WEBVTT - Closing Bell: Hilton Closes Higher, Tesla Earnings Fall Short, IBM Posts Lukewarm Growth 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, podcasts, radio news. 0:00:09.880 --> 0:00:13.320 This is the closing bell on this stock movers report 0:00:13.560 --> 0:00:16.520 the company's making moves at the close of US trading 0:00:16.760 --> 0:00:21.319 with Carol Masser, Tim Stenebeck, Romain Bostick, and Scarlet Food. 0:00:22.520 --> 0:00:24.880 The S and P five hundred guys, most names, no 0:00:24.960 --> 0:00:27.960 surprise lower in today's session after we've seen the major 0:00:27.960 --> 0:00:30.480 indices under pressure three hundred and two to the downside, 0:00:30.520 --> 0:00:33.760 Katie one hundred and ninety nine gaining ground to unchanged. 0:00:34.000 --> 0:00:34.800 Well, let's take a. 0:00:34.720 --> 0:00:36.800 Look at the sectors how they performed today. You did 0:00:36.960 --> 0:00:40.160 have four sectors managed to finish in the green, seven 0:00:40.640 --> 0:00:42.440 in the red. You can see that the tech sector 0:00:42.520 --> 0:00:44.840 was down, and that's certainly taking a bite out of things. 0:00:44.920 --> 0:00:48.040 But in terms of what did do well, energy outperforming 0:00:48.159 --> 0:00:51.599 up one point three percent as a sector, consumer staples, healthcare, 0:00:51.640 --> 0:00:54.320 real estate also managing to finish in the green. But 0:00:54.400 --> 0:00:57.440 it's going to be hard to actually see the benchmark 0:00:57.560 --> 0:00:59.960 go green when you have tech weigh on things like that. 0:01:00.520 --> 0:01:03.680 Yeah, right, big pressure, lots of pressure. Having said that, 0:01:04.120 --> 0:01:07.240 Intuitive Surgical definitely an outperformer, guys, top in the S 0:01:07.280 --> 0:01:10.080 and P and Nasdaq. The Robotic Surgery company you know them. 0:01:10.080 --> 0:01:13.480 While finishing the day just shy of a fourteen percent gain, 0:01:14.120 --> 0:01:17.320 the company did boost its worldwide da Vinci procedure growth 0:01:17.360 --> 0:01:18.319 forecast for the year. 0:01:18.400 --> 0:01:19.920 So I use one of those ones. 0:01:20.080 --> 0:01:20.400 I know. 0:01:20.920 --> 0:01:21.440 We're still cool. 0:01:21.440 --> 0:01:23.760 I mean I didn't personally use it, but it's used 0:01:23.800 --> 0:01:24.080 on me. 0:01:24.280 --> 0:01:25.559 Yeah, and I guess it went well. 0:01:25.680 --> 0:01:25.920 It did. 0:01:26.000 --> 0:01:26.560 I'm still here. 0:01:26.720 --> 0:01:27.440 We're so happy. 0:01:27.840 --> 0:01:29.720 You know, the dot banks, the thank you doctor Tuari. 0:01:29.840 --> 0:01:30.280 It was great. 0:01:30.440 --> 0:01:32.920 If you're watching the doctors wear goggles to use these. 0:01:32.959 --> 0:01:34.880 I was actually having a conversation with a surgeon last 0:01:34.959 --> 0:01:37.479 night who uses this machine, and he made the point 0:01:37.480 --> 0:01:40.280 that it actually hasn't changed much since he began using 0:01:40.319 --> 0:01:43.640 it over the last ten years. It's remained relatively consistent 0:01:43.680 --> 0:01:45.920 with what it can do and sort of yes, it's 0:01:45.920 --> 0:01:48.760 gotten smaller a little bit, but it hasn't actually changed 0:01:48.760 --> 0:01:49.080 that much. 0:01:49.240 --> 0:01:50.280 Sounds like a great dinner. 0:01:50.400 --> 0:01:51.760 Yeah we had burgers. 