US FINANCIAL MARKET

Stocks Waver As Investors Digest Fed News – Wall Street Journal, 11/4/2021

• U.S. stocks were mixed Thursday, with investors still digesting the Federal Reserve’s latest update on stimulus spending and interest rates.
• The S&P 500 rose 0.4% in morning trading, and the tech-focused Nasdaq Composite gained 0.8%.
• The Dow Jones Industrial Average slipped about 0.1%. All three had hit record highs for the fourth day in a row.
• The Fed on Wednesday said it had approved plans to start scaling back its pandemic-driven bond buying.
• With the Fed news out of the way, equities investors have turned their attention back to corporate profits.
• A strong earnings season so far has shown that Americans are still eager to pay for companies’ products and services, curtailing worries about the effect of higher prices.
• Shares of Qualcomm gained 12% after the mobile-phone chip company posted record quarterly sales and forecast further growth powered by surging demand for 5G smartphones.
• Airbnb, Square, Uber Technologies and Peloton Interactive are slated to post earnings after markets close.
• Fresh figures showed that 269,000 Americans applied for first-time unemployment benefits in the week ended Oct. 30, down from the week prior. Claims have fallen over the past few weeks.
• In bond markets, the yield on the 10-year Treasury note ticked down to 1.546% Thursday from 1.577% Wednesday.
• The Bank of England surprised some investors when it opted to leave its benchmark interest rate unchanged. In the lead-up to the decision, some investors bet on a rate increase by selling U.K. government bonds, causing prices to drop and yields to rise.
• The pan-continental Stoxx Europe 600 rose 0.3%. Commerzbank shares added more than 6% in German trading after the bank posted results that beat analysts’ estimates.
• In Asia, major indexes closed with gains. China’s Shanghai Composite and Hong Kong’s Hang Seng each added 0.8%. Japan’s Nikkei 225 climbed 0.9%.

Qualcomm Posts Record Sales Amid Surging Demand for 5G Smartphones – Wall Street Journal, 11/3/2021

• Qualcomm posted record quarterly sales and forecast further growth amid surging demand for 5G smartphones in the face of supply-chain constraints.
• The mobile-phone chip giant, whose processors are in many new 5G handsets, said sales rose 12% to $9.3 billion in its fiscal fourth quarter, generating a $2.8 billion profit, exceeding Wall Street expectations.
• Qualcomm said sales in the current quarter should reach $10 billion to $10.8 billion.
• Chief Financial Officer Akash Palkhiwala said per-share earnings growth in the fiscal year that began in October is expected to exceed 20%, driven by strength across the company’s various hardware segments.
• The company expects 500 million to 550 million shipments of 5G handsets this year.
• In the prior quarter, it said it had an upward bias for shipments in the range of 450 million to 550 million units.

Fox’s Revenue Rises as Ad Sales Improve – Wall Street Journal, 11/3/2021

• Fox, parent of Fox News and the Fox broadcast network, reported higher revenue in the latest quarter, as more original entertainment programming, live sports and growth at its streaming platforms boosted advertising sales.
• Revenue rose 12% to $3.05 billion for the quarter ended Sept. 30. Analysts polled by FactSet were expecting $2.94 billion.
• Fox’s cable programming unit, which includes the Fox Business Network and Fox Sports 1 channel as well as Fox News, pulled in $1.42 billion in revenue, up nearly 7% from last year.
• Revenue from Fox’s TV stations was $1.58 billion, up from $1.35 billion a year ago due to growth at Tubi and higher advertising sales as local markets recovered from the pandemic-induced restrictions last year.
• Profit attributable to stockholders decreased to $701 million, or $1.21 a share, for the fiscal first quarter, from $1.11 billion, or $1.83 a share, in the year-earlier period. The decline was attributed to the absence of a $462 million gain from Walt Disney related to tax liabilities from its sale of 21st Century Fox assets.

ViacomCBS edges past revenue estimates on streaming strength – Reuters, 11/4/2021

• ViacomCBS on Thursday posted better-than-expected quarterly revenue, helped by more subscriber additions to its fast-growing streaming platforms and strong advertising sales.
• Revenue rose 13% to $6.61 billion in the third quarter ended Sept. 30.
• Analysts on average had expected $6.57 billion, according to Refinitiv data.
• ViacomCBS’ streaming revenue rose 62% during the quarter to about $1.1 billion.
• The company added 4.3 million global streaming subscribers in the quarter, led by Paramount+, bringing the total to nearly 47 million.
• Operating income stood at $879 million, down from $903 million, a year earlier.
• Adjusted profit of 76 cents was in-line with Wall Street’s estimate.
• On a call with investors the company said it expects fourth-quarter streaming expenses, including content and marketing, to rise $350 million relative to third-quarter streaming costs.

