DAILY MARKET REPORTS
- Stocks fell on Friday for the first time in 4 days, giving back their initial gains, as sharp losses in Apple overshadowed better-than-expected employment data and renewed optimism on trade.
- Apple fell after the company’s iPhone shipments for last quarter missed estimates. The company also offered light guidance and announced major changes to its reporting structure.
- Stocks initially surged after the Labor Department said the U.S. economy added 250,000 jobs last month. Economists expected an addition of 190,000.
- Wages, meanwhile, rose 3.1% on an annualized basis in October for the first time since the recession..
US FINANCIAL MARKET
Apple warns holiday sales may disappoint amid weakness in emerging markets
- Apple warned that sales for the holiday quarter would likely miss expectations, which it blamed on weakness in emerging markets, foreign exchange costs and uncertainty whether the iPhone maker can keep up with demand for new products.
- For the quarter ended in September, Apple brought in $62.9 billion in revenue, beating expectations of $61.5 billion.
- Apple sold 46.9 million iPhones in the fiscal fourth quarter, missing analyst expectations of 47.5 million iPhones.
- The average selling price of iPhones was $793, well above analyst estimates of $750.78.
- Apple said revenue from services reached $10 billion, in line with analyst estimates.
- Net income increased to $14.1 billion, compared to $10.7 billion in the same period a year ago and ahead of estimates.
- Apple expects between $89 and $93 billion in revenue next quarter, with a midpoint coming in below expectations of $93 billion.
- Apple said it would stop providing unit sales for iPhones, iPads, and Macs in fiscal 2019, a step toward becoming more of a services business – a move the market did not appreciate, sending shares down almost 7%.
Starbucks same-store sales boosted by U.S., China rebound; shares soar
- Starbucks reported a better-than-expected rise in quarterly sales at established stores as it benefited from higher prices in the United States and a rebound in China, sending its shares up nearly 9%.
- Total net revenue rose 11% to $6.30 billion, beating expectations of $6.27 billion.
- Sales at established U.S. cafes in the fourth quarter grew 4%, well above analysts’ expectations, while the amount spent by customers on average rose 5%, helping the company post its best U.S. sales growth in five quarters.
- Same-store sales in China also rose 2%, reversing a decline from the third quarter and driving a 3% rise in global comparable store sales.
- Net income declined to 4% to $756 million from $789 million in the year ago quarter, despite a 52% decrease in the company’s tax expense.
Exxon Mobil profit tops estimates but production falls
- Exxon Mobil reported a quarterly profit that topped analysts’ estimate on higher prices received for its oil and natural gas but its production volumes fell on a year-over-year basis.
- Oil production fell 3% to 3.8 million barrels of oil equivalent and natural gas output dropped 4%, the company said.
- The company posted third-quarter net income of $6.24 billion, compared with $3.97 billion a year ago.
Chevron quarterly profit doubles as U.S. oil production jumps
- U.S. oil and natural gas producer Chevron said its quarterly profit doubled as record oil and gas production helped overcome a series of one-time items.
- Chevron’s production rose to 2.96 million barrels of oil equivalent per day (boed) from 2.72 million boed a year ago.
- Chevron topped analysts’ estimates with third-quarter net income of $4.05 billion, compared with $1.95 billion in the same quarter a year earlier.
- Quarterly results included $930 million in one-time expenses offset by a $350 million gain from a sale.
CBS third-quarter revenue, profit tops estimates
- TV broadcaster and media company CBS beat analysts’ estimates for third-quarter revenue and profit on Thursday, boosted by strong advertising sales and higher digital subscriptions.
- Total revenue rose 3% to $3.26 billion, beating expectations of revenue of $3.24 billion.
- Advertising revenue rose 14.2% to $1.26 billion, but affiliate and subscription fees revenue fell 12% to $1.01 billion.
- Net income rose to $488 million in the quarter, from $418 million a year earlier.
