Market Update
U.S. Stocks Rebound, Oil Jumps 5%
Barry Adams
03 Oct, 2022
New York City
Stocks on Wall Street rebounded after a difficult month and quarter as bond yield edged slightly lower.
The S&P 500 index and the Nasdaq Composite index declined for the third quarter in a row and investors bid up stocks on the first trading of the fourth quarter.
Investors are also bracing for earnings revisions ahead of the earnings season kickoff next week.
The S&P 500 index increased 1.1% to 3,624.84 and the Nasdaq Composite index rose 80.40 or 0.7% to 11,062.56.
Energy complex stocks led the gainers on Wall Street. Exxon Mobil, Chevron, Hess and Schlumberger jumped between 4% and 5%.
Tesla Inc declined 6.9% to $246.49 after the company announced record deliveries of 343,000 electric vehicles in the third quarter.
The stock edged lower after the company missed earlier delivery projections, despite the record deliveries.
Treasury Yields Edge Lower
The yield on 2-year Treasury notes decreased to 4.12%, 10-year notes dropped to 3.68% and 30-year bonds fell to 3.66%.
Oil Jumps 5%
Crude oil prices jumped more than 5% ahead of the meeting of OPEC+ nations this Wednesday.
The energy producing nations are expected to cut as much as one million barrels a day to lift the price of oil.
Crude oil jumped $4.83 to $84.34 to a barrel and natural gas declined 31 cents to $6.46.
Brent crude oil jumped 5.2% to $89.56 and the TTF natural gas price declined 6.1% to 177.26 euros a megawatt hour.
Pound Rebounds After UK Govt U Turn
European markets advanced after a week of losses and the British government reversed its recent tax proposal in the mini-budget.
The mini-budget included several tax provisions but the finance minister was forced to reverse some of the proposals after bond and currency markets perceived the measure more inflationary than growth driver.
Finance minister Kwasi Kwarteng said that the government will not cut tax rate to 40% from 45% for income higher than 150,000 pounds.
The euro edged lower to 97.65 U.S. cents and the British pound edged higher to $1.12.
Swiss Inflation Drops in September
Inflation rate in Switzerland unexpectedly declined to 3.3% in September from 3.5% in August, the Swiss Federal Statistics Office said Monday.
European Stock Movers
The DAX index roe 0.4% to 12,169.9, the CAC 40 index gained 0.07% to 5,766.90 and the FTSE 100 index decreased 0.2% to 6,880.61.
Credit Suisse AG dropped 5.9% to 3.61 Swiss francs and the troubled investment bank assured investors over the weekend about the health of the company.
Natuzzi SpA jumped 15.3% to $6.79 after the Italy-based leather furniture maker reported sixth consecutive quarterly revenue growth in a row.
Revenue in the fiscal second quarter increased 7.8% to
Major Averages Suffer Weekly, Monthly and Quarterly Losses
Barry Adams
30 Sep, 2022
New York City
Morning doldrums on Wall Street turned sharp and accelerating losses on the final day of the week, the month and the quarter.
Investors dumped stocks and risk appetite was low after the latest inflation report gave one more reason to continue its campaign of large-sized rate increase.
The core rate of The personal consumption expenditure price index accelerated in August, denting the market sentiment.
The yield on 2-year Treasury notes held stable at 4.26%, 10-year Treasury notes edged down to 3.82% and 30-year bonds traded near 3.78%.
Immediate month delivery futures of crude oil declined $1.63 to $79.63 a barrel and natural gas fell 6 cents to $6.81 a thermal unit.
Major Averages Extend Quarterly Loss Streak
The S&P 500 index fell 1.5% to 3,585.22 and the Nasdaq Composite index dropped 1.5% to 10,575.62.
The S&P 500 declined for the third quarter in a row, the streak last seen in 2009 and the Nasdaq Composite for the for the first time since the collapse of dotcom stocks in 2000.
In the third quarter, the S&P 500 index dropped 5.2% and the Nasdaq Composite declined 4.1%.
In September, the S&P 500 index declined 9.2% and the Nasdaq Composite plunged 10.4%.
For the week, the S&P 500 index fell 2.9% and the Nasdaq Composite index decreased 2.7%.