Roku shares drop after streaming company misses revenue estimates – CNBC, 11/4/2021

• Roku shares dropped in after-hours trading Wednesday after the company reported a third-quarter revenue that missed expectations.
• The company’s revenue came in at $680 million, just below a Refinitiv forecast of $683.4 million. That’s still up 51% from a year earlier. Roku’s earnings per share of 48 cents, however, topped expectations for earnings of 6 cents.
• Active accounts on the platform rose 23% year over year to 56.4 million.
• That’s also an increase of 1.3 million active accounts from the second quarter.
• Player revenue, which includes the company’s streaming devices, fell 26% year over year in the third quarter to $97.4 million, while costs went up because of supply chain issues.
• Platform revenue jumped 82% to $582.5 million.
• Roku makes money on its smart TV streaming platform largely through advertising and content distribution.

Insurer MetLife’s quarterly profit beats on rebound in investment income – Reuters, 11/3/2021

• U.S. insurer MetLife blew past Wall Street estimates for third-quarter profit on Wednesday, as strong investment gains helped cushion a hit from coronavirus-related claims.
• The New York-based insurer, which had earlier said that the worst of the pandemic was behind it, reported an 18% jump in net investment income to $5.57 billion on strong returns from private-equity investments.
• Adjusted earnings in its U.S. group business took a $290 million hit from pandemic-related claims, a jump from $75 million in the prior quarter, due to a bigger share of COVID-19 deaths under age 65.
• Adjusted earnings in its U.S. group business took a $290 million hit from pandemic-related claims, a jump from $75 million in the prior quarter, due to a bigger share of COVID-19 deaths under age 65.
• The company reported adjusted profit of $2.1 billion, or $2.39 per share compared to $1.6 billion, or $1.73 per share, a year earlier. Analysts on average had expected a profit of $1.74 per share, according to Refinitiv data.

Albemarle boosts 2021 forecast on rising global lithium demand – Reuters, 11/3/2021

• Albemarle, the world’s largest producer of lithium for electric vehicles, boosted its 2021 sales forecast on Wednesday after posting an adjusted third-quarter profit that easily beat Wall Street’s expectations.
• Albemarle posted a third-quarter net loss of $392.8 million, or $3.36 per share, compared with a net profit of $98.3 million, or 92 cents per share in the year-ago quarter, even as revenue rose 11%.
• The result included a $657.4 million charge related to an arbitration decision about Rockwood Holdings Inc’s 2014 sale of a pigments division to Huntsman.
• Sales of lithium, the company’s largest division, jumped 35% during the quarter, helped by rising prices.
• Albemarle Chief Executive Kent Masters forecast “increasing demand from our customers” for the EV battery metal.
• Sales rose in the company’s bromine division, which sells chemicals for fire extinguishers and other products, and fell in the catalysts division, which sells materials for oil refineries.

Booking shines on travel rebound, COVID in Europe casts doubts on holiday demand – Reuters, 11/4/2021

• Booking Holdings topped market expectations for quarterly profit and revenue on Wednesday, but said a COVID-19 resurgence in Europe had cast uncertainty over year-end demand.
• Total revenue rose 77% to $4.68 billion in the third quarter to beat expectations of $4.30 billion.
• Its shares rose 3.7% in extended trading as gross travel bookings surged 77% from a year earlier to $23.7 billion. Room nights – a measure of occupancy at any property – rose 44%.
• The company earned $37.70 per share on an adjusted basis, compared with analysts’ average estimate of $32.9, according to Refintiv data.
• The company has also recorded more gross bookings for the Christmas and New Year period in the United States compared with pre-pandemic 2019.

EA, Take-Two boost sales view as gaming boom going strong – Reuters, 11/4/2021

• Electronic Arts and rival Take-Two Interactive Software boosted their 2021 adjusted sales forecasts as gamers remained logged into flagship titles like “FIFA 22” and “Grand Theft Auto V” even as lockdowns wound down.
• California-based EA’s shares shot up nearly 3% in extended trading as it also reported an over twofold jump in quarterly adjusted sales, beating expectations thanks to a clutch of strong titles including “Apex Legends” and “Madden NFL 22”.
• The company is also banking on the upcoming launch of warfare title “Battlefield 2042”, saying it had seen strong engagement for the game’s beta version.
• EA forecast full-year adjusted sales of $7.63 billion, compared with $7.40 billion previously.
• Analysts expected $7.59 billion, according to Refinitiv data.
• Take-Two raised its annual adjusted sales outlook to between $3.3 billion and $3.4 billion, citing strong demand for its key franchises “Grand Theft Auto V”, “NBA2K” and “Red Dead Redemption 2.”
• Streaming hours in the quarter rose 21% from a year ago to 18 billion, with active accounts averaging 3.5 streaming hours a day.

