BP, Disney, Peloton, Crocs, Ferrari, Boeing, UBS, Palantir - Markets Defused

Proactive Published 07/05/2024

Share X in f @

Markets Defused aims to present an easy-to-understand and straightforward recap of the day’s most engaging stock market news.

BP profits ‘miss’ expectations

London-listed oil major BP PLC (LSE:BP.) reported first-quarter profits below market expectations, with its profitability marker coming in at $2.72 billion versus a forecasted $2.87 billion.

It compares to $4.96 billion for the same quarter last year.

BP blamed weaker oil prices at the start of the year for the ‘miss’, and it also pointed to lower output due to an outage at a refinery in Indiana.

The oil company said it would now seek to make $2 billion of cost cuts.

BP still managed to generate some $5 billion of ‘surplus’ cash flow.

Shareholders, meanwhile, will continue to be supported by BP’s continuing share buy-back program which will see another $1.75 billion spent purchasing the oiler’s stock up until the end of July.

In London, BP shares were down slightly on Tuesday.

Disney drops despite turning first profit in streaming business

Traders on the New York Stock Exchange we not buying what Walt Disney Co (NYSE:DIS, ETR:WDP) financial results were selling – as the stock fell 10% despite an apparent upgrade to the media giant’s financial forecasts.

Disney today told investors that its streaming business was now turning a profit for the first time, helped by Aussie kids TV phenomenon ‘Bluey’ (which is the most watch thing on Disney+ worldwide).

The Disney+ and Hulu subscription streamers made a $47 million profit for the second quarter, compared to a $587 million loss this time last year.

Nevertheless, Disney’s wider entertainment and sport broadcasting business fell short of the market’s revenue forecasts.

The division brought in $9.79 billion of revenue which was down 5% versus the same period last year. It was also below Wall Street predictions of $9.93 billion.

The disappointing return was the result of falling revenues in ‘linear’ TV businesses and as Disney’s light movie slate underwhelmed.

Disney’s ‘Experiences’ business division – which comprises its theme parks and vacation businesses -saw a 9% improvement in revenue, generating $8.39 billion. Specifically, it was driven by a strong performance for Florida’s Walt Disney World Resort and the Disney Cruise Line.

Peloton stock rallies on takeover talk

Fitness-tech firm Peloton Interactive Inc (NASDAQ:PTON) spiked more than 15% higher off the back of a rumoured private-equity powered takeover.

Talks have taken place between Peloton and at least one private-equity group, that’s according to a report by US financial media firm CNBC.

Peloton last week launched a cost-cutting program aiming to take $200 million of spending out the business.

At the same time, it announced the exit of Barry McCarthy who as chief executive oversaw the company lose around 90% of its market value.

The company, which makes the interactive ‘spin’ bikes that surged in popularity during the COVID lockdowns, came to market in a 2019 IPO priced at $27, that gave it an $8.1 billion valuation, and the stock hit its Pandemic peak in early 2021 at some $162.72 per share.

Today, after spiking higher on the takeover talk, Peloton stock is priced at just over $4.00 – giving it a market value of close to $1.5 billion.

Ferrari (NYSE:RACE) revved up financial results, investor want more

Ferrari (NYSE:RACE) reported very strong financial results, but evidently left investors wanting more.

The luxury sports-car maker’s first quarter financials included double-digit revenue and profit growth, but lacked a parrel upgrade to Ferrari’s full year projections.

Investors will have to wait for future updates in hope of upside it seems.

Ferrari reported adjusted earnings of €605 million over the three months to March, whilst margins improved to 38.2% from 37.6%, and it banked €1.59 billion of quarterly revenue.

That came despite shipping fewer cars, as there were seven fewer deliveries in the period, with the tally standing at 3,560 supercars for the three months.

Chief executive Benedetto Vigna highlighted the success of Ferrari’s ‘value over volume’ strategy.

Market analysts, meanwhile, described the financial performance as “high quality”.

Ferrari stock gave up nearly 5%, losing €18.80 per share to a €378.80 close in Milan.

