Stocks Rebound as GDP, Jobless Claims Data Point to Cooling Economy

Cintas Jumps on Earnings Beat, Raised Outlook

27 minutes ago

Shares of uniform rental company Cintas Corp. (CTAS) jumped to an all-time high Thursday after its quarterly earnings topped Wall Street estimates.

Revenue grew 9% year-over-year to $2.38 billion in the second quarter of the company’s 2024 fiscal year. Cintas reported net income of $375 million, an 11% increase from a year ago. Both exceeded analysts’ expectations. 

“We are pleased with our second quarter fiscal 2024 financial results. Each of our operating segments continue to execute at a high level, leading to robust revenue growth of 9.3%, high operating margin of 21.0% and diluted EPS growth of 15.7%,” said chief executive Todd Schneider. 

As a result of the quarter’s strong results, Cintas raised its full-year sales and earnings guidance. It now expects revenue of between $9.48 billion and 9.56 billion, an $80 million increase from its prior estimate. And diluted earnings per share are forecast to fall in the range of $14.35 to $14.65, up from a range of $14 to $14.45. 

Shares of Cintas were up 5.5% Thursday afternoon and were on pace to close at a record high.

Midday Movers

1 hr 18 min ago

Shares of Micron Technology (MU) gained more than 7% as the chipmaker posted better-than-expected results and gave a strong outlook on higher prices and soaring demand for its artificial intelligence (AI) products.

Carnival Corporation (CCL) shares rose more than 5% as the cruise line posted a smaller-than-anticipated loss and beat revenue forecasts on steady demand for cruises.

CarMax (KMX) shares jumped more than 4% after the biggest U.S. used car dealer beat earnings estimates as it sold more vehicles in the wholesale market and restarted its share repurchase program.

Warner Bros. Discovery (WBD) and Paramount Global (PARA) shares declined more than 2% following reports the two entertainment giants were in merger talks.

Comcast (CMCSA) shares fell for a second straight session after reporting that hackers breached the media company’s Xfinity cable system, compromising the personal data of some 36 million customers.

–Bill McColl

Carnival Stock Gains on Record Revenue, Cheery 2024 Outlook

1 hr 58 min ago

Shares of cruise operator Carnival Corp. (CCL) jumped Thursday after the company reported record fourth-quarter and full-year revenue, and forecast another strong year in 2024. 

Revenue totaled $5.4 billion in the fourth quarter, up 40% from the year-ago quarter and nearly 13% higher than the same period in 2019, right before Covid brought operations to a halt. Full-year revenue hit a record high of $21.6 billion as consumers unleashed pent-up demand—and savings—on travel. 

Carnival’s net loss narrowed in the fourth quarter to $48 million from $1.6 billion a year ago. On an adjusted basis, the company reported net income of $1 million for the full year, making 2023 its first profitable year since the onset of the pandemic. 

Management was upbeat in its forecast for 2024. Robust demand in the second half of this year means 2024 occupancy is already two-thirds booked.

“We continue to experience strong bookings momentum across the board, with our European brands showing remarkable strength during the quarter with booking volumes running up well into the double digits at considerably higher prices,” said CEO Josh Weinstein. 

The company also highlighted its efforts to pay down its debt, a priority this year as rising interest rates have driven up borrowing costs. After paying about $6 billion throughout the year, long-term debt totaled just over $30 billion at the end of the fourth quarter.

Carnival shares jumped 7% to a five-month high on Thursday afternoon. Fellow cruise operators Norwegian Cruise Line Holdings (NCLH) and Royal Caribbean (RCL) followed close behind, gaining about 5% and 4%, respectively.

Paychex Stock Falls on Soft Sales Report

2 hr 55 min ago

Payroll and HR services provider Paychex (PAYX) was the worst-performing stock in the S&P 500 Thursday morning after its quarterly earnings reported fell short of expectations. 

Paychex reported total revenue of $1.26 billion in the second quarter of its 2024 fiscal year, a 6% increase over last year but below analysts’ estimates. Earnings per share rose 9% year-over-year to $1.08, beating expectations by 1 cent.

