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Business

Intel, Chevron, American Express, Silvergate and more

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Intel said April 5, 2022 that it has suspended all business operations in Russia.

Paco Freire/Sopa Images | Lightrocket | Getty Images

Check out the companies making headlines before the bell:

Intel — The chipmaker suffered a 9% loss in its shares in early morning trading after its latest financial results missed analysts’ estimates and showed significant declines in the company’s sales, profit and gross margin. The company also forecasted a loss for the current quarter.

Advanced Micro Devices — Chip stocks such as Advanced Micro Devices fell as a group following Intel’s results. Shares of Advanced Micro Devices fell nearly 2.4%, while shares of Nvidia and Micro dipped about 1.5% each.

Chevron — Shares dipped more than 1% after Chevron reported its latest earnings results. The oil producer missed earnings expectations, but topped revenue forecasts, according to consensus estimates from Refinitiv. The shares had gained on Thursday after Chevron raised its dividend and announced a buyback plan.

American Express — Shares of the credit card company rose 5% despite weaker-than-expected results for the fourth quarter. American Express reported $2.07 in earnings per share on $14.18 billion of revenue. Analysts surveyed by Refinitiv were looking for $2.22 per share on $14.22 billion of revenue. However, American Express’ guidance for 2023 was better than anticipated for earnings and revenue. Also, AMEX said it would be increasing its dividend by 15%.

Ralph Lauren — Shares fell more than 3% after BMO Capital Markets downgraded the stock to underperform. The investment firm said Ralph Lauren’s recent rally has gone too far.  

Chewy — Chewy shares rose more than 4% after Wedbush upgraded the stock to outperform from neutral.

Silvergate Capital — The bank to crypto businesses slid about 8% after the company suspended payments on its Series A preferred stock dividend, in an effort to preserve capital as it navigates recent crypto market volatility. The stock has been falling since November, after crypto exchange FTX, for whom Silvergate held deposits, collapsed in scandal.

Visa — The payment network operator reported strong financial results for its most recent quarter, including adjusted earnings per share of $2.18 and revenue of $7.94 billion. Analysts expected $2.01 per share in adjusted earnings and $7.70 billion in revenue, according to Refinitiv. Visa shares rose about 1% in premarket trading.

Hasbro — Shares of the toy maker slid more than 5% after the company said it would eliminate around 1,000 employee positions and warned of weak holiday-quarter results. The layoff of around 15% of its global workforce comes as the company seeks to save between $250 million and $300 million annually by the end of 2025.

KLA — Chip maker KLA Corporation declined about 4.6% after issuing weaker-than-expected forward guidance for its fiscal third quarter. Otherwise, KLA reported a beat on earnings and revenue expectations.

— CNBC’s Tanaya Macheel, Yun Li and Jesse Pound contributed reporting

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Business

Strong earnings from Tesla, United Rentals helped lift market

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CNBC’s Jim Cramer said that Thursday’s rally is thanks to a batch of strong company earnings.

“I’ve said over and over again that during earnings season, what matters is companies and the CEOs with the smarts to direct them,” he said.

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Stocks rose on Thursday as investors digested the latest batch of earnings and new gross domestic product data showing the U.S. economy grew by a higher-than-expected 2.9% in the fourth quarter.

Cramer said that contrary to what many might believe, the economic data didn’t drive the trading session’s rallies.

“That’s a classic misdirection play — just totally wrong. It’s stale. It doesn’t count. We’re in earnings season, for heaven’s sake,” he said, adding, “Stocks did well today because many of them delivered good numbers.”

He went over several examples of corporate news and earnings reports that fueled Thursday’s gains:

“It’s very confusing if you’re on permanent negative autopilot because you only pay attention to the [Federal Reserve]. If you watched the individual companies, these moves would be a lot less surprising,” Cramer said.

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Business

S&P 500 rises after strong GDP report, Nasdaq jumps nearly 1% on Tesla results

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The Nasdaq Composite rose Thursday as fourth-quarter gross domestic product came in above expectations, and investors parsed through the latest batch of corporate earnings.