U.S. Stock Movers
Carnival Corp plunged 20.9% to $7.25 after the cruise line operator reported larger-than-expected loss and slower than expected business recovery after the pandemic.
Revenues in the third quarter ending in August increased 80% from the second quarter and jumped nearly eight-fold from a year ago to $4.3 billion.
Net loss in the quarter shrank to $770 million compared to $2.8 billion a year ago and diluted loss per share fell to 65 cents from $2.50 a year ago.
The company said fourth quarter bookings are lagging pre-pandemic 2019 levels, and at lower daily rates but 2023 advance bookings are "slightly above the historical average and at considerably higher prices, as compared to 2019."
The cruise operator is also battling with $28 billion of long term debt, with about $9 billion due before the end of 2025.
Micron Technology, Inc rose 1.8% to $50.91 after the semiconductor chipmaker reported mixed quarterly results and offered an outlook that fell short of expectations.
Revenues in the fourth quarter declined to $6.6 billion from $8.3 billion a year ago.
Net income in the quarter fell to $1.5 billion from $2.7 billion and diluted earnings declined to $1.35 from $2.39 a year ago.
For the fiscal year 2022, revenue jumped to $30.7 billion from $27.7 billion and net income soared to $8.7 billion from $5.8 billion and diluted earnings per share rose to $7.75 from $8.35 a year ago.
The company guided fiscal first quarter revenue of $4.25 billion with a band of $250 million and gross margin between 23% and 27%.
The company guided diluted earnings per share between a loss of 9 cents and a profit of 10 cents.
Natuzzi SpA declined 1.7% to $6.21 ahead of the furniture maker releasing its quarterly earnings release after the market closes on Friday.
In the previous quarter ending in March, the company said revenues increased 16.8% to 118.5 million euros.
In the quarter, earnings plunged to 1.3 million euros from 5.9 million euros or diluted earnings per share to 2 euro cents from 11 euro cents a year ago.
Nike Inc declined 11.1% to $84.80 after the premium athletic shoemaker reported a sharp fall in earnings.
In the latest quarter ending in August, Nike said sales increased 4% to $12.7 billion from $12.2 billion a year ago. Despite the weakness in its third largest market in China and supply chain challenges, sales rose.
Net income in the fiscal year first quarter plunged 22% to $1.5 billion from $1.87 billion a year ago. Diluted earnings per share declined to 93 cents from $1.16 a year ago.
Rent-A-Center Inc plunged 21.0% to $17.64 after the rent to own furniture and electronics company lowered its current quarter earnings outlook.
The company tightened its third quarter revenues in the range between $1.00 billion and $1.02 billion from the previous estimate in the range between $1.00 billion and $1.05 billion.
The company also lowered its non-GAAP diluted earnings per share in the range between 85 cents and 95 cents from the previous guidance between $1.05 and $1.25.
U.S. Core PCE Inflation Accelerated
The personal consumption expenditure price index rose 0.3% in August after falling 0.1% in July, Bureau of Economic Analysis said Friday.
On a monthly basis, prices for goods declined 0.3% and for services rose 0.6% in August. Energy prices declined 5.5% but food prices rose 0.8%.
The PCE price index, excluding food and energy, rose 0.6% on a monthly basis.
The PCE price index on an annual basis increased 6.2%, slower than 6.4% in July but still elevated and significantly ahead of Fed's target rate of 2%.
Core rate of inflation, excluding food and energy, rose 4.9% in August from a year ago and jumped 0.6% on a monthly basis.
Eurozone Inflation Accelerates
Consumer prices rose at the fastest annual pace 10.0% in September after rising at 9.3% in August, the Eurostat said Friday.
The inflation rate in September increased to 1.2% from the previous month
Inflation accelerated for the fifth month in a row and showed no signs of easing, raising pressure on the central bank to lift rates.
Food, tobacco and beverages prices accelerated to 11.8% from 10.6% in August, energy prices rose 40.8% from 38.6% and services increased 4.3% from 3.8%.
Among the larger member countries in the eurozone, Germany recorded the largest inflation rate of 10.9% in September from 8.8% in September, followed by Italy with 9.5% compared to 9.1% but the rate slowed in France to 6.2% from 6.1% and in Spain to 9.3% from 10.5%.
Prices in Estonia, Latvia and Lithuania surged between 22% and 24.5% in the month on an annual basis.
