Dow Notches Worst Month Since September 2022; Eli Lilly, 3M Jump on Earnings
Stock Indexes Wrap: 3M, Eli Lilly Climb on Earnings; Amazon Slumps Ahead of Earnings
22 hr 43 min ago
The Dow
3M (MMM) jumped 4.7% after reporting better-than-expected earnings even as it indicated it would likely lose its status as a dividend aristocrat when it resets its quarterly payout next month.
Amazon (AMZN) fell 3.3% ahead of its earnings report after the bell.
Tech stocks slumped, with Microsoft (MSFT) down 3.2% and Intel (INTC) falling 2.9%.
Walmart (WMT) slid 1.5% after announcing it was abandoning its push into low-cost health centers amid mounting costs.
Coca-Cola (KO) ticked down 0.5% after topping earnings estimates with its first-quarter results, with the top line getting a boost from higher prices.
McDonald’s (MCD) slid 0.2% despite missing quarterly earnings estimates as cash-strapped consumers pulled back.
The S&P 500
Leidos Holdings (LDOS) led the index, climbing 6.6% after beating earnings estimates and raising its full-year forecasts amid strong sales and bookings growth.
Eli Lilly (LLY) surged 6% after raising its full-year revenue guidance by $2 billion as demand for its weight loss drugs remains robust.
GE HealthCare (GEHC) tumbled 14.3% after posting weaker-than-expected first-quarter results.
Molson Coors (TAP) dropped 9.9% after affirming its cautious earnings outlook.
The Nasdaq 100
NXP Semiconductors (NXPI) climbed 3.7% after offering better-than-expected current-quarter earnings guidance despite industrywide challenges.
PayPal (PYPL) advanced 1.4% after topping Wall Street’s expectations with its earnings.
Warner Bros Discovery (WBD) fell 9.7% amid reports competitor Comcast (CMCSA) was willing to bid as much as $2.5 billion a year for National Basketball Association broadcast rights, about double what Warner currently pays. Comcast shares dipped 1.9%.
Tesla (TSLA) shed 5.6%, giving up some of yesterday’s gains following Elon Musk’s productive visit to China.
Walmart Slips After Abandoning Health Clinic Foray as Costs Mount
23 hr 30 min ago
Walmart (WMT) said Tuesday it will close health centers it opened in five states and shutter its telehealth business, as expenses around building a network of low-cost health clinics increase.
The retailer said it is closing all 51 health centers it had first launched in 2019, although the company said it will continue to provide health and wellness services in its 4,600 pharmacies and more than 3,000 Vision Centers.
“This is a difficult decision, and like others, the challenging reimbursement environment and escalating operating costs create a lack of profitability that make the care business unsustainable for us at this time,” the retail giant said.
Walmart shares were down 1.4% late in the session Tuesday.
Cannabis Stocks Soar on Reports of Possible Reclassification
April 30, 2024 02:28 PM EDT
Cannabis stocks soared on Tuesday after the Associated Press reported the U.S. Drug Enforcement Administration (DEA) planned to reclassify marijuana as a less dangerous class of drug.
The DEA’s proposal, according to sources who spoke to the AP on the condition of anonymity, would acknowledge marijuana’s medical applications and recognize the substance has less potential to be abused than more dangerous drugs.
Marijuana is currently classified as a Schedule I drug alongside heroin and LSD. The DEA proposal would make marijuana a Schedule III drug, characterized by “moderate to low potential for physical and psychological dependence,” alongside ketamine and anabolic steroids.
The proposal would not legalize marijuana nationally, though it has already been legalized for medical use in 38 states and recreational use in 24.
Cannabis stocks soared following the news, with the AdvisorShares Pure US Cannabis ETF (MSOS) jumping more than 21% in intraday trading. Shares of Canadian grower Canopy Growth Corp. (CGC) soared 35%, while New York-based Curaleaf Holdings (CURLF) surged more than 18%.
3M Stock Rises Even as Its Dividend Hike Era Ends
April 30, 2024 01:53 PM EDT
Shares of 3M (MMM) climbed as the streamlined multinational conglomerate reported better-than-anticipated results, even as the spin-off of its healthcare unit led to the end of its days as a dividend aristocrat.
The maker of Post-it notes and Scotch tape posted first-quarter earnings per share (EPS) of $2.39, with revenue down 0.3% to $8.0 billion. The results, which exceeded forecasts, showed the company’s efforts to streamline by spinning off its health care unit Solventum (SOLV) paid off.
The results also mark the end of 3M’s six-decade-long history of raising its dividend each year. The company announced a quarterly dividend of $1.51 per share.
The company said Tuesday its annual payout ratio “is expected to be approximately 40% of adjusted free cash flow with potential to increase over time.
3M shares were up 2.8% higher Tuesday afternoon, bringing the stock’s one-year gain to nearly 7%.
Inflation Takes a Bite Out of McDonald’s Earnings
April 30, 2024 12:47 PM EDT
McDonald’s (MCD) on Tuesday reported first-quarter profit that missed estimates as its results were hurt by the effects of inflation on consumers and continuing boycotts in the Middle East.
The company posted first-quarter diluted earnings per share of $2.66, a 9% increase from the year-ago quarter but missing estimates compiled by Visible Alpha. Revenue increased 4.6% to $6.17 billion, slightly above forecasts.
Comparable store sales were up 1.9%, slowing sharply from the 12.6% growth it reported a year ago. Comparable store sales fell 0.2% at the International Developmental Licensed Markets unit “as the segment continued to be impacted by the war in the Middle East.”
