Early Look

Friday, August 5, 2022

Futures	Up/Down	%	Last
Dow	38.00	0.12%	32,720
S&P 500	0.25	0.02%	4,151
Nasdaq	-16.50	0.12%	13,311

 

 

S&P futures flat around 4,150, in narrowest trading range in months of about 16 points (4,150 low and 4,166.25 high) ahead of the monthly payroll figures at 8:30 AM. U.S. stocks closed mixed Thursday as investors considered a fresh batch of corporate earnings reports and the latest actions in China. Treasury yields fell, extending recent volatility as investors weighed high inflation and rising interest rates against a worsening outlook for the economy. The yield on 10-year Treasury notes fell to 2.674% on Thursday from 2.747% Wednesday. Action quiet ahead of the monthly jobs report expected at 8:30 AM: Nonfarm payroll estimate for +250K jobs, private payrolls +230K, manufacturing payrolls +17K, the unemployment rate hold steady at 3.6% and average hourly earnings to rise +0.3% m/m. Stocks have ripped higher in recent weeks, pushing the S&P 500 15% higher from its mid-June low amid signs that some drivers of the inflation surge are easing. In Asian markets, The Nikkei Index gained 243 points to settle at 28,175, the Shanghai Index rose 37 points or 1.19% to 3,227, and the Hang Seng Index edged higher 27 points to 20,201. In Europe, the German DAX is down about -20 points to 13,643, while the FTSE 100 slips -0.15% to 7,435.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -3.23 points, or 0.08%, to 4,151.94

·     The Dow Jones Industrial Average fell -85.68 points, or 0.26%, to 32,726.82

·     The Nasdaq Composite advanced 52.42 points, or 0.41%, to 12,720.58

·     The Russell 2000 Index declined -2.47 points, or 0.13% to 1,906.46

 

Economic Calendar for Today

·     8:30 AM ET                  Non-farm payrolls for July…est. +250K

·     8:30 AM ET                  Private Payrolls for July…est. +230K

·     8:30 AM ET                  Manufacturing Payrolls for July…est. +17K

·     8:30 AM ET                  Unemployment Rate for July…est. 3.6%

·     8:30 AM ET                  Average Hourly Earnings for July…est. +0.3%

·     1:00 PM EST                Baker Hughes Weekly rig count data

·     3:00 PM ET                   Consumer Credit for June

 

Earnings Calendar:

·     Earnings Before the Open: AAWW ACMR ADNT AMCX AXL CLMT CNK CVGI DKNG ESNT FLR FWONA GOGO GT GTES GTN JOUT LBRDA LESL LSXMA MMI PAYA PRLB ROAD RUTH SRCL SSP TILE TRMB TWST VIVO VST WAB WDC WOW

 

 

Macro	Up/Down	Last
Nymex	0.15	88.69
Brent	-0.03	94.09
Gold	-4.30	1,802.50
EUR/USD	-0.0012	1.0231
JPY/USD	0.23	133.08
10-Year Note	+0.021	2.697%

 

 

World News

·     Chinese warplanes and warships carried out maneuvers off Taiwan’s coast on Friday morning, Taiwan’s Ministry of National Defense said. During the operation, China’s military crossed the median line in the Taiwan Strait – WSJ

·     China announced sanctions on Nancy Pelosi and her immediate family members over her trip to Taiwan.

 

Sector News Breakdown

Consumer

·     Beyond Meat (BYND) 2Q EPS ($1.53) vs est. ($1.18) on revs $147Mm vs est. $149.2Mm, adj EBITDA ($68.8Mm) vs est. ($60Mm); announces reduction-in-force off approx 4% of its global workforce; sees FY revs $470-520Mm vs est. $559.4Mm

·     B&G Foods (BGS) Q2 adj EPS $0.07 vs. est. $0.27; Q2 revs $479M, in-line with consensus; guides FY adjusted EPS $1.08-$1.28 below consensus $1.68, reaffirms year sales and revised its full year fiscal 2022 adjusted EBITDA guidance to a range of $300M-$320M

