Markets Defused is an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- ARM plummeted after softer guidance spooked market
- Meta stock jumped on market-beating financials
- GSK vexed as vax sales dented otherwise strong quarter
- Qualcomm saw whipsaw trade after revealing strong quarter
- Boeing’s new CEO hire put a silver lining on latest losses
- HSBC rose on promise of more shareholder returns
- Taylor Wimpey boosted, backing Labour govt’s housing plans
ARM plummeted after softer guidance spooked market
Arm Holdings PLC (NASDAQ:ARM) shares hit the brakes and went into reverse in Wednesday’s afterhours trade, as softer than anticipated guidance evidently spooked the market.
The UK-headquartered, Japanese-owned and US-listed chipmaker told investors that it was forecasting second-quarter revenue between $780 million and $830 million – with the range falling beneath a prior analyst consensus estimate of $804 million.
Its first quarter was otherwise more than buoyant, driven by rising demand and investment in AI-capable processing technologies.
Revenue for its first quarter was up 39% year-over-year at $939 million, and was comfortably higher than the Wall Street analyst forecast of $902 million. Earnings (adjusted) per share came in at 40 cents, also ahead of market expectations of 34 cents.
Another more bearish signal was a quarter royalty revenue figure, marked at $467 million, that was below the expected $492 million, albeit licensing revenue was ahead of forecast at $472 million versus $418 million.
In afterhours trade, Arm shares fell $18.37 or 12.75% to $125.80 - that followed an 8.4% gain during Wednesday’s regular trading hours, in which Arm had closed at $144.17.
Meta stock jumped on impressive market-beating forecasts
Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB) jumped in Wednesday’s afterhours trade, after bumper second-quarter results that easily beat market expectations.
Revenue was up 22% year-over-year totalling $39.07 billion and was above the Wall Street consensus forecast which was pitched at $38.31 billion.
Net income for the quarter was $13.47 billion, massively higher than the $7.79 billion reported this time last year.
Meanwhile, earnings per share rose to $5.16, from $2.98 a year ago, and was comfortably ahead of the $4.73 predicted by analysts.
The Facebook, Instagram and WhatsApp parent highlighted growth in user engagement, with its metric ‘daily active people’ (DAP) reaching 3.27 billion, which marked a 7% improvement year-over-year increase.
Across the social media apps, Meta saw market shares in advertising an a 22% increase in ad related revenue – outpacing the 11% growth reported last week by Google parent Alphabet.
In afterhours trading, Meta shares were up around $30.00 or 6.25% priced at $504.62.
GSK investors vexed as vax sales dented otherwise strong quarter
GSK PLC (LSE:GSK, NYSE:GSK) shares closed 2% lower on Wednesday, with its performance held back by lower-than-expected vaccine sales – with the firm’s shingles and chickenpox vaccine Shingrix notably impacted.
GSK highlighted a robust performances in its oncology and HIV treatments which contributed to an 18% rise in core operating profit.
And, the drug maker revised up full-year guidance, to see sales growth of 7-9% and core earnings per share (EPS) growth of 10-12%.
On other hand, meanwhile, GSK bears also worry over ongoing legal issues related to Zantac and its associated rise in legal costs.
In London, GSK shares were down 32p or 2% closing Wednesday’s session at 1,510p.
Qualcomm saw whipsaw trade after revealing strong quarter
Qualcomm Inc (NASDAQ:QCOM, ETR:QCI) shares saw volatile exchanges in Wednesday’s afterhours trade, as the Snapdragon chipmaker boasted strong quarterly financials. Having closed the regular trading some 8.4% higher to around $181, Qualcomm kicked on – up as high as $193.50 – immediately after reporting results that were comfortably higher than Wall Street consensus.
Revenue for its third-quarter rose to $9.39 billion, from $8.45 billion this time last year and handily higher that analyst forecasts pitched at $9.21 billion.
Earnings (adjusted) per share was reported at $2.33 for the quarter, ahead of the $2.25 pencilled in by analysts. Net income, meanwhile, improved some 18% to $2.13 billion for the three month period, ended 23 June.
Looking ahead, Qualcomm predicted its fourth-quarter revenue between $9.5 billion and $10.3 billion, and, said it expected adjusted earnings per share to range from $2.45 to $2.65.
After spiking following the release of results, pulled back somewhat and in afterhours dealing was down $2.16 or 1.2%, priced at $178.79.
Boeing’s new CEO hire put a silver lining on latest quarterly loss
Boeing Co (NYSE:BA, ETR:BCO) shares added 2% in Wednesday’s deals with the news that aircraft maker will have a new chief executive in August.
Kelly Ortberg takes up the role effective August 8, succeeding Dave Calhoun, who is retiring.
The appointment of the former Rockwell Collins chief exec grabbed the headlines on the day that Boeing, which continues to be impacted by scrutiny over safety and quality following high profile recent incidents, reported another jump in year-over-year losses.
Boeing’s core operating loss of $1.4 billion for the second quarter, was more than triple the loss announced for the same quarter last year.
Revenue for the quarter amounted to $16.9 billion, shy of a consensus Wall Street forecast pitched at $17.39 billion.
In New York, Boeing stock closed the regular trading session up $3.74 or 2% at $190.60.
HSBC traded strongly after promising more shareholder returns
HSBC Holdings PLC (LSE:HSBA) shares rose 4%, closing Wednesday’s session at 704p, after the bank announced a $3 billion share buyback and a second interim dividend of $0.10 per share.
Pre-tax profit for the first half of 2024 was $21.56 billion, down slightly from $21.66 billion in the same period last year.
Meanwhile, notably, the second-quarter was stronger – with the three-month financials showing pre-tax profit was up 1.5% to $8.9 billion, driven by growth in the bank’s wealth division and improving demand for investment banking services.
It was the last set of results for outgoing chief executive Noel Quinn, who is being succeeded by Georges Elhedery in September.
The bank raised its net interest income forecast for the full year to $43 billion, from $41 billion.
HSBC's performance exceeded analysts' expectations, even though it also included a 5% bump in operating expenses due to increased tech spend and ‘inflationary pressures’.
Taylor Wimpey shares found support after backing UK govt’s ambitious housing plans
British housebuilder Taylor Wimpey PLC (LSE:TW.) saw its shares rise on Wednesday, closing shy of 1% higher, after a stronger than expected, albeit not perfectly positive performance.
Taylow Wimpey’s first half operating profit fell by more than 20% to £182 million, and pre-tax profit was down nearly 60% - impacted by a £88 million writedown related to fire safety improvements.
Nevertheless, the downside was already priced in and some of its on-site metrics surprised the market to the upside.
The builder completed 4,654 homes in the first half, an 8% decrease from the same period last year.
It now expects full-year completions to reach the upper end of its guidance range of 9,500 to 10,000 homes.
In today’s commentary, meanwhile chief executive Jennie Daly was upbeat in support of the new British government's target to build 1.5 million new homes over the next five years, describing the target as "ambitious" and necessary for future growth.
In London, Taylor Wimpey shares closed Wednesday up 0.7% at 159.70p.