Etsy’s Earnings Were Strong. Why the Stock Slid. – Barron’s, 11/4/2021

• Shares of Etsy slipped about 2% in extended trading Wednesday after the e-commerce company’s fourth-quarter revenue guidance fell short of analyst forecasts.
• The company, however, reported fiscal third-quarter results that beat Wall Street expectations.
• Revenue improved 18% to $532.4 million from $451.5 million a year ago.
• Etsy reported net income of $89.9 million, or 62 cents a share, compared with net income of $91.8 million, or 70 cents a share, last year. The company’s adjusted net income was $174.2 million.
• Analysts surveyed by FactSet had expected third-quarter net income of 55 cents a share on revenue of $519 million.
• However, fourth-quarter sales were estimated at between $660 million and $690 million, short of the $691 million projected by analysts.

Moderna Cuts Covid-19 Vaccine Sales Forecast for 2021 – Wall Street Journal, 11/4/2021

• Moderna lowered its sales outlook for the full year and said that some planned Covid-19 vaccine deliveries will slip into early 2022.
• Its quarterly revenue through September of $4.97 billion fueled a $3.33 billion profit, or earnings of $7.70 a share.
• Those metrics soared above last year’s third-quarter levels, before Moderna’s Covid-19 shot had been approved, when revenue was $157 million and the company recorded a $233 million loss.
• But the latest results fell short of Wall Street forecasts.
• Analysts surveyed by FactSet had predicted sales of $6.2 billion and adjusted earnings of $9.09 a share.
• Moderna now expects product sales of between $15 billion and $18 billion in 2021.
• In August, the company said it had signed agreements for sales of $20 billion.
• The company forecast that in 2022, sales could range from $17 billion to $22 billion.
• Moderna said it has already signed advanced-purchase orders worth $17 billion for deliveries next year.

Kellogg Raises Sales Outlook Despite Labor Strike, Supply Challenges – Wall Street Journal, 11/4/2021

• Kellogg raised its sales outlook for the full year even as it tackles inflationary pressures, supply-chain issues and a labor strike by some of its employees.
• Kellogg posted net sales for the quarter ended Oct. 2 of $3.62 billion, up 5.6% from the comparable period last year and beating Wall Street estimates.
• In North America, net sales for the quarter were about flat, with supply challenges weighing on results.
• Third-quarter adjusted earnings were $1.09 a share, ahead of expectations of analysts polled by FactSet.
• The Battle Creek, Mich., company reaffirmed its outlook for currency-neutral adjusted earnings per share to grow about 1% to 2% for the year.
• Kellogg said its profitability and cash-flow metrics could end up at the lower end of the guidance ranges it provided due to current supply and labor challenges.
• The cereal and snack maker behind Pop-Tarts, Frosted Flakes and Rice Krispies on Thursday said it expects organic net sales—which exclude the effect of acquisitions, divestitures, foreign currency and differences in shipping days—to rise 2% to 3% in fiscal 2021. That is up from the company’s prior guidance of flat-to-1% growth in organic net sales.

Cigna profit beats as health services unit drives growth – Reuters, 11/4/2021

• Cigna reported better-than-expected third-quarter profit on Thursday and modestly raised its full-year adjusted profit forecast, on the back of growth in its health services unit that includes the pharmacy benefits management business.
• Evernorth’s adjusted revenue for the quarter ended Sept. 30 rose 12.7% to $33.61 billion, from $29.83 billion a year earlier.
• Cigna’s medical care ratio (MCR), the amount spent on medical claims versus income from premiums, worsened to 84.4% in the third quarter, from 82.6% a year earlier, compared with an estimate of 83.93%, according to four analysts polled by Refinitiv.
• Excluding special items, Cigna’s income from operations was $5.73 per share, above analysts’ estimate of $5.23 per share, according to Refinitiv IBES data.
• Cigna moderately raised its outlook for 2021 adjusted profit from operations to at least $20.35 per share, from its prior estimate of a minimum of $20.20 per share.
• The company now expects 2021 MCR to be between 84.0% and 84.5%, up from its prior forecast of 83.0% to 84.0%.

