US FINANCIAL MARKET

Stock Market Today: Stocks Move Higher as Big Tech Climbs – Wall Street Journal, 7/28/2023

• U.S. stock indexes rose Friday, lifted by tech shares, as blue-chip earnings and fresh inflation data rolled in.
• The Nasdaq Composite added more than 1.5%. The S&P 500 and Dow industrials also rose.
• The Dow on Thursday snapped a 13-day winning streak, its longest since 1987.
• Big tech stocks, including Alphabet and Meta Platforms, powered ahead.
• Big tech shares were among the day's leading gainers.
• The S&P 500's communications services sector rallied, led by Meta Platforms and Alphabet.
• Intel gained after it posted a return to profit late Thursday on the back of a resurgent PC market. Tesla and other EV stocks rose, while Ford retreated.
• Chevron and Exxon Mobil moved lower after the oil giants' quarterly profits dipped from last year's records.
• The Federal Reserve's preferred gauge of consumer inflation, the PCE price index, showed prices rising 3% in June from a year ago. That was a cooldown from the 3.8% increase in May.
• The benchmark 10-year U.S. Treasury yield fell to 3.959%, from 4.011% on Thursday.
• Japan's central bank on Friday let the yield on its 10-year government bond rise to a nearly nine-year high.
• Overseas stock markets were mixed.
• Technology stocks weighed on the Stoxx Europe 600, which slipped.

Exxon Profit Misses Estimates as Natural Gas, Refining Slip – Bloomberg, 7/28/2023

• Exxon Mobil fell short of analysts' expectations with a third straight drop in profit — the longest decline since the 2014-2016 oil-market crash — amid weaker natural gas prices and shrinking returns from fuel sales.
• Adjusted earnings of $1.94 per share were 6 cents below the Bloomberg Consensus.
• Exxon's production from key growth projects in Guyana and the US Permian Basin rose 20% during the first half of 2023 compared with a year earlier.
• Capital spending, meanwhile, is trending toward the high end of its $23 billion-to-$25 billion target for the year, while refining throughput was the highest for any second quarter in 15 years.
• Output from Guyana also reached a record daily equivalent of 380,000 barrels.
• Exxon pledged to continue buying back shares at a steady pace despite slipping cash flow and a recently announced $4.9 billion purchase of carbon-dioxide pipeline operator Denbury.
• Overall, Exxon paid out $8 billion in the form of buybacks and dividends during the second quarter.

Chevron stock falls after reporting full results, with revenue falling 48% but topping expectations – Market Watch, 7/28/2023

• Shares of Chevron fell in premarket trading Friday, after the oil giant reported full second-quarter results, a week after providing performance highlights, and confirmed a profit beat while reporting revenue that dropped nearly 30% but topped forecasts.
• Total revenue fell 29% to $48.90 billion, above the FactSet consensus of $46.73 billion.
• Net production grew 4% to a new quarterly record of 1.22 million barrels of oil equivalent per day, amid strength in the Permian Basin.
• The company confirmed that excluding nonrecurring items adjusted earnings per share was $3.08, which when revealed on July 23 beat the FactSet consensus of $2.91.

Enphase Energy's stock sinks on revenue miss and weak forecast – Market Watch, 7/28/2023

• Enphase Energy's stock initially plunged more than 15% in extended trading Thursday after the company reported quarterly revenue that fell short of analysts' estimates and offered a weak forecast.
• Revenue was $711.1 million, compared with $530.2 million last year.
• Adjusted earnings were $1.47 a share.
• Enphase provided third-quarter revenue guidance of between $555 million and $600 million, short of the $749 million forecast by analysts on FactSet.
• Analysts surveyed by FactSet had expected on average second-quarter net income of $1.28 a share on revenue of $726 million.

Roku's stock races higher after earnings as revenue blows past estimates – Market Watch, 7/28/2023

• Roku shares surged in Thursday's aftermarket action after the streaming-media company easily topped expectations with its latest results while offering upside with its forecast.
• Revenue rose to $847 million from $764 million, while analysts were modeling $775 million.
• The company logged $743 million in platform revenue, which includes advertising and licensing.
• The FactSet consensus called for $670 million in revenue within that service.
• Revenue in the devices business grew 9% to $103 million, while analysts had been modeling $105 million.
• Roku also posted a loss of $18 million on the basis of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), whereas the FactSet consensus on the metric was for a $75 million loss.
• The company logged a net loss of $108 million, or 76 cents a share, compared with a loss of $112 million, or 82 cents a share, in the year-earlier period.
• Analysts tracked by FactSet were expecting a loss of $1.26 a share.
• Roku expects $815 million in total net revenue for the third quarter, along with a $50 million loss on the basis of adjusted EBITDA.
• Analysts were forecasting $809 million in revenue and a $57 million loss on the adjusted EBITDA metric.

