Author: Consultant

Bay Street Seen Opening On Mixed Note

Canadian shares are likely open on a mixed note Friday morning, tracking firm commodity prices and downbeat earnings updates from a few top U.S. firms.

Data on Canada’s GDP for the month of February is due at 8:30 AM ET. A report on raw materials prices in Canada is also due at 8:30 AM ET.

Magna International Inc. (MG.TO) reported adjusted net income of $183 million for the first quarter of the current financial year. Adjusted earnings per share came in at $1.28 in the quarter, compared to $1.86 a year ago.

TC Energy Corporation (TRP.TO) reported first-quarter net income of $0.4 billion or $0.36 per common share compared to a net loss of $1.1 billion or a loss of $1.11 per common share in 2021.

Imperial Oil (IMO.TO) said the company posted its highest first quarter net income in over 30 years of $1,173 million with Upstream income of $782 million and Downstream income of $389 million, driven primarily by strong market conditions

The Canadian market ended on a strong note on Thursday with investors shrugging off concerns about inflation and fears over interest rate hikes, and reacting to upbeat earnings from top companies across Canada, the U.S. and Europe.

The benchmark S&P/TSX Composite Index ended with a gain of 376.83 points or 1.82% at 21,121.06, after climbing to a high of 21,206.46 intraday.

Asian stocks closed higher on Friday, tracking Wall Street’s tech-led gains overngith that came as traders shrugged off the surprise contraction in the U.S. economy in the first quarter of 2022. Optimism over likely policy support from Beijing amidst the severe Covid curbs contributed as well to markets’ upside.

European stocks are holding in positive territory, continuing to benefit from fairly strong earnings updates.

In commodities market, West Texas Intermediate Crude oil futures are up $0.75 or 0.71% at $106.11 a barrel.

Gold futures are gaining $26.00 or 1.4% at $1,917.30 an ounce, while Silver futures are up $0.164 or 0.71% at $23.345 an ounce.

U.S. economy contracts in first quarter; trade and inventories mask underlying strength

The U.S. economy unexpectedly contracted in the first quarter amid a resurgence in COVID-19 cases and drop in pandemic relief money from the government, but the decline in output is misleading as domestic demand remained strong.

The first decrease in gross domestic product since the short and sharp pandemic recession nearly two years ago, reported by the U.S. Commerce Department on Thursday, was mostly driven by a wider trade deficit as imports surged, and a slowdown in the pace of inventory accumulation.

A measure of domestic demand accelerated from the fourth quarter’s rate, allaying fears of either stagflation or a recession. The Federal Reserve is expected to hike interest rates by 50 basis points next Wednesday. The U.S. central bank raised its policy interest rate by 25 basis points in March, and is soon likely to start trimming its asset holdings.

“The economy is still showing some resilience, but the first-quarter GDP report signals the start of more moderate growth this year and next, largely in response to higher interest rates,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “Despite the contraction, the Fed has little choice but to hike aggressively in May to corral inflation.”

Gross domestic product fell at a 1.4 per cent annualized rate last quarter, the government said in its advance GDP estimate. The economy grew at a robust 6.9-per-cent pace in the fourth quarter. Economists polled by Reuters had forecast GDP growth rising at a 1.1-per-cent rate. Estimates ranged from as low as a 1.4-per-cent rate of contraction to as high as a 2.6-per-cent growth pace.

The economy also took a hit from supply chain challenges, worker shortages and rampant inflation. Last quarter’s decline is a head fake as GDP remains 2.8 per cent above its level in the fourth quarter of 2019 and the economy grew 3.6 per cent on a year-on-year basis. Further, 1.7 million jobs were created in the first quarter and manufacturing output grew at a 5-per-cent pace.

“It is nonsense that real GDP declined,” said Conrad DeQuadros, senior economic adviser at Brean Capital in New York.

But the mismatch hints at weaker productivity last quarter.

