Markets are somewhat directionless, mystified by the spell of the Trump agenda, which they haven't quite figured out, while also awaiting January CPI on Wednesday and PPI on Thursday. In the interim, companies are still reporting full year 2024 and fourth quarter earnings, among them, McDonald's (MCD), which reported prior to Monday's open.
McDonald's had a good showing, up nearly 5.00% after it missed expectations top and bottom. Revenue for the fourth quarter fell 0.28% from a year ago to $6.39 billion, missing expectations for $6.45 billion. Adjusted earnings per share of $2.80 were below Wall Street's estimate of $2.84. The company attributed the quarterly decline to an E. coli outbreak that sent U.S. same store sales tumbling 1.4% from the same period a year ago.
These are the kind of desperate excuses and investment decisions that lead ultimately to bad outcomes. Revenue for all of 2024 was $25.92 billion versus $25.99 billion for 2023. Adjusted earnings per share were $11.39 in 2024 versus $11.74 in 2023. The stock has more than doubled over the past five years and hit a record high of 316 in October, 2024. It carries a dividend yield of just 2.30%, less than inflation, and a P/E of 27.
With immigration and freebies to illegals being cut off, Americans barely able to afford McDonald's offerings of food substitutes, a recession looming, and Mickey D's margins cratering, stock pickers should be shorting this stock rather than sending it higher on what were, effectively, lousy results, E. coli or no E. coli.
One commenter put it thusly: "Food at McDonalds tastes like a punishment for being poor."
Prior to Tuesday's open, Humana (HUM), British Petroleum (BP), Coca-Cola (KO), AutoNation (AN), Shopify (SHOP), and Marriott (MAR) all reported.
Briefly, serial under-performer Humana (HUM) posted a loss of $693 million, or -$5.76 a share, compared to a loss of $541 million, or -$4.42 a share a year ago. Stripping out one-time items, losses per share came in at -$2.16. Analysts expected an adjusted loss of -$2.21 a share. Humana was down 2.74% on Monday. In pre-market trading, it's up 3.20%. The stock hit a high of 554 in October, 2022 and has slid to 266 as of yesterday. This is not an investment; it's a trade.
British Petroeum (BP) reported its worst quarter in four years, missing expectations of 0.08 per share with a reported 0.07. The company cited weak refining margins, turnarounds at plants that lowered output and raised costs, as well as corporate charges for the decline in profit in the last three months of last year. OK, sure. Pass.
Coca-Cola (KO) was one of the bright spots, reporting earnings per share of 55 cents against 52 cents expected and 46 cents a year ago. Revenue for the quarter was $11.54 billion vs. $10.68 billion estimated.
AutoNation (AN) posted an earnings beat for the quarter, but net income was USD 186.1 million compared to USD 216.2 million a year ago. Diluted earnings per share from continuing operations was USD 4.64 compared to USD 5.04 a year ago. Diluted earnings per share was USD 4.64 compared to USD 5.04 a year ago.
For the full year, revenue was USD 26,765.4 million compared to USD 26,948.9 million a year ago. Net income was USD 692.2 million compared to USD 1,021.1 million a year ago. Shares are marginally higher priro to the opening bell.
Shopify (SHOP) Q4 revenue surged 31.3%, but shares are bouncing around, down as much as seven percent pre-market. The company had adjusted earnings of 44 cents a share, topping estimates for 43 cents. In the year-ago quarter, earnings per share were 36 cents. Shares are close to all-time highs and the P/E ratio is over 100. Can Shopify succeed where others, like WIX or AMZN have? Looks a little pricey, but they are into AI and are making profits.
Marriott (MAR) posted full year revenue of $6.43 billion vs analyst estimates of $6.39 billion (5.5% year-on-year growth). Adjusted 4th quarter EPS was $2.45 vs. analyst estimates of $2.38. Share are lower due to middling guidance. Stock price is around 300 with a P/E over 30 and dividend yield of less than one percent. Hope they're doing share buybacks.
That's the equity roundup that's sent stock futures tumbling Tuesday morning. Dow futures: -$88; NASDAQ: -$96; S&P: -16.
Gold hit another all-time high early this A.M. at $2,968.50 on the COMEX. It's being beaten down, currently around $2,920 per ounce. Silver remains in the bargain basement, down this morning at $31.92. Supply has been flowing to the United States since Trump's election in November. Most don't know what to make of this recent phenomenon, but some are suggesting that ramping up gold purchases could be a sign that Trump ultimately intends to finish off the era of fiat money by eliminating the Federal Reserve. That would be a feather in Trump's All-American hat, but it's really too early to tell just what he's up to concerning the U.S. debt and the Fed.
Tuesday may be a little on the dull side with CPI for February topping the ticket Wednesday morning. After the bell Tuesday Doordash (DASH), Zillow Group (ZG), Lyft (LYFT), Gilead (GILD), Supermircro (SMCI) report.
Wednesday, before the bell, KraftHeinz (KHC), Ryder (R), Barrick Gold (GOLD), Generac (GNRC), and CVS Health (CVS) report.
At the Close, Monday, February 10, 2025:
Dow: 44,470.41, +167.01 (+0.38%)
NASDAQ: 19,714.27, +190.87 (+0.98%)
S&P 500: 6,066.44, +40.45 (+0.67%)
NYSE Composite: 20,117.88, +78.39 (+0.39%)
Posts
No comments:
Post a Comment