US EARLY MORNING: US index futures flat after rising to monthly high

APAC stocks were higher as momentum from global peers supported the region after encouraging US data and a slight easing of geopolitical concerns. European shares are higher amid a heavy slate of corporate earnings. After the S&P 500 closed at a monthly high on Wednesday, US equity futures are trading around unchanged. Treasury yields are narrowing by a couple of basis points with major curve spreads little changed. The Dollar Index is down around 0.2%. Crude benchmarks are lower. The US Day Ahead features labour market data by way of weekly jobless claims and challenger layoffs, ahead of Friday’s jobs report (our NFP preview can be accessed here). Fed 2022 voter Mester is due to speak in the afternoon. But the main central banking highlight of the day is the BoE’s rate decision, where it is expected to lift rates by 50bps (our preview is here). Meanwhile, the US corporate earnings slate includes CI, LLY, BABA, COP, AMGN (full daily US Earnings estimates here). Full Day Ahead here.

CONSUMER CYCLICAL:

• 
  eBay Inc (EBAY) - Q2 adj. EPS USD 0.99 (exp. 0.89), Q2 Revenue USD 2.42bln (exp. 2.37bln). Gross merchandise volume -18% on as-reported basis at USD 18.55bln, US gross merchandise volume USD 8.98bln, International gross merchandise volume USD 9.57bln, Active buyers 138mln (exp. 142.3mln). Sees Q3 Adj. EPS between 0.89-0.95 (exp. 0.92), Q3 revenue is seen between 2.29bln-2.37bln (exp. 2.30bln), sees FY Adj. EPS 3.95-4.10 (exp. 3.98), Q3 revenue 9.6bln-9.9bln (exp. 9.68bln). Exec said that eBay is stronger position today than when it entered the pandemic, and despite rising inflation, and an uncertain macro environment, it remains on track to deliver on our 2022 commitments.


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  Booking Holdings Inc. (BKNG) - Q2 EPS 19.09 (exp. 17.48), Q2 Revenue USD 4.3bln (exp. 4.32bln). Q2 Gross bookings 34.55bln (exp. 32.76bln), Q2 Gross agency bookings 19.45bln (exp. 19.96bln), Q2 Gross merchant bookings USD 15.10bln (exp. 12.8bln), Room nights sold 246mln (exp. 239.7mln), Rental car days sold 16mln (exp. 18.2mln), Airline tickets sold 6mln (exp. 5.8mln), Marketing expense 1.74bln (exp. 1.83bln). CEO said Q2 room nights surpassed 2019 levels for the first time, expects record Q3 revenue. On early Q3 trends, exec said that the pace of growth moderated, but through Q3, it expects higher gross bookings.


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  Adidas (ADDYY) - Q2 Revenue EUR 5.60bln (exp. 5.58bln). Operating profit -28% Y/Y. Gross margin down 1.5ppts to 50.3% reflecting significantly higher supply chain costs. Continued COVID-19-related lockdowns in Greater China also weighed on the top-line development in Q2. Due to the less favourable market mix and the impacts from initiatives to clear excess inventories in Greater China until the end of the year, gross margin is now expected to reach a level of around 49.0% (previously: around 50.7%) in 2022. Still sees FY gross margin around 49% (exp. 49.3%). FY 2022 outlook reflects double-digit growth in H2.


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  MGM Resorts International (MGM) - Q2 adj. EPS 0.03 (exp. 0.23), Revenue USD 3.30bln (exp. 3.04bln). Exec said Q2 saw the best ever Adj. Property EBITDAR at its Las Vegas Strip Resorts, and the best Q2 Adj. Property EBITDAR at our Regional Operations driven by consistent strong demand from the leisure consumer and a return from our convention customers.


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  Starbucks Corporation (SBUX) - Starbucks will unveil its web3 initiative, which includes coffee-themed NFTs, at next month’s Investor Day event, TechCrunch reported.


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  Lucid Group Inc (LCID) - Q2 EPS -0.33 (exp. -0.36), Revenue USD 97.3mln (exp. 145.49mln). H1 production 1,405 vehicles, FY22 production volume view revised to 6-7k vehicles. Named Steven David Senior Vice President of Operations.


