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Major stocks like FedEx, KB Home, Klaviyo, and Skyworks Solutions saw notable price swings in premarket trading Thursday morning ahead of the opening bell. Investors reacted to latest earnings reports, new product launches, and analyst rating changes.
Shares of shipping giant FedEx jumped over 5% in premarket trading after the company reported better-than-expected fiscal first quarter 2023 earnings results. FedEx earned $4.55 per share, beating analyst estimates of $3.73 per share. Total revenue reached $21.7 billion, slightly below expectations of $21.81 billion.
According to FedEx’s earnings release, the company benefited from pricing initiatives and volume growth in its Express and Ground segments. Operating margins also improved year-over-year. However, the weakening global economy presents headwinds. FedEx plans to cut costs by $2.2 billion to $2.7 billion this fiscal year through lower variable compensation accruals, reduced plane flights, and optimized Ground delivery routes.
“The quarter’s results demonstrate good execution across our businesses to drive revenue quality, improve margins and efficiently manage costs,” said FedEx CEO Raj Subramaniam.
FedEx offers global transportation, e-commerce, and business services. The company ships over 15 million packages daily to over 220 countries. FedEx’s strong Q1 performance and focus on efficiency buoyed investor confidence, driving the stock price higher Thursday morning.
KB Home Stock Falls Despite Strong Q3 Earnings Beat
Meanwhile, shares of homebuilder KB Home dropped over 3% despite the company beating expectations for its fiscal third quarter 2022 results. KB Home generated revenue of $1.59 billion, surpassing estimates of $1.48 billion. Earnings per share hit $1.80, exceeding projections of $1.43.
According to the earnings release, KB Home’s average selling price per home rose 20% to $517,000. Homebuilding revenues increased by 23%. The results show KB Home successfully navigated supply chain issues, inflation, and rising interest rates.
However, KB Home warned its housing gross margin will likely shrink in Q4 2022 due to elevated costs. The forecast sent shares lower Thursday morning. KB Home builds single family homes across the U.S., primarily for first-time homebuyers. The company delivered over 67,000 homes in the past decade.
Klaviyo Stock Slips After NYSE Debut
Shares of marketing software firm Klaviyo fell slightly over 1% Thursday morning, a day after the company’s NYSE debut. Klaviyo began public trading Wednesday at an opening price of $36.75 per share, higher than the set IPO price of $30 per share.
The email and SMS marketing automation platform priced 11.7 million shares at $30 each, raising nearly $351 million in the offering. Founded in 2012, Klaviyo enables online businesses to customize marketing campaigns based on customer data and behaviors. The company serves over 100,000 paying customers.
“We believe we are still in the very early stages of capitalizing on our opportunity,” said Klaviyo co-founder and CEO Andrew Bialecki. While trailing yesterday’s opening price, shares remain elevated from the original IPO cost. Klaviyo is one of the more anticipated tech IPOs in a cooling market.
Skyworks Solutions Shares Fall on Analyst Downgrade
In other market moving news, semiconductor stock Skyworks Solutions fell over 1% after BNP Paribas Exane downgraded the stock from outperform to neutral. The firm also lowered its price target from $115 to $110 per share, as reported by FactSet.
Skyworks manufactures radio frequency and analog semiconductors used in various devices. Its chips power WiFi, 5G, IoT, and automotive applications. Skyworks faces headwinds from lower iPhone production and weakening consumer demand.
Exane analysts believe Skyworks’ growth prospects are fully valued at current levels. The downgrade weighed on shares Thursday morning ahead of the opening bell. Skyworks stock is down over 40% year-to-date.
Starbucks Opens Huge Manufacturing Plant in China
Coffeehouse leader Starbucks saw a slight 0.4% dip in its stock price Thursday morning. The move lower comes after Starbucks on Tuesday opened a $220 million manufacturing and distribution facility in Dongguan, China. It’s the company’s largest manufacturing site globally.
The 630,000 square-foot plant will produce Starbucks bottled Frappuccinos and coffee drinks for over 5,000 stores in China. It highlights Starbucks’ push to expand operations in the lucrative Chinese market. The nation is Starbucks’ fastest growing with over 5,500 stores currently.
Additionally on Wednesday, Starbucks announced a 7.5% quarterly dividend increase to $0.50 per share. The coffee purveyor has raised its dividend every year since initiating payouts in 2010. Starbucks opened its first China store in 1999 and aims to have 9,000 total locations in the country by 2025.
Disney, Netflix Stocks Trend Lower as Strike Deadline Looms
Finally, shares of streaming giants Netflix and Disney drifted lower Thursday morning as Writers Guild of America (WGA) representatives near a tentative agreement, sources told CNBC’s David Faber.
Contract negotiations between the WGA and Alliance of Motion Picture and Television Producers (AMPTP) have intensified in recent days as the strike deadline approaches. The groups are hashing out terms related to minimum pay rates and streaming residuals.
With promising progress, a walkout could be averted. The news sent Netflix shares 0.8% lower premarket. Disney stock also slipped 0.7% on the hopes of averting mass production halts. New content from major studios could resume sooner than expected if a deal is reached.
The WGA contract with AMPTP expires May 1. Over 10,000 TV and film writers would strike if a new agreement isn’t reached in time. The labor dispute has already disrupted production on many shows. Avoiding a strike would limit further delays for studios like Netflix and Disney.
In sum, major stocks saw significant premarket swings Thursday on the heels of earnings surprises, analyst actions, and sector developments. The market action shows investors continue reacting to emerging headlines amid a turbulent economic environment.
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