0:01:52.360 --> 0:01:54.640 Ok, well, I'm going to say, great, gayner, can you. 0:01:54.640 --> 0:01:56.120 Go to dinner with me? You talk about stocks that 0:01:56.160 --> 0:01:57.160 are moving, that's what happens. 0:01:57.440 --> 0:02:00.240 Cool, all right, our performance, but still the stock only 0:02:00.320 --> 0:02:02.760 up about not even quite one percent for a year 0:02:02.800 --> 0:02:03.040 to date. 0:02:03.080 --> 0:02:04.520 Here was you said burgers. Did you mean like a 0:02:04.600 --> 0:02:05.240 veggie burger? 0:02:06.440 --> 0:02:09.799 We did chicken. We just go there of course, Oh my. 0:02:09.760 --> 0:02:12.280 God, it always comes back to food when it's always 0:02:12.280 --> 0:02:14.679 always hey Hilton. I just want to mention Hilton Worldwide 0:02:14.760 --> 0:02:17.919 up about three point two percent, also a top gainer, 0:02:17.960 --> 0:02:19.720 I think earlier in the session in the S and 0:02:19.760 --> 0:02:22.840 P the company boost it's annually adjusted even a forecast 0:02:23.000 --> 0:02:25.400 and the low end of its net unit growth outlook 0:02:25.520 --> 0:02:28.760 for the year. So some optimism there. And I was 0:02:28.840 --> 0:02:31.120 going to say beyond me, but don't judge me. It 0:02:31.160 --> 0:02:33.720 was up one hundred and twelve percent earlier in the session, guys, 0:02:33.760 --> 0:02:37.080 but actually finishing to day down nine to the percent. 0:02:37.120 --> 0:02:37.959 But it's hard. 0:02:38.000 --> 0:02:40.040 Wait, Whire, that was the range today? 0:02:40.240 --> 0:02:43.280 Yes, it was down twenty seven percent and it's lost today. 0:02:43.320 --> 0:02:44.920 So talk about that was like the widest I was 0:02:44.919 --> 0:02:46.840 taken of the widest range we've seen on that stock 0:02:46.840 --> 0:02:49.280 at least since twenty twenty two, and on a percentage basis, 0:02:49.320 --> 0:02:51.639 I mean what we've seen this week basically the widest 0:02:51.680 --> 0:02:52.919 sense it's been a public company. 0:02:52.960 --> 0:02:54.800 But it's still up right, Like let me, oh no, 0:02:54.840 --> 0:02:57.760 it's down, it's down percent for the year. I was 0:02:57.800 --> 0:02:59.079 going there, all right. 0:02:59.000 --> 0:03:02.680 It's meaning yeah to talk about some non meme stocks. 0:03:02.720 --> 0:03:05.800 Let's talk about Netflix down ten percent today, biggest decline 0:03:05.840 --> 0:03:08.640 going back to April of twenty twenty two. This after 0:03:08.880 --> 0:03:11.320 we learned about a tax dispute with Brazil cutting into 0:03:11.320 --> 0:03:12.720 third quarter earnings and hey. 0:03:12.639 --> 0:03:15.440 I'll go to revee here. Tesla Earning's crossing the wire 0:03:15.520 --> 0:03:17.680 right now. Let's get right to it here. My apologies. 0:03:17.720 --> 0:03:20.880 Tim adjusted EPs in the most recent quarter for Tesla 0:03:20.960 --> 0:03:23.240 coming in at fifty cents a share. The street on 0:03:23.320 --> 0:03:26.320 average was looking for fifty four cents. Revenue did come 0:03:26.360 --> 0:03:29.960 in above estimates, though, at twenty eight point one billion, 0:03:30.080 --> 0:03:33.079 so a beat on the revenue side, a slight miss 0:03:33.080 --> 0:03:36.440 on the EPs side. For cash flow well above what 0:03:36.480 --> 0:03:38.560 the street was looking for three point nine to nine 0:03:38.560 --> 0:03:41.600 billion dollars in free cash flow. Now the estimate based 0:03:41.640 --> 0:03:44.960 on Bloomberg reporting is one point twenty five, so that's 0:03:45.280 --> 0:03:47.480 almost four times what the street was expecting. We'll have 0:03:47.480 --> 0:03:49.640 to dive a little bit deeper into that gross margin. 