DAILY MARKET REPORTS
- U.S. stocks ticked higher in thin trading on Tuesday, supported by strong earnings and a rebound in technology stocks from a two-day selloff, while investors braced for the outcome of U.S. midterm elections.
- Polls point to President Donald Trump’s Republican party losing control of the House of Representatives, which could curb some of his policymaking power.
- A political gridlock between the White House and Congress could hinder Trump’s pro-business agenda and raise concerns about political instability, but most analysts say this may not be the worst outcome for equities.
- Booking Holdings gained 6.3% after the online travel agency forecast fourth-quarter profit above estimates.
- Mylan jumped 12.9% after the drugmaker beat analysts’ estimates for third-quarter profit.
- Pharmacy chain CVS Health was up about 2.9% after its quarterly profit beat analysts’ estimates on higher sales of prescription drugs and consumer health and beauty products.
US FINANCIAL MARKET
Booking Jumps as Fourth-Quarter Forecast Beats Estimates
- Booking Holdings analysts raised their targets on the online travel company Tuesday, after it reported results that beat expectations and pointed to continued growth ahead.
- The company posted revenue of $4.85 billion, above estimates of $4.81 billion.
- Travel bookings rose 12% and nights sold rose 13.4%.
- Net income increased marginally to $1.77 million compared to $1.72 million in the same quarter a year earlier.
- The company forecasted adjusted EPS of $18.90 – $19.40, well above the midpoint consensus of $18.74.
Drugmaker Mylan’s profit beats; puts no timeline on strategic options
- Mylan beat analysts’ estimates for third-quarter profit, as the generic drugmaker reported higher sales of its products in emerging markets and said it had not set any timeline on evaluating its strategic alternatives.
- Total revenue fell 4% to $2.86 billion, below expected revenue of $2.91 billion.
- Revenue from the North America unit, its biggest, fell 13.6% to $1.01 billion, mainly due to lower sales volumes of EpiPens and other products.
- The company, which reaffirmed its full-year 2018 revenue and profit forecasts, said net income doubled to $176.7 million.
CVS results beat on demand for prescription drugs, beauty products
- CVS Health’s third-quarter profit beat analysts’ estimates, as it benefited from higher sales of prescription drugs as well as consumer health and beauty products.
- Quarterly same-store sales at front-end stores rose 0.8% in contrast to analysts’ expectation of a 0.8% drop despite brick-and-mortar drugstore chains like CVS coming under increasing pressure from consumer shift to online options.
- Net revenue rose 2.4% to $47.27 billion, beating expectation of $47.18 billion.
- The company said net income rose to $1.39 billion in the quarter.
- Its income tax provision declined by $268 million in the quarter.
Lilly lifts earnings target after Trulicity boost
- Eli Lilly recorded higher sales of its newer drugs Trulicity and Taltz in the third quarter, helping the diabetes specialist top Wall Street profit estimates and raise its yearly earnings target.
- Revenue rose about 7% to $6.06 billion, edging past analysts’ expectations of $6.05 billion.
- Net income more than doubled to $1.15 billion. Results a year earlier included a write-down of more than $400 million.
- Lilly raised its 2018 adjusted earnings forecast to between $5.55 and $5.60 per share, from $5.40 to $5.50 per share.
Martin Marietta beats but lowers guidance
- Martin Marietta beat estimates for revenue and profit as the company sold higher volumes of aggregates at higher prices.
- Total revenue was up 12% to $1.22 billion from $1.09 billion a year ago. Analysts had forecast $1.15 billion.
- Net income increased 19% to $180 million from $151 million in the year ago period, predominantly due to a lower tax rate as lower gross margins in aggregates, concrete, and paving was offset by higher gross margins in cement.
- The company now expects total revenue in 2018 of $4.14 billion to $4.26 billion, down from $4.3 billion to $4.5 billion, and lowered guidance for adjusted EBITDA to a range of $1.1 billion to $1.15 billion, down from $1.18 billion to $1.30 billion.
- Challenges with weather-related events in the quarter affected guidance, the company said.
Summit Materials Tops Q3 EPS, Revenues Beat
- Summit Materials beat estimates for profit and revenue, driven by higher revenues at its Aggregates business, but higher input costs and weather-related items caused the company to lower its next quarter guidance.