Front-loading by businesses fearful of shortages because of the Russia-Ukraine war contributed to a surge in imports. Exports tumbled, leading to a sharp widening of the trade deficit, which chopped 3.20 percentage points from GDP growth, the most since the third quarter of 2020. Trade has now been a drag on growth for seven straight quarters.

Businesses have turned to imports to satisfy demand, with local manufacturers lacking the capacity to boost production. Business inventories increased at a US$158.7-billion pace, slowing from the robust US$193.2-billion rate in the October-December quarter. Inventory investment cut 0.84 percentage point from GDP growth.

Who is Elliott, the contentious investment firm trying to shake up Suncor?

Activist investors rarely scare chief executives the way they used to. A decade ago, the sector was a magnet for investment dollars, after some high-profile fights generated stellar returns and spawned a flurry of copycat campaigns to shake up public companies.

The successes, however, proved hard to replicate. Boards of directors developed better tactics to fight off opportunistic activists, and investors grew tired of the industry’s expensive fees, because low-cost ETFs often delivered returns that were just as good, if not better.

Elliott Investment Management is one of the few activists that still garners the respect it used to. The Florida-based firm, founded by Republican powerbroker Paul Singer in 1977, is frequently referred to as the most-feared of its tribe. It is also often the most active. In 2021, it launched 10 public campaigns, the most of any major activist, according to Insightia, which tracks the sector.

This reputation could serve Elliott well in its new fight with Suncor Energy Inc. SU-T +12.03%increase, one of Canada’s corporate titans. Despite some recent stock market struggles, the Calgary giant is treated as royalty, deeply respected for spearheading a push to develop the oil sands into one of the most prolific asset bases for energy production in the world.

Until now, Elliott hasn’t been very active in Canada, usually focusing instead on the United States, Britain and Europe. But it has a history of targeting large companies, including AT&T Inc. T-N +1.84%increase, GlaxoSmithKline PLC GSK-N +0.66%increase and Twitter Inc. TWTR-N +0.97%increase, so Suncor’s $60-billionmarket value before Elliott went public with its demands is not a deterrent. Last year, the average market value of companies Elliott targeted was US$30.1-billion, according to Insightia.

Shark hunting isn’t the only thing that makes the firm stand out. Elliott also has a reputation for being ruthless, if not a little cut-throat. Two high-profile experiences in particular have shaped its reputation.

In addition to its activism, Elliott is also a traditional hedge fund that invests in credit and other assets. At one point, one of its debt investments were Argentinian bonds. This position got Elliott into a protracted fight with the Argentine government.

Elliott often did not accept the terms of Argentina’s debt restructuring deals, and it wouldn’t back down, which included taking Argentina to court in the United States. At one point, Elliott went so far as to convince a court in Ghana to detain a 348-foot Argentine navy vessel that had docked in its port, with the fund arguing it had a right to the take the ship.

More recently, in 2017, Elliott lent more than €300-million ($403-million) to Li Yonghong, an unknown Chinese businessman who was trying to buy AC Milan, a famous soccer club, from Silvio Berlusconi. The debt charged an annual interest rate of 11 per cent a year, and Elliott figured it would either get a hefty annual return, or, worst case, be able to take ownership of a storied franchise.

In 2018, only one year after purchasing the club, Mr. Li defaulted on the debt, and Elliott took control of the club. While Elliott injected another €50-million into the franchise, in all, the investment firm got control for roughly €400-million, a little more than half of the club’s sale price the prior year, according to the Financial Times.

As for its activist reputation, Elliott has been accused of flashing a six-inch-thick dossier during a meeting with directors that purportedly contained dirt on them and their families, and unearthing the old divorce records of a chief executive officer it was hoping to get fired and allegedly leaking them to the media. (Elliott has denied these allegations and declined to comment.)