P&G Earnings Show Its Pricing Power Endures – Wall Street Journal, 7/28/2023

• Shoppers continue to accept high prices for staples from razors to toothpaste, propping up sales at Procter & Gamble even as volumes slipped.
• The consumer-products company said it raised prices by 7% across its brands in the June quarter from a year earlier.
• That followed two straight quarters in which the maker of Pampers and Gillette raised prices by about 10% year over year.
• Sales volumes fell 1% overall in the most recent quarter, dragged down by lower demand in its healthcare and fabric and home-care divisions, including such brands as Crest toothpaste, Tide detergent and Mr. Clean.
• Organic sales, a metric that excludes deals and currency moves, rose 8% for the latest quarter and 7% for the fiscal year ended June 30.
• P&G expects organic sales growth of 4% to 5% for the current year.
• The Cincinnati-based company said overall revenue increased around 5% to $20.6 billion in the latest quarter, slightly surpassing the $20 billion expected by analysts surveyed by FactSet.

Intel Returns to Profit as PC Rebound Lifts Chip Demand – Wall Street Journal, 7/28/2023

• Intel shares soared Thursday as a resurgent personal-computer market helped it bounce back from two quarters of record losses and it forecast new demand from the artificial-intelligence boom.
• Intel's revenue rose in the second quarter compared with the previous one, reaching $12.9 billion and exceeding Wall Street forecasts.
• Revenue was 15% lower than during the same quarter a year earlier.
• The company forecast $12.9 billion to $13.9 billion of revenue in its current quarter, ahead of Wall Street estimates.
• PC shipments declined 13.4% in the second quarter, according to International Data Corp., a more-modest fall than the 29% rout in the first quarter.
• Sales in Intel's PC-chip division fell by 12% in the second quarter, the company said.
• But the $6.8 billion in sales topped the $5.8 billion for that division in the first quarter.
• Sales in the company's data-center and AI division fell 15% in the second quarter to $4 billion.
• Amid the market struggles, Gelsinger has announced layoffs and promised to slash costs by $3 billion this year and boost cuts to as much as $10 billion annually by the end of 2025.
• The $1.5 billion profit defied analysts' expectations of another loss.
• It came after the $2.76 billion shortfall that Intel reported the previous quarter, the worst ever recorded for the storied chip maker.

Ford Raises Profit Forecast Despite Steeper EV Losses – Wall Street Journal, 7/28/2023

• Ford Motor delivered healthy profits for the second quarter and raised its profit outlook for the full year, the latest sign that the car business continues to defy Wall Street's gloomy forecasts heading into the year.
• Revenue rose 12% to $45 billion.
• In its EV division, Ford lost about $1.1 billion, widening from its roughly $700 million loss last quarter.
• In the April-to-June period, strong sales of pickups, especially among businesses and other commercial customers, helped the Dearborn, Mich. auto maker's bottom line.
• Pretax earnings per share: 72 cents per share, easily surpassing the analysts' average forecast of 54 cents per share, according to FactSet.
• At the same time, Ford warned Thursday of steeper-than-expected losses in its electric-vehicle business, which has been buffeted by stiff price competition in some parts of the EV market.
• Ford now expects its EV division to lose $4.5 billion this year, up from an earlier forecast of $3 billion.
• Ford raised its annual pretax-profit guidance to $11 billion to $12 billion, up from its previous projection of $9 billion to $11 billion.

First Solar earnings, revenue bring upside as stock shoots higher – Market Watch, 7/28/2023

• Shares of First Solar were moving higher in Thursday's aftermarket action after the solar-technology company easily cleared expectations with its second-quarter results.
• Net sales increased to $811 million from $621 million, while analysts were looking for $711 million.
• The company notched net income of $171 million, or $1.59 a share, compared with net income of $56 million, or 52 cents a share, in the year-earlier period.
• The FactSet consensus was for $1.00 a share in earnings.

Cadbury-maker Mondelez raises annual forecasts boosted by strong demand – Reuters, 7/28/2023

• Mondelez International on Thursday raised its full-year growth forecasts for the second time this year, helped by robust demand for the Oreo maker's snacks and chocolates despite several rounds of price increases.
• The company logged double-digit organic revenue growth across regions, including Europe, Latin America and North America, which helped improve its margins during the quarter.
• The Toblerone maker now expects full-year organic net revenue and adjusted per-share profit growth of more than 12%, compared to a prior outlook of a 10% increase.
• Separately, Mondelez has sold its remaining stake in Keurig Dr Pepper for $704 million in proceeds, it said in a filing.

