When Apple reported its quarterly results in late January, the company cruised past earnings and revenue expectations. Second-quarter revenue guidance of $63 billion to $67 billion easily topped the consensus outlook of $62.5 billion.
Just a few weeks later, management now says it will miss that range due to a combination of weak demand and a hit to its supply chain. Both supply and demand are under pressure in China thanks to the coronavirus, although demand is otherwise stable in the rest of the world.
So far the market, and for the most part Apple too, are shaking off the update and taking the news pretty well. The Nasdaq Composite rallied back to positive territory during the day, while Apple fell less than 2% in afternoon trading.
Movers in the Stock Market Today
Apple wasn’t the only stock moving in the stock market today. Before management’s update, Walmart (NYSE:WMT) was the likely target for investors’ focus on the day. That’s as the company reported its fiscal fourth-quarter earnings results.
Earnings of $1.38 per share missed expectations by 6 cents, while revenue of $141.7 billion was in line with expectations after growing 2.1% year-over-year. However, comparable-store sales missed estimates, rising 1.9% against expectations for 2.4% growth. As for guidance, management sees full-year earnings of $5.00 to $5.15 per share, short of consensus estimates at $5.22 per share.
Despite all of this, shares climbed more than 1.5% on the day.
Word that Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) acquired 18.9 million shares in Kroger (NYSE:KR) caused the stock to jump 5%. Other tidbits from the filing include Berkshire decreasing its positions in Goldman Sachs (NYSE:GS) and Wells Fargo (NYSE:WFC).
Amazon’s (NASDAQ:AMZN) Jeff Bezos announced that he will be putting $10 billion toward launching his own fund to help fight climate change. “We can save the Earth,” Bezos wrote. For years, Bezos has sold a small portion of his Amazon stake to help fund his other initiatives, like Blue Origin.
General Motors (NYSE:GM) is pulling out of Australia and New Zealand and by 2021, the company plans to finish off the Holden brand. Further, Great Wall Motors signed a deal to buy GM’s manufacturing facility in Thailand, as GM will withdraw the Chevrolet brand by the end of 2020. These changes will cause GM to take $1.1 billion in charges, including $300 million in cash.
Shares of Pier 1 (NYSE:PIR) are down more than 44% this year and 80% over the past 12 months. The final nail in the coffin came on Monday, as the company files for chapter 11 bankruptcy protection.
Dell (NYSE:DELL) shares are down slightly in the stock market despite agreeing to sell its RSA cybersecurity unit for $2.1 billion. The sale is expected to close in six to nine months and will go to a group of buyers comprised of Symphony Technology Group, Ontario Teachers’ Pension Plan Board and AlpInvest Partners.
Heard on the Street
Tesla (NASDAQ:TSLA) is keeping things exciting (and a bit difficult) for analysts. Morgan Stanley raised its base case price target from $360 to $500 and its bull case target from $650 to $1,200. Despite raising his price targets, analyst Adam Jonas maintained his “underperform” rating and warns that “investors should expect a very challenging 1Q.”
Gold bugs are starting to chatter, with the yellow metal rising to its highest price since 2013. Gold futures pushed through $1,600, as we see a strange development in the markets. As investors worry about the economic impact of the coronavirus, they are bidding up bonds and gold. At the same time though, equities seem unfazed.