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  MercadoLibre, Inc. (MELI) - Q2 EPS USD 2.43 (exp. 1.79), Q2 revenue USD 2.597bln (exp. 2.5bln). Gross Merchandise Volume +26.2% Y/Y at USD 8.6bln, unique active users 84mln (vs 76mln Y/Y).


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  Next (NXGPY) - Q2 full price sales +5.0% Y/Y, ahead of prior guidance. Full price sales guidance for the second half maintained at +1.0%. EPS +7.2% Y/Y. Raises FY pretax to GBP 860mln (exp. GBP 848mln, prev. GBP 850mln).


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  Zalando (ZLNDY) - Q2 Sales EUR 2.6bln (exp. 2.64bln), adj. EBIT 77mln (exp. 72mln). Confirms FY22 guidance, expects higher profitability during H2.

CONSUMER STAPLES:

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  Costco Wholesale Corporation (COST) - Reported net sales of USD 16.85bln for the retail month of July, +10.8 Y/Y. For the forty-eight week period, it reported net sales of USD 205.19bln, +16.4% Y/Y.


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  Tyson Foods, Inc. (TSN) - NY AG said Tyson Foods was failing to comply with a subpoena for a civil probe into possible price gouging during the COVID-19 pandemic, Reuters reported.


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  Walmart Inc. (WMT) - Walmart is cutting hundreds of corporate roles in a restructuring effort, WSJ reported citing sources, following recent profit warning.


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  Clorox Company (CLX) - Q4 adj. EPS 0.93 (exp. 0.93), Q4 revenue USD 1.8bln (exp. 1.86bln). FY23 adj. EPS seen between USD 3.85-4.22 (exp. 5.26); FY23 sales seen down 4% to up 2% (exp. 7.33bln). Announced a streamlined operating model, will begin implementing in Q1, , new operating model expected to generate ongoing annual savings of approximately USD 75-100mln. CEO said FY23 environment looked difficult.


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  Sprouts Farmers Market, Inc. (SFM) - Q2 EPS 0.57 (exp. 0.51), Q2 revenue USD 1.6bln (exp. 1.58bln). Comp store sales growth +2.0%. Sees Q3 adj. EPS between 0.49-0.53 (exp. 0.51), and sees Q3 comp store sales growth +1.0-2.0%. FY22 adj. EPS seen between 2.18-2.26 (exp. 2.14).

MATERIALS:

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  Glencore (GLNCY) - H1 Revenue USD 134.4bln (exp. 135.7bln), adj. EBITDA USD 18.9bln (exp. 17.5bln). Announced a new USD 3.0bn share buyback. Special distribution of USD 1.45bln, equating to 0.11/shr. Expects more normal conditions in H2.


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  Albemarle Corp (ALB) - Q2 Adj. EPS 3.45 (exp. 3.26), Revenue USD 1.48bln (exp. 1.50bln). Boosts FY22 adj. EPS outlook to 19.25-22.25 (prev. 12.30-15.00), and lifts FY22 revenue outlook to USD 7.1-7.5bln (exp. 6bln, prev. 5.8-6.2bln).


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  Nutrien Ltd (NTR) - Q2 2022 (USD): Adj. EPS 5.85 (exp. 5.76), Revenue 14.5bln (exp. 14.86bln).


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  Summit Materials, Inc. (SUM) - Q2 EPS USD 1.61 (exp. 0.56), Q2 revenue USD 631.9mln (Exp. 679mln). Has already achieved a mid to high single digit price increases in each line of business, with asphalt achieving double digit price increases. Continues to characterise current market conditions as favourable towards the potential for additional price increases.

INDUSTRIALS:

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  Boeing Company (BA) - FAA acting chief to meet FAA safety inspectors in South Carolina Thursday before determining whether Boeing can resume deliveries of its 787 Dreamliner, Reuters reported


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  Toyota Motors (TM) - Q1 net JPY 746.8bln (prev. 897.8bln Y/Y), revenue JPY 8.49tln (prev. 7.94tln Y//Y), raises FY net forecast to 2.36tln from 2.26tln, maintains FY global output forecast at 9.7mln vehicles.