Dexcom lifts revenue forecast on demand for glucose-monitoring devices – Reuters, 7/28/2023

• Medical device maker Dexcom on Thursday raised its annual revenue forecast after strong demand for its continuous glucose monitoring (CGM) systems boosted second-quarter results, lifting its shares up in aftermarket trading.
• The company now expects revenue of $3.5 billion to $3.55 billion, compared with its previous range of $3.4 billion to $3.52 billion.
• Analysts estimate annual sales of $3.5 billion, according to Refinitiv data.
• Quarterly sales rose 25% to $871.3 million, beating estimates of $841.6 million.
• Excluding items, the company made a quarterly profit of 34 cents per share, compared with estimates of 23 cents.

T-Mobile Stock Slips Despite Earnings Beat – Barron's, 7/28/2023

• T-Mobile shares are losing ground late Thursday after the mobile carrier announced mixed second quarter results.
• For the June quarter, T-Mobile reported revenue of $19.2 billion, down 2.6% from a year ago, and a little shy of the Wall Street consensus forecast for $19.3 billion.
• T-Mobile said it had 760,000 postpaid phone net subscriber additions in the quarter, ahead of analysts' consensus forecast for 728,000.
• T-Mobile added 509,000 high-speed internet customers, above the consensus at 480,000.
• Adjusted EBITDA, or earnings before interest, taxes, depreciation, and amortization, was $7.3 billion, up 11% from a year ago, in line with estimates.
• T-Mobile said it bought back 25.2 million shares in the quarter for $3.5 billion.
• Profits in the quarter topped estimates though, at $1.86 a share, ahead of Wall Street at $1.69 a share.
• T-Mobile now sees postpaid net customer additions of between 5.6 million and 5.9 million, up from 5.3 million to 5.7 million.
• Core Adjusted EBITDA is now expected to be between $28.9 billion and $29.2 billion, slightly narrowing the range from a previous forecast of $28.8 billion to $29.2 billion.

Facebook Bowed to White House Pressure, Removed Covid Posts – Wall Street Journal, 7/28/2023

• Facebook removed content related to Covid-19 in response to pressure from the Biden administration, including posts claiming the virus was man-made, according to internal company communications viewed by The Wall Street Journal.
• The emails show Facebook executives discussing how they managed users' posts about the origins of a pandemic that the administration was seeking to control.
• "Can someone quickly remind me why we were removing—rather than demoting/labeling—claims that Covid is man made," asked Nick Clegg, the company's president of global affairs, in a July 2021 email to colleagues.
• "We were under pressure from the administration and others to do more," responded a Facebook vice president in charge of content policy, speaking of the Biden administration. "We shouldn't have done it."
• The email, and a number of other such internal company communications, were obtained by the Republican-led House Judiciary Committee, which has been investigating what GOP lawmakers say is the Biden administration's improper efforts to censor Americans' speech on social media about Covid and other topics.

Banks Are Halting Stock Buybacks Again as New Capital Rules Loom – Wall Street Journal, 7/28/2023

• They called it the Basel Endgame, but U.S. banks and their investors have a long way to go before they have outright clarity on new capital rules. That is acting as a stop sign for stock buybacks.
• The Federal Reserve and other banking regulators on Thursday announced a long-awaited proposal on stricter new rules governing the safety nets banks build under themselves.
• That, in turn, will impact the amount of profits banks return to investors through buybacks.
• The proposed rules are the latest iteration of the U.S. interpretation of international Basel requirements.
• The idea behind the rules is for banks to hold more capital against specific business transactions.
• To build the higher buffers, banks will have to hold on to profits instead of investing them or returning them to investors via dividends or buybacks.
• Bankers have been warning that higher capital will crimp their lending, but the first chopping block is undoubtedly stock buybacks.

Yellow in Talks to Sell Its Logistics Business – Wall Street Journal, 7/28/2023

• Trucking company Yellow said it is in talks with multiple parties about selling Yellow Logistics as the financially ailing operator seeks to raise cash.
• Yellow didn't say who the company is talking with but said in a statement Thursday that discussions are "active and ongoing."
• Shares of Yellow initially rose in post-market trading before falling back to 57 cents a share, where they closed the regular session, down 44%.

Biogen to Buy Reata Pharmaceuticals in $7.3 Billion Deal – Wall Street Journal, 7/28/2023

• Biopharmaceutical company Biogen has agreed to buy smaller peer Reata Pharmaceuticals in a $7.3 billion deal that bolsters its portfolio of treatments for neuromuscular and rare diseases.
• Biogen on Friday said it would pay $172.50 a share in cash for Reata, a nearly 59% premium to Thursday's closing price of $108.55 for the Plano, Texas-based company, which earlier this year won Food and Drug Administration approval for Skyclarys as the first U.S. treatment for the genetic disorder Friedreich's ataxia.
• Biogen, based in Cambridge, Mass., said it plans to fund the deal with cash on hand, supplemented by the issuance of term debt, adding that it expects to complete the acquisition by the end of the year.