- 4 months ago
Category
🗞
NewsTranscript
00:00And right now we are two minutes away from the end of the trading day.
00:03Romain Bostic alongside Katie Greifeld taking you through to that closing bell with a global simulcast that starts now.
00:09Carol Masser, Tim Senevic, they join us from the radio booth.
00:12Welcome to our audiences across all of our Bloomberg platforms, including our partnership with YouTube.
00:17A slew of big earnings.
00:19Carol Masser coming after the bell tonight, including from IBM and Tesla.
00:22Yeah, big earnings, right?
00:23And they're just going to get fast and furious over the next couple of weeks here.
00:27Having said that, we talked with Sam Stovall, and he reminded us we're in the 64th quarter.
00:32It looks like out of the last 66 that earnings have surpassed estimates.
00:36But it's also revenue growth.
00:37Revenue growth is surpassing estimates.
00:39So is profit margin.
00:40So, so far, so good.
00:42But let's remind everybody we've got some big ones coming at us.
00:44Yeah, Carol also saying, and I think fairly during that, that we need to kind of maybe think about differently how we do estimates if we're exceeding estimates so frequently.
00:54Consistently?
00:55Yeah, consistently.
00:56We're being managed pretty well.
00:57Yeah, absolutely.
00:58I mean, that's sort of the game, right?
01:00The management talks to the sell side analysts, and they sort of figure out where things are going to land.
01:06Though I will say we were just talking with Savita Subramanian.
01:08She made the point that, yes, beat rates are very high right now, 85 percent.
01:13But so, too, is the bar that you're seeing a lot of post-earnings disappointment in shares.
01:18Yeah, and I just wanted to, we talk about Tesla, and this kind of feeds into the AI trade.
01:22I know it's a car company.
01:23I know we're going to talk about EVs and the sales they get from that.
01:26But a lot of investors are looking ahead to this idea of an autonomous future, a robotics future, and that ties into the AI trade.
01:32And a lot of questions as to just whether Tesla is actually part of that or behind.
01:36Yeah, well, we'll see if we'll get any updates, whether that somehow gets put into that earnings release remain.
01:42Absolutely.
01:43Well, Tesla is slightly lower here on the day by about nine-tenths of one percent.
01:47Right across the screen for all of the major indices and averages in the U.S., including the Dow Jones Industrial Average down seven-tenths of one percent.
01:54The S&P 500, the benchmark, down a half a percent.
01:57The NASDAQ indices, the composite and the 100, each down by roughly about a percent.
02:01And your biggest laggers today, you're going to find that in the more cyclical and small-caps space, mid-caps down 1.2 percent.
02:07The Russell 2000 small-caps, Carol, down 1.5.
02:10All right, back to the big caps I go.
02:11The S&P 500, guys, most names, no surprise.
02:14Lower in today's session after we've seen the major indices under pressure.
02:18$302 to the downside, Katie, $199 gaining ground to unchanged.
02:23Well, let's take a look at the sectors, how they performed today.
02:25You did have four sectors managed to finish in the green, seven in the red.
02:30You can see that the tech sector was down, and that's certainly taking a bite out of things.
02:34But in terms of what did do well, energy outperforming up 1.3 percent as a sector.
02:39Consumer staples, health care, real estate also managing to finish in the green.
02:43But it's going to be hard to actually see the benchmark go green when you have tech weighing on things like that.
02:49Yeah, right, big pressure, lots of pressure.
02:52Having said that, Intuitive Surgical, definitely an outperformer, guys.
02:55Top in the S&P and NASDAQ, the robotic surgery company, you know them well.
02:59Finishing the day just shy of a 14 percent gain.
03:03The company did boost its worldwide DaVinci procedure growth forecast for the year.
03:07No, you know, I used one of those once.
03:09I know.
03:10I mean, I didn't personally use it, but it was used on me.
03:13Yeah, and I guess it went well.
03:14It did.
03:15I'm still here.
03:15We're so happy.
03:17You know, the doctors wear goggles.
03:18Thank you, Dr. Tuari.
03:19He's great, if you're watching.
03:20The doctors wear goggles to use these.
03:22I was actually having a conversation with a surgeon last night who uses this machine,
03:25and he made the point that it actually hasn't changed much since he began using it over the last 10 years.