Lately, however, activists of all stripes have been trying to soften the way they are portrayed. Many of their own investors are sick of bruising campaigns, especially after a number of them have resulted in major losses. Sometimes, going for the throat just isn’t worth it. In a letter to investors last month, Bill Ackman, who has endured some high-profile blow-ups, such as his campaign against Herbalife, preached agitating for change in a quieter, more co-operative way.

Elliott has been participating in this makeover in its own way, in part by expanding a private equity division that buys companies outright and allows the firm to make the changes it wants behind closed doors. Recently, Elliott and Brookfield Asset Management jointly bid $16-billion, including debt, to buy television ratings giant Nielsen.

Yet Elliott isn’t straying all that far from its activist roots. In its new fight with Suncor, the firm did not give its target a heads up or try to engage with the board privately, choosing instead to deploy the age-old activist playbook of putting out a public letter addressed to directors and suggesting selling off a non-core retail business.

This time, though, Elliott is going up against a board that knows these tactics well. Suncor chair Mike Wilson used to run Calgary’s Agrium Inc., which was targeted by Jana Partners, another well-known activist that called for selling off a non-core retail business a decade ago. Despite the pressure on him, Mr. Wilson dug in, and won, which was a rare feat at the time.

Apple shares dip after company warns of a possible $8 billion hit from supply constraints

• Apple’s revenue grew nearly 9% year over year during the quarter ended in March.
• But shares fell nearly 4% in extended trading after Apple CFO Luca Maestri warned of challenges in the current quarter, including supply constraints that could hurt sales by up to $8 billion.
• The tech giant authorized $90 billion in share buybacks.

Apple’s revenue grew nearly 9% year over year in the quarter ended in March, the company said on Thursday, showing strong growth and bucking investor worries about a deteriorating macroeconomic environment affecting demand for high-end smartphones and computers. 

But Apple shares fell nearly 4% in extended trading after Apple CFO Luca Maestri warned of several challenges in the current quarter, including supply constraints related to Covid-19 that could hurt sales by between $4 billion and $8 billion. The tech giant also warned that demand in China was being sapped by Covid-related lockdowns.

Apple CEO Tim Cook added the company was “not immune” to supply chain challenges.

Here’s how Apple did versus Refinitiv consensus estimates:  

• EPS: $1.52 vs. $1.43 estimated 
• Revenue: $97.28 billion vs. $93.89 billion estimated, up 8.59% year over year 
• iPhone revenue: $50.57 billion vs. $47.88 billion estimated, up 5.5% year over year 
• Services revenue: $19.82 billion vs. $19.72 billion estimated, up 17.28% year over year 
• Other Products revenue: $8.81 billion vs. $9.05 billion estimated, up 12.37% year over year 
• Mac revenue: $10.44 billion vs. $9.25 billion estimated, up 14.73% year over year 
• iPad revenue: $7.65 billion vs. $7.14 billion estimated, down 1.92% year over year 
• Gross margin: 43.7% vs. 43.1% estimated 

Apple did not provide a forecast for the current quarter — the company hasn’t provided official revenue guidance since February 2020, citing uncertainty tied to the pandemic.  

In addition, Apple said that its board of directors authorized $90 billion in share buybacks, maintaining its pace as the public company that spends the most buying its own shares. It spent $88.3 billion on buybacks in 2021, according to S&P Dow Jones Indices.  

Canadian banks stocks even more attractive after U.S. bank earnings reports: Scotiabank

CIBC materials analyst Jacob Bout is concerned about a global food crisis,

“The World Bank calculates there could be another 37% jump in food prices if the crisis continues. U.S. corn ($7.9/bu.), wheat ($10.7/bu.) and soybean ($16.9/bu.) are trading near their all-time highs driven by several factors creating the “perfect storm,” including: 1) continued uncertainties surrounding Ukraine’s crop exports, 2) elevated global import demand from China, 3) the rise of food protectionism, 4) potential drought-reduced supplies from the Americas, 5) high energy prices driving increased consumption of ethanol/renewable fuels, and 6) higher costs of fertilizer which may depress yields globally … U.S. Winter Wheat Drought Area Increases To 70%: The amount of U.S. winter wheat considered in drought conditions increased to 70%. Only 30% of U.S. winter wheat is rated in good to excellent condition, a 26-year low.”