Euro Area Unemployment Rate 6.6%
Seasonally adjusted unemployment rate was 6.6% in August, the Eurostat reported Friday.
The jobless rate was stable from July and fell from 7.5% from a year ago
The unemployment rate was stable at 6.0% in August in the European Union from the previous month and declined from 6.8% a year ago.
About 12,92 million people were unemployed in the European Union and 10.966 million were in the euro area.
UK Revises Q2 GDP Rate Higher
UK GDP growth was revised higher to 4.4% from a year ago from the previous estimate of 2.9%, the Office for National Statistics reported Friday.
Despite the upward revision, the British GDP growth rate is still the smallest in five quarters.
The statistical office also revised the data for 2020 and 2021.
UK GDP is now estimated to have contracted 11.0% in 2020, revised from the previous estimate of a fall of 9.3%.
In 2021, UK GDP is estimated to have expanded by an upwardly revised 7.5% from the previous estimate of 7.4%.
Euro Area Indexes Down Third Quarter In a Row
European markets are set close down for the third quarter in a row for the first time since early 2011.
The DAX index closed up 1.2% to 12,114.36, the CAC-40 index added 1.5% to 5,762.34 and the FTSE 100 index rose 0.2% to 6,893.11.
For the quarter, the DAX fell more than 5%, the CAC-40 dropped 2.5% and the FTSE 100 index eased 4%.
The Swiss Market Index spent the entire session in the negative territory and closed down 93.77 points or 0.92% to 10,126.99.
For the quarter, the SMI is down about 5%.
Europe Stock Movers
Dignity PLC dropped 7.6% to 365.29 pence after the funeral-related services provider reported first-half loss on rising costs and falling revenue.
Clariant AG increased 7.7% to 15.90 Swiss francs after Credit Suisse upgraded stock to "outperform" and lifted its price target.
Webuild SpA jumped 5.6% to 1.26 euros after the company said its 2022 results are expected to be "significantly" ahead of the guidance.
The company also won a contract worth
Movers: Blue Apron, Carnival Corp, Micron, Natuzzi, Nike, Rent-A-Center
Barry Adams
30 Sep, 2022
New York City
Stocks on Wall Street turned lower after the release of the latest inflation report.
The hotter-than-expected inflation, the preferred measure by the Federal Reserve, was the second signal in as many days indicating that elevated inflation is here to stay despite the five rate hikes in six months.
The PCE price index on an annual basis increased 6.2%, slower than 6.4% in July but still elevated and significantly ahead of Fed's target rate of 2%.
The yield on 2-year Treasury notes held stable at 4.19%, 10-year Treasury notes edged down to 3.73% and 30-year bonds traded near 3.76%.
Immediate month delivery futures of crude oil declined $1.03 to $88.06 a barrel and natural gas fell 7 cents to $6.80 a thermal unit.
The S&P 500 index dropped 0.4% to 3,622.20 and the Nasdaq Composite index declined 0.3% to 10,704.11.
Blue Apron Holdings was in focus and gained 3.8% to $5.77 after the meal-kit company said chief financial officer Randy Greben will step down from the role on October 17 to take a position with another company.
Greben was appointed in the role in January 2021.
Blue Apron appointed Mitchell Cohen to serve as interim Chief Financial Officer.
Carnival Corp plunged 20.9% to $7.25 after the cruise line operator reported larger-than-expected loss and slower than expected business recovery after the pandemic.
Revenues in the third quarter ending in August increased 80% from the second quarter and jumped nearly eight-fold from a year ago to $4.3 billion.
Net loss in the quarter shrank to $770 million compared to $2.8 billion a year ago and diluted loss per share fell to 65 cents from $2.50 a year ago.
The company said fourth quarter bookings are lagging pre-pandemic 2019 levels, and at lower daily rates but 2023 advance bookings are "slightly above the historical average and at considerably higher prices, as compared to 2019."
The cruise operator is also battling with $28 billion of long term debt, with about $9 billion due before the end of 2025.
Micron Technology, Inc rose 1.8% to $50.91 after the semiconductor chipmaker reported mixed quarterly results and offered an outlook that fell short of expectations.
Revenues in the fourth quarter declined to $6.6 billion from $8.3 billion a year ago.