03:30It's remained relatively consistent with what it can do, and sort of, yes, it's gotten smaller a little bit,
03:36but it hasn't actually changed that much.
03:38Sounds like a great dinner.
03:39Yeah, we had burgers.
03:41Okay.
03:42Well, all I'm going to say, great gainer.
03:43You go to dinner with me, you talk about stocks that are moving.
03:45That's what happens.
03:46Cool.
03:47All right.
03:47Outperformance, but still the stock only up about not even quite 1% for year-to-date here.
03:52When you said burger, did you mean like a veggie burger?
03:54We did chicken.
03:56We did chicken burger.
03:57Oh, gosh.
03:58Oh, my God.
03:59It always comes back to food when it's dim.
04:01Always, always.
04:01Hey, Hilton, I just want to mention.
04:03Hilton Worldwide up about 3.2%.
04:05Also a top gainer, I think, earlier in the session in the S&P.
04:09The company boosted its annual adjusted EBITDA forecast and the low end of its net unit growth outlook for the year.
04:15So some optimism there.
04:17And I was going to say beyond me, but don't judge me.
04:20It was up 112% earlier in the session, guys, but actually finishing the day down 9%.
04:26But it's been on fire.
04:27Wait, what?
04:28That was the range today?
04:29Yes.
04:30It was down 27% and it's lows today.
04:32So talk about.
04:33That was like the widest.
04:34I was taking the widest range we've seen on that stock, at least since 2022.
04:37And on a percentage basis, I mean, what we've seen this week, basically the widest since it's been a public company.
04:42But it's still up, right?
04:43Oh, no, it's down 4.6% for the year.
04:46I was going there.
04:47All right.
04:48It's memeing.
04:49Yeah.
04:49Now I'm, yeah.
04:50All right.
04:50I'm going to talk about some non-meme stocks.
04:52Let's talk about Netflix.
04:53Down 10% today.
04:54Biggest decline going back to April of 2022.
04:57This is after we learned about a tax dispute with Brazil cutting into third quarter earnings.
05:01Hey, I'm going to interrupt you here.
05:03Tesla earnings crossing the wire right now.
05:05Let's get right to it here.
05:06My apologies, Tim.
05:07Adjusted EPS in the most recent quarter for Tesla coming in at 50 cents a share.
05:11The street, on average, was looking for 54 cents.
05:14Revenue did come in above estimates, though, at 28.1 billion.
05:19So a beat on the revenue side, a slight miss on the EPS side for cash flow, well above what the street was looking for, $3.99 billion in free cash flow.
05:29Now, the estimate, based on Bloomberg reporting, is 1.25.
05:33So that's almost four times what the street was expecting.
05:36We'll have to dive a little bit deeper into that.
05:38Gross margin, a slight beat at 18% here in operating income coming in relatively in line with estimates, 1.62.
05:45The street was looking for 1.65.
05:46Yeah, and you can see that the stock is kind of deciding what to do with this information.
05:50As you mentioned, of course, a big miss when it comes to adjusted EPS.
05:54But that free cash flow certainly is an eye-popping figure here when you take a look at it being 46% higher year-over-year and more than double the estimate.
06:04Shares down just a little bit after hours.
06:06The volatility on this stock has been pretty incredible as well, up 100% since April's lows, but still only about 8% higher for the year.
06:14Yeah, worth repeating that third quarter free cash flow number, $3.99 billion, massively exceeding estimates of $1.25 billion.
06:21Third quarter adjusted earnings per share of 50 cents.
06:24The estimate was 54 cents.
06:26Third quarter operating income, $1.62 billion.
06:29Estimates for $1.65 billion.
06:31Shares, though, still moving lower in the after hours, down about 1.5%.
06:34Yeah, I mean, let's remind everybody.
06:36I mean, this stock has been on quite a tear.
06:39We've seen a bounce back off of its lows.
06:42And so some concerns when it comes to the valuations that we've seen compared with some of the other MAG-7.
06:47I mean, this is a company, Romain, with a forward P.E. of almost 251.
06:52So, you know, investors want to see some outperformance or get an idea of revenue growth going forward.
06:58Yeah, I'm just going through the investor statement here.
07:01And they talk a lot, not so much about the vehicles, but the idea of new products and looking to launch new products.
07:06Of course, they do flag some of the updates to the Model 3 and Model Y.