Crocs stomp higher despite Heydude slippage

Crocs Inc. (NASDAQ:CROX), the foam clog fashion ‘pioneer’, leapt some 7.5% higher in Tuesday’s trading thanks to a strong set of financial results.

Reporting first quarter revenue of $938.6 million Crocs easily exceeded the $884.2 million banked this time last year, and also comfortably beat Wall Street forecasts of $884 million.

Net income was marked at $152.5 million, $2.50 per share, which also edge above last year's comparative.

Early trading was subdued by the drag that Heydude, a slip-on shoe brand acquired in 2022 and is seen to be struggling with weak demand.

"We delivered an exceptional first quarter, led by mid-teens growth of our Crocs Brand, driven by robust consumer demand both in North America and in international markets,” chief executive Andrew Rees said in a statement.

Rees, meanwhile, told Crocs investors that management is still confident in the long-term opportunity for the HEYDUDE brand, but, its reducing revenue expectations whilst the company “continues to prioritize brand health in the North American market”.

Traders soon saw past that, though, to drive Crocs price higher.

In New York, Crocs stock traded as high as $142.30 and at the time of writing was up 6.8% at $135.30.

Boeing on back foot again as FAA launches investigation

Boeing Co (NYSE:BA, ETR:BCO) stock was again on the back foot in New York as investors reacted to news of the latest inquiry into its quality control and safety.

The US Federal Aviation Administration (FAA) said it had launched an investigation regarding inspections and record keeping for Boeing’s 787 Dreamliner aircraft.

The aircraft manufacturer, in April, voluntarily informed the FAA that checks on bonding between the wings and fuselages on some Dreamliners may not have been completed. That followed a ‘whistleblower’ employee reporting their concerns to the regulator.

Boeing said there are no immediate risks to safety, as it confirmed it would now re-inspect jets that are due to be delivered to airlines.

“It will impact our customers and factory teammates because the test now needs to be conducted out of sequence on aeroplanes in the build process,” a Boeing spokesperson said.

It is the latest negative episode and scrutiny on Boeing following an incident in January which saw a plane door fall off an Alaska Air 737 jet mid-flight.

In New York, Boeing stock was down only slightly, trading 0.3% lower at $177.85. The aerospace stock is down more than 29% in the year to date.

UBS financials smashed expectations

Swiss bank UBS Group (NYSE:UBS) was up strongly in Tuesday’s trade as its latest set of financial results easily exceeded market expectations, helped by the continuing integration of the Credit Suisse business that it acquired last year.

UBS shares gained around 8% today, and are now up around 50% since the Credit Suisse deal.

The bank reported $1.8 billion of net income, which was three times better than forecasted by stock market analysts.

UBS said that cost-cutting in ‘non-core’ parts of its business was a factor in the strong figures.

The Bank also said it would be continuing with plans to reward shareholders with a buy-back of its shares – with some $1 billion going into the program this year. Buy-backs are also planned for 2025 and 2026, it noted.

Palantir’s 2024 revenue forecast got a big AI boost

Palantir Technologies Inc (NYSE:PLTR), a closely followed US software firm involved in ‘big data’, saw its shares soaring at the start of this week after it reported “strong traction” for its artificial intelligence platform (AIP).

Alex Karp, Palantir’s chief executive, said a growing portion of America’s corporate sector “is now coming to us” because they see “how significant artificial intelligence and large-language models will be in reshaping the industries within which they operate.”

The CEO’s comments came as Palantir reported better than expected financial results for its first quarter and gave new upgraded guidance for its full-year forecasts.

Palantir said it expects to bring in between $2.677 billion and $2.689 billion of revenue for 2024, allowing for $868 million to $880 million of (adjusted) income from operations this year – these predictions were lifted from prior estimates for $2.65-2.66 billion and $834-850 million respectively.

Second quarter revenue is meanwhile estimated at $649 million to $653 million.

In New York, Palantir stock was up 8% on Monday, and on Tuesday it traded around 10% lower changing hands at around $22.70.

For 2024 to date, the price is up around 50% from $16.58 at the start of the year.