Mr. Bout also noted that sky high potash prices are already hitting demand.

“CIBC: “Global Food Crisis Concerns Increase”” – (research excerpt) Twitter

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Scotiabank analyst Meny Grauman argued that Canadian bank stocks look even better after U.S. bank earnings,

“We believe that the most recent US earnings season has been more consequential as it clearly illustrates why Canadian banks are better positioned than their US counterparts across a number of different facets including capital, credit, capital markets, and expenses … While rising rates are generally positive for banks, there is a potential downside that is playing out in the most recent US bank results. This is because left unhedged, rising rates drive mark-to-market losses on banks’ available-for-sale (AFS) securities holdings – securities balances that in many cases grew significantly over the pandemic … However, we know that the Canadian banks hedge these rate moves quite aggressively, and as a result the impact on Canadian CET1 ratios is expected to be very modest… we can clearly see that Canadian banks are better positioned to weather emerging macro tail risks better than their US counterparts. Even putting aside the absence of direct exposure to Russia in the Canadian banking system, the reality is that the Canadian banks have been much more conservative in releasing their pandemic-related credit reserves than their US peers”

Scotia does not think Canadian bank earnings will be as negatively affected by falling investment banking revenue as U.S. banks.

“Scotia: Canadian bank stocks look even better after U.S. bank earnings reports” – (research excerpt) Twitter

Before the Bell: April 27

Equities

Wall Street futures bounced higher early Wednesday after the previous session’s sell off with earnings remaining in focus. Major European markets were mixed after a weaker start. TSX futures futures were up as crude prices edged higher.

In the early premarket period, futures linked to the three key U.S. indexes were up about 1 per cent. A day earlier, all three saw sharp losses with the Nasdaq losing nearly 4 per cent. The S&P/TSX Composite Index finished down 1.53 per cent, marking a fifth day of losses.

“The inability to hold onto the attempted rally is not only worrying but also speaks to a general lack of confidence more broadly about the economic outlook, as well as the ability of central banks to engineer a ‘soft landing’ as they look to tackle inflation,” Michael Hewson, chief market analyst with CMC Markets U.K., said.

Early Wednesday, shares of Google-parent Alphabet were down more than 2 per cent after the company’s latest results disappointed investors. Alphabet said first-quarter sales were US$68.01-billion, 23-per-cent higher than last year but below the average estimate of US$68.1-billion among financial analysts tracked by Refinitiv.

After the closing bell, U.S. markets get results from Facebook-parent Meta Platforms.

In Canada, markets will get results from Canadian Pacific Railway after the close. Cenovus and Teck resources report earlier in the day.

Meanwhile, CN Rail lowered its earnings forecast for the year, now predicting diluted earnings per share growth of between 15 per cent to 20 per cent. It had projected growth of 20 per cent at the start of the year. In its latest quarter, CP posted diluted adjusted earnings per share rose of $1.32 up from $1.23 in the same period last year, but below analyst expectations of $1.38, according to financial data firm Refinitiv. The results were released Tuesday afternoon.

Elsewhere, Cannabis producer Canopy Growth Corp. is laying off 250 people in a cost-cutting plan to save the company $100-million to $150-million within 12 to 18 months in order to reach profitability.

Overseas, the pan-European STOXX 600 edged up 0.07 per cent in morning trading. Britain’s FTSE 100 rose 0.21 per cent. Germany’s DAX slid 0.14 per cent. France’s CAC 40 was up 0.52 per cent. Investors were weighing news that Russian energy giant Gazprom said had halted gas supplies to Bulgaria and Poland for failing to pay for gas in rubles.