0:03:49.680 --> 0:03:53.200 A slight beat at eighteen percent here, and operating income 0:03:53.240 --> 0:03:55.800 coming in relatively in line with estimates one point six 0:03:55.840 --> 0:03:57.880 to two Street was looking for one point sixty five. 0:03:57.720 --> 0:03:59.360 Yea, and you can see that the stock is kind 0:03:59.360 --> 0:04:02.400 of deciding what to do with this information. As you mentioned, 0:04:02.440 --> 0:04:05.520 of course, a big miss when it comes to adjusted EPs, 0:04:05.560 --> 0:04:08.680 but that free cash flow certainly is an eye popping 0:04:08.720 --> 0:04:10.800 figure here when you take a look at it, being 0:04:10.920 --> 0:04:14.160 forty six percent higher year over year and more than 0:04:14.240 --> 0:04:17.560 double the estimates. Shares down just a little bit after hours. 0:04:17.600 --> 0:04:20.599 The volatility on this stock has been pretty incredible as well, 0:04:20.640 --> 0:04:23.760 up one hundred percent since April's lows, but still only 0:04:23.800 --> 0:04:25.200 about eight percent higher for the year. 0:04:25.279 --> 0:04:27.640 Yeah, we're worth repeating that third quarter of free cash 0:04:27.640 --> 0:04:30.679 flow number three point nine to nine billion, massively exceeding 0:04:30.800 --> 0:04:33.320 estimates of one point twenty five billion, third quarter adjusted 0:04:33.400 --> 0:04:36.040 earnings per share of fifty cents the estimate was fifty 0:04:36.120 --> 0:04:39.160 four cents. Third quarter operating income one point six two 0:04:39.200 --> 0:04:42.120 billion dollars estimates for one point six five billion dollars. 0:04:42.320 --> 0:04:44.480 Shares those still moving lower in the after hours, down 0:04:44.600 --> 0:04:45.679 about one and a half percent. 0:04:45.760 --> 0:04:47.839 Yeah, I mean, let's remind everybody, I mean, this stock 0:04:47.880 --> 0:04:50.960 has been on quite a tear. We've seen a bounce 0:04:51.040 --> 0:04:54.400 back off of its lows, and so some concerns when 0:04:54.440 --> 0:04:56.560 it comes to the valuations that we've seen compared with 0:04:56.600 --> 0:04:58.159 some of the other mag seven. I mean, this is 0:04:58.160 --> 0:05:01.480 a company remain with a forward pe of almost two 0:05:01.560 --> 0:05:04.839 hundred and fifty one, so you know, investors want to 0:05:04.880 --> 0:05:08.159 see some outperformance or get an idea of revenue growth 0:05:08.200 --> 0:05:08.880 going forward. 0:05:09.000 --> 0:05:11.960 Yeah, they talk. I'm just going through the investor statement here, 0:05:12.000 --> 0:05:14.320 and they talk a lot, not so much about the vehicles, 0:05:14.320 --> 0:05:17.119 but the idea of new products and looking to launch 0:05:17.160 --> 0:05:19.120 new products. Of course, they do flag some of the 0:05:19.200 --> 0:05:21.359 updates to the Model three and the Model Why, but 0:05:21.520 --> 0:05:24.200 of course a lot of talk about their other businesses, 0:05:24.240 --> 0:05:27.200 of course in the hardware business, in the energy storage business, 0:05:27.200 --> 0:05:29.760 and of course when it comes to robotics and automation. 