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  Fisker Inc. (FSR) - Q2 EPS -0.36 (exp. -0.41), cash and cash equivalents USD 851.9mln (USD 14.2mln raised from Fisker's USD 350mln at-the-market equity programme). Backed its view for the expected timing of Fisker Ocean SOP on November 17th. Fisker Ocean reservations over 56k as of August 1st.


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  Rolls-Royce (RYCEY) - H1 Revenue GBP 5.6bln (exp. 5.34bln). Gross profit GBP 1.062bln (prev. 0.814bln). Operating margin 4.0% (prev. 0.7%). Reaffirms guidance. Full year guidance is based on expected improvement in Civil Aerospace in the second half driven by planned higher spare large engine sales and large engine shop visits.


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  Ingersoll Rand Inc (IR) - Q2 2022 (USD): Adj. EPS 0.54 (exp. 0.52), Revenue 1.44bln (exp. 1.39bln). Raises FY22 organic revenue growth expectation by 300bps to 11-13%, re-affirms total revenue growth view of 11-13%, and raised its adj. EBITDA range to USD 1.395-1.425bln.


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  Sturm, Ruger & Company, Inc. (RGR) - Q2 EPS USD 1.17 (exp. 1.49), Q2 revenue USD 140.7mln (exp. 156.4mln). Exec said that consumer demand for firearms has subsided from the unprecedented levels of the surge that began early in 2020 and remained for most of 2021, resulting in a 30% reduction in sales vs Q2 2021. Channel inventory of some product families, including certain polymer pistols and modern sporting rifles, have been largely replenished, but inventories of other product families remain below desired levels, exec added.


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  Tetra Tech, Inc. (TTEK) - Q3 EPS USD 1.09 (exp. 1.05), Q3 revenue USD 890mln (exp. 703.7mln). Q4 EPS seen between 1.13-1.18 (exp. 1.15), and sees Q4 revenue between USD 676-726mln (exp. 711mln). Sees FY22 EPS between 4.38-4.43 (exp. 4.36), and sees FY22 revenue between USD 2.78-2.83bln (exp. 2.8bln)


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  WillScot Corporation (WSC) - Q2 EPS 0.32 (exp. 0.29), Q2 revenue USD 581.6mln (exp. 527mln). Raised FY22 revenue outlook to USD 2.2-2.3bln (exp. 2.2bln, prev. guidance 2.1-2.2bln), and raised its FY22 adj. EBITDA view to USD 900-940mln (prev. 860-900mln).

ENERGY:

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  Marathon Oil Corporation (MRO) - Q2 adj. EPS USD 1.32 (exp. 1.26), Q2 revenue USD 2.3bln (Exp. 2.1bln).


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  Northern Oil and Gas, Inc. (NOG) - Q2 adj. EPS USD 1.72 (exp. 1.70), Q2 revenue USD 441.5mln (exp. 391.1mln). Quarterly production 72,689 BOEPD, +33% vs Q2 2021.


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  Western Gas Partners, LP (WES) - Q2 EPS 0.74 (exp. 0.76), Q2 revenue USD 876.4mln (exp. 806.7mln).

COMMUNICATIONS:

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  Altice USA, Inc. (ATUS) - Q2 EPS 0.23 (exp. 0.32), Q2 revenue USD 2.46bln (Exp. 2.44bln). Expects to continue to accelerate investments in key growth initiatives, increasing cash capex to approximately USD 1.7-1.8bln in FY22.


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  Lumen Technologies Inc (LUMN) - Q2 Adj. EPS 0.35 (exp. 0.46), Revenue USD 4.612bln (exp. 4.58bln). Reiterated full-year 2022 financial outlook measures.

TECH:

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  Microsoft Corporation (MSFT) - Microsoft is testing a Game Pass widget on Windows 11, The Verge reported.


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  Robinhood Markets, Inc. (HOOD) - SEC has been probing Robinhood's compliance with short-selling rules since October 2021, according to a filing.


