Earnings Previews: Broadcom, Lululemon
The three major U.S. equity indexes closed lower for the third straight day on Tuesday. The Dow Jones industrials dipped by 0.96%, the S&P 500 dropped 1.1% and the Nasdaq retreated by 1.12%. All 11 sectors ended the day with losses, led by energy (3.4%) and materials (1.6%). Financials closed down 0.5%, the day’s smallest loss. All three major indexes were trading higher in Wednesday’s premarket.
Russia has shut off all natural gas supplies to Europe through the Nord Stream 1 pipeline for three days of maintenance. The pipeline was shut down for 10 days last month. The weekly U.S. oil inventory report out later in the morning is expected to reveal a small drawdown of 660,000 barrels last week. The federal government releases 8.1 million barrels from the Strategic Petroleum Reserve last week.
After markets closed Tuesday, ChargePoint reported a larger-than-expected loss per share but higher-than-expected revenue. Third-quarter guidance was in line with expectations, and the company reaffirmed full-year guidance. Shares traded up about 5% Wednesday morning.
Chewy posted unexpected earnings per share (EPS) of $0.05 but missed the consensus revenue estimate and issued downside guidance for the current quarter and for the fiscal year. The stock traded down about 11% in Wednesday’s premarket session.
CrowdStrike beat estimates on both the top and bottom lines and issued upside guidance for the current quarter and the full year. Shares traded up 1% Wednesday morning.
Hewlett Packard Enterprise met the consensus EPS estimate but missed the consensus revenue target. The company issued in-line guidance for the current quarter and reaffirmed full-year guidance. Shares traded up by less than 1%.
HP missed the revenue estimate and beat the EPS estimate by a penny. Then it issued downside guidance for the current quarter. The stock traded down 6.1% in Wednesday’s premarket session.
After U.S. markets close on Wednesday or before they open on Thursday, Campbell Soup, Okta, PureStorage and SentinelOne will be reporting quarterly results.
Here is a preview of two companies set to report results after U.S. markets close on Thursday.
Like most other chipmakers not named Intel, Broadcom Inc. (NASDAQ: AVGO) posted its 52-week high in late December and the shares have staggered lower ever since. The good news is that Broadcom’s loss is smaller than Intel’s, AMD’s or Nvidia’s over the same period. In late May, the company offered to pay $66 billion in cash and stock for an 88% stake in VMware. Including $8 billion in debt, the deal will cost Broadcom $74 billion. The deal is expected to close next year, but Broadcom may have to divest some other businesses in order to get regulatory approval.
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