Coffee With Greta: Big Tech Stumbles

DJIA Futures: -102 (-0.3%)

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NASDAQ Futures: -223 (-1.9%)

Good morning friends!

Futures are falling as traders digest disappointing earnings from big tech companies. 

Let’s get right to it!

Alphabet Disappoints

Alphabet (GOOGL) shares are dropping 6.7% after missing Q3 expectations on the top and bottom line. 

Here’s how the Google parent company’s results compared to analysts’ expectations:

• EPS: $1.06 vs $1.25 expected
• Revenue: $69.09 billion vs $70.58 billion expected
• YouTube ad revenue: $7.07 billion vs $7.42 billion expected
• Google Cloud revenue: $6.9 billion vs $6.69 billion expected

Revenue growth slowed to just 6% in the quarter vs 41% in the same quarter a year ago.

That’s the weakest quarter of growth since 2013 excluding early in the pandemic. 

The CFO said hiring in Q4 will slow to less than half of the additions in Q3. 

Microsoft Tops Fiscal Q1 Expectations, Guidance Falls Short

Microsoft (MSFT) shares are falling 6.8% in premarket trade despite beating fiscal Q1 expectations after guidance came in weak. 

Here’s how the tech giant’s results compared to analysts’ expectations:

• EPS: $2.35 vs $2.30 expected
• Revenue: $50.12 billion vs $49.61 billion expected

Revenue was up 11% year over year. 

But revenue in the Intelligent Cloud business segment missed expectations at $20.33 billion vs $20.36 billion estimated. 

Azure revenue grew just 35% in fiscal Q1, down from 40% in the previous quarter and lower than analysts’ expectations for growth over 36%. 

Microsoft forecast fiscal Q2 revenue between $52.35 billion and $53.35 billion vs analysts’ estimates of $56.05 billion. 

The company expects Azure revenue growth of 37% next quarter vs the 39.4% estimate from analysts.

Price Hikes Boost Chipotle Earnings

Chipotle Mexican Grill (CMG) shares are slipping 0.6% ahead of the open after reporting mixed Q3 results. 

Here’s how the restaurant chains results compared to analysts’ expectations:

• Adjusted EPS: $9.51 vs $9.21 expected
• Revenue: $2.22 billion vs $2.23 billion expected

Same-store sales rose 7.6% year over year vs 7.3% expected. 

Total transactions declined 1% but the CEO said Chipotle saw “minimal resistance” to higher menu prices. 

Chipotle forecast Q4 same-store sales growth in the mid-to-high single digits and expects to open between 235 and 250 new restaurants by year-end. 

Boeing Reports Surprise Loss

Boeing (BA) shares are down 0.7% in premarket trade after reporting an unexpected Q3 loss. 

Here’s how the plane maker’s results compared to analysts’ expectations:

• Loss per share: $6.18 vs $0.07 in earnings expected
• Revenue: $15.96 billion vs $17.76 billion expected

Boeing reported a $2.8 billion loss in its defense unit due to the KC-46 tanker and Air Force One.

Commercial revenue rose 40% from a year ago as Boeing delivered 112 planes during the quarter vs 85 in Q3 2021. 

The company generated nearly $3 billion in free cash flow, up from $507 million a year earlier. 

Boeing reiterated its forecast to achieve positive free cash flow for the year. 

Bed Bath & Beyond Appoints Interim CEO to Position Permanently

Bed Bath & Beyond (BBBY) shares are tumbling 7.4% ahead of the open after naming its interim CEO, Sue Gove, to the position permanently. 

Gove was appointed to the position over the summer after the company’s board pushed out the former CEO.

Bed Bath is still searching for a new CFO.

The prior chief accounting officer is serving in that role on an interim basis. 

Mortgage Demand Falls Further

Mortgage demand continued to drop last week as rates surged. 

The Mortgage Bankers Association reported purchase application fell 2% weekly and were down 42% year over year. 

Refinance applications slipped just 0.1% weekly and were down 86% annually. 

Demand is at the lowest level since 1997. 

The average 30-year contract rate rose to 7.16% from 6.94%, a 21-year high. 

New Home Sales Expected to Fall

The Commerce Department reports new home sales for September at 10:00 a.m. ET. 

That report is expected to show the pace of sales fell last month to a seasonally adjusted annual rate of 593,000 units vs 685,000 in August. 

Key Earnings After the Close

Here are the key companies set to report earnings after the close today:

• Meta (META)
• Ford (F)