Net income in the quarter fell to $1.5 billion from $2.7 billion and diluted earnings declined to $1.35 from $2.39 a year ago.
For the fiscal year 2022, revenue jumped to $30.7 billion from $27.7 billion and net income soared to $8.7 billion from $5.8 billion and diluted earnings per share rose to $7.75 from $8.35 a year ago.
The company guided fiscal first quarter revenue of $4.25 billion with a band of $250 million and gross margin between 23% and 27%.
The company guided diluted earnings per share between a loss of 9 cents and a profit of 10 cents.
Natuzzi SpA gained 3.4% to $6.41 ahead of the furniture maker releasing its quarterly earnings release after the market closes on Friday.
In the previous quarter ending in March, the company said revenues increased 16.8% to 118.5 million euros.
In the quarter, earnings plunged to 1.3 million euros from 5.9 million euros or diluted earnings per share to 2 euro cents from 11 euro cents a year ago.
Nike Inc declined 11.1% to $84.80 after the premium athletic shoemaker reported a sharp fall in earnings.
In the latest quarter ending in August, Nike said sales increased 4% to $12.7 billion from $12.2 billion a year ago. Despite the weakness in its third largest market in China and supply chain challenges, sales rose.
Net income in the fiscal year first quarter plunged 22% to $1.5 billion from $1.87 billion a year ago. Diluted earnings per share declined to 93 cents from $1.16 a year ago.
Rent-A-Center Inc plunged 21.0% to $17.64 after the rent to own furniture and electronics company lowered its current quarter earnings outlook.
The company tightened its third quarter revenues in the range between $1.00 billion and $1.02 billion from the previous estimate in the range between $1.00 billion and $1.05 billion.
The company also lowered its non-GAAP diluted earnings per share in the range between 85 cents and 95 cents from the previous guidance between $1.05 and $1.25.
European Markets Down Third Quarter In a Row, Inflation Accelerates
Bridgette Randall
30 Sep, 2022
Frankfurt
European markets traded lower after the release of eurozone inflation, unemployment data.
Market indexes struggled after inflation shot up to a record high in August in the euro area and showed no signs of easing, stoking worries that the large-sized rate hikes may continue.
Eurozone Inflation Accelerates
Consumer prices rose at the fastest annual pace 10.0% in September after rising at 9.3% in August, the Eurostat said Friday.
The inflation rate in September increased to 1.2% from the previous month
Inflation accelerated for the fifth month in a row and showed no signs of easing, raising pressure on the central bank to lift rates.
Food, tobacco and beverages prices accelerated to 11.8% from 10.6% in August, energy prices rose 40.8% from 38.6% and services increased 4.3% from 3.8%.
Among the larger member countries in the eurozone, Germany recorded the largest inflation rate of 10.9% in September from 8.8% in September, followed by Italy with 9.5% compared to 9.1% but the rate slowed in France to 6.2% from 6.1% and in Spain to 9.3% from 10.5%.
Prices in Estonia, Latvia and Lithuania surged between 22% and 24.5% in the month on an annual basis.
Euro Area Unemployment Rate 6.6%
Seasonally adjusted unemployment rate was 6.6% in August, the Eurostat reported Friday.
The jobless rate was stable from July and fell from 7.5% from a year ago
The unemployment rate was stable at 6.0% in August in the European Union from the previous month and declined from 6.8% a year ago.
About 12,92 million people were unemployed in the European Union and 10.966 million were in the euro area.
UK Revises Q2 GDP Rate Higher
UK GDP growth was revised higher to 4.4% from a year ago from the previous estimate of 2.9%, the Office for National Statistics reported Friday.
Despite the upward revision, the British GDP growth rate is still the smallest in five quarters.
The statistical office also revised the data for 2020 and 2021.
UK GDP is now estimated to have contracted 11.0% in 2020, revised from the previous estimate of a fall of 9.3%.
In 2021, UK GDP is estimated to have expanded by an upwardly revised 7.5% from the previous estimate of 7.4%.
Euro Area Indexes Down Third Quarter In a Row
European markets are set close down for the third quarter in a row for the first time since early 2011.
The DAX index closed up 1.2% to 12,114.36, the CAC-40 index added 1.5% to 5,762.34 and the FTSE 100 index rose 0.2% to 6,893.11.