·     Callaway Golf (ELF) Q2 EPS $0.47 vs. est. $0.42; Q2 revs $1.12B vs. est. $1.1B; sees Q3 revenue $940M-$955M vs. consensus $967.83M; raising its full year 2022 Adjusted EBITDA guidance to $555 million – $565 million, an increase of $15 million at the midpoint

·     Carvana (CVNA) Q2 EPS loss (-$2.35) vs. est. loss (-$1.79); Q2 revs $3.88B vs. est. $3.98B; qtrly retail units sold of 117,564, an increase of 9% y/y; continue to expect sequential improvements in SG&A per retail unit sold in q3 vs. q2 and again in q4 vs. q3 on a consolidated basis

·     DoorDash (DASH) 2Q revs $1.6B vs est. $1.52B, adj EBITDA $103Mm vs est. $57.5Mm; sees 3Q marketplace gov to be in range of $13.0-13.5B and adj EBITDA $25-75Mm vs est. $50.5Mm

·     Expedia (EXPE) 2Q adj EPS $1.96 vs est. $1.56 on revs $3.2B vs est. $2.99B, qtrly gr bookings +26%, qtrly booked room night +21%, qtrly lodging gross bookings +8% vs 2Q19

·     Floor & Décor (FND) 2Q adj EPS $0.76 vs est. $0.73 on revs $1.09B vs est. $1.07B, comps +9.2%; sees FY sales $4.29-4.33B vs est. $4.32B, comps +10-11%, adj EBITDA $565-580Mm vs est. $568.7Mm

·     Funko (FNKO) Q2 adj EPS $0.26 vs. est. $0.23; Q2 revs +33.7% y/y to $315.7M vs. est. $292.6M; guides year EPS $1.88-$1.99 vs. est. $1.90 and sales $1.3B-$1.35B vs. est. $1.31B

·     Lyft Inc. (LYFT) 2Q adj EPS $0.13 vs est. ($0.03) on revs $990.7Mm vs est. $990.5Mm, revs per active rider $49.89 +12% to second highest on record, active drivers around +25% highest level since covid began, contribution margin 59.6%

·     Monster Inc. (MNST) 2Q EPS $0.51 vs est. $0.70 on revs $1.66B vs est. $1.61B; says sets price increase for September in US and sees increases in certain int’l markets planned for 2Q22

·     Tesla (TSLA) shareholders approved a board proposal authorizing an increase in outstanding shares to enable a three-for-one stock split. Two board proposals – cutting directors’ terms to two years and eliminating supermajority requirements – did not receive the required number of votes

·     TripAdvisor (TRIP) Q2 adj EPS $0.37 vs. est. $0.27; Q2 revs $417M vs. est. $393.03M; said saw “robust” 2q improvement; Viator and TheFork Had Strong 2Q Growth; said average monthly users rose 19%, reaching about 83% of Fugure for comparable 2019 period

·     Zillow (ZG) Q2 adj EBITDA $164M vs $183M last year; Q2 revs $1.0B vs. est. $984.56M; announces multi-year partnership with Open Door (OPEN) that combines two category leaders to transform how people start their move; Premier Agent revenue decreased 5% year over year to $333 million; Rentals revenue decreased 3% year over year to $71 million; sees Q3 revenue of $431M-461M, down from the consensus of $561.9M.

 

Financials

·     Block Inc. (SQ) Q2 EPS $0.18 vs. est. $0.16; Q2 revs $4.4B vs. est. $4.34B; ex-Bitcoin, Q2 revs rose 34% to $2.62B; Transaction-based revenue $1.48B, +20% y/y, vs. est. $1.51B; Block posted $1.79 billion in Bitcoin transactions in the second quarter, down 34% y/y; recorded an impairment charge of $36 million on its bitcoin holdings

·     Green Dot (GDOT) Q2 EPS $0.74 vs. est. $0.55; Q2 revs $362.8M vs. est. $355.1M; raises FY22 EPS view to $2.35-$2.49 from $2.32-$2.46 (est. $2.440; reaffirms FY22 operating revenues to be between $1.394B-$1.43B, or up 2% y/y at midpoint