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  Qorvo, Inc. (QRVO) - Q1 EPS USD 2.25 (exp. 2.12), Q1 revenue USD 1.03bln (exp. 1.02bln). Sees Q2 EPS between USD 2.45-2.65 (exp 2.64).


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  DXC Technology Company (DXC) - Q1 adj. EPS 0.75 (exp. 0.82), Q1 revenue USD 3.71bln (exp. 3.72bln). Sees Q2 adj. between EPS 0.70-0.75 (exp. 0.93), Q2 revenue USD 3.55-3.58bln (exp 3.69bln). FY23 adj EPS seen betwen 3.45-3.75 (exp. 3.93), and FY23 revenue seen between USD 14.6-14.75bln (exp. 14.95bln).


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  FleetCor Technologies, Inc. (FLT) - Q2 adj. EPS USD 4.17 (exp. 3.82), Q2 revenue USD 861.3mln (exp. 821mln). Sees Q3 adj. EPS between 4.15-4.25 (exp. 3.99), and sees Q3 revenue between USD 870-890mln (exp. 864mln). Lifts FY22 adj. EPS outlook to USD 15.85-16.05 (exp. 15.51, prev. 15.45-15.75), and raised FY22 revenue view to USD 3.38-3.42bln (prev. 3.335-3.385bln, exp. 3.36bln). Extended its agreement to manage the commercial fleet card program for BP (BP). Announced that it has acquired Accrualify, an accounts payable automation software company; no terms.


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  Sunrun Inc. (RUN) - Q2 EPS -0.06 (exp. -0.10), Q2 revenue USD 584.6mln (exp. 501.5mln).cQ2 Customer Additions 34,403, of which it saw 25,339 Subscriber Additions. Sunrun now has 724,177 Customers, including 614,280 Subscribers.


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  DoubleVerify Holdings, Inc. (DV) - Q2 EPS 0.06 (exp. 0.04), Q2 revenue USD 109.8mln (exp. 102mln). Sees Q3 revenue between USD 108-110mln (exp. 106.9mln), and sees FY22 revenue between USD 448-450M (exp. 441.7mln).


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  Confluent, Inc. (CFLT) - Q2 adj. EPS -0.16 (exp. -0.19), Q2 revenue USD 139mln (exp. 131.9mln). Sees Q3 adj. EPS 0.19 to -0.17 (exp. -0.19), and sees Q3 revenue between USD 143-145mln (exp. 142mln). Lifts its FY22 EPS outlook to -73c to -69c (exp. -75c, prev. guidance -79c to -73c).


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  Fortinet, Inc. (FTNT) - Q2 adj. EPS 0.24 (exp. 0.22), Q2 revenue USD 1.03bln (exp. 1.03bln). Sees Q3 adj. EPS between 0.26-0.28c (exp. 0.27), and sees Q3 revenue between USD 1.105-1.135bln (exp. 1.12bln). FY22 adj. EPS seen between 1.01-1.06 (exp. 1.03), and backs its FY22 revenue outlook of USD 4.35-4.4bln (exp. 4.4bln).


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  GoDaddy Inc. (GDDY) - Q2 EPS 0.56 (exp. 0.49), Q2 revenue USD 1.02bln (in line). Sees Q3 revenue between 1.03-1.045bln (exp. 1.05bln); lowers FY22 revenue view to USD 4.1-4.13bln (prev. .14-4.16bln, exp. 4.15bln).


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  Vimeo, Inc. (VMEO) - Q2 adj. EPS -0.03 (exp. -0.17), Q2 revenue USD 111mln (exp 108.9mln). Now has over 9,000 customers sold via its salesforce, representing 35% of its Q2 revenue. Sees Q3 revenue growth exceeding +5% Y/Y, and sees FY22 revenue growth near 10% Y/Y.

FINANCIALS:

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  Western Union Company (WU) - Q2 adj. EPS 0.51 (exp. 0.41), Q2 revenue USD 1.1bln (exp. 1.13bln). WU revised FY22 outlook, lowering its revenue view and raising its operating profit margin view based on the timing of expenses, better than expected cost management year-to-date, as well as a softer environment for topline trends. Sees FY22 adj. EPS between 1.75-1.85 (exp. 1.79), while GAAP revenue now seen down between 11-13% (prev. guided down 9-11%). Q2 revenue impacted by continued softness in retail money transfer. Said the suspension of operations in Russia and Belarus negatively impacted revenue by approximately 3ppts, and Argentina inflation benefited revenue by around 1ppt.


