Mixed After-Market Results From Late Earnings: NKE, FDX, LULU

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It was another strong day in the markets today. With one more session to go for the week, we’ve seen all four major indices up nicely, from +1.42% on the Nasdaq (which has been the leading index for the past year) to +3.26% on the Russell 2000, which had been the most downtrodden. Today, the small-cap index beat the field, +1.25%, the Dow was up +0.68%, the S&P +0.32%, and the Nasdaq +0.20%.

Market participants are still riding the heady buzz of three interest rate cuts from the Fed in its latest dot-plot yesterday, with the S&P now riding three consecutive sessions of all-time high closes. Economic data out this morning was all positive — from Weekly Jobless Claims to Philly Fed manufacturing to the Account Deficit, and then after the bell from Leading Economic Indicators and Existing Home Sales, which came in well ahead of projections.

In short, the U.S. economy is clicking and the market is not missing out. Eventually, there will be some sort of exhale and reassessment of equity valuations, etc., but for now — wee! The Nasdaq is up a full +11% year to date, with the S&P close on its heels. And this from a forecasted market that was supposed to struggle to continue its strong ways as of the end of 2023.

NIKE Inc. (NKE - Free Report) reported fiscal Q3 earnings after today’s closing bell, and if to keep the karmic winning streak going, easily outperforming expectations on top and bottom lines. Earnings of 77 cents per share bettered the 69 cent consensus (though 2 cents below the year-ago quarter, likely on a weaker Chinese market), on $12.43 billion in revenues, above $12.28 billion estimated. The company reportedly made more than 1500 job cuts in the quarter, and this looks like it paid off for shareholders.

FedEx (FDX - Free Report) shares are up +10% in late trading on its fiscal Q3 beat on the bottom line: earnings of $3.51 per share outpaced estimates by 2 cents. Revenues, however came in a little light of analysts’ projections: $21.9 billion versus $22.2 billion in the Zacks consensus. The company returned $2.7 billion in stock repurchases and dividends, which likely helped boost its appearance to shareholders. The high-end of next-quarter earnings range is about a dollar higher than analysts had been looking for.

Lululemon (LULU - Free Report) also reported earnings, in this company’s fiscal Q4, by the way, with beats on both top and bottom lines: earnings of $5.29 per share surpassed the $5.01 analysts had been expecting, on sales of $3.2 billion that demonstrated +16% growth year over year. But guidance was light from previous estimates for next quarter, on both earnings and revenues, which may explain why the stock is trading down -10% in the after-market.


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