0:05:30.240 --> 0:05:31.920 And we are going to continue to keep an eye 0:05:31.920 --> 0:05:33.720 on Test. Let me just quickly break in and talk 0:05:33.760 --> 0:05:37.479 about LAMB Research. These results coming out adjusted EPs for 0:05:37.680 --> 0:05:42.360 the first quarter actually beating estimates here, adjusted EPs coming 0:05:42.400 --> 0:05:44.760 in at a dollar and twenty six cents. The estimate 0:05:44.800 --> 0:05:47.279 had been for a dollar and twenty two cents, so 0:05:47.320 --> 0:05:51.200 a beat there on adjusted EPs. Also beating on revenue 0:05:51.360 --> 0:05:53.640 as well, coming in in the first quarter five point 0:05:53.640 --> 0:05:56.400 three two billion dollars. The estimate had been for five 0:05:56.480 --> 0:05:58.840 point two three billion dollars. You can see shares up 0:05:59.040 --> 0:06:01.080 about one person in the after hours. 0:06:01.160 --> 0:06:03.280 We'll get back to Tesla in just a moment. Meantime, 0:06:03.360 --> 0:06:06.640 Las Vegas sans out with numbers. We're seeing the stock 0:06:06.720 --> 0:06:09.320 higher four point seven percent in the after hours. Third 0:06:09.400 --> 0:06:13.159 Quarter adjusted EPs came in above estimates at seventy eight cents, 0:06:13.520 --> 0:06:16.039 third quarter net revenue coming in above estimates at three 0:06:16.080 --> 0:06:18.840 point three three billion dollars. Once again, shares in the 0:06:18.880 --> 0:06:21.279 after hours hired by about four point seven percent. 0:06:21.279 --> 0:06:23.599 All right, let's go back to Tesla, folks, because we 0:06:23.640 --> 0:06:27.080 continue to monitor this one and it's been bouncing around here. 0:06:27.120 --> 0:06:28.800 Just a little bit lower down about six tens of 0:06:28.880 --> 0:06:32.440 a percent here in the after market. We're looking at 0:06:32.480 --> 0:06:34.640 Tesla posting third quarter profit that fell short of Wall 0:06:34.680 --> 0:06:40.040 Street expectations despite record ev sales, assign of the pressure 0:06:40.080 --> 0:06:43.400 automakers are facing from shifting federal policies and rising costs. 0:06:43.720 --> 0:06:46.120 Just eddorings were fifty cents per share in the period, 0:06:46.120 --> 0:06:49.400 The company said Alice had expected fifty four cents on average, 0:06:49.440 --> 0:06:53.080 and estimates compiled by US Revenue was twenty eight point 0:06:53.120 --> 0:06:56.800 one billion. But again, the stock i agree that investors 0:06:56.800 --> 0:06:58.440 are trying to figure out this one ro made. 0:06:58.400 --> 0:06:59.720 Trying to figure it out, and I think it gets 0:06:59.760 --> 0:07:01.920 at this idea of a company at an inflection point 0:07:02.080 --> 0:07:04.040 when we talk about the ev side of the business. 0:07:04.080 --> 0:07:06.880 Of course, the loss of that US tax credit a 0:07:06.880 --> 0:07:09.560 big issue here, not only for Tesla but for its 0:07:09.560 --> 0:07:12.120 peers as well. They mentioned that in the shareholder letter, 0:07:12.600 --> 0:07:15.760 particularly when it comes to lower regulatory credit revenue and 0:07:15.840 --> 0:07:20.440 lower hurt their overall revenue but also impacted the bottom 0:07:20.480 --> 0:07:23.240 line with regards to profitability. They also mention a few 0:07:23.320 --> 0:07:26.120 one time costs there as well that also did weigh 0:07:26.160 --> 0:07:28.960 on profitability too. So this is a company that, of course, 0:07:29.000 --> 0:07:31.520 looking backwards, you can see a lot of the issues 0:07:31.520 --> 0:07:33.440 that they're having to grapple with. But the big question, 0:07:33.600 --> 0:07:35.800 particularly when we get to that conference call in less 0:07:35.800 --> 0:07:38.400 than an hour's time, is what is the future? Is 0:07:38.960 --> 0:07:41.320 going to be a discussion about new vehicles or is 0:07:41.360 --> 0:07:44.280 this going to be more discussion about autonomy and robotics. 