Plus, UPS shares are down after earnings showed deliveries are slowing down in the U.S., GE CEO Culp warned that the conglomerate is facing inflationary pressures, and American Airlines said it may have to add extra stops for some flights amid snarls in trucking and supply chains delays fuel shipments to some airports.
Stocks were lower at the open on Tuesday with the Dow dropping 65 points, or nearly 0.2%. The S&P 500 slid by 0.1%, while the Nasdaq traded 0.2% lower.
Tesla delivered a beat on the top and bottom lines when it reported after the bell on Monday. The electric vehicle maker reported earnings per share of $1.45 on revenue of $11.96 billion, while analysts had expected earnings per share of $0.98 on revenue of $11.30 billion. Tesla also reported $1.14 billion in GAAP net income for the second quarter, marking the first time it has surpassed $1 billion. “It puts them down the path of being the best-in-class automotive company from a margin perspective,” said Ben Kallo, an analyst with Robert W. Baird. “I don’t think anyone expected this big of a beat.” Coming up in tech earnings, Apple, Alphabet, and Microsoft report later today.
UPS shares are down nearly 9% this morning after its second quarter earnings showed that deliveries are slowing down in the U.S. UPS reported adjusted earnings per share of $3.06 on revenue of $23.42 billion, versus analysts’ expectations for earnings per share of $2.82 on revenue of $23.24 billion. But the headline beat was overshadowed by packaged volume in the U.S. dropping by 4% year-over-year. “Declining average daily volume and higher than expected unit costs are likely weighing on investor sentiment, with some reading the result as an indication the pandemic-driven demand trend is slowing,” Cowen analyst Helane Becker said after the earnings release.
General Electric CEO Larry Culp warned today that the industrial conglomerate is facing inflationary pressure that looks set to intensify in the latter half of the year. The comments came after GE lifted its free cash flow forecast for the year after unexpectedly reporting positive cash flow in the second quarter early Tuesday. “We’re certainly not immune from these inflationary pressures,” Culp said. “We’re going to see more of that pressure in the second half.” GE said it now expects free cash flow to come in between $3.5 billion to $5 billion this year, up from its prior forecast of $2.5 billion to $4.5 billion.
Bitcoin fell as low as $36,419.39 overnight after Amazon pushed back against speculation that it might accept the digital coin for payments this year, suggesting yesterday’s rally above $39,000 is fizzling out. “Shorts were piling up as we were moving down, assuming we were looking at a minimum of $25,000, which was expected across the board,” said Vijay Ayyar, head of crypto exchange Luno’s Asia Pacific business. “But then there was heavy accumulation in the $29,000 to $30,000 region, which caught a lot of those shorts unaware and hence led to the spring upwards. …We’re still seeing the correction play out.”
And American Airlines and Southwest Airlines warned that they might have to add stops to certain flights and have some flights carry additional fuel as snarls in U.S. trucking and supply chains delay deliveries to small and mid-sized airports across the nation. “American Airlines station jet fuel delivery delays initially affected mostly western U.S. cities, but are now being reported at American stations across the country. Delivery delays are expected to continue through mid-August,” American Airlines’ managing director of flight operations John Dudley said in a memo to pilots. “As our country continues to face multiple challenges, let’s work together as a team to operate reliably, safely and as efficiently as possible.”
Stocks We’re Watching
Farmland Partners Inc (NYSE: FPI): Farmland Partners announced today that it has purchased 182 acres of cropland in Northern Florida for $1 million. The property consists of 160 irrigated, tillable acres. “We are pleased to add this high-quality farm to the portfolio and expand our presence in the Southeast region,” said Paul A. Pittman, the Company’s Chairman and CEO. “Farms like this one, with an abundance of irrigation water, that offer the ability to grow row crops, specialty crops, and the ability to raise cattle during off seasons are very attractive as long-term investments.”