The tech-heavy index jumped 1.2%, while the Dow Jones Industrial Average traded 104 points, or 0.3%, higher. The S&P 500 rose 0.6%.

GDP data released Thursday showed the economy expand at an annualized rate of 2.9% during the fourth quarter, the Commerce Department said. That’s above the 2.8% Dow Jones estimate, but represents a slight cooldown from the third-quarter reading.

“With today’s better-than-expected GDP number, I think investors are thinking, maybe we can get away with a pretty soft, mild recession that is not likely to throw us into an even deeper bear market when all is said and done,” said Sam Stovall, CFRA Research’s chief investment strategist.

Meanwhile, earnings season trudged on, with strong results from Tesla giving the Nasdaq and electric vehicle stocks a boost. Tesla jumped 9% after posting record revenue and solid earnings. Beaten-up technology giants Microsoft, Apple, Amazon and Alphabet added more than 1% each.

Airline earnings also rolled out, with Southwest falling on a larger-than-expected loss fueled by its holiday meltdown. American Airlines rose on a fourth-quarter beat.

Elsewhere, Chevron added 3% after announcing a $75 billion share repurchasing program.

Wall Street is coming off a mixed session, but all the major averages are headed for weekly, and monthly, gains. The Dow and S&P are up 1.5% and 1.9% so far this week, respectively. The Nasdaq has gained 3.1% this week and is on pace for its best month since July.

Focus now shifts to next week’s Federal Reserve policy, where the central bank is widely expected to announce a 25 basis point hike as it battles high inflation. Investors will be on the lookout for clue into how much further the Fed intends to hike before it cuts rates.

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Business

Southwest, Tesla, Las Vegas Sands

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A Southwest Airlines Co. Boeing 737 passenger jet pushes back from a gate at Midway International Airport (MDW) in Chicago, Illinois.

Luke Sharrett | Bloomberg | Getty Images

Check out the companies making the biggest moves premarket:

Southwest — The airline dropped 2.1% after reporting a $220 million loss for the fourth quarter after the holiday meltdown cost the company millions in expenses and drove up expenses.

Comcast — The media company reported fourth-quarter earnings that beat Wall Street’s expectations, with earnings per share coming in at 82 cents, adjusted, versus the 77 cents expected from analysts surveyed by Refinitiv. Revenue was $30.55 billion compared to the $30.32 expected. Shares, however, were down less than 1% in the premarket.

Tesla — The electric-vehicle maker soared 7% after reporting record revenue and an earnings beat. CEO Elon Musk said Tesla might be able to produce 2 million cars this year.

Las Vegas Sands — Shares of the hotel and casino operator rose about 4% despite the company posting weaker-than-expected financial results for the most recent quarter. Wall Street analysts cited upbeat comments about its reopening in Macao on the company earnings call for their positive outlook on the stock.

Levi Strauss — Shares of the denim maker popped 6% premarket on a better-than-expected quarterly report. Levi Strauss topped analysts’ revenue estimates and beat earnings projections by 5 cents a share.

Blackstone — Blackstone shares dipped less than 1% after the asset manager reported mixed earnings results. Total segment revenues fell short of expectations, while distributable earnings beat estimates by 12 cents a share.

Chevron — The energy giant jumped more than 3% in premarket after the company announced a $75 billion stock buyback program and a dividend hike to $1.51 from $1.42 per share. The buyback program will become effective on April 1.

Dow — The chemicals giant posted fourth-quarter earnings, revenue and adjusted EBITDA that missed analyst expectations before the bell Thursday, sending the stock down more than 3% in premarket trading.

IBM — Shares of IBM shed 2.7% after the company reported quarterly results Wednesday that generally exceeded Wall Street’s expectations but included an announcement that the firm will cut 3,900 jobs. IBM reported adjusted earnings per share of $3.60 per share on $16.69 billion in revenue where analysts expected $3.60 per share and $16.4 billion in revenue, per Refinitiv.

American Airlines — The airline gained 1.5% after its fourth-quarter profits beat Wall Street’s expectations, thanks to strong holiday demand and high fares.