0:07:44.320 --> 0:07:46.320 Well, they're going to try to make it about AI, 0:07:46.440 --> 0:07:49.280 autonomy and robotics. I'm looking at the twenty nine page 0:07:49.520 --> 0:07:52.960 Q three quarterly update. The third paragraph in talks about 0:07:52.960 --> 0:07:56.080 how every Tesla vehicle delivered today is designed for autonomy. 0:07:56.200 --> 0:07:59.040 Every Tesla energy storage product is capable of being enhanced 0:07:59.040 --> 0:08:02.920 and optimized our Virtual power Planner Auto Bidter functionality. We 0:08:02.960 --> 0:08:05.360 continue to deliver a fleet of products that brings AI 0:08:05.440 --> 0:08:08.080 into the real world as we pursue a future of 0:08:08.120 --> 0:08:10.720 sustainable abundances outlined in our master plan. 0:08:10.760 --> 0:08:12.960 All right, IBM, crossing the Bloomberg terminal. Here's the red 0:08:13.000 --> 0:08:15.880 sticky though number that jumps out. Third quarter revenue folks 0:08:15.920 --> 0:08:19.440 slight beat sixteen point thirty three billion versus an estimate 0:08:19.480 --> 0:08:23.400 of sixteen point one billion. Software so key third quarter 0:08:23.560 --> 0:08:27.320 software revenue of seven point twenty one billion. That is 0:08:27.400 --> 0:08:30.440 smack in line with what the street was expecting. Also, 0:08:30.680 --> 0:08:33.440 some of the outlook sees fiscal year free cash flow 0:08:33.720 --> 0:08:37.040 fourteen billion dollars had seen above thirteen point five billion. 0:08:37.080 --> 0:08:39.720 The estimate on the street is thirteen point forty eight billion. 0:08:40.320 --> 0:08:44.079 Consulting revenue also important, third quarter consulting revenue five point 0:08:44.120 --> 0:08:46.800 thirty two billion, and that two KTI is coming better 0:08:46.840 --> 0:08:49.800 than expected. A quick check on the stock in the aftermarket, 0:08:49.880 --> 0:08:52.520 and I'm pulling it up at my Bloomberg and it 0:08:52.600 --> 0:08:54.000 is down three and a half percent. 0:08:54.080 --> 0:08:56.440 Katie interesting. I mean this was another name though where 0:08:56.480 --> 0:08:59.559 expectations were high, and you can see year to date 0:08:59.600 --> 0:09:02.640 through the close up thirty three percent on IBM shares. 0:09:02.720 --> 0:09:04.679 So this goes back to what we were talking about. 0:09:04.840 --> 0:09:07.640 Beat rates are high. We're getting positive results here, but 0:09:07.960 --> 0:09:11.199 the reaction to some of these earnings reports certainly has 0:09:11.240 --> 0:09:13.000 been in the opposite. 0:09:12.520 --> 0:09:14.480 Direction, and we should put out the CEO of IBM 0:09:14.600 --> 0:09:17.680 was at the White House yesterday talking about investing in 0:09:17.720 --> 0:09:20.360 the United States, so we'll continue to monitor that. 0:09:21.440 --> 0:09:25.480 This stock Movers report from Bloomberg Radio. Check back with 0:09:25.559 --> 0:09:28.120 us throughout the day for the latest roundup of companies 0:09:28.200 --> 0:09:31.320 making news on Wall Street and for the latest market 0:09:31.320 --> 0:09:35.800 moving headlines. Listen to Bloomberg Radio Live, catch us on YouTube, 0:09:35.880 --> 0:09:39.400 Bloomberg dot com, and on Applecarplay and Android Auto with 0:09:39.440 --> 0:09:40.959 the Bloomberg Business app.