AbbVie lifts profit target after cancer drug powers quarterly beat
- AbbVie beat estimates for third-quarter profit, driven by strong sales of blockbuster cancer medicine Imbruvica, and the drugmaker raised its 2018 earnings forecast.
- Net revenue rose nearly 18% to $8.24 billion in the quarter, beating the average estimate of $8.23 billion helped by sales of its blood cancer treatments.
- Sales of Humira, about two-thirds of Abbvie’s net revenue, rose 9% to $5.12 billion, ahead of the $5.10 billion forecast.
- Net earnings jumped 68.4% to $2.75 billion, ahead of estimates after adjusting for items.
U.S. Steel profit beats; forecast cut weighs on shares
- United States Steel beat Wall Street estimates for quarterly profit on Thursday, as the Trump administration’s hefty tariffs on imported steel boosted prices and shipments.
- Revenue rose to $3.73 billion, above analysts’ estimate of $3.71 billion, due to a 4% jump in total quarterly shipments from a year earlier, although flat compared with the second quarter.
- Net income rose to $291 million in the quarter, from $147 million a year earlier.
- The steelmaker cut its 2018 adjusted EBITDA to about $1.80 billion, compared with its earlier forecast of $1.85 billion to $1.9 billion, saying it was seeing lower customer orders as steel prices fall from their highs.
MasTec Fourth Quarter Adjusted EPS Forecast Beats Estimates
- Third quarter 2018 revenue was $1.98 billion, compared with $1.96 billion for the same period last year, but slightly below estimates of $1.99 billion.
- Third quarter 2018 adjusted net income was $105.2 million compared to $68.0 million in the third quarter of 2017, a 62% increase driven by a lower tax rate and a higher gross margin.
- The company’s backlog jumped to a record $7.8 billion, up 56% from the third quarter of 2017.
- MasTec’s forecast of $1.05 per share in profit and 1$.9 billion in revenue in the fourth quarter beat expectations of $1.03 per share and $1.89 billion in revenue by analysts.
Fluor Reports Third Quarter Results
- Third quarter revenue was $4.7 billion compared to $4.9 billion in the prior year and ahead of estimates of $4.6 billion.
- Net income declined to $77.3 billion compared to $94.5 billion a year ago and came in below estimates.
- New awards for the quarter were $9.6 billion. Consolidated ending backlog was $34.9 billion, up from $32.9 billion a year ago.
MetLife posts profit on higher net investment income
- Insurer MetLife reported a third-quarter profit, compared with a year-ago loss, helped by volume growth, favorable underwriting, expense management and improved investment income.
- Premiums, fees and other revenue fell 4% to $12.1 billion due to weakness in Asia, Europe, Middle East and Africa.
- Net income was $880 million, compared to a loss of $97 million a year earlier.
Symantec second-quarter profit beats estimates, shares rise
- Cybersecurity firm Symantec beat analysts’ estimates for second-quarter profit and revenue on Thursday, easing investor concerns following three consecutive quarters of disappointing results and forecast cuts.
- Revenue fell to $1.18 billion from $1.24 billion. Analysts on average had expected revenue of $1.15 billion.
- The company’s loss narrowed to $8 million in the quarter, from a loss of $12 million a year earlier.
Kraft Heinz earnings disappoint as costs surge, shares slide
- Tater tots maker Kraft Heinz missed quarterly earnings estimates, sending its shares down more than 7%, as steep commodity costs, other expenses and pricing promotions overshadowed higher-than-expected sales.
- Net sales rose 1.6% to $6.38 billion, topping Wall Street estimates of about $6.31 billion.
- Pricing fell 0.9%, a disappointing reversal from the higher prices the company reported in the first half of the year.
- Net income fell by a third, reflecting a similar decline in operating income, to $630 million in the quarter versus $944 million in the same period a year ago.
GoPro forecasts fourth-quarter revenue below estimates, shares fall
- GoPro forecast a fourth-quarter revenue below analysts’ estimates as it continues to battle waning demand for its products, sending the shares of the action-camera maker down nearly 13% in after-market trading.