In Asia, Japan’s Nikkei closed down 1.17 per cent after a weak handoff from Wall Street. Hong Kong’s Hang Seng rose 0.06 per cent.

Commodities

Crude prices shook off early losses after Russian energy giant Gazprom said it had cut gas supplies to Bulgaria and Poland for not paying in rubles.

The day range on Brent is US$104.41 to US$105.98. The range on West Texas Intermediate is US$101.38 to US$102.99. Prices had sought direction through much of the overnight period but turned higher on the Gazprom headlines.

Gazprom said on Wednesday it halted gas supplies to Bulgaria and Poland marking an escalation in tensions with the West amid Moscow’s invasion of Ukraine.

“If Russia makes little progress in its latest offensive, the Kremlin could lash out and widen those export bans if Europe doesn’t accept the ruble blackmail,” OANDA senior analyst Jeffery Halley said in a note.

“Once Germany is included, we can assume energy prices will be heading higher once again. For now, risk aversion is capping oil’s gains.”

However, the advance was capped by continuing concerns about the impact of COVID-19 restrictions on the Chinese economy. On Tuesday, China’s central bank said it would step up policy support for the economy but the International Monetary Fund also warned that Asia faces a ‘stagflation’ outlook due to a variety of factors.

Later Wednesday morning, markets will get weekly inventory figures from the U.S. Energy Information Administration. Numbers from the American Petroleum Institute showed a rise in crude inventories but a decline in gasoline stocks.

In other commodities, gold prices were lower, weighed down by a rising U.S. dollar.

Spot gold was down 0.6 per cent at US$1,893.70 per ounce by early Wednesday morning. U.S. gold futures slid 0.3 per cent to US$1,898.60.

Currencies

The Canadian dollar was down slightly, continuing recent weakness that saw it hit a six-week low during the previous session, while its U.S. counterpart continues to rally against a group of world currencies.

The day range on the loonie is 77.83 US cents to 78.27 US cents. On Tuesday, the Canadian dollar touched its lowest level since mid-March to mark a fourth straight day of declines, hit by weak global risk sentiment and a stronger U.S. dollar.

Early Wednesday, the U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.3 per cent to 102.6, after touching its highest since the early days of the pandemic, according to a Reuters report.

Meanwhile, the euro fell below US$1.06 for the first time in five years. The euro slipped to a five-year low of US$1.05890 after Russia’s Gazprom said it would cut gas supply to Poland and Bulgaria. It was 0.16% lower at US$1.0616 in the early predawn period.

Microsoft Corp forecast double-digit revenue growth for the next fiscal year, driven by demand for cloud computing services. Microsoft forecast Intelligent Cloud revenue of US$21.1-billion to US$21.35-billion for its fiscal fourth quarter, driven by strong growth in its Azure platform. That compared with a Wall Street consensus of US$20.933-billion, according to Refinitiv data.

Economic news

(8:30 a.m. ET) U.S. goods trade deficit for March.

(8:30 a.m. ET) U.S. wholesale and retail inventories for March.

(10 a.m. ET) U.S. pending home sales for March. Consensus is a decline of 0.5 per cent from February.

(6:30 p.m. ET) Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers appear before the Senate Standing Committee on Banking, Trade and Commerce

Air Canada Reports First Quarter 2022 Financial Results

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NEWS PROVIDED BYAir Canada 

Apr 26, 2022, 06:00 ET

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• First quarter operating revenues of $2.573 billion, or about three-and-a-half times first quarter 2021 operating revenues
• First quarter 2022 operating loss of $550 million compared to an operating loss of $1.049 billion in the first quarter of 2021
• Advance ticket sales grew about $1.2 billion in the first quarter of 2022 from year end 2021
• Airbus A321XLR order increased by four to 30 aircraft with IAE to supply related PW1100G-JM engines

MONTREAL, April 26, 2022 /CNW Telbec/ – Air Canada today reported its first quarter 2022 financial results.

