HP's Tough Macro Environment
And, Nordstrom’s inventory upgrade.
Today is Wednesday, November 23, 2022.
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HP's Tough Macro Environment
Although the financial results had problems, shares of HP (NYSE: HPQ) ticked up 2.11% in after-hours trading on Tuesday.
Financials: HP reported earnings of 85 cents per share and revenue of $14.8 billion; both were better than expected.
Sales Drop: Revenue declined by 11.2% in the quarter. Net revenue for personal systems declined by 13% and net revenue for printing declined by 7%. The company said it faced a “volatile macro-environment.”
Layoffs: To deal with a current sales drop and weak future guidance, HP announced a cost-cutting plan on Tuesday that included a reduction of 4,000 to 6,000 employees by the end of 2025. HP anticipates saving at least $1.4 billion through these measures.
Stock Price: Shares of HP are down 22% this year, but are up 8% in the last 30 days.
Final Thoughts: HP also increased its dividend by 5%. The company is trying to return money to shareholders.
Notable Earnings Today: Deere (NYSE: DE), Kingsoft Cloud Holdings (Nasdaq: KC), Lufax Holding (NYSE: LU).
Notable IPOs Today: NewAmsterdam Pharma Company N.V. Ordinary Shares (Nasdaq: NAMS), Adamas One Corp. Common Stock (Nasdaq: JEWL).
Notable Equity Crowdfunding Campaigns Ending Today: myButterfly.ai (StartEngine).
Notable Economic Events Today: Building Permits (8:00 a.m. ET), Jobless Claims (8:30 a.m. ET), Core Durable Goods Orders / Durable Goods Orders (8:30 a.m. ET), Manufacturing PMI (9:45 a.m. ET), S&P Global Composite PMI (9:45 a.m. ET), Services PMI (9:45 a.m. ET), New Home Sales (10:00 a.m. ET), Michigan Consumer Expectations / Sentiment (10:00 a.m. ET), Crude Oil Inventories (10:30 a.m. ET), FOMC Meeting Minutes (2:00 p.m. ET).
Nordstrom’s Inventory Improvement is Not Enough
Declining sales sent shares of Nordstrom (NYSE: JWN) down 9.23% in after-hours trading on Tuesday as the company announced its financial earnings results.
Financials: Nordstrom reported earnings of 20 cents per share and revenue of $3.5 billion; both were better than expected.
Sales Down: The company experienced a net sales decrease of 2.9%, including a 16.4% drop in digital sales.
Outlook: Nordstrom reaffirmed its full-year financial guidance, but that guidance was already downgraded a few months ago.
Some Good News: Facing supply chain challenges, the company said that it right-sized its inventory levels and mix during the quarter. Nordstrom said it is on pace to end the year in a healthy position.
Final Thoughts: While the stock is a good value and only down about 5% this year, it’s not a retail stock that is headed in the right direction.
Litecoin Surges on Positive Sentiment
A day after the prices for most cryptos dropped, Tuesday was a recovery day that saw the price of the cryptocurrency Litecoin climb 29%.
Behind the Growth: In spite of all of the recent controversies in the crypto market, Litecoin sustained some growth thanks to bullish comments on social media. The digital coin lost about half of its value this year but is up about 60% in the last 30 days.
Final Thoughts: Litecoin is proving to be a positive altcoin right now, although the crypto market in general has been problematic.
Trends to Watch
Goal: Manchester United owners exploring potential sale of famed club (CNN)
Automatically Bad: Autodesk trims billings forecast, citing a more cautious software customer (MarketWatch)
Pricing in Fear: Bitcoin Regains $16K, But Analysts Are Still Bearish (CoinDesk)
Investing in Good: Biden administration loosens Trump-era investing rules around environment, social and governance funds for 401(k) plans (CNBC)
Not on the House: Investor Home Purchases Drop 30% as Rising Rates, High Prices Cool Housing Market (The Wall Street Journal)
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