Seagate Technology — The data storage company jumped more than 8% in premarket trading after reporting earnings and revenue for the last quarter that beat expectations.

Pfizer — The pharma giant was downgraded by UBS on Thursday, which said Pfizer’s Covid franchise estimates need to come down and its pipeline is too premature. Pfizer was up less than 1% in the premarket.

— CNBC’s Carmen Reinicke, Yun Li, Samantha Subin, Tanaya Macheel and Michael Bloom contributed reporting.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

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Business

Chevron announces $75 billion stock buyback, dividend boost

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Chevron last month reported its second-highest quarterly profit ever.

Justin Sullivan | Getty Images News | Getty Images

Energy giant Chevron announced a $75 billion stock buyback program and a dividend hike on Wednesday evening.

Shares of Chevron were up more than 2% in extended trading.

The buyback program will become effective on April 1, with no set expiration date, the company said in a press release. The dividend hike increases Chevron’s per share payout to $1.51 from $1.42, and that will be distributed on March 10.

Chevron’s market cap was roughly $350 billion as of Wednesday’s market close, meaning that the buyback would represent more than 20% of the company’s stock at current prices.

This buyback plan follows a $25 billion plan enacted in 2019. The old plan will be terminated at the end of March. For the third quarter of 2022 — the most recent quarter that Chevron has reported — the company repurchased $3.75 billion of shares.

The new buyback plan comes after a massive year for energy stocks, as a reopened U.S. economy and Russia’s invasion of Ukraine combined to drive oil and gas prices hire in 2022. Chevron reported more than $12 billion of free cash flow and $11 billion of net income in the third quarter alone.

Shares of Chevron rose more than 50% in 2022 even as the broader stock market declined.

Chevron was a hot stock in 2022.

The financial success of energy companies has led to criticism from politicians, including U.S. President Joe Biden, who threatened higher taxes on energy companies last year for their “war profiteering.”

Chevron CEO Mike Wirth told CNBC in December that the company was “in contact” with the Biden administration on a variety of issues.

“Our goal of stable markets and prices that are affordable for the economy is something we share. How we get there, sometimes we have different ideas,” Wirth said on “Squawk Box.”

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World

Dow drops more than 100 points as Chinese Covid protests dampen market sentiment

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Stocks fell Monday as social unrest from China’s prolonged Covid restrictions weighed on markets, sending oil prices lower — after Wall Street notched gains during the Thanksgiving holiday-shortened week.

The Dow Jones Industrial Average fell more than 100 points, or 0.3%, at open. The S&P 500 and Nasdaq Composite each lost 0.5%.

Over the weekend, demonstrations broke out in mainland China as people vented their frustrations with Beijing’s zero-Covid policy. Local governments tightened Covid controls as cases surged, even though earlier this month Beijing adjusted some policies that suggested the world’s second-biggest economy was on its way to reopening.

The developments weighed on sentiment in Asia trading, with oil futures hovering around new 2022 lows around demand concerns. Shares of companies with big production facilities in the country led premarket losses.  Shares of Apple lost 1.5% and Tesla declined 0.9%.

“You cannot rewire supply chain overnight,” said Mohamed El-Erian, chief economic advisor at Allianz and president of Queens’ College. “So what does it mean for those companies? It means supply uncertainty.”

The moves come after all three major U.S. indexes ended last week higher, even with the shortened trading time due to the Thanksgiving holiday. The Dow rose 1.78%, and the S&P 500 increased 1.53% during the short week. The tech-heavy Nasdaq lagged the other two indexes but was still up 0.72% in the same timeframe.

Stocks were lifted during the week by comments from Federal Reserve officials signaling that the central bank would step down its aggressive rate hike path as inflation cools. Minutes from the Fed’s November meeting confirmed the likely shift in policy.

“A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate,” the minutes stated.

Investors will be watching this week more earnings reports and a slew of economic releases that will give further information on the state of the consumer and the U.S. economy. Intuit, Salesforce and Five Below are among companies scheduled to report earnings. Personal consumption data and the labor report for November will also be released.

