2023-09-21 06:53:07 ET
Summary
- FedEx rises 5% premarket on strong results, estimates.
- US Steel refuses to open its books to Cleveland-Cliffs, hindering takeover offers.
- MGM Resorts reports operations back to normal after hacking attack, estimated to cost $20-40M in losses.
Listen below or on the go on Apple Podcasts and Spotify
FedEx ( FDX ) rises after the close on strong results , estimates. (00:28) Cleveland-Cliffs ( CLF ) refuses to sign standstill agreement with US Steel ( X ) - report. (01:51) MGM Resorts ( MGM ) says operations have recovered from organized hacking attack. (02:41)
This is an abridged transcript of the podcast.
FedEx (NYSE: FDX ) is up 5% premarket after its sales forecast beat estimates .
For the current fiscal year, the company forecast flat revenue year-over-year, compared to the prior forecast of flat to low-single-digit-percent revenue growth. That compares to the -0.17% average analyst estimate.
For the first quarter, EPS of $4.55 beat the average analyst estimate by $0.80 while revenue of $21.7B missed by $130M.
The company CEO said, “FedEx Ground had an outstanding quarter which, when combined with improved earnings at FedEx Express and expense controls across the organization, led to our better-than-expected overall financial performance.”
FedEx Express operating income increased 18% during the quarter, as a 9% decline in revenue was offset by reduced operating expenses.
FedEx Ground operating income increased 59% during the quarter primarily due to yield improvement and cost reductions.
FedEx Freight operating income decreased 26% during the quarter driven by lower fuel surcharges and shipments, partially offset by base yield improvement.
FDX is up more than 41% year-to-date.
US Steel ( X ) has refused to open its books to Cleveland-Cliffs ( CLF ) and allow it into its sale process because they won't sign a six-month standstill agreement that would prevent it from challenging US Steel's board of directors.
According to a Reuters report , which cited people familiar with the matter, the refusal to open its books comes as US Steel ( X ) is accepting initial takeover offers this week.
Cliffs ( CLF ) opened its own books to US Steel ( X ) as half its $7 billion offer is in stock, Reuters said.
Cliffs has also given letters to US Steel from Wells Fargo (WFC), JPMorgan ( JPM ) and UBS, among others attesting to their commitment to finance its bid.
The latest update comes after a Tuesday CNBC report that U.S. Steel may have interest from as many as four bidders.
MGM Resorts said resort services, dining, entertainment, pools and spas are all operating normally again after intermittent issues that resulted from a hacking incident.
The casino floor is also functioning normally after MGM ( MGM ) had to resort to paying out slot winners manually.
The only exception noted by MGM is that guests at Excalibur may continue to have to ask casino cashiers and slot guest representatives for assistance as the company works to normalize operations.
Macquarie analyst Chad Beynon estimated the hacking incident cost MGM Resorts ( MGM ) between $20M to $40M in losses. That amount is believed to be well below the cyber insurance policy maximum that covers business interruptions, although it may lead to higher premiums in the future.
Shares of MGM Resorts ( MGM ) are down more than 5% over the last week vs. the 1.4% decline for the Dow Jones U.S. Gambling Index over the same period.
Other headlines to look out for on Seeking Alpha:
Hollywood strike may end soon as writers, studios return to bargaining table
Toshiba set to end 74-year run as listed firm as $13.5B buyout concludes
KB Home Q3 earnings reflect steady demand, but average sales price slips
On our catalyst watch for the day,
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Notable events include Charles River Laboratories' Investor Day (CRL), Celcuity's ( CELC ) Virtual Science Day, and Cidara Therapeutics' (CDT X ) Virtual R&D Day.
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Shareholders with Magellan Midstream Partners ( MMP ) will vote on the deal for the company to be acquired by ONEOK ( OKE ) for $25.00 in cash and 0.667 shares of ONEOK stock for each outstanding Magellan common unit.
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Reata Pharmaceuticals ( RETA ) shareholders will vote on its planned $7 billion sale to Biogen (BIIB).
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The Federal Trade Commission will hold a closed door meeting on multiple matters.
U.S. stocks on Wednesday ended a tumultuous day deep in the red, while the more rate-sensitive 2-year Treasury yield (US2Y) hit a level not seen since 2006.
The Dow ( DJI ) ended 0.22% lower. The S&P 500 (SP500) retreated 0.94%, while the Nasdaq ( COMP.IND ) put in the worst performance with a 1.53% decline.
Of the 11 S&P sectors, seven ended in negative territory, with Communication Services and Tech the top two losers. Consumer Staples and Real Estate topped the gainers.
Treasury yields were up, with the 2-year yield (US2Y) - up 3 basis points to 5.14%. The 10-year yield (US10Y) was up 2 basis points to 4.39%.
Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the red. The Dow is down 0.4%, the S&P 500 is down 0.6% and the Nasdaq is down 0.7%. Crude oil is down 0.8% at less than $89 a barrel. Bitcoin is down 1.2%.
In the world markets, the FTSE 100 is down 0.6% and the DAX is down 1%.
The biggest stock movers for the day premarket: After an impressive debut, the Klaviyo (NYSE: KVYO ) is down around 4%. This happened after the share price of the stock increased by as much as 32% on Wednesday before declining to end the day 9.2% higher at $32.76.
On today’s economic calendar at 8:30 am the Philly Fed business outlook and at 10am existing home sales.
For further details see:
Wall Street Breakfast Podcast: FedEx Pops