For the quarter, the DAX fell more than 5%, the CAC-40 dropped 2.5% and the FTSE 100 index eased 4%.
The Swiss Market Index spent the entire session in the negative territory and closed down 93.77 points or 0.92% to 10,126.99.
For the quarter, the SMI is down about 5%.
Europe Stock Movers
Dignity PLC dropped 7.6% to 365.29 pence after the funeral-related services provider reported first-half loss on rising costs and falling revenue.
Clariant AG increased 7.7% to 15.90 Swiss francs after Credit Suisse upgraded stock to "outperform" and lifted its price target.
Webuild SpA jumped 5.6% to 1.26 euros after the company said its 2022 results are expected to be "significantly" ahead of the guidance.
The company also won a contract worth
Eurozone Inflation Accelerates to 10% In September
Brian Turner
30 Sep, 2022
New York City
European markets traded lower after the release of eurozone inflation data.
Consumer prices rose at the fastest annual pace 10.0% in September after rising at 9.3% in August, the Eurostat said Friday.
The inflation rate in September increased to 1.2% from the previous month
Inflation accelerated for the fifth month in a row and show no signs of easing, raising pressure on the central bank to lift rates.
Food, tobacco and beverages prices accelerated to 11.8% from 10.6% in August, energy prices rose 40.8% from 38.6% and services increased 4.3% from 3.8%.
Among the larger member countries in the eurozone, Germany recorded the largest inflation rate of 10.9% in September from 8.8% in September, followed by Italy with 9.5% compared to 9.1% but the rate slowed in France to 6.2% from 6.1% and in Spain to 9.3% from 10.5%.
Prices in Estonia, Latvia and Lithuania surged between 22% and 24.5% in the month on an annual basis.
Core PCE Index Highlights Stubborn Elevated Inflation
Brian Turner
30 Sep, 2022
New York City
The hotter-than-expected inflation, the preferred measure by the Federal Reserve, was the second signal in as many days indicating that elevated inflation is here to stay despite the five rate hikes in six months.
The personal consumption expenditure price index rose 0.3% in August after falling 0.1% in July, Bureau of Economic Analysis said Friday.
On a monthly basis, prices for goods declined 0.3% and for services rose 0.6% in August. Energy prices declined 5.5% but food prices rose 0.8%.
The PCE price index, excluding food and energy, rose 0.6% on a monthly basis.
The PCE price index on an annual basis increased 6.2%, slower than 6.4% in July but still elevated and significantly ahead of Fed's target rate of 2%.
Core rate of inflation, excluding food and energy, rose 4.9% in August from a year ago and jumped 0.6% on a monthly basis.
The yield on 2-year Treasury notes held stable at 4.19%, 10-year Treasury notes edged down to 3.73% and 30-year bonds traded near 3.76%.
Stocks Struggle After Fed's Core Inflation Gauge Advances
Barry Adams
30 Sep, 2022
New York City
Stocks on Wall Street turned lower after the release of the latest inflation report.
The hotter-than-expected inflation, the preferred measure by the Federal Reserve, was the second signal in as many days indicating that elevated inflation is here to stay despite the five rate hikes in six months.
The personal consumption expenditure price index rose 0.3% in August after falling 0.1% in July, Bureau of Economic Analysis said Friday.
On a monthly basis, prices for goods declined 0.3% and for services rose 0.6% in August. Energy prices declined 5.5% but food prices rose 0.8%.
The PCE price index, excluding food and energy, rose 0.6% on a monthly basis.
The PCE price index on an annual basis increased 6.2%, slower than 6.4% in July but still elevated and significantly ahead of Fed's target rate of 2%.
Core rate of inflation, excluding food and energy, rose 4.9% in August from a year ago and jumped 0.6% on a monthly basis.
The yield on 2-year Treasury notes held stable at 4.19%, 10-year Treasury notes edged down to 3.73% and 30-year bonds traded near 3.76%.
Immediate month delivery futures of crude oil declined $1.03 to $88.06 a barrel and natural gas fell 7 cents to $6.80 a thermal unit.
The S&P 500 index fell 0.24% to 3,632.11 and the Nasdaq Composite index was nearly unchanged at 10,737.58.
Eurozone Record Double Digit Inflation In September
European markets traded lower after the release of eurozone inflation data.