- Revenue increased 9% to $694 million from $634 million in the year ago period and above estimates of $643 million.
- Net income declined to $71.3 million compared to $81.3 million a year ago, as gross margin declined 300 basis points to 32%.
- Summit reduced 2018 guidance for adjusted EBITDA to a range of $400-$410 million due to inflationary costs and weather conditions.
Ralph Lauren tops revenue estimates, North America sales rebound
- Ralph Lauren returned to growth in North America in its second fiscal quarter as a strategy to intensify marketing on social media bore fruit, also helping the upscale fashion group top Wall Street revenue estimates.
- Revenue overall rose 1.6% to $1.69 billion, better than analysts’ expectation of a 0.9% fall to $1.65 billion, .
- Net income rose to $170.3 million in the second quarter, from $143.8 million a year earlier.
ADM profit tops estimates on export sales, oilseeds
- Archer Daniels Midland reported a bigger-than-expected quarterly profit, as the U.S. grain merchant made export sales to buyers in countries other than China during an escalating trade war between Washington and Beijing.
- Revenue rose to $15.80 billion from $14.83 billion.
- Net profit rose to $536 million in the quarter, from $192 million a year earlier.
Marriott cuts current-quarter forecast on weak North America demand
- U.S. hotel chain Marriott cut its fourth-quarter forecast for a key measure of hotel health, blaming uncertainty related to weak demand in North America, its biggest market.
- The company’s revenue fell about 1% to $5.05 billion, missing estimates of $5.37 billion.
- While fewer people booked Marriott rooms across the world in the quarter, the average room rate rose 2.2%.
- Marriott’s net income dropped to $483 million in the quarter ended Sept. 30 from $485 million.
Amazon plans to split second headquarters in two cities: sources
- Amazon.com is planning to split its second headquarters evenly between two cities, people familiar with the matter said Monday, in a twist to a more than year-long contest that has drawn overtures from locales across North America.
- Dallas, Long Island City in New York and Arlington near Washington, D.C. are all among the finalists with which Amazon is holding advanced talks.
- The split could help Amazon ease the same degree of congestion and jump in costs of living that led to unrest in Seattle.
- An affordable housing crisis there prompted the city council to adopt a head tax on businesses in May, which Amazon helped overturn in a subsequent city council vote.
US ECONOMY & POLITIC
Job openings slip to 7 million in September, still near record high
- The level of job openings in the U.S. edged lower in September but was still well ahead of the total number of people looking for work, the Labor Department said Tuesday.
- Vacancies edged lower to just over 7 million, according to the Job Openings and Labor Turnover Survey (JOLTS).
- Consensus estimates had pointed to a slight decrease for September, but still at 7.125 million.
- In addition to the decline in job vacancies, the “quits” rate, which measures those who left their jobs voluntarily and is seen as a sign of worker confidence, declined a bit from 3.65 million to 3.6 million.
EUROPE & WORLD
EU digital tax plan flounders as states ready national moves
- A European Union plan to tax big internet firms like Google and Facebook on their turnover was on the verge of collapsing on Tuesday after several EU governments rejected it and announced national initiatives instead.
- Under a proposal from the EU’s executive Commission in March, EU states would charge a 3% levy on the digital revenues of large firms that are accused of averting tax by routing their profits to the bloc’s low-tax states.
- The plan is aimed at changing tax rules that have let some of the world’s biggest companies pay unusually low rates of corporate tax on their earnings.
- But it requires the support of all 28 EU states and is opposed by a number of them, including small, low-tax countries like Ireland that have benefited by allowing multinationals to book profits there on digital sales to customers elsewhere.
China says ready for U.S. talks, sees no winners in trade war
- China is ready to hold discussions and work with the United States to resolve trade disputes because the world’s two largest economies stand to lose from confrontation, Vice President Wang Qishan said on Tuesday.
- The focus is now on U.S. President Donald Trump’s meeting with Chinese President Xi Jinping at the end of the month.
- Trump has threatened to impose further tariffs on $267 billion of Chinese imports into the United States if the two countries cannot reach a deal on trade.
TODAY in HISTORY
- Abraham Lincoln was elected president of the United States. (1860)
- Mohandas Gandhi led a march of miners in South Africa. He was arrested three times in the first four days of the march. (1913)
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