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Facebook, Tesla Hit S&P 500 Futures; Apple On Tap As iPhone Plays Falter | Stock News & Stock Market Analysis

Futures for the S&P 500 index fell modestly vs. fair value late Wednesday. That follows a wave of reports late Wednesday, including from Facebook (FB) and Tesla (TSLA). Investors already are turning their eyes to Apple (AAPL), a new Federal Reserve chief, and the GOP tax plan on tap for Thursday.

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Apple’s earnings are crucial not only because it’s the world’s most valuable company, but because its results and guidance will influence a wide array of suppliers and other iPhone-related companies. Apple chipmaker Broadcom (AVGO) and OLED technology specialist Universal Display (OLED) closed below buy points on Wednesday.

S&P 500 index futures lost 0.2% vs. fair value. Nasdaq 100 futures sank 0.3%. Dow futures fell a fraction. In addition to Facebook and Tesla, cybersecurity and fiber-optic stocks were notable after-hours losers.

Facebook

Facebook earned $1.59 a share, crushing views for $1.28, according to Zacks Investment Research. Revenue surged 47% to $10.3 billion, ending a four-quarter string of decelerating growth. Facebook also sees slower expense growth going forward.

The social media giant routinely beats EPS views, but even by that measure Q3’s results were outstanding. Earnings topped the consensus by 24%. In the prior four quarters, Facebook beat by 4%, 11%, 18% and 17%.

But Facebook said that revenue growth will slow in 2018, while expenses surge 45%-60%. The social giant plans to double capital spending next year. Facebook will beef up security in the wake of pro-Russia forces exploiting its network, which CEO Mark Zuckerberg said would affect profitability. It also wants to keep expanding video.

So shares fell 1.7% in late trading to around 179.50. Facebook closed up 1.4% to 182.66 on the stock market today, part of a 7.1%, four-day surge that included Friday’s breakout past a 175.59 flat-base buy point.

Overnight action often doesn’t translate to how a stock will perform in the next trading session.

Tesla

Tesla lost $2.92 a share adjusted in the third quarter, worse than the $2.45 billion expected. Revenue growth narrowly topped views, but the electric car maker burned through $1.4 billion in cash in Q3. Tesla has $3.53 billion in cash, up from the end of Q2, after raising more capital for the Model 3 ramp up.

Tesla now says it’ll produce 5,000 Model 3 sedans a week by the end of the first quarter, pushing back from earlier claims that it would reach that level by the end of 2017. Tesla produced just 260 Model 3 cars in Q3, far below the 1,500 that CEO Elon Musk had promised.

Musk, on the earnings call, now says “I don’t want to get into the week to week (production rate) stuff.”

Tesla tumbled 4.7% to 306.02 in late trading, on track to fall through its 200-day moving average on Thursday. Tesla, which closed down 3.15% to 321.08 ahead of its release, has been finding support at its 200-day line recently. It hasn’t been below that level this year.


IBD’S TAKE: Buying or holding a stock can be risky heading into an earnings report. Here’s an earnings options strategy that can help you cash in on post-earnings stock gains, while minimizing the risk from a weak quarter.


Apple

Apple is expected to report fourth-quarter earnings per share of $1.87, up 12% vs. a year earlier, as revenue rises 9% to $51.17 billion. But analysts’ focus will be on production of the iPhone X, which will be in short supply when it goes on sale starting Friday.

Apple shares closed down 1.3% to 166.89, still in range from a 160.97 cup-with-handle buy point cleared last Friday.

But various iPhone plays had more trouble: Universal Display sank 2.6% to 142.70, back below a 145.40 entry after breaking out on Tuesday. Universal Display is not an Apple supplier. But it makes technology and parts used in making OLED screens, which are on the iPhone X. Universal Display reports earnings late Thursday.

Chipmaker Broadcom fell 1.75% to 259.29, finishing just below a 259.46 buy point surpassed on Monday. Skyworks Solutions (SWKS), another iPhone chip supplier, sank 2.2% to 111.32, closing above a 110.71 entry after undercutting it intraday.

Meanwhile, Qorvo (QRVO), another Apple chipmaker, late Wednesday topped quarterly views but gave weak guidance. Qorvo fell in late trading after retreating 1.8% during the regular session, failing to close above a buy point once again — despite topping it intraday for a third straight session.

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