Early Look

Tuesday, July 23, 2024

U.S. futures looking flat around 5,612 for the S&P 500 (overnight high 5,614 and low 5,587.75) as investors digest a heavy dose of large cap earnings this morning. Chip stocks looking lower after NXPI shares drop on results and guidance; GM helps boost auto stocks after its results beat, ahead of TSLA tonight; homebuilders another good earnings result, this time from PHM; in leisure space, PII tumbles after a drastic lower guidance; in industrial space, GE with a beat and raise lifting shares early; and in the package delivery space, UPS posted a quarterly miss and issued disappointing guidance (a possible good read on the strength of the consumer). No Fed speakers again today ahead of FOMC meeting next week, with only a few economic data points (GDP Thursday and PCE on Friday the key items this week). U.S. stock markets jumped on Monday following last week’s sell-off in the S&P 500 and Nasdaq amid a rotation back into tech stocks as the semiconductor index (SOX) jumped 4%. Among the S&P 500’s 11 major industry sectors, nine closed higher with the biggest gains coming from technology, while energy was the weakest group. In Asian markets, The Nikkei Index fell -4 points to 39,594, the Shanghai Index tumbled -48 points or 1.65% to 2,915, the Hang Seng Index dropped -166 points to 17,469. In Europe, the German DAX is up 213 points to 18,620, while the FTSE 100 is up 24 points to 8,222.

• The Dow Jones Industrial Average rose 127.91 points, or 0.32%, to 40,415.44.
• The Nasdaq Composite jumped 280.63 points, or 1.58%, to 18,007.57.
• The Russell 2000 Index advanced 36.30 points, or 1.66% to 2,220.65.

• 8:55 AM ET                  Johnson/Redbook Weekly Sales
• 10:00 AM ET                Existing Home Sales M/M for June…est. 4,0M
• 10:00 AM ET                Richmond Fed Index for July… prior (-10)
• 1:00 PM ET U.S. Treasury to sell $69B in 2-year notes
• 4:30 PM ET API Weekly Inventory Data

• Earnings After the Close: ADC AGR APAM BDN CALM COF CSGP EGP ENPH ENVA EQT EWBC FCF FTAI GOOGL HAFC HIW MANH MAT MTDR NBR PFSI PKG PMT RNST ROIC RRC RRR STX TRMK TSLA TXN USNA V VBTX VICR

• GM Inc. (GM) Q2 adj EPS $3.06 vs. est. $2.71; Q2 net sales and revs rose 7.2% y/y to $47.97B vs. est. $45.62B; Q2 automotive net sales and revenue $44.06B, +6.8% y/y; raises FY adj EPS to $9.50-$10.50 from $9-$10 (est. $9.53); boosts FY adj free cash flow to $9.5B-$11.5B from $8.5B-$10.5B and boosts FY adj Ebit to $13B-$15B from $12.5B-$14.5B.
• Kimberly-Clark (KMB) Q2 adjusted EPS $1.96 tops consensus $1.71 on revs falling -2% y/y to $5.03B vs. est. $5.1B; said it now expects full-year adjusted EPS to grow at a mid-to-high teens percentage rate on a constant-currency basis, an increase from previous expectations of low-teens growth; still expects organic sales to grow at a mid-single digit rate.
• PulteGroup (PHM) Q2 EPS $3.83 vs. consensus $3.27 and Q2 revs rose 10% y/y to $4.6B vs. consensus $4.49B; Q2 net new orders totaled 7,649 homes with value of $4.4B; Q2 average sales price increased 2% to $549,000; Q2 home sale gross margin increased 30 bps to 29.9%.
• Polaris Inc. (PII) shares tumble; Q2 adj EPS $1.38 misses consensus of $2.23 and revs fell -12% y/y to $1.96B below consensus of $2.18B saying Q2 proved challenging as our industry continued to contend with elevated interest rates, inflation, and an increasingly cautious dealer and consumer; cuts full-year sales to fall 17% to 20%, compared with prior guidance of down 5% to 7%; lowers FY adj EPS to be down 56% to 62%, compared with prior guidance of down 10% to 15%.