CEO Chris Kempczinski said McDonald’s was feeling the effects of inflation, noting consumers “are more discriminating with every dollar that they spend.”
McDonald’s shares plunged at the open Tuesday before recovering to trade 0.1% lower in the early afternoon. Shares hit an all-time high in January, but they’ve stumbled since, losing close to 8% year to date.
Coca-Cola Earnings Pop on Higher Prices, Strong Demand in Latin America
April 30, 2024 11:48 AM EDT
Coca-Cola (KO) posted better-than-expected results for the first quarter and raised its outlook as it benefited from higher prices, though volume growth was soft.
Coca-Cola reported first-quarter diluted earnings per share (EPS) of 74 cents, up from 72 cents in the year-ago period and above analysts’ estimates. Revenue advanced 2.9% year-over-year to $11.3 billion, also beating forecasts. The company noted that revenue got a boost from a 13% increase in price/mix, while concentrate sales dipped 2%. Unit case volume was 1% higher.
The results were boosted by demand in the Latin America market, which had a 22% jump in price/mix and a 4% gain in unit case volume. Coca-Cola’s price/mix in Europe, the Middle East, and Africa was also up 22%, with volume rising 2%.
Shares of Coca-Cola were little changed following the release, edging 0.3% lower to $61.84 late Tuesday morning. They’ve gained close to 5% since the start of the year.
GE HealthCare Stock Tumbles After Earnings Miss
April 30, 2024 10:58 AM EDT
GE HealthCare (GEHC) shares tumbled in early trading Tuesday after the medical device manufacturer reported weaker-than-expected results for the first quarter as sales in its Imaging, Ultrasound, and Patient Care Solutions segments fell.
GE HealthCare posted first-quarter revenue of $4.65 billion, down from the $4.71 billion it reported a year earlier, and below the $4.81 billion analysts expected, according to estimates compiled by Visible Alpha.
GE HealthCare’s net income rose slightly to $374 million or 81 cents per share, up from $372 million or 41 cents per share in the year-ago period, but that also came short of analyst estimates of $391.52 million or 88 cents per share.
Despite lackluster first-quarter results, the company affirmed its full-year guidance, projecting revenue growth of about 4% and adjusted earnings per share (EPS) of between $4.20 and $4.35, compared to the $3.93 the company reported in 2023.
GE HealthCare shares were 10.7% lower at $79.42 Tuesday morning, bringing the stock’s year-to-date return to about 2%.
Eli Lilly Stock Surges as Weight-Loss Drugs Continue to Fuel Growth
April 30, 2024 10:13 AM EDT
Eli Lilly (LLY) stock jumped in early trading Tuesday after the drugmaker reported first-quarter earnings that beat analysts’ expectations and raised its guidance thanks to continued high demand for the company’s weight-loss drugs.
Shares were up 7.6% at $793.54 early in the session, putting it on course to possibly surpass its all-time closing high of $792.28 set in early March. The stock has nearly doubled over the past year.
Eli Lilly said revenue for the first quarter rose 26% from the year-earlier period to $8.77 billion, which was almost exactly in line with analysts’ estimates compiled by Visible Alpha. The increase was primarily driven by the company’s weight-loss drugs, Mounjaro and Zepbound, the company said.
The company was more profitable than analysts expected, reporting a net income of $2.24 billion for an earnings per share (EPS) of $2.48, compared to the $2.11 billion and $2.34 per share analysts expected.
Full-year guidance also received a bump, with Eli Lilly shifting its revenue projections up $2 billion to a range of $42.4 billion to $43.6 billion and EPS projections to a range of $13.05 to $13.55, compared to the $11.80 to $12.30 range the company projected in its fourth-quarter report earlier this year.
Stocks Making the Biggest Moves Premarket
April 30, 2024 09:26 AM EDT
Gains:
- Eli Lilly (LLY): Shares of the pharmaceutical giant jumped more than 5% after reporting better-than-expected earnings on strong demand for its GLP-1 agonists Mounjaro and Zepbound.
- PayPal (PYPL): Shares of the fintech climbed more than 5% after raising its full-year profit guidance as consumer spending remained strong and cost-cutting measures widened margins.
- 3M (MMM): Shares of the industrial conglomerate rose 5% after topping Wall Street’s estimates on the top and bottom lines in the first quarter. CEO Mike Roman also said the company was “resetting” its dividend after its spin-off earlier this year of its healthcare business, Solventum (SOLV).
Losses:
- GE Healthcare (GEHC): The medical devices maker’s shares slumped more than 8% after its first-quarter sales fell short of estimates amid weakness in its Chinese sales.
- Stellantis (STLA): The Jeep maker’s shares fell 8% after it reported a 12% decline in sales in the first quarter, which it attributed to a lull before the roll-out of several new models this year.
- McDonald’s (MCD): Shares of the fast-food giant slid more than 3% after it missed earnings estimates for the first quarter as consumers pulled back on discretionary spending.
Futures Slip as Consumer Giants’ Earnings Roll In
April 30, 2024 08:31 AM EDT
Futures contracts connected to the Dow Jones Industrial Average were down less than 0.1% in premarket trading.
S&P 500 futures were also off less than 0.1%.
Nasdaq 100 futures traded slightly more than 0.1% lower about an hour before the opening bell.
Read More: Dow Notches Worst Month Since September 2022; Eli Lilly, 3M Jump on Earnings