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  MetLife Inc (MET) - Q2 adj. EPS 2.00 (exp. 1.45), Revenue USD 15.56bln (exp. 16.11bln). CEO said underlying business performance remained robust, supported by solid capitalisation and ample liquidity.


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  ING Groep (ING) - Q2 net income EUR 1.18bln (exp. 1.07bln). Revenue EUR 4.68bln (prev. 4.52bln Y/Y). Adj. Pretax EUR 1.74bln (prev. 2.07bln). NII EUR 3.47bln (prev. 3.34bln). Underlying group ROE 9.2% (prev. 11.2%). NIM 1.36% (prev. 1.36%).


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  Credit Agricole (CRARY) - Q2 net EUR 1.98bln (exp. 1.16bln), Revenue EUR 6.33bln (exp. 5.78bln), CET1 11.3% (prev. 11.0% QQ). Declines to comment on insurance tie-up discussions with Banco BPM (BPM IM).


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  Allstate Corporation (ALL) - Q2 adj. EPS -0.76 (exp. -1.27), Q2 revenue USD 12.2bln (exp. 11.1bln). Exec said that the impact of rising claim repair costs and upward prior year loss reserve development led to a recorded combined ratio of 107.9 in Q2. Will further accelerating insurance price increases, implementing underwriting restrictions in underperforming states and reducing advertising spend, which is expected to improve profitability and slow policy growth. Insurance premiums earned of USD 10.9bln were +8.6% primarily due to higher average premiums in auto and homeowners insurance.

HEALTH CARE:

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  Bayer (BAYRY) - Q2 sales EUR 12.8bln (exp. 12.3bln), adj. EBITDA EUR 3.35bln (exp. 3.3bln), Net Income EUR -0.3bln (exp. 1.5bln). Upgrades FY outlook: Sales seen between EUR 47-48bln (prev. guided 46bln).


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  Mckesson Corp (MCK) - Q1 Adj. EPS 5.83 (exp. 5.28), Revenue USD 67.2bln (exp. 65.14bln). Raises its FY adjusted EPS guidance to USD 23.95-24.65 (prev. guidance 22.90-23.60). Said it had reached agreements to settle opioid-related claims in all 50 states.


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  Merck (MKKGY) - Q2 Revenue EUR 5.57bln (exp. 5.423bln). Adj. EBTDA 1.78bn (exp. 1.69bln), EBIT 1.18bln (exp. 1.32bln), Net Income 0.87bln (exp. 1.09bln). Co. affirms its FY22 revenue and adjusted EBITDA guidance; stronger positive currency effects are expected of 5-8% for net sales.


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  BioMarin Pharmaceutical Inc. (BMRN) - Q2 EPS 0.15 (exp. 0.11), Q2 revenue USD 533.8mln (exp. 521.5mln). Raised FY22 revenue outlook to USD 2.06-2.16bln (exp. 2.1bln, prev. guidance 2.05-2.15bln).


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  Bruker Corporation (BRKR) - Q2 adj. EPS 0.45 (exp. 0.45), Q2 revenue USD 588.4mln (exp. 590.9mln). Reiterates its FY22 adj. EPS outlook of 2.29-2.33 (exp. 2.29). FY22 revenue growth now seen between 2.5-4.5% Y/Y.

REAL ESTATE:

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  National Storage Affiliates Trust (NSA) - Q2 FF/shr 0.71 (exp. 0.71), Q2 revenue USD 137.3mln (exp. 194.6mln). Occupancy 95.1% (vs 95.2% Y/Y). Reiterates FY22 FFO.shr outlook of2.80-2.85 (exp. 2.84).

UTILITIES:

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  Uniper (UNPPY) - Said coal supplies were limited by low Rhine water levels and may need to curb output at German coal plants.

04 Aug 2022 - 09:31- Research Sheet- Source: Newsquawk