·     Paylocity (PCTY) 4Q adj EPS $0.80 vs est. $0.54 on revs $218.1Mm vs est. $218.1Mm; sees 1Q23 revs $237.3-241.3Mm vs est. $225.6Mm and adj EBITDA $55-58Mm vs est. $56Mm; sees FY23 revs $1.087-1.092B vs est. $1.034B and adj EBITDA $314.5-318.5Mm vs est. $287.2Mm

·     Redfin (RDFN) Q2 EPS loss (-$0.73) vs. est. loss (-$0.60); Q2 revs $606.9M vs. est. $612.6M; sees Q3 revenue $590M-$627M vs. est. $626.7M and total Q3 net loss is expected to be between $87M-$79M compared to net loss of $19M q/q

·     Rocket Companies (RKT) 2Q adj EPS ($0.03) vs est. $0.02 on revs $1.4B vs est. $1.49B

 

Healthcare

·     Acadia Pharma (ACAD) -11% after the FDA declines to approve expanded use of Co’s antipsychotic drug; has recommended that Acadia conduct an additional trial

·     Amgen inc. (AMGN) 2Q adj EPS $4.65 vs est. $4.40 on revs $6.59B vs est. $6.53B, adj op margin 53.1%; sees FY revs $25.5-26.4B vs est. $26.2B and adj EPS $17.00-18.00 vs est. $17.40

·     CareDX Inc. (CDNA) Q2 EPS loss (-$0.13) vs. est. loss (-$0.11); Q2 revs $80.6M vs. est. $81.9M; cuts FY22 revenue to $325M-$335M vs. est. $337.9M

·     Doximity (DOCS) -17%; after cutting FY rev guidance to $424M-$432M, well below consensus estimate of $455.92M and prior view of $454M-$458M

·     Insulet Corp. (PODD) Q2 EPS loss (-$0.50) vs. est. $0.22; Q2 revs rose 13.8% y/y to $299.4M vs est. $291.5M; raises FY22 revenue growth view to 14%-17% from 12%-16%

·     Iovance BioTherapeutics (IOVA) Q2 EPS loss (-$0.63) vs. est. (-$0.61); says cash position of $430.9M at June 30 is expected to be sufficient into 2024

·     PTC Therapeutics (PTCT) Q2 EPS loss ($2.13) vs. est. loss ($1.67); Q2 revs $165.5M vs. est. $162.09M; sees year revs $700M-$750M vs. est. $722.9M; said The Duchenne muscular dystrophy (DMD) franchise continued to show strong growth, with second quarter total net product revenue of $134 million, or 32% year-over-year growth

·     Vertex Pharma (VRTX) 2Q adj EPS $3.60 vs est. $2.48 on revs $2.2B vs est. $2.13B; raises FY product revs guide to $8.6-8.8B vs prior $8.4-8.6B and est. $8.58B

 

Industrials & Materials

·     Corteva Inc. (CTVA) said it expects $400M in restructuring charges through 2Q23 as it plans to exit certain geographies and product lines. During 2Q22, the seed and pesticide company recorded $68M in restructuring charges, $45M of which is related to its previously announced decision to leave Russia.

·     MasTec (MTZ) Q2 adj EPS $0.73 vs. est. $0.72; Q2 revs $2.30B vs. est. $2.24B; guides Q3 EPS and FY below views and revs mixed

·     Republic Service (RSG) Q2 adj EPS $1.32 vs. est. $1.18; Q2 revs $3.41B vs. est. $3.29B; raises 2022 adjusted EPS outlook to $4.77-$4.80 from $4.58-$4.65 (est. $4.69); raised its full-year adjusted free cash flow guidance to $1.7B-$1.725B

·     Virgin Galactic (SPCE) files prospectus for offering of up to $300 mln of common stock, released Q2 results, and again delayed its commercial flight to Q2 2023 from Q1 2023

 

Media & Internet

·     AT&T (T) and Warner Bros. Discovery (WBD) announce distribution agreement for HBO Max. The agreement replaces an earlier one that offered HBO Max to AT&T Mobility and Internet clients

·     AMC Entertainment (AMC) beats quarterly revenue estimates; also announced a special dividend in the form of preferred stock, to paid on Aug. 19. The company will issue one preferred equity unit for each of the 516.8 million class A common stock: Revenue in the quarter ending June 30 rose to $1.17 billion from $444.7 million a year earlier

