Tuesday saw stocks dip slightly, led by tech stocks, which were among the worst performers with 0.4% losses as a group. The S&P 500 fell 0.1%, the Dow Jones Industrial Average dipped 0.03% and the Nasdaq Composite slipped 0.2%.
Heading into Wednesday’s trade, Delta Air Lines, Inc. (NYSE:DAL) is proving that airlines can make headlines for the right reasons, a major investor has issues with the Tesla Inc (NASDAQ:TSLA) board and Neurocrine Biosciences, Inc. (NASDAQ:NBIX) is hitting the roof on big FDA news.
Here’s what you should know heading into Wednesday:
Delta Air Lines, Inc. (DAL)
While competitor United Continental Holdings Inc (NYSE:UAL) broils under the heat of its own mismanaged PR situation, DAL shares are enjoying a nice post-earnings bump on the strength of a Street-beating first quarter.
For Q1, Delta earned $603 million (82 cents per share) — a whopping 36% decline in profits. However, on an adjusted basis, the company still managed to leapfrog estimates of 75 cents by 2 cents. Revenues weren’t as bad, just down 1% to $9.15 billion, though that was slightly below expectations for $9.18 billion.
That all came amid middling operational metrics — a 0.5% increase in traffic to 47.95 billion revenue passenger miles, but a 1% decline in total passenger revenue to $7.69 billion. However, looking forward, the company expects the June quarter’s passenger unit revenues to improve 1%-3% and “remain positive throughout the year.”
While it has been overshadowed by United’s fiasco, Delta has been shoveling out of its own issues — namely, a multiday set of cancellations sparked by massive storms that rocked its primary Atlanta hub. DAL was forced to cancel several thousand flights, which Raymond James says could knock a percentage point off second-quarter unit revenue.
Still, DAL stock is headed higher Wednesday morning by about 2%.
Tesla Inc (TSLA)
TSLA shares might be sitting right under all-time highs after finally breaking out of a three-year range, and they might be up a scorching 45% year-to-date, but that doesn’t mean Tesla isn’t without problems. Specifically, a few investors are pounding the table over Tesla’s management team, and the EV maker is about to get some big-pocketed competition in China.
Specifically, the California State Teachers Retirement System (CalSTRS) have written a letter to Tesla’s lead independent director saying that they want Tesla’s board to add members not connected in some way to Elon Musk.
Right now, Tesla’s board members include Elon’s brother, several SpaceX directors and investors and a former SolarCity C-suiter. Said the letter:
“Directors should be held to a higher standard of independence given the conflicts of interest that permeate this board. A thoroughly independent board would provide a critical check on possible dysfunctional group dynamics, such as groupthink.”
CalSTRS is no small potato, controlling roughly $720 billion in assets.
Meanwhile, Tesla also faces a new challenger in China, with Volkswagen AG (ADR) (OTCMKTS:VLKAY) presenting an all-electric competitor to the Model X in Shanghai later this week.
Volkswagen has set a goal to sell a million electric cars annually by 2025, and will try to get there with its I.D. lineup. The latest concept entry will be a crossover that is expected to be priced lower than the Model X, and includes an autonomous driving mode.
Neurocrine Biosciences, Inc. (NBIX)
NBIX is popping by double digits after reporting some good news regarding one of its medications.
The company’s tardive dyskinesia received drug received approval from the Food and Drug Administration (FDA) ahead of Wednesday’s action.
Tardive dyskinesia is a side effect of taking anti-psychotic medications that causes uncontrolled movement of the face and body. Tardive dyskinesia affects between 5% and 8% of patients who take these medications.
The drug, Ingrezza, is the first drug of its kind to gain FDA approval. The drug is expected to cost between $20,000 and $60,000 annually, depending on the necessary dosage. Investors are excited about analysts’ projections for annual sales of about $700 million by 2023.
NBIX shares are up more than 20% in early Wednesday action.