Coffee With Greta: Worker Productivity Tumbles In Q2

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Good morning friends!

Futures are mostly lower as falling chip stocks weigh on the tech sector and new data shows worker productivity fell further in Q2.

Let’s get right to it!

Worker Productivity Drops, Labor Costs Soar

U.S. productivity levels dropped again in the second quarter while labor costs continued to surge.

The Labor Department reported worker productivity fell 4.6% annually in Q2 vs economists’ expectations for a 4.3% decline. 

This is the second straight quarterly decline in productivity.

Hours worked rose 2.6% while output fell 2.1%.

Unit labor costs jumped 10.6% quarterly and 9.5% year-over-year. 

That was steeper than the 8.2% annual gain in Q1.

Micron Slips After Revenue Warning

Micron Technology (MU) is falling 4.1% in premarket trade after issuing a revenue warning for the rest of the year.

The chip maker said fiscal Q4 revenue “may come in at or below the low end of the revenue guidance range provided in our June 30 earnings call.”

Executives said, “[W]e expect a challenging market environment in FQ4 22 and FQ1 23.”

This comes a day after Nvidia (NVDA) warned its Q2 results will be weaker-than-expected on Monday.

Spirit Tops Q2 Expectations Despite Surging Costs

Spirit Airlines (SAVE) shares are up 0.7% ahead of the open after beating Q2 expectations.

The discount airline reported an adjusted loss of $0.30 per share on $1.37 billion in revenue. 

That was better than analysts’ expectations for a loss of $0.46 per share on $1.35 billion in revenue.

Revenue surged 59% year-over-year and was 34.9% higher than Q2 2019. 

Revenue per passenger, per flight jumped 24% from 2019 to $140.61.

Spirit expects pre-tax margins in Q3 to range between negative 1% and positive 1%.

The company plans to expand its schedule 14% from 2019 levels in Q3 and 25% in Q4.

Novavax Craters on Unexpected Q2 Loss

Novavax (NVAX) shares are plummeting 30.3% in premarket trade after reporting an unexpected profit loss in the second quarter and slashing its full-year guidance. 

The drugmaker reported a loss of $6.53 per share on $185.9 million in revenue. 

That sharply missed analysts’ expectations for earnings of $5.54 per share on $1.02 billion in revenue. 

Novavax now expects full-year revenue of $2 billion to $2.3 billion, a sharp downgrade from previous guidance for $4 billion to $5 billion.

The company said it slashed guidance “account for several evolving market dynamics.”

The CEO said the new forecast reflects an unexpected shortfall in demand for the company’s Covid vaccines.

GoodRx Surges On Strong Q2 Results

GoodRx (GDRX) shares are surging 29.4% ahead of the open after beating Q2 expectations on the top and bottom line.

The company reported adjusted earnings of $0.06 per share on $191.8 million in revenue. 

That beat analysts’ expectations for adjusted EPS of $0.04 on $184.7 million in revenue. 

The company also announced it has addressed a previously disclosed issue with a major grocer.

Tesla’s China Sales Slump

Tesla (TSLA) shares are down 0.3% in premarket trade after reporting a sharp slowdown in China sales last month. 

The electric automaker delivered 28,217 vehicles from its factory in Shanghai in July. 

That was down sharply from a record 78,906 in June. 

20,000 of those cars were exported and over 8,000 were delivered to Chinese customers. 

This drop was expected though as Tesla took some planned downtime last month to upgrade equipment at the assembly plant.

But preliminary reports showed deliveries around 30,000.

In Case You Missed It

• Consumer inflation expectations cooled in July. The New York Fed’s Survey of Consumer Expectations found Americans still expect inflation to be at a 6.2% annual pace a year from now. That’s down from the record-high 6.8% in June. In 3 years, consumers see inflation at 3.2% vs 3.6% in June. Americans expect home prices to rise just 3.5% over the next 12-months, the lowest reading since November 2020.