“The substantial year-over-year improvement in Air Canada’s first quarter results is clear evidence that a recovery is underway. Our strong improvement is a testament to our employees, and I thank them for their hard work taking care of our customers throughout more than two years of a global pandemic. Now, our employees are demonstrating this same level of determination, commitment and passion in executing on our recovery strategy,” said Michael Rousseau, President and Chief Executive Officer of Air Canada.

“The year began with weakness brought on by the Omicron variant and travel restrictions. However, we quickly rebounded in March with passenger volumes exceeding the strong December levels and passenger ticket sales in March 2022 over 90 per cent of March 2019 levels, a leading indicator to much stronger 2022 second and third quarter results. For the quarter, Air Canada had operating revenues of $2.573 billion, more than triple that of the same quarter in the prior year.  This was accompanied by a strict cost discipline that reduced adjusted CASM* by over six per cent from the fourth quarter of 2021. Quarterly EBITDA*, while a negative $143 million, improved $620 million over last year and we ended the quarter with $10.162 billion in unrestricted liquidity, close to 2021 year-end levels.

“In anticipation of our recovery, Air Canada has kept the course with key long-term projects to increase and diversify revenue and lower costs. One such program is the expansion of Air Canada Cargo, with quarterly revenue up 42 per cent to $398 million from the first quarter of 2021, and now further expanded with the addition of two new Boeing 767-300 freighters to be delivered in 2022.  The renegotiation of key engine maintenance contracts completed in the quarter, will also yield savings over the remaining life of the contracts.  Aeroplan air redemption bookings in the quarter exceeded those of the same quarter in 2019 by 19 per cent.  The relaunched program saw the highest new member acquisitions and redemptions in a quarter, and generated third-party gross billings exceeding first quarter 2019 levels by 21 per cent,” said Mr. Rousseau.

“Air Canada is rapidly adapting for the post-pandemic world. We are doing our part by contributing to the travel of Ukrainians to Canada, with a substantial donation of 100 million Aeroplan points.  We have also advanced our ESG goals in the quarter by announcing an order for 26 fuel-efficient Airbus A321XLR aircraft, which we have now increased to 30 aircraft. As well, we have recently entered into a long-term agreement with International Aero Engines, LLC (Pratt & Whitney) for the selection of the PW1100G-JM engines, spare engines and related maintenance services for these new aircraft.  We are responding to the evolving competitive landscape through our Rise Higher strategy to elevate all aspects of our business, particularly as it relates to the customer experience. Given pent-up travel demand, the demonstrated loyalty of our customers, and the expected further removal of travel-related government restrictions, Air Canada anticipates its recovery will gain momentum through the balance of 2022 and beyond,” said Mr. Rousseau.First Quarter 2022 Financial Results

• In the first quarter of 2022, Air Canada’s operating capacity, measured by Available Seat Miles (ASMs) increased about 3.4 times from the first quarter of 2021. When compared to the first quarter of 2019, ASM capacity represented a decline of 45 per cent, which was generally in line with the capacity expectations projected in Air Canada’s fourth quarter 2021 earnings release dated February 18, 2022.
• First quarter 2022 passenger revenues of $1.917 billion increased nearly five times from the first quarter of 2021.
• First quarter 2022 operating revenues of $2.573 billion increased about three-and-a-half times from the first quarter of 2021.
• First quarter 2022 total operating expenses of $3.123 billion increased $1.345 billion or 76 per cent from the first quarter of 2021.
• First quarter 2022 cost per available seat mile (CASM) of 21.8 cents compared to first quarter 2021 CASM of 42.2 cents.
• First quarter 2022 adjusted cost per available seat mile* (adjusted CASM) of 15.6 cents compared to first quarter 2021 adjusted CASM of 40.4 cents.
• First quarter 2022 EBITDA (excluding special items)* or earnings before interest, taxes, depreciation and amortization of negative $143 million compared to negative EBITDA of $763 million in the first quarter of 2021.
• First quarter 2022 net loss of $974 million or $2.72 per diluted share compared to a net loss of $1.304 billion or $3.90 per diluted share in the first quarter of 2021.
• First quarter 2022 cash from operations was $335 million compared to cash used in operations of $888 million in the first quarter of 2021, an improvement of $1,223 million driven by improved operating results and strong advance ticket sales. Free cash flow of $59 million in the first quarter of 2022 improved by $1,221 million when compared to the same period in 2021.