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World

US provides Chevron limited authorization to pump oil in Venezuela after reaching humanitarian agreement

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Washington
CNN
 — 

The US has granted Chevron limited authorization to resume pumping oil from Venezuela following the announcement Saturday that the Venezuelan government and the opposition group have reached an agreement on humanitarian relief and will continue to negotiate for a solution to the country’s chronic economic and political crisis, including a focus on the 2024 elections.

A senior Biden administration official described Saturday’s announcements as “important steps in the right direction,” but noted that there is still much to be done as both parties work toward a more permanent solution to the ongoing crisis. The official also highlighted the license’s limited nature saying that they do not expect this to have a tangible impact on international oil prices and that the move is intended as an inducement for the negotiations – not a reaction to high global oil prices.

The Treasury Department’s Office of Foreign Assets Control on Saturday issued Venezuela General License 41, which authorizes Chevron to “resume limited natural resource extraction operations in Venezuela,” according to a news release from the Treasury Department. This is a 6-month license, and the US can revoke it at any time. Additionally, any profits earned will go to repaying debt to Chevron and not to the Maduro regime, according to the senior official, and states that the US government will continue to require significant reporting by Chevron on its financial operations.

“GL 41 authorizes activity related to Chevron’s joint ventures in Venezuela only, and does not authorize other activity with PdVSA. Other Venezuela-related sanctions and restrictions imposed by the United States remain in place; the United States will vigorously enforce these sanctions and will continue to hold accountable any actor that engages in corruption, violates U.S. laws, or abuses human rights in Venezuela,” the release said. PdVSA is the state-owned Venezuelan oil and gas company.

Chevron CEO Mike Wirth told Bloomberg TV earlier this year that if there was a thaw that it would take months and years to refurbish their oil fields in the country and that there “wouldn’t be an instantaneous” effect on oil production.

If the Venezuelan regime continues to take concrete steps toward reaching a negotiated solution, then future targeted sanctions relief is possible, according to the official.

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Nasdaq futures fall after weak Amazon guidance adds pressure to tech rout

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Nasdaq 100 futures were lower Friday after disappointing Amazon earnings added to the already pressured index.

Futures tied to the Nasdaq dropped 0.84% Dow Jones Industrial Average futures were fractionally lower and S&P 500 futures lost 0.53%.

Amazon led the declines in extended trading, having plunged after the company posted weaker-than-expected quarterly revenue and issued disappointing fourth-quarter sales guidance.

Apple shares were initially lower too after the company reported weaker-than-anticipated iPhone revenue, but they have since reversed higher. The company still beat Wall Street estimates for quarterly earnings and revenue.

Tech names were a dark cloud over the market in regular trading, too. Earlier in the day, the Nasdaq Composite lost 1.6%, due to a rout in Meta and other tech stocks, and the S&P 500 fell 0.6%. Meanwhile, the Dow rose 194.17 points, or 0.6%, for its fifth straight day of wins, helped by GDP data that hinted that inflation may be waning.

SoFi head of investment strategy Liz Young said the pain investors are feeling in earnings was inevitable and necessary to move forward in the current cycle.

“We’ve been waiting for this to happen,” she said on CNBC’s “Closing Bell: Overtime.” “There’s usually a sequence of events: First the market goes, then earnings go, then the economy goes. So this is finally that part where we’re seeing earnings get hit and I don’t think it’s any mistake that it’s tech getting hit the most. Tech is what has been under pressure in this market since the beginning.”

“This is just another check on the list of things that we need to get through before we can really be done with this part of the cycle,” she added.

The Dow and S&P are on pace to end the week higher by about 3% and 1.5%, respectively. The Nasdaq is set to finish slightly lower.

Friday brings a quieter day for earnings. As investors digest the bloodbath in tech, they’ll have Chevron and Exxon Mobil on deck before the bell as well as AbbVie and Colgate-Palmolive.

In economic data, traders are looking forward to the Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred inflation gauge, as well as consumer sentiment and pending home sales.

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Saudi Aramco profit surges 90% in second quarter amid energy price boom

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An employee looks on at Saudi Aramco oil facility in Abqaiq, Saudi Arabia October 12, 2019.