“The macro-economic environment remains stable for small and mid-sized businesses, who continue to face challenges in both the cost of and access to growth capital; and finding quality talent in the current labor market,” said CEO John Gibson.

Shares of Paychex were down 5.7% midday Thursday. Competitor ADP (ADP) fell 1.2%.

Warner Bros. Discovery, Paramount Reportedly in Merger Talks

3 hr 42 min ago

Warner Bros. Discovery (WBD) and Paramount (PARA) are in early talks about an entertainment mega-merger, according to reporting by Axios.

CEOs David Zaslav and Bob Bakish met in New York City this week to discuss the possible merger.

The deal could shake up the entertainment industry and lead to further consolidation, with the two companies likely seeking to combine their Paramount+ and Max streaming services in a bid to challenge rivals Netflix (NFLX) and Disney (DIS).

Shares of Warner Bros. Discovery were down 4.7% Thursday morning, while Paramount shares slipped 1.7%.

–Kevin George

A Chart to Watch Today: Micron

4 hr 23 min ago

Micron (MU) shares were up 7.5% Thursday morning after the hardware memory and storage maker posted a better-than-expected quarterly earnings report and delivered encouraging sales guidance. The company posted an adjusted loss of $0.95 per share in the fiscal first quarter, and generated revenue of $4.73 billion, both of which were better than analysts had expected.

Micron shares have oscillated within a broad ascending channel throughout 2023, with the pattern’s upper and lower trendlines establishing identifiable support and resistance levels. After the company’s upbeat earnings report, investors should watch for a potential breakout of the channel’s top trendline. If such a move occurs, it’s likely the price would retest the initial breakout point before any sustained rally, given the shares have risen sharply since late October.

See here for two more charts to keep an eye on today.

–Timothy Smith

Stocks Making the Biggest Moves Premarket

5 hr 15 min ago

Gains: 

• CarMax Inc. (KMX): Shares of the used car retailer jumped 10% after it reported better-than-expected earnings for the third quarter despite sales falling short of estimates as high interest rates shut out potential buyers.
• Micron Technology Inc. (MU): Shares of the memory chip maker popped 7% after it reported a narrower-than-expected loss in the first quarter of its 2024 fiscal year. Management also offered upbeat guidance and said they expect business conditions to improve throughout 2024.
• Boeing Co. (BA): Shares of the jet maker rose more than 1% following reports it would make its first 787 Dreamliner delivery to China since 2021, a step toward resuming deliveries of its best-selling 787 Max, which has been grounded in the country for four years.

Losses:

• Paychex Inc. (PAYX): Shares of the payroll and HR services provider dropped more than 3% after its quarterly sales came in lower than Wall Street estimates as small and mid-sized businesses grappled with a still tight labor market.
• Paramount Global (PARA): Shares of the entertainment company fell more than 1% following reports it was in talks about a potential merger with Warner Bros. Discovery (WBD) as the two companies seek to compete with better-financed streaming competitors like Amazon (AMZN) and Apple (AAPL). Shares of Warner Bros. Discovery were up 0.5% premarket.

U.S. Economy Grew Slower In Third Quarter Than Previously Estimated

5 hr 42 min ago

It turns out the U.S. economy grew at a slightly slower pace in the third quarter than the breakneck speed that was estimated last month. 

The Gross Domestic Product, a measure of the country’s entire economic output, grew at an annual rate of 4.9% in the third quarter, the Bureau of Economic Analysis said Thursday in its latest estimate of the indicator. That’s down from the 5.2% growth rate the bureau had estimated in November. 

The bureau releases three versions of its quarterly economic report on the GDP, each incorporating new data. The third and final revision released Thursday showed that consumer spending, the main engine of the U.S. economy, was lower than previously thought. 

Even after the downward revision, however, the economy grew at its fastest pace since 2021.

–Diccon Hyatt

Stock Futures Up Ahead of Unemployment Claims, GDP Data

6 hr 16 min ago

Futures contracts connected to the Dow Jones Industrial Average were up 0.4% in early trading Thursday.

S&P 500 futures rose 0.5%.

Nasdaq 100 contracts gained 0.7%.