Consumer prices rose at the fastest annual pace 10.0% in September after rising at 9.3% in August, the Eurostat said Friday.
The inflation rate in September increased to 1.2% from the previous month
Inflation accelerated for the fifth month in a row and show no signs of easing, raising pressure on the central bank to lift rates.
Food, tobacco and beverages prices accelerated to 11.8% from 10.6% in August, energy prices rose 40.8% from 38.6% and services increased 4.3% from 3.8%.
Among the larger member countries in the eurozone, Germany recorded the largest inflation rate of 10.9% in September from 8.8% in September, followed by Italy with 9.5% compared to 9.1% but the rate slowed in France to 6.2% from 6.1% and in Spain to 9.3% from 10.5%.
Prices in Estonia, Latvia and Lithuania surged between 22% and 24.5% in the month on an annual basis.
Euro Area Stocks Third Quarterly Loss In a Row
European markets are set close down for the third quarter in a row for the first time since early 2011.
The DAX index trimmed earlier gains to 0.5% to 12,041.53, the CAC-40 index added 0.6% to 5,712.21 and the FTSE 100 index fell 0.3% to 6,858.61.
For the quarter, the DAX is set to close down 6%, the CAC-40 down 3% and the FTSE 100 index down 4%.
Nike Quarterly Sales Rise 4%, Net Income Plunges 22%
Scott Peters
29 Sep, 2022
New York City
Nike Inc dropped more than 10% in the after-market trading after the maker of premium athletic shoemaker reported a sharp fall in earnings.
In the latest quarter ending in August, Nike said sales increased 4% to $12.7 billion from $12.2 billion a year ago.
Despite the weakness in its third largest market in China and supply chain challenges, sales rose.
Net income in the fiscal year first quarter plunged 22% to $1.5 billion from $1.87 billion a year ago.
Diluted earnings per share declined to 93 cents from $1.16 a year ago.
Gross Margin Declined
The decline in gross margin was primarily driven by the weakness in the North America segment.
Gross margin decreased 220 basis points to 44.3%, primarily driven by higher freight and logistics costs, lower margins in NIKE Direct business driven by higher markdowns, and higher dollar.
Inventories Jump 44%
Inventories surged 44% $9.7 billion, primarily driven by larger in-transit shipments to deal with supply chain issues and volatility.
Segment Breakdown
Sales in North America, its largest market, increased 13% to $5.5 billion from $4.9 billion a year ago.
Sales in Europe, Middle East and Africa increased 1% to $3.33 billion from $3.30 billion a year ago.
Greater China sales declined 16% to $1.7 billion, largely on the business interruptions linked to zero-Covid policy lockdowns.
Stock Buyback and Dividend
The company repurchased and retired 9 million shares for $1.0 billion in the quarter.
Nike used $0.7 billion to repurchase 6.5 million shares retired under the company
Cintas Lifts Earnings Outlook
Scott Peters
29 Sep, 2022
New York City
Cintas Corporation declined 1.7% to $387.86 after the company reported revenue in the fiscal first quarter 2023 ending in August 14.2% to $2.17 billion from $1.90 billion a year ago.
Gross margin as a percentage of revenue was 47.5% for the first quarter compared to 47.6% a year ago.
Energy expenses, including gasoline, natural gas and electricity, increased 30 basis from a year ago.
Net income in the quarter increased to $351.7 million from $331.2 million and diluted earnings per share rose to $3.39 from $3.11 a year ago.
Excluding the fiscal 2022 first quarter gain and the related income tax impact, fiscal 2023 first quarter diluted earnings per share increased 12.3% to $3.39 from $3.02 a year ago.
Fiscal Year Outlook
The company also lifted its annual revenue expectations from a range of $8.47 billion to $8.58 billion to a range of $8.58 billion to $8.67 billion and diluted earnings per share from a range of $11.90 to $12.30 to a range of $12.30 to $12.65.
The revised earnings estimate suggest growth between 9.0% and 12.1%.
Worthington Industries Announces Business Separation, Earnings Dive
Scott Peters
29 Sep, 2022
New York City
Worthington Industries, Inc plunged 11.6% to $43.53 after the steel processor and maker of pressure vessels said it plans to separate two businesses in two publicly traded companies.
