October 31st - Previewing the Presidential Election

In partnership with Hebbia

Welcome back!

We have a very lengthy piece today as we dive into the busy earnings season plus talk about the economic outcomes that could go down following a change in the Presidency.

Earnings Corner 📜 

Trending Up 📈 

Alphabet (GOOG) reported earnings that beat estimates, with revenue of $88.27B up 15% y/y (vs. $86.3B expected) and EPS of $2.12 (vs. $1.85 expected). Cloud services helped drive outperformance, with segment revenue of $11.35B up 35% y/y.  Mgmt. attributed the cloud growth to AI offerings, including subscriptions for enterprise customers. The stock was up 2.9% at Wednesday’s close

Reddit (RDDT) reported earnings that beat estimates, with revenue of $348.8MM up 68% y/y (vs. $312.8MM expected) and EPS of $0.16 (vs. -$0.07 expected). Mgmt. raised its Q4 adjusted earnings outlook to $110MM-$125MM (vs. $85.2MM expected). The stock soared on the news and was up 42% at Wednesday’s close

AbbVie (ABBV) reported earnings that beat estimates, with sales of its Skyrizi immunology drug up 51% y/y, driving the stock up 6.4% at Wednesday’s close

Automatic Data Processing (ADP) reported earnings that beat estimates, while raising its 2025 revenue outlook, citing benefits from its recent acquisition of WorkForce Software. The stock was up 1.7% at Wednesday’s close

Mondelez International (MDLZ) reported earnings that beat estimates, driving the stock up 0.9% at Wednesday’s close

Stryker (SYK) reported earnings that beat estimates, with mgmt. raising guidance, driving the stock up 1.6% at Wednesday’s close

Visa (V) reported earnings that beat estimates, with mgmt. noting that volumes remained stable through the quarter. The stock was up 2.9% at Wednesday’s close

Trending Down 📉 

Microsoft (MSFT) reported earnings that beat estimates, with revenue of $65.59B up 16% y/y (vs. $64.51B expected) and EPS of $3.30 (vs. $3.10 expected). Cloud computing revenue was up 33% y/y, but projected Q2 revenue of $68.1B-$69.1B disappointed analysts’ expectations of $69.84B. The stock was down 3.2% after Wednesday’s close

Meta (META) reported earnings that beat estimates, with revenue of $40.59B up 19% y/y (vs. $40.29B expected) and EPS of $6.03 (vs. $5.25 expected). However, mgmt. reported weaker-than-expected user numbers (3.29B daily active users vs. 3.31B expected) and warned that AI infrastructure expenditures will accelerate in 2025. The stock was down 3.2% at Wednesday’s close

Advanced Micro Devices (AMD) reported earnings in line with expectation, with revenue of $6.82B up 18% y/y (vs. $6.71B expected) and EPS of $0.92 (vs. $0.92 expected). Mgmt. projected Q4 revenue of $7.5B, in line with analysts’ expectations. The stock was down 10.6% at Wednesday’s close

Ford (F) reported earnings that beat estimates, with automotive revenue of $43.7B up 5.5% y/y (vs. $41.9B expected) and EPS of $0.49 (vs. $0.47 expected). However, mgmt. noted inflationary pressures, rising warranty costs, and high inventory levels and guided to the lower end of its FY EBIT forecast at $10B (vs. $10B-$12B previously). The stock was down 7.9% at Wednesday’s close

Pfizer (PFE) reported earnings that beat estimates, with revenue of $17.7B up 31% y/y (vs. $14.95B expected) and EPS of $1.06 (vs. $0.62 expected). Stronger than expected Paxlovid and Covid vaccine sales drove the outperformance, which comes at a crucial time for mgmt. as it faces pressure from activist fund Starboard Value. The stock was down 1.7% at Wednesday’s close

PayPal (PYPL) reported earnings that beat estimates, with revenue of $7.85B up 6% y/y (vs. $7.89B expected) and EPS of $1.20 (vs. $1.07 expected). However, mgmt. issued a disappointing Q4 revenue projection of “low single-digit growth” (vs. 5.4% expected). The stock was down 6.5% at Wednesday’s close

Chipotle (CMG) reported earnings that beat estimates, with revenue of $2.79B up 13% y/y (vs. $2.82B expected) and EPS of $0.27 (vs. $0.25 expected). Same store sales growth of 6% disappointed expectations of 6.3%. The stock was down 7.9% at Wednesday’s close

Eli Lily (LLY) reported earnings that missed estimates as its GLP-1 drugs Zepbound and Mounjaro disappointed sales expectations. Mgmt. also cut its FY profit guidance, driving the stock down 6.3% at Wednesday’s close

McDonalds (MCD) reported earnings that beat estimates, reversing last quarter’s decline in same-store sales, but analysts are concerned that the recent E. coli outbreak may hurt Q4 performance. The stock was down 1.8% at Wednesday’s close

Amgen (AMG) reported earnings that beat estimates, on the back of reduced costs. The stock was down 0.2% after Wednesday’s close

Caterpillar (CAT) reported earnings that missed estimates, with mgmt. cutting its annual sales outlook due to slowing demand, driving the stock down 2.1%

Chubb (CB) reported earnings that beat estimates, with solid underwriting income and improved investment income, but the stock was down 1.24% at Wednesday’s close