Coffee With Greta: $HOODwinked! Robinhood Cuts More Jobs

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Good morning friends!

Futures are higher as Wall Street looks to bounce back from back-to-back losing sessions.

Let’s get right to it!

Robinhood Announces More Lay Offs

Robinhood (HOOD) shares are up 1% ahead of the open despite the company announcing new layoffs and mixed Q2 results.

CEO Vlad Tenev announced the job cuts in a blog post on Tuesday. 

He said Robinhood is reducing its headcount by 23%.

Those cuts will mostly impact operations, marketing, and program management positions. 

This is the second round of layoffs this year after the company cut 9% of its workforce in April. 

Tenev said since then, Robinhood has seen “additional deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash. This has further reduced customer trading activity and assets under custody.”

Impacted employees were notified immediately and will be able to stay on until October 1.

Robinhood also reported mixed Q2 earnings on Tuesday. 

The company lost $0.34 per share on $318 million in revenue vs analysts’ expectations for a loss of $0.37 per share on $321 million in revenue. 

PayPal Rallies On Solid Q2 Results

PayPal (PYPL) shares are rallying 13.5% in premarket trade after beating Q2 expectations. 

The digital payments platform reported adjusted earnings of $0.93 per share on $6.81 billion in revenue. 

That topped analysts’ expectations for adjusted EPS of $0.86 on $6.79 billion in revenue.

PayPal had 429 million active accounts at the end of Q2, up 6% year-over-year but lower than analysts’ estimates for 432.8 million. 

Activist investment group Elliott Management, which owns a $2 billion stake in PayPal, said the company “has an unmatched and industry-leading footprint across its payments businesses and a right to win over the near- and long term.”

PayPal also announced a new $15 billion share buyback program and said it has a “commitment to work with Elliott Investment Management L.P. on a comprehensive evaluation of capital return alternatives.”

The company hiked its full-year forecast, expecting adjusted EPS between $3.87 and $3.97. 

That was better than analysts’ expectations for $3.82.

AMD Slips On Weak Forecast

Advanced Micro Devices (AMD) shares are down 4.3% ahead of the open despite beating Q2 expectations. 

The chipmaker reported adjusted earnings of $1.05 per share on $6.55 billion in revenue. 

That beat analysts’ expectations for adjusted EPS of $1.03 on $6.53 billion in revenue. 

Overall revenue rose 70% year-over-year.

But AMD’s Q3 forecast came in short of estimates. 

The company expects $6.7 billion in revenue this quarter vs analysts’ expectations for $6.83 billion. 

Starbucks Rises On Q2 Earnings Beat

Starbucks (SBUX) shares are up 1.7% in premarket trade after topping Q2 expectations. 

The coffee chain reported adjusted earnings of $0.84 per share on $8.15 billion in revenue. 

That was better than analysts’ estimates for adjusted EPS of $0.75 on $8.11 billion in revenue.

Starbucks said inflation and higher wages weighed on its margins in Q2. 

Same-store sales in the U.S. rose 9% as higher prices pushed order totals higher. 

But sales outside the U.S. were down 18% as sales in China tumbled 44% due to renewed Covid lockdowns.

The company declined to provide a full-year forecast citing uncertainty about those restrictions in China. 

Airbnb Slumps Despite Strong Q2

Airbnb (ABNB) shares are falling 6.8% ahead of the open despite reporting record profits in Q2. 

The vacation rental site reported earnings of $0.56 per share on $2.10 billion in revenue. 

That beat analysts’ expectations for EPS of $0.43 and was in line with revenue estimates. 

Revenue jumped 58% compared to Q2 2021, but that was down from the 70% annual growth in the first quarter.

Airbnb said customers booked 103.7 million nights and experiences last quarter, a record high and up 24% compared to 2019.

But that was shy of analysts’ expectations for 106.2 million nights and experiences booked. 

Airbnb also announced a $2 billion share buyback program. 

