Earnings Previews: Alliance Resource Partners, GE Healthcare, Li-Cycle, SoFi Technologies
In early trading Thursday, the Dow Jones industrials were up 0.35%, the S&P 500 was up 0.65% and the Nasdaq was up 1.16%.
The first reading of fourth-quarter gross domestic product came in better than expected, posting an annual rate of 2.9%, more than 10% better than the consensus estimate of 2.6% and closer to the 3.2% growth posted in the third quarter. The price deflator was up 3.5%, also more than expected. Overall, the report may indicate that Federal Reserve rate hikes will be smaller or may stop altogether for a while in order to give the economy a bit more room to grow. Real GDP increased by just 2.1% last year after booming to 5.9% growth in 2021. Getting closer to 3% for this year may be a Fed target, provided the central bankers can keep inflation in check. Interesting times.
After U.S. markets closed Wednesday, Tesla reported earnings per share (EPS) and revenue that beat consensus estimates. The company also forecasts production of 1.8 million vehicles in 2023, up nearly 40% year over year. New orders (following price cuts announced earlier this month) are running at nearly double year-ago totals. Shares traded up more than 10% shortly after Thursday’s opening bell.
IBM missed the consensus EPS estimate by a penny and met revenue expectations. Big Blue also said it planned to reduce its workforce by around 3,900. The stock traded down 3.8% Thursday morning.
CSX beat consensus estimates on both the top and bottom lines. The railroad expects both merchandise and coal shipments to rise this year. Shares traded down more than 2%.
Lam Research also beat top-line and bottom-line estimates but issued downside guidance for its wafer fabrication equipment. The company said it is taking steps to reduce costs, including job cuts of 1,300, about 7% of its global workforce. Shares traded down 0.4%.
Before markets opened on Thursday, Nokia beat both EPS and revenue estimates. The Finnish company issued in-line guidance, and shareholders will get a dividend increase of 50%. Shares traded up 2.8% in the first half-hour of trading.
American Airlines beat the consensus EPS estimate and narrowly missed on revenue. For the current quarter, guidance was in line with estimates, and full-year EPS guidance was well above estimates. Shares traded down by about 1%.
Comcast surpassed EPS and revenue estimates but reported the loss of 26,000 broadband subscribers. Shares traded up about 0.5% shortly after Thursday’s opening bell.
Four Dow companies are on deck to report results late Thursday or early Friday: American Express, Chevron, Intel and Visa.
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Here is a preview of four companies scheduled to report results first thing Monday morning.
Alliance Resource Partners
Shares of coal producer Alliance Resource Partners L.P. (NASDAQ: ARLP) have increased by more than 50% in the past 12 months. According to the International Energy Agency (IEA), coal demand rose to more than 8 billion metric tons in 2022, and the agency believes demand will remain flat through 2025. Alliance is a master limited partnership (MLP) that pays a hefty pretax distribution to shareholders.
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