Maxim Shemetov | Reuters

Saudi oil giant Aramco reported a stunning 90% surge in second quarter net income and record half year results on Sunday, as high oil prices continue to drive historic windfalls for “Big Oil.” 

Aramco said strong market conditions helped to push its second quarter net income to $48.4 billion, up from $25.5 billion a year earlier. The result easily beat analysts estimates of $46.2 billion.

“Our record second-quarter results reflect increasing demand for our products — particularly as a low-cost producer with one of the lowest upstream carbon intensities in the industry,” Aramco President and CEO Amin Nasser said. 

Aramco said half year net income soared to $87.9 billion, easily outpacing the largest listed oil majors, including Exxonmobil, Chevron and BP and other “Big Oil” companies, which are all benefiting from a commodity price boom.

Oil prices surged above $130 dollars a barrel earlier this year, as the global energy crisis, made worse by supply disruptions stemming from Russia’s invasion of Ukraine, roiled global markets and contributed to decades high inflation.

“While global market volatility and economic uncertainty remain, events during the first half of this year support our view that ongoing investment in our industry is essential — both to help ensure markets remain well supplied and to facilitate an orderly energy transition,” Nasser added.

Aramco said it expects the post-pandemic recovery in oil demand to continue for the rest of the decade, despite what it called “downward economic pressures on short-term global forecasts.”

The blowout results are also a major windfall for the Saudi Arabian government, which relies heavily on its Aramco dividend to fund government expenditure. The Kingdom reported a $21 billion budget surplus in the second quarter. 

Aramco said it would maintain its dividend payout of $18.8 billion in the third quarter, covered by a 53% increase in free cash flow to $34.6 billion. 

Major gains

Aramco is using its major gains to invest in its own production capabilities in both hydrocarbons and renewables, while also paying down debt. 

“We are progressing the largest capital program in our history, and our approach is to invest in the reliable energy and petrochemicals that the world needs, while developing lower-carbon solutions that can contribute to the broader energy transition,” the company said.

Saudi Arabia, alongside its OPEC+ counterparts, has been under increasing pressure to boost oil output to ease high prices. Company executives said limited global spare production capacity was a major concern for the global pricing outlook.

Aramco said it achieved total hydrocarbon production of 13.6 million barrels of oil equivalent per day in the second quarter, and was working to boost capacity from 12 million barrels of oil per day to 13 million barrels of oil per day by 2027.

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Stock futures fall slightly to start August trading with market coming off best month since 2020

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Stock futures fell slightly following the market’s best month since 2020 as investors look ahead to another week of key earnings reports and economic data.

The Dow Jones Industrial Average futures fell by 67 points, or 0.2%. S&P 500 futures shed around 0.2% and Nasdaq 100 futures dipped by 0.3%.

On Friday, all major indexes gained, posting winning weeks and capping off the best month of the year so far and then some. The Dow gained 6.7% in July, while the S&P 500 added 9.1%. The Nasdaq Composite rose 12.4% as investors rushed into the tech stocks beaten up the most during this bear market. For each index, July’s performances were the best since 2020.

“We are seeing a relief rally in the stock market, as pessimism reached extreme levels, and as longer-term interest rates have been coming back down,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

“We believe the rally will last until later in the summer, but as stock prices rebound and it becomes increasingly clear that we are headed for a more typical recession (e.g. one with higher unemployment and nominal GDP dropping close to zero or negative), markets will again have another selloff,” he added. “But until that time, enjoy the rally as it’s likely catching a lot of people off guard.”

This week, investors have more economic data and company earnings to digest. On Monday, companies such as Activision Blizzard, Devon Energy, Loews and more report earnings. Later in the week Uber, Caterpillar, Starbucks, Eli Lilly, Amgen and others also have scheduled reports.

In addition, the Friday nonfarm payrolls report from the Bureau of Labor Statistics will give more insight into the strong labor market. So far this year, the solid growth of jobs has prompted economists to say the U.S. is currently not in a recession, even with two consecutive quarters of negative GDP.

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