Nasdaq futures pop, Tesla surges after earnings with more heavyweights on deck

Live4 updates

• 

  Wed, April 24, 2024 at 5:21 AM MDT

  Hilton continues to buy its company back

  Hilton (HLT) continues to be one of the most aggressive acquirers of its stock out of the gazillion companies I follow closely.

  In many respects, it almost feels like Hilton is taking itself private again! The hotel and resorts company went public again in 2013 after being bought by Blackstone in 2007.)

  This from the company’s just-released earnings report:

  “During the three months ended March 31, 2024, Hilton repurchased 3.4 million shares of its common stock at an average price per share of $196.17, for a total of $662 million, returning $701 million of capital to shareholders during the quarter including dividends. The number of shares outstanding as of April 19, 2024 was 250.0 million.”

  For perspective, Hilton ended 2022 with a share count of 277 million.

• 

  Wed, April 24, 2024 at 5:03 AM MDT

  Toymaker earnings not coming in fun

  No playing around here, earnings from major toymakers Mattel (MAT) and Hasbro (HAS) aren’t very fun to look at.

  Not exactly a great earnings report from Mattel last night — now saying it will return to revenue growth in 2025. Mattel is unique in that the Barbie movie really drove up its results last year, so things mathematically will be down. Sales fell 1% year-over-year in the first quarter.

  Hasbro’s earnings this morning are also tough on the eyes for investors. The company is calling out a 21% sales plunge in its key consumer products business due to “broader industry trends, exited businesses and reduced closeout sales as a result of last year’s inventory clean-up.”

  Both weak reports say a lot about where shoppers minds are at right now … not with buying dolls, action figures and board games.

• 

  Wed, April 24, 2024 at 4:57 AM MDT

  One stat to know on AT&T

  I am still wading through AT&T’s (T) long earnings report, but one number caught my attention right off the jump.

  $4.7 billion.

  That’s how much debt AT&T repaid in the quarter, as it continues to try to bring down leverage in life after Time Warner. CEO John Stankey has told me a few times within the past year that paying down debt is one of the most important goals for his management team.

  As it should be — AT&T still ended the first quarter with about $132.8 billion in total debt! The company’s market cap is $118 billion.

• 

  Wed, April 24, 2024 at 4:48 AM MDT

  A list of questions Tesla investors need to ponder

  The day after.

  Tesla (TSLA) CEO Elon Musk has played investors like a fiddle. He gave them what they were clamoring for ahead of earnings — details on a cheaper Tesla — and they are eating it up. Shares are up 10% in pre-market trading, and the company’s ticker is dominating the Yahoo Finance Trending Ticker page.

  All of that is fine and good, but it all detracts (likely by Musk’s design) from the main story at Tesla that has weighed on its stock price this year: The company is struggling, and any bold promises by Musk that sends its stock higher inside an awful year for the company should be questioned big-time.

  Here are some questions the Tesla bulls need to ask themselves.

  • Musk promises robotaxis, shows off in the earnings slide-deck what their ride-sharing app may look like. But…

    • What do regulators have to say about this? How feasible is this launch within the next 12-months?

    • Musk does know that Uber (UBER) exists right? And that it’s nicely making profits finally and investing aggressively in its business.

    • Musk seems to think people will want to share their Teslas and make this platform a success. What happens if they don’t want to share their tricked out Model 3?

    • Musk mentions Tesla will own some of the robotaxi fleet. What does that do to its cash flow and margin profile? Do investors and analysts want to see Tesla saddled with these extra costs while the pure EV business is under pressure and they are trying to make humanoid Optimus robots?

  • Musk promises he is fully engaged at Tesla. But …

    • Some interesting dialogue on the earnings call on how long Musk plans to stay CEO of Tesla. He didn’t answer precisely with a timeline, said he works on Sunday and seemingly around the clock (like many other humans). He then questioned whether Tesla could get out its robots if he weren’t leading the company. Is now the time to ponder a Musk-less Tesla within the next few years? What does that even look like for investors? So many of his top execs have left or are leaving, including one of the guys on the earnings call last night! If buttoned-up/corporate Disney (DIS) CEO Bob Iger is seen as failing at succession planning, then Musk could be seen as one of the worst succession planners in CEO history.

  • Musk pounds the table on Tesla being an AI company again. But …

    • Sure, Tesla has some amazing technology. But doesn’t Tesla make cars first that then use its technology? Who would you rather own stock in? A pure play AI company such as Microsoft (MSFT) or a car company masquerading as an AI company?

  • Musk hypes a cheaper Tesla. But …

    • Tesla is no stranger to recalls and concerns about product quality. Just check out the Cybertruck recall last week! So, how high quality is a $25,000 Tesla going to be? This sounds like it could be a dreadful ownership experience, not unlike when my parents bought a cheap 1986 Ford Tempo and a 1987 Ford Escort when they came out.