* EBITDA, EBITDA margin, adjusted CASM and free cash flow (discussed further below) are non-GAAP financial measures or non-GAAP ratios. Such measures are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results. Refer to the “Non-GAAP Financial Measures” section of this news release for descriptions of Air Canada’s non-GAAP financial measures and non-GAAP ratios and for a reconciliation of Air Canada non-GAAP measures to the most comparable GAAP financial measure.First Quarter 2022 Overview

Over the quarter, and until February 28, 2022, all travellers, regardless of vaccination status, were required to provide a negative pre-entry COVID-19 PCR test result taken within 72 hours of departure or a proof of a positive test result received in the previous 11 to 180 days. On February 15, 2022, the Government of Canada announced changes to certain travel restrictions for fully vaccinated travellers.  Refer to section 4 “Overview & First Quarter 2022 Highlights” of Air Canada’s First Quarter 2022 MD&A for additional information on such changes.

On March 17, 2022, the Government of Canada announced additional changes that came into effect on April 1, 2022, allowing for fully vaccinated travellers to no longer be required to provide a pre-entry COVID-19 test result to enter Canada by air, land or water. Foreign nationals who do not meet the requirements to be considered fully vaccinated are not able to enter Canada unless they meet an exemption set out in the Orders made under the Quarantine Act. Unvaccinated or partially vaccinated travellers allowed to enter Canada remain subject to the federal requirement to quarantine and take a COVID-19 PCR test at the time of arrival and on day eight after arrival

Microsoft earnings beat across the board, stock up on outlook

• Microsoft beat expectations on the top and bottom lines.
• Fourth-quarter revenue guidance for each of the company’s three business segments surpassed the expectations of analysts surveyed by StreetAccount.
• The company announced plans in the quarter to buy Activision Blizzard for almost $69 billion.

Stocks making the biggest moves after hours: Alphabet, Robinhood, Meta and more

Alphabet — Shares tumbled more than 6% in extended trading after Google’s parent company reported an earnings miss. The firm reported earnings of $24.62 per share and revenues of $68.01 billion. Refinitiv analysts were expecting earnings of $25.91 and revenues of $68.11 billion.

Robinhood — Shares of the retail brokerage fell more than 5% in extended trading after Robinhood said it is cutting back on staff, according to a blog post from CEO Vlad Tenev on Tuesday. The company cited “duplicate roles and job functions” after it expanded last year.

Microsoft — Shares dipped 0.4% in extended trading after Microsoft reported earnings that exceeded expectations. The tech giant reported earnings of $2.22 per share, compared to $2.19 earnings per share expected by analysts, according to Refinitiv. Revenues came in at $49.36 billion, versus the $49.05 billion expected.

Enphase Energy — Shares jumped more than 6% in extended trading after the solar tech company reported quarterly results. Enphase reported earnings of 79 cents per share, compared to analyst expectations of 67 cents per share, according to Refinitiv.

Meta Platforms — Meta’s stock price dropped more than 4% in extended trading following sharp declines for the Nasdaq Composite and Big Tech names during the trading session. The social media company is expected to report quarterly earnings on Wednesday.

Qualcomm — Shares of the semiconductor stock dipped 1.8% after hours, extending losses from the regular trading session. Qualcomm is expected to report quarterly earnings after the bell on Wednesday.

Visa — Shares jumped 4.8% after the payments company posted an earnings beat on the top and bottom lines. Visa expects travel recovery will continue to boost growth.