Plus, Gap’s Athleta brand is launching a workout and wellness platform, Tesla is reportedly moving its showrooms out of malls, and ride sharing app Swvl is going public via a reverse merger with a SPAC.
Stocks were higher at the open on Wednesday with the Dow adding 51 points, or 0.1%. The S&P 500 traded just above the flatline, while the Nasdaq rose nearly 0.4%.
Big tech delivered big earnings after the bell on Tuesday. Apple posted a massive beat reporting earnings per share of $1.30 on revenue of $81.41 billion versus estimates for earnings per share of $1.01 on revenue of $73.30 billion. Apple did warn that sales growth is likely to slow and supplies are getting tight amid the global chip shortage. The supply constraints will affect the iPhone and iPad for the September quarter. Microsoft also delivered a big beat, reporting earnings per share of $2.17 on revenue of $46.15 billion compared to analysts’ expectations for earnings per share of $1.92 on revenue of $44.24 billion. And Google-parent Alphabet said its advertising revenue rose 69% year-over-year in the second quarter. Overall, Alphabet reported earnings of $27.26 per share on revenue of $61.88 billion, while Wall Street had anticipated earnings per share of $19.34 on revenue of $56.16 billion.
In other earnings news, Pfizer said it sold $7.8 billion in COVID-19 vaccine shots in the second quarter and raised its 2021 sales forecast for the vaccine to $33.5 billion – up from $26 billion. “The second quarter was remarkable in a number of ways,” Pfizer CEO Albert Bourla said in a statement. “Most visibly, the speed and efficiency of our efforts with BioNTech to help vaccinate the world against COVID-19 have been unprecedented, with now more than a billion doses of BNT162b2 having been delivered globally.” Boeing reported a surprise profit, marking its first quarterly profit in nearly two years. “While we still have a ways to go before a full rebound, it is encouraging to see the commercial market improving, enabled by continued vaccine distribution and increasing travel demand, particularly in domestic markets,” CEO Dave Calhoun said. And McDonald’s delivered an earnings beat driven by the chain’s new Crispy Chicken Sandwich and a promotion with K-pop group BTS. McDonald’s posted earnings per share of $2.37 on revenue of $5.89 billion versus estimates for earnings per share of $2.11 on revenue of $5.6 billion.
Gap’s Athleta brand said it is launching AthletaWell, a digital health and wellness platform that will offer workout content and community spaces for women. Athleta is partnering with fitness startup obé Fitness for workout content on the new app. “We know being active is an important part of our customer’s overall well-being, so we are thrilled to invest in and partner with obé, and offer the Athleta community access to this like-minded partner,” Mary Beth Laughton, Athleta President and CEO, said in a press release. “As our brand continues to grow, this investment creates a unique engagement opportunity for our customers and helps us build even more loyalty over time.”
Tesla is reportedly moving its showrooms out of fancy malls and into cheaper locations, according to a report from Electrek. The decision marks a big shift in the company’s retail strategy, which has struggled in recent years. According to people familiar with the matter, Tesla will close some retail locations in favor of delivery centers with a large retail workforce that will work remotely with people placing orders online. Tesla is also expected to rent spaces in mall parking lots, warehouses, and other locations to manage test drive fleets and delivery centers.
And Dubai-based mobility company Swvl said today that it is going public via a reverse merger with Queen’s Gambit Growth Capital, a special purpose acquisition company led entirely by women. Swvl focuses on mass transit ride sharing in emerging markets that don’t always have reliable public transportation, and the deal with Queen’s Gambit values the company at $1.5 billion making it the largest Middle East-based unicorn to debut on the Nasdaq. “Mass transit systems in cities around the world are riddled with deficiencies, resulting in congestion, environmental concerns and reduced productivity,” said Swvl founder and CEO Mostafa Kandil. Queen’s Gambit founder and CEO Victoria Grace said, “Having established a leadership position in key emerging markets, we believe Swvl is ready to capitalize on a truly global market opportunity.”
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Pentair Plc (NYSE: PNR): Pentair Plc reported second quarter earnings yesterday, posting sales growth of 32% year-over-year. “We were pleased to deliver a strong second quarter with sales up over 30 percent, adjusted EPS growth greater than 40 percent, and free cash flow up over $100 million in the first half of the year. I would like to thank our Pentair teams for helping deliver these results even in the face of unprecedented material shortages and inflation,” President and CEO John L. Stauch said in the earnings release. “Our orders continued to grow and our backlog ended the quarter at record levels. We believe our order trajectory gives us increased confidence not only in our ability to keep growing in the second half, but it also gives us comfort that the top line momentum we have built the past several quarters will carry over into next year. Our Transformation work is on track and we have built a strong pipeline of initiatives across the enterprise. Regarding the current inflationary environment, we have implemented further price increases and we expect the price/cost gap to further narrow in the second half.”