The Nasdaq Composite surged above the 6,000 mark for the first time ever Tuesday on a 0.7% rise yesterday. That served as a punctuation mark on a broad up-day that saw the S&P 500 Index gain 0.6% and the Dow Jones Industrial Average jump 1.1%.
The good times are rolling for several companies as we head into Wednesday’s trading day, including Chipotle Mexican Grill, Inc. (NYSE:CMG) and Twitter Inc (NYSE:TWTR). However, United States Steel Corporation (NYSE:X) reported earnings so ugly, they’re bringing down the rest of the company’s industry brethren.
Here’s what to look for on Wednesday:
Twitter Inc (TWTR)
TWTR shares are rocketing higher Wednesday morning thanks to a beat — finally — after several quarters of worse-than-expected results.
For its first quarter, Twitter reported adjusted earnings of 11 cents per share versus just the penny estimated by Wall Street analysts. Revenues enjoyed a healthy beat too, coming to $548 million versus the consensus mark of $511.9 million.
The top and bottom lines both represented year-over-year declines, and the company’s Q2 outlook was miserable. TWTR projects adjusted EBITDA of $95 million to $115 million, with even the top end of the range well short of estimates for $141 million.
Still, Wall Street was focused on the beats, as well as Twitter’s win in user expansion — long the albatross around the company’s neck, and the metric by which Twitter’s failure was gauged. The company added 9 million sequentially to hit 328 million — 7 million more users than Wall Street expected.
CEO Jack Dorsey credited a number of things, including quicker-to-market product improvements and positive changes to the user experience.
TWTR stock was up 10% in Wednesday morning’s trade.
Chipotle Mexican Grill, Inc. (CMG)
CMG shares were also headed higher on Wednesday amid a strong first-quarter earnings report that overshadowed news that the company’s servers may have been recently breached.
Its payment service “detected unauthorized activity” that may have targeted the personal information of those who made a transaction with the restaurant chain between March 24 through April 18. The Mexican eatery believes to have stopped unauthorized activity thanks to aid from cyber security firms, law enforcement and its payment processor.
“Consistent with good practices, consumers should closely monitor their payment card statements,” Chipotle said. The company had little additional information on the breach.
The breach, however, served as a relatively minor point of the company’s Q1 earnings announcement.
Chipotle grew revenues 28.1% to $1.07 billion, filtering down to earnings of $1.60 per share — both of which topped the consensus estimate. The real win, however, was a 17.8% climb in comparable-store sales, a year after the company drowned with a nearly 30% decline in comps.
CMG stock was headed 3% higher in Wednesday’s early action.
United States Steel Corporation (X)
Unfortunately, the good news isn’t spreading to X shares, which are hemorrhaging this morning on results so bad, they’re taking the rest of the industry with it.
U.S. Steel reported a surprise loss for its fiscal first quarter, bleeding 83 cents per share versus expectations for net income of 34 cents per share. Revenues of $2.725 billion didn’t miss as badly, but still were well shy of expectations for $2.928 billion.
The forecast wasn’t any better, with X targeting full-year earnings of $1.50, which don’t even begin to sniff analysts’ projections for $3.05.
Shares were hammered on the news, off 17% in Wednesday’s premarket trade, setting up what should be a shock to U.S. Steel’s technicals. X stock is primed to open Wednesday around $25.60, which would be well below all of its major moving averages. A bad-case scenario could see shares drop to the $19 area, which acted as support for U.S. Steel in the final quarter of 2016.
The shockwaves were so bad that AK Steel Holding Corporation (NYSE:AKS), Nucor Corporation (NYSE:NUE) and other industry mates were trending a couple percentage points lower in Wednesday’s premarket trade.