Shale drillers boost dividend as profit surpasses Wall St expectations – Reuters, 11/4/2021

• U.S. oil and gas producers on Wednesday posted quarterly profits that beat Wall Street expectations as energy prices recovered from pandemic lows to multi-year highs, prompting some drillers to raise dividend.
• Pioneer Natural Resources, Marathon Oil, Callon Petroleum, and Apache parent APA earned more than market predictions, while Continental Resources’s adjusted profit in the third quarter was in line with consensus.
• The five companies sold their U.S. oil at 81% higher price than a year earlier and gas at nearly three times more, according to a Reuters calculation.
• Continental on Wednesday increased its quarterly dividend by 5 cents per share to 20 cents, while Pioneer Natural Resources raised it by more than 10% to 62 cents and declared a variable dividend of $3.02 per share per quarter.
• APA raised its dividend for the second time this year, while Marathon increased its base dividend for the third straight quarter to $0.06 per share.
• Pioneer raised its full-year total production to between 613,000 barrels of oil equivalent per day (boped) and 619,000 boepd from earlier outlook of 605,000 boepd 631,000 boepd.

Fastly Stock Is Gaining as Earnings Show Departed Customers Are Returning – Barron’s, 11/4/2021

• Fastly stock is headed higher after the content delivery network and security software company posted better-than-expected third-quarter results.
• For the quarter, Fastly posted revenue of $87 million, up 23% from a year earlier, and ahead of the Street consensus forecast of $83.7 million.
• On a non-GAAP basis, the company lost 11 cents a share, narrower than the Street consensus forecast for a loss of 19 cents a share.
• Fastly said its enterprise customer count grew to 430 from 408 one quarter earlier, while the total customer count increased to 2,748 from 2,581.
• For the December quarter, Fastly is projecting revenue of $90 million to $93 million, with a non-GAAP loss of 16 to 19 cents a share. Street consensus previously had called for revenue of $91.9 million and a loss of 15 cents a share.

Wayfair shares sink after revenue miss – MarketWatch, 11/4/2021

• Wayfair, shares dropped 5.2% in Thursday premarket trading after the online home goods seller swung to a third-quarter loss and reported revenue that missed expectations.
• Revenue of $3.121 billion was down from $3.839 billion and below the FactSet consensus of $3.238 billion.
• Active customers rose to 29.2 million from 28.8 million.
• Net losses totaled $78.0 million, or 75 cents per share, after net income of $173.2 million, or $1.67 per share, last year.
• Adjusted EPS of 14 cents beat the FactSet consensus for a penny per share.

Qiagen lifts annual forecast as COVID testing boosts third-quarter profit – Reuters, 11/3/2021

• Qiagen on Wednesday raised its full-year forecasts for profit and revenue, with higher demand for its non-coronavirus products as well COVID-19 tests helping the U.S.-German genetic testing specialist beat quarterly profit expectations.
• The company said its non-COVID related products grew 17% in the third quarter, at constant exchange rates, boosted by higher demand for tuberculosis testing, which brought in $79 million.
• Qiagen said third-quarter adjusted earnings per share rose to $0.58 on a currency-adjusted basis, beating the $0.54 expected on average by analysts.
• Qiagen said its annual revenue will grow 15% compared to the prior forecast of 12% growth.
• It forecast adjusted diluted earnings per share of $2.48, from prior guidance of $2.42.
• Chief Executive Thierry Bernard said the company was on track to achieve its 2021 sales target and would cross more than $2 billion in net sales.

Nikola Says It Will Pay $125 Million to Settle SEC Investigation – Wall Street Journal, 11/4/2021

• Electric-truck startup Nikola will likely pay $125 million to settle a regulatory investigation into allegedly misleading statements made by its founder and former executive chairman.
• Nikola disclosed the development Thursday in a securities filing that says the company plans to seek reimbursement for the penalty from its founder, Trevor Milton, who was indicted on fraud charges in July.
• Nikola said the deal with the SEC isn’t final and needs to be approved by the agency’s commissioners.

Google Invests $1 Billion in Exchange Giant CME, Strikes Cloud Deal – Wall Street Journal, 11/4/2021

• Alphabet’s Google has invested $1 billion in futures-exchange giant CME Group and struck a deal to move the company’s core trading systems to the cloud.
• Under the deal, the technology giant’s Google Cloud unit would eventually power markets that handle trillions of dollars in trades each day.
• The companies said Thursday that their 10-year partnership would allow CME to bring on new users faster, streamline operations and develop new tools with Google technology, such as artificial-intelligence software for monitoring market risks.

Google to Pursue Pentagon Cloud-Computing Contract – Wall Street Journal, 11/4/2021

• Google is pursuing a massive cloud-computing contract with the Department of Defense, nearly three years after abandoning a similar bid process in the face of employee protests.
• The head of the Alphabet subsidiary’s cloud division, Thomas Kurian, met this week with Pentagon officials to discuss the bid process for a contract called the Joint Warfighting Cloud Capability, according to people familiar with the meeting.
• The three-year contract will be split across multiple bidders.
• It replaces the 10-year, $10 billion JEDI cloud-computing contract terminated in July, which was planned to consolidate the Pentagon’s patchwork of data systems to give defense personnel better access to real-time information and artificial-intelligence capabilities.