024 range from 1.91 to 1.95 million barrels of oil equivalent per day.
S&P Global falls on Wall Street. The parent company of the Standard & Poor’s rating agency has just disappointed with its outlook and profits for the closed quarter. For the quarter, S&P Global posted revenues of $3.15 billion, up 7%, while its adjusted earnings per share climbed 23% to $3.13, but missed the consensus of 3. .15$. Revenue was expected at $3.13 billion. Adjusted net profit increased 19% to $988 million. The guidance is also mixed, with the group forecasting revenues ranging from $13.18 to $13.43 billion for the 2024 financial year, a level lower than expectations. Adjusted earnings per share are expected between $13.75 and $14, compared to a consensus of $14.4.
Intercontinental Exchange, the parent company of the NYSE, revealed adjusted group profit for the past quarter of $760 million, or $1.33 per share, compared to $698 million for the comparable period last year. Consolidated revenues excluding transaction expenses soared by 25% to $2.2 billion. Average daily volumes rose 26% in the fourth quarter alone and 10% for the full year.
Mattel posted revenues for its fourth quarter up 16% to $1.62 billion, but below the consensus of $1.66 billion. Adjusted earnings per share were 29 cents per share, compared to 18 cents a year earlier and 31 cents consensus. The success of the Barbie blockbuster and its impact on the group has been undeniable, but demand for toys has otherwise remained mixed. For 2024, Mattel envisages sales in line with the 5.44 billion for 2023, while analysts on average hoped for an increase of just over 1%. The group also announced a new savings plan focused on the supply chain. Annual adjusted profit is expected between $1.35 and $1.45, compared to a consensus of $1.37.