- Revenue fell 13.3% to $285.9 million. Analysts had expected revenue of $272.3 million.
- The company reported a net loss of $27.1 million in the quarter, compared to a profit of $14.7 million a year earlier.
- The company expects fourth-quarter revenue to be between $360 million and $380 million, below estimates of $392.9 million.
US ECONOMY & POLITIC
Jobs smash estimates with gain of 250,000, wage gains pass 3% for first time since recession
- Nonfarm payrolls powered up by 250,000 for the month, well ahead of estimates of 190,000.
- The unemployment rate stayed at 3.7%, the lowest since December 1969.
- Average hourly earnings increased by 5 cents an hour for the month and 83 cents year over year, representing a 3.1% gain. The annual increase in wages was the best since 2009.
- The ranks of the employed rose to a fresh record 156.6 million and the employment-to-population ratio increased to 60.6%, the highest level since December 2008, according to the department’s household survey.
- Participation rate increased to 62.9% from 62.7 percent the prior month.
- The big month for job gains comes off a disappointing September that may have been weighed down by the violent storm season in the Carolinas.
- U-6, or underemployment rate, fell to 7.4% from 7.5 percent; includes part-time workers wanting full-time job, people who aren’t actively looking.
Trump Asks Cabinet to Draft Possible Trade Deal with China
- President Trump wants to reach an agreement on trade with Chinese President Xi Jinping at the G20 summit in Argentina later this month and has asked key U.S. officials to begin drafting potential terms, according to four people familiar with the matter.
- The push for a possible deal with China was prompted by the president’s telephone call with Xi on Thursday, the people said, requesting anonymity to discuss internal deliberations.
- Xinhua, China’s state news agency, reported on Friday that Trump had told the Chinese leader that “he looks forward to meeting Xi during the G20 summit so they can have an in-depth discussion about some major issues.”
U.S. indicts Chinese, Taiwan firms for targeting Micron trade secrets
- The U.S. Justice Department unveiled an indictment against two companies based in China and Taiwan and three individuals, saying they conspired to steal trade secrets from U.S. semiconductor company Micron relating to its research and development of memory storage devices.
- The charges against Taiwan-based United Microelectronics, China state-owned Fujian Jinhua Integrated Circuit and three individuals who once worked for a unit of Micron mark the fourth case brought by the Justice Department since September as part of a broader crackdown against alleged Chinese espionage on U.S. companies.
- The U.S. Commerce Department earlier this week also announced that it had put Fujian Jinhua Integrated Circuit on a list of entities that cannot buy components, software and technology goods from U.S. firms.
- U.S. Attorney General Jeff Sessions told a news conference that Chinese espionage has been “increasing rapidly,” and the government is launching a new initiative to crack down on Chinese espionage trade cases..
EUROPE & WORLD
Alibaba cuts sales forecast on economic uncertainty, trade fears
- China’s Alibaba lowered its full-year sales forecast due to concerns about the economic impact of a U.S.-China trade spat, which the company expects will dent revenue ahead of its top sale season.
- Total revenue increased 54% to 85.1 billion yuan in the quarter.
- Revenue from cloud computing grew 90.5% to 5.67 billion yuan while sales in the company’s entertainment and digital media business rose 24% to 5.94 billion yuan.
- Asia’s most valuable public company cut its full-year revenue forecast to between 375 billion and 383 billion yuan ($54.4 billion -$55.6 billion), a 4-6% drop.
- Despite the weak forecast, net income rose 13% to 20.03 billion yuan, above analyst estimates.
TODAY in HISTORY
- Harry S. Truman defeated Thomas E. Dewey to the surprise of pollsters and newspapers, in the greatest presidential upset in history. (1948)
- Jimmy Carter defeated Gerald Ford, becoming the first U.S. president from the deep South since the Civil War. (1976)
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