• Crown Holdings (CCK) Q2 adj EPS $1.81 vs. consensus $1.58 and Q2 revenue $3.04B vs. consensus $3.06B; posted a decline in sales in its latest quarter despite higher global beverage-can shipments; guides Q3 adjusted EPS $1.75-$1.85 vs. est. $1.79; boosts FY24 EPS view to $6.00-$6.25 from $5.80-$6.20 (est. $5.97); sees Fy24 free cash flow (FCF) for the year is now expected to be at least $750M (watch shares of BALL, SLGN on results).
• GE Aerospace (GE) Q2 adj EPS $1.20 vs. est. $0.98; Q2 revs $8.22 vs. est. $8.46B; Q2 total orders $11.2B, up 18%; sees FY24 adjusted EPS $3.95-$4.20 above prior view $3.80-$4.05 and vs. consensus $4.08; sees FY adj revenue growth in the high single digits vs. previous view low single digits+; sees FY operating profit $6.5B-$6.8B vs. previous view $6.2B-$6.6B.
• Nucor Corp. (NUE) Q2 EPS $2.68 vs est. $2.35, EBITDA $1.23B vs est. $1.169B on sales $8.08B vs est. $7.686B; sees Q3 earnings down sequentially, sees decrease in earnings of steel mills segment due to lower ASP, expects earnings in steel products segment to decrease sequentially in Q3.
• Simpson Manufacturing (SSD) Q2 EPS $2.31 vs est. $2.44 on revs $596.978BMm vs est. $604.65Mm; says expectations for modest housing market growth this year has been extended out into 2025; sees 2024 US housing starts flat to down slightly and European housing starts down y/y.
• UPS (UPS) Q2 adj EPS $1.79 vs. est. $1.99 and Q2 revenue fell -1.9% y/y to $21.8B below consensus $22.18B; In the U.S. domestic package segment, revenue declined 1.9% to $14.12 billion, to miss expectations of $14.54 billion, as average daily volume fell 2.6%. International revenue fell 1% to $4.37 billion, amid a 2.9% decrease in average daily volume; now expects 2024 revenue of approximately $93B, compared with its previous full-year guidance range of $92B-$94.5B; restarts share repurchase program, targets $1B annually.

• Alexandria Real Estate (ARE) Q2 FFO $2.36 vs. consensus $2.34; Q2 revs $766.7 vs. est. $780.1M; Q2 Same property net operating income growth of 1.5% and 3.9% over prior year; reaffirms FY24 FFO view $9.41-$9.53 vs. est. $9.49; Q2 same property net operating income growth of 1.5% and 3.9% (cash basis) for y/y and 1.1% and 3.7% for 1H24 over 1H23.
• Cadence bank (CADE) Q2 adj EPS $0.69 vs. est. $0.61; Q2 Total deposits were $37.9 billion as of June 30, 2024, a decline of $261.6 million from the prior quarter; Net charge-offs for the second quarter of 2024 were $22.6 million, or 0.28% of average net loans and leases on an annualized basis.
• Equity Lifestyle Properties (ELS) Q2 FFO $0.66 vs. est. $0.65; Q2 revs $380.0 vs. est. $375.13M; sees FY24 normalized FFO $2.86-$2.96 vs. consensus $3.07; Q2 Core property operating revenues increased 4.6% and Core income from property operations, excluding property management increased 5.5% for the quarter ended June 30, 2024 y/y.
• WR Berkley (WRB) Q2 EPS $0.92 vs est. $0.92 on premiums written $3.718B vs est. $3.669B, combined ratio 91.1%.
• Zions Bancorp (ZION) Q2 EPS $1.28 vs est. $1.10 on NII $597Mm vs est. $595.81Mm; NIM 2.98%; pre-provision net revs $278Mm.

• Owens & Minor (OMI) has entered into a definitive agreement to acquire Rotech Healthcare Holdings, a privately held home based care business headquartered in Orlando, Florida, for $1.36B in cash.

• Cadence Design Systems (CDNS) Q2 EPS $1.28 vs. consensus $1.22 and revs $1.06B vs. consensus $1.04B; sees Q3 EPS $1.39-$1.49 vs. consensus $1.60 and guides Q3 revenue $1.165B-$1.195B vs. consensus $1.19B; sees Q3 operating margin 40.7%-42.3%; Q2 quarter-end backlog was $6.0 billion and current remaining performance obligations; cuts FY24 EPS view to $5.77-$5.97 from $5.88-$5.98 but raises its year rev outlook.
• Calix Inc. (CALX) Q2 EPS $0.09 vs. est. $0.06; Q2 revs $197.1M vs. consensus $200.81M; guides Q3 EPS $0.05-$0.11 on revs $198M-$207M, both below consensus $0.12/$208.09M; said while they continue to increase our sales activity and footprint expansion, they are taking a cautious view on appliance shipments.
• Logitech (LOGI)
• NXP Semiconductors (NXPI) Q2 adj EPS $3.20 vs est. $3.21 on revs $3.13B vs est. $3.125B; sees Q3 adj EPS $3.21-3.63 vs est. $3.61, sees revs $3.15-$3.35B vs est. $3.355B.
• SAP AG (SAP) reported a 25% jump in Q2 cloud revenue to 4.15B euros ($4.52B) underpinned by 33% Cloud ERP Suite revenue growth; reports Q2 cloud backlog of EUR 14.8B, up 28%, at nominal and CC; backs 2024 revs EUR17B-EUR17.3B and backs 2024 EUR29.0B-EUR29.5B cloud/software revs; raises FY25 Non-IFRS op profit to EUR 10.2B from EUR 10B.
• Warner Bros. Discovery (WBD) said late Thursday it has informed the National Basketball Association that it intends to use its matching rights for a package of games earmarked for another company.
• Six senators are asking the Justice Department and the Federal Communications Commission to consider challenging a deal that would allow T-Mobile (TMUS) to use part U.S. Cellular’s wireless spectrum – CNBC