The CEO said, “Our Q2 results demonstrate that Airbnb has achieved growth and profitability at scale.”

The company forecast record Q3 revenue between $2.78 billion and $2.88 billion, topping analysts' estimates for $2.77 billion. 

CVS Beats Q2 Expectations, Hikes Guidance

CVS (CVS) shares are up 4.1% in premarket trade after beating Q2 expectations and hiking its full-year forecast. 

The drugstore chain reported adjusted earnings of $2.40 per share on $80.64 billion in revenue. 

That topped analysts’ estimates for adjusted EPS of $2.17 on $76.37 billion in revenue. 

The CEO said, “Despite a challenging economic environment, our differentiated business model helped drive strong results this quarter, with significant revenue growth across all of our business segments.”

Same-store sales rose 8% year-over-year.

CVS administered more than 4 million Covid tests and 6 million vaccines in Q2, down from 6 million and 8 million in Q1.

The company now expects full-year adjusted EPS between $8.40 and $8.60 vs its previous estimate between $8.20 and $8.40.

Moderna Rises On Earnings Beat

Moderna (MRNA) shares are up 4.5% ahead of the open after beating Q2 expectations on the top and bottom line. 

The biotech company reported adjusted earnings of $5.24 per share on $4.7 billion in revenue.

That was better than expectations for adjusted EPS of $4.55 on $4.1 billion in revenue. 

$4.5 billion of that total revenue was Covid vaccine sales. 

Moderna said it took a nearly $500 million hit from expiring vaccinations.

The company maintained its full-year forecast for $21 billion in Covid vaccine sales.

Moderna also announced a $3 billion share buyback program.

Nikola Wins Shareholder Approval To Issue More Stock

Nikola (NKLA) shares are up 3.8% in premarket trade after shareholders voted in favor of the company’s plan to issue more stock. 

The CEO announced the measure had passed in a webcast on Tuesday. 

He did not reveal the margin of the vote but it required approval from owners of at least 50% of the company’s outstanding shares.

Ex-CEO and founder Trevor Milton, who holds a 20% stake in the company, previously voted against the plan on June 1.

Nikola is seeking to issue new stock in an effort to raise more capital.

Oil Prices Rise As OPEC+ Agrees to Small Production Increase 

Oil prices are higher on fresh supply concerns after OPEC+ agreed to a small output increase for September. 

West Texas Intermediate crude futures are up 1.7% at $96 bbl while Brent crude futures are up 1.3% at just under $102 bbl. 

Reuters reported OPEC+ agreed to increase oil production by 100,000 barrels per day in September.

That’s a much smaller increase than the U.S. was hoping the group would approve.

The American Petroleum Institute reported Tuesday that U.S. crude stockpiles rose by 2.2 million barrels last week while gasoline inventories fell by 204,000 barrels.

The Energy Information Administration reports official inventory levels later today.

Gas Prices Are Still Falling

U.S. gas prices fell for the 48th day in a row today.

AAA shows the national average for regular gas fell more than 2 cents overnight to $4.163/gal.

The national average for diesel dropped 2 cents overnight to $5.237/gal.

In Case You Missed It

• The Labor Department’s Job Openings and Labor Turnover Survey showed there were 10.7 million available jobs in June. That was down by 600,000 from May and lower than expectations for 11.1 million. It was the first time job openings fell below 11 million since November, a sign that hiring is beginning to slow. There were still 4.8 million more job openings than unemployed workers in June. 
• The New York Fed reported U.S. household debt surged to $16.15 trillion in Q2. That’s the highest total on record as home prices jumped and inflation squeezes consumers. Mortgage balances rose by $207 billion to $11.4 trillion, up 9.1% year-over-year. That jump was due to higher prices, as originations fell. Credit card balances jumped by $46 billion, up 13.1% annually. That was the largest annual gain in more than 20 years as inflation outpaces wage gains.