·     Live Nation (LYV) Q2 EPS $0.66 vs. est. $0.51; Q2 revs $4.43B vs. est. $3.96B; Highest Quarterly Attendance Ever with Over 33Mm fans across 12,500 Events; said Ticketmaster delivers another record quarter – AOI Up 86%, Transacted GTV Up 76% — Sponsorship AOI Up 81% in Q2

·     Warner Brothers (WBD) Q2 EPS loss (-$1.50) vs. est. $0.08; Q2 revs fell -1% y/y ex-FX to $9.83B vs. est. $11.9B; total DTC subscribers were 92.1 million at q2 end an increase of 1.7 million global subscribers since the end of q1

·     Yelp Inc. (YELP) 2Q EPS $0.11 vs est. $0.01 on revs $299Mm vs est. $286.2Mm; adj EBITDA $67.3Mm vs est. $52.8Mm

 

Technology & Telecom

·     Atlassian Corp (TEAM) Q4 EPS in-line at $0.24 on revs $759.8M up 36% y/y vs. est. $725.3M; Quarterly subscription revenue of $597 million, up 55% y/y; Quarterly IFRS operating margin of (8)% and non-IFRS operating margin of 14% ; Quarterly cash flow from operations of $230 million and free cash flow of $195 million; guides Q1 revs $795M-$810M vs. est. $770M; named Joe Binz formerly with roles at MSFT and INTC as its new CFO and Principal Financial Officer.

·     Cloudflare Inc. (NET) 2Q adj EPS $0.00 vs est. ($0.01) on revs $234.5Mm vs est. $227.3Mm; sees 3Q revs $250-251Mm vs est. $246.9Mm and adj EPS $0.00-0.01 vs est. $0.01; sees FY revs $968-972Mm vs est. $958.4Mm and adj EPS $0.03-0.04 vs est. $0.03

·     Dropbox (DBX) 2Q adj EPS $0.38 vs est. $0.37 on revs $572.7Mm vs est. $570.4Mm, gross margin 81.5%, adj op margin 31.9%

·     HubSpot Inc. (HUBS) 2Q adj EPS $0.44 vs est. $0.43 on revs $421.8Mm vs est. $409.3Mm; sees 3Q revs $425-426Mm vs est. $438.3Mm and adj EPS $0.50-0.52 vs est. $0.52; sees FY revs $1.69-1.695B vs est. $1.72B and adj EPS $2.28-2.30 vs est. $2.35

·     Motorola Solutions (MSI) Q2 EPS $2.07 vs. est. $1.87; Q2 revs $2.1B vs. est. $2.06B; raises FY22 EPS view to $10.03-$10.13 from $9.80-$9.95 (est. $9.86) and raises FY revenue growth to approximately 8%, up from its prior guidance of approximately 7%

·     New Relic (NEWR) 1Q adj EPS ($0.26) vs est. ($0.36) on revs $216.5Mm vs est. $213.2Mm; sees 2Q revs $219-224Mm vs est. $225.3Mm and adj EPS ($0.07)-($0.04) vs est. ($0.07); sees FY revs $920-930Mm vs est. $944Mm and adj EPS ($0.17)-($0.10) vs est. ($0.34)

·     NortonLifeLock (NLOK) 1Q adj EPS $0.45 vs est. $0.43 on revs $707Mm vs est. $710Mm; sees 2Q adj revs $695-705Mm vs est. $720.7Mm and adj EPS $0.44-0.46 vs est. $0.44; sees 3Q adj revs $695-705Mm vs est. $729.6Mm

·     Skyworks Solutions (SWKS) Q3 adj EPS $2.44 vs. est. $2.35; Q3 revs $1.23B vs. est. $1.23B; raises quarterly dividend 11% to 62c per share; sees Q4 revenue $1.375B-$1.425B vs. est. $1.42B

·     Twilio (TWLO) 2Q adj EPS ($0.11) vs est. ($0.20) on revs $943.4Mm vs est. $919.4Mm; sees 3Q revs $965-975Mm vs est. $977.9Mm