Wednesday, January 24, 2024

Markets rise with tech earnings in the spotlight

Dow went up 132 taking it over 38K again, advancers over decliners better than 3-2 & NAZ advanced 147.  The MLP index gained 2+ to 261 & the REIT index was off 2 to 381.  Junk bond funds were higher along with stocks & Treasuries were about even.  Oil was up 1 to the 75s & gold fell 9 to 2015.

AMJ (Alerian MLP Index tracking fund)

Netflix (NFLX) added 13.1M subscribers during the 4th qtr, stronger growth than  expected as the streamer builds its ad-supported service & cracks down on password sharing.  NFLX now has 261M paid subscribers, a new record for the service.  The subscriber growth easily tops the 8.76M paid membership adds reported in the 3rd qtr.  The company also blew past 4th-qtr expectations of 8-9M.  EPS rose to $2.11 versus 12¢ in the prior-year period.  The company posted revenue of $8.8B for the qtr, up from $7.8B in the year-ago qtr.  As it focuses on improving profits, the company increased its 2024 full-year operating margin forecast to 24%, up from 22-23%.  It cited the weakening of the $ & a stronger-than-forecast 4th-qtr performance.  The company also projects EPS of $4.49 for the fiscal first qtr of 2024, higher than the $4.10 that had been expected.  “As our competitors adjust to these changes, it’s logical to expect further consolidation, particularly among companies with large and declining linear networks,” the company said.  “We’re not interested in acquiring linear assets. Nor do we believe that further M&A among traditional entertainment companies will materially change the competitive environment given all the consolidation that has already happened over the last decade.”  The stock zoomed 56+ (11%).

Netflix adds 13.1 million subscribers, tops revenue estimates as membership push gains steam

The head of the Federal Aviation Administration (FAA) is vowing that the agency will have "boots on the ground" at Boeing's (BA), a Dow stock, 737 MAX factory until it feels "comfortable" that its quality control system is working.  The statements from administrator Mike Whitaker come as 737-9 MAX planes remain grounded by the FAA in the wake of a Jan 5 incident in which one of the aircraft operated by Alaska Airlines (ALK) lost a passenger door plug while in flight.  The FAA has since announced an "audit involving the Boeing 737-9 MAX production line & its suppliers to evaluate BA's compliance with its approved quality procedures."  "We've got a lot of inspectors on the ground, visually inspecting the aircraft as it comes through," Whitaker said.  "We're shifting from more of an audit approach to a direct inspection approach."  "Until we're comfortable that the [quality control] system is working properly... we're going to have boots on the ground," he reportedly added.  Whitaker also said the FAA has sent a "couple of dozen" inspectors to look over the planes & that the inspections have "been longer" than the estimated 4-8 hours per aircraft.  "We've required a lot of measurements," Whitaker said.  "Once the area's exposed, we want to understand bolt tensions and gaps and things of that nature. So we've required more data than would normally be the case because we really wanted to understand the issue."  Meanwhile, CEO Dave Calhoun is reportedly planning to meet with a group of senators on Capitol Hill this week.  BA stock was up 2.46.

FAA reportedly supervising Boeing 737 MAX factory until quality control reached

eBay (EBAY) will begin reducing its workforce by approximately 9% (1000 full-time roles) in efforts to "better position eBay for long-term, sustainable growth," the company announced.  Pres & CEO Jamie Iannone said the "fundamental changes" put into place over the past 3 years have "accelerated the pace of innovation" & resulted in increased customer satisfaction & improved market growth, but "there is more" the company can do to be successful.  "We need to better organize our teams for speed – allowing us to be more nimble, bring like-work together, and help us make decisions more quickly," Iannone wrote.  Described as the "most significant and toughest of the decisions," Iannone said the company will reduce its current full-time workforce by an estimated 9%, which is approximately 1000 roles.  eBay will also be cutting down on the number of contracts it has within its alternate workforce.  "These are not actions we take lightly – and we recognize the impact they will have on all eBayers. We have to say goodbye to people who have made so many important contributions to the eBay community and culture, and this isn't easy," Iannone wrote.  The company's decision to eliminate some roles was made after it became clear the "overall headcount and expenses have outpaced" EBAY's growth.  Going forward, some teams will be consolidated & aligned with organizational changes that improve experiences better meet customers needs.  The stock went up 18¢.

eBay to eliminate 1,000 roles, reducing full-time workforce by 9%: 'This is not easy'

Highlighted by the NFLX report above, tech stocks are clearly in demand.   Additionally, Dow is hoping to set another record over 38K.

Dow Jones Industrials 

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