07:10But, of course, a lot of talk about their other businesses, of course, in the hardware business, in the energy storage business.
07:16And, of course, when it comes to robotics and automation.
07:19And we are going to continue to keep an eye on Tesla.
07:21Let me just quickly break in and talk about LAM Research.
07:24These results coming out.
07:25Adjusted EPS for the first quarter actually beating estimates here.
07:30Adjusted EPS coming in at $1.26.
07:33The estimate had been for $1.22.
07:36So, a beat there on adjusted EPS.
07:38Also beating on revenue as well.
07:41Coming in in the first quarter, $5.32 billion.
07:44The estimate had been for $5.23 billion.
07:47You can see shares up about 1% in the after hours.
07:50We'll get back to Tesla in just a moment.
07:52Meantime, Las Vegas Sands out with numbers.
07:55We're seeing the stock higher, 4.7% in the after hours.
07:58Third quarter, adjusted EPS came in above estimates at $0.78.
08:01Third quarter net revenue coming in above estimates at $3.33 billion.
08:07Once again, shares in the after hours higher by about 4.7%.
08:10All right.
08:10Let's go back to Tesla, folks, because we continue to monitor this one.
08:14And it's been bouncing around here just a little bit lower, down about 0.6% here in the aftermarket.
08:21We're looking at Tesla posting third quarter profit that fell short of Wall Street expectations despite record EV sales.
08:27It's a sign of the pressure automakers are facing from shifting federal policies and rising costs.
08:32Adjusted earnings were $0.50 per share in the period, the company said.
08:36Analysts had expected $0.54 on average in estimates compiled by us.
08:40Revenue was $28.1 billion.
08:43But again, the stock, I agree that investors are trying to figure out this one, Romain.
08:47Trying to figure it out, and I think it gets to this idea of a company at an inflection point.
08:51When we talk about the EV side of the business, of course, the loss of that U.S. tax credit, a big issue here, not only for Tesla but for its peers as well.
08:59They mentioned that in the shareholder letter, particularly when it comes to lower regulatory credit revenue and lower – hurt their overall revenue but also impacted the bottom line with regards to profitability.
09:11They also mentioned a few one-time costs there as well that also did weigh on profitability too.
09:16So this is a company that, of course, looking backwards, you can see a lot of the issues that they're having to grapple with.
09:22But the big question, particularly when we get to that conference call in less than an hour's time, is what is the future?
09:27Is this going to be a discussion about new vehicles or is this going to be more discussion about autonomy and robotics?
09:33Well, they're going to try to make it about AI, autonomy, and robotics.
09:36I'm looking at the 29-page Q3 quarterly update.
09:40The third paragraph in talks about how every Tesla vehicle delivered today is designed for autonomy.
09:45Every Tesla energy storage product is capable of being enhanced and optimized by our virtual power planner auto bidder functionality.
09:52We continue to deliver a fleet of products that brings AI into the real world as we pursue a future of sustainable abundance as outlined in our master plan.
10:00All right, IBM crossing the Bloomberg terminal.
10:01Here's the red sticky, the number that jumps out.
10:03Third quarter revenue, folks, slight beat, $16.33 billion versus an estimate of $16.1 billion.
10:10Software, so key.
10:11Third quarter software revenue of $7.21 billion.
10:15That is smack in line with what the street was expecting.
10:19Also, some of the outlook.
10:21Seize fiscal year free cash flow of $14 billion.
10:24Had seen above $13.5 billion.
10:26The estimate on the street is $13.48 billion.
10:29Consulting revenue, also important.
10:31Third quarter consulting revenue, $5.32 billion.
10:34And that, too, Katie, is coming in better than expected.
10:37A quick check on the stock in the aftermarket.
10:39And I'm pulling it up on my Bloomberg.
10:41And it is down 3.5%, Katie.
10:43Interesting.
10:44I mean, this was another name, though, where expectations were high.
10:47And you can see year-to-date through the close, up 33% on IBM shares.
10:52So this goes back to what we were talking about.
10:54Beat rates are high.
10:55We're getting positive results here.
10:56But the reaction to some of these earnings reports certainly has been in the opposite direction.
11:02And we should point out the CEO of IBM was at the White House yesterday talking about investing in the United States.
11:07So we'll continue to monitor that.
Comments