The company reported revenue in the fiscal 2022 first quarter ending in August rose 27% to $1.4 billion from $1.1 billion a year ago.
Gross margin fell $50 million from the prior year's quarter to $169.4 million, as improvements in both the Consumer Products and Building Products segments were more than offset by lower margin contributions from Steel Processing.
Margins in Steel Processing were negatively impacted by an estimated $48.6 million unfavorable swing related to inventory holding losses in the current quarter compared to inventory holding gains a year ago.
Net income in the quarter declined to $64.08 million from $132.4 million and diluted earnings per share fell to $1.30 from $2.55 a year ago.
Business Separation
The post-separation, Worthington will focus on consumer products, building products and sustainable energy solutions.
Steel processing business with extensive supply chain and pricing solutions focus on custom and wholesale markets with expanded product offerings in electrical steel laminations and laser welding solutions.
Acquisitions and Divestitures
Worthington acquired Level5 Tools, LLC, a provider of drywall tools and related accessories for a net cash purchase price of approximately $56.1 million, with a potential earnout of up to $25.0 million based on performance through 2024.
The transaction was completed on June 2, 2022.
The company sold its 50% interest in ArtiFlex to the unaffiliated joint venture member for approximately $42.1 million, after closing adjustments.
The sale transaction was completed on August 3, 2022.
The sale included real estate in Wooster, Ohio, owned by Worthington and leased to ArtiFlex.
As a result of the transaction, the company recorded a pre-tax loss of approximately $15.8 million in equity income during the quarter.
Outlook
The company did not provide a specific quarterly or annual earnings or revenue guidance.
Jobless Claims Report Signals Strong Labor Market
Brian Turner
29 Sep, 2022
New York City
Initial weekly jobless claims rate dropped less-than-expected to 196,000 in the week ending September 24.
The fewer-than-expected claims offered yet another impetus to the Federal Reserve in continuing its campaign to lift by a large amount of 75 basis points.
Seasonally adjusted weekly initial jobless claims declined 16,000 to 193,000 in the week ending September 24, the Department of Labor said Thursday.
Unadjusted initial claims fell 12,642 to 156,060 led by significant declines in Michigan (5,674), New Jersey (1,521) and New York (1,266).
The 4-week moving average declined 8,750 to 207,000.
Averages Fall 2% With Rate Hike In Focus
Barry Adams
29 Sep, 2022
New York City
Tech stocks led the decliners on Wall Street after the latest jobs report highlighted labor market strength.
The stronger-than-anticipated jobless report reinforced the strength in the labor market and provided one more signal to the Fed in continuing its campaign to lift rates.
Benchmark indexes opened sharply lower after the jobs report knocked the sentiment down.
Moreover, the sentiment in the tech sector weakened after Apple Inc was downgraded.
Jobless Claims Signal Strong Labor Market
Initial weekly jobless claims rate dropped less-than-expected to 196,000 in the week ending September 24.
The fewer-than-expected claims offered yet another impetus to the Federal Reserve in continuing its campaign to lift by a large amount of 75 basis points.
Seasonally adjusted weekly initial jobless claims declined 16,000 to 193,000 in the week ending September 24, the Department of Labor said Thursday.
Unadjusted initial claims fell 12,642 to 156,060 led by significant declines in Michigan (5,674), New Jersey (1,521) and New York (1,266).
The 4-week moving average declined 8,750 to 207,000.
Stock Movers
Tech stocks were under pressure after Bank of America downgraded Apple stoking anxieties of similar downgrades for other leaders in the sector.
Apple, Google, and Microsoft dropped to 18-month lows and Intel declined to a 8-year low.
Semiconductor makers, retailers, furniture makers and cruise liners were among the leading losers of the day.
The S&P 500 index fell 2.1% to 3,640.47 and the Nasdaq Composite index dropped 2.8% to 10,737.51.
Apple Inc plunged 4.9% to $142.48 after Bank of America analyst downgraded the stock to "neutral" from "buy" on the expectations of weakening consumer demand.
Bed Bath & Beyond Inc plunged 9.2% to $5.87 after the troubled retailer of home and kitchen goods reported a large quarterly loss.
The retailer's gross margin plunged after the company marked down prices on several goods to clear inventories ahead of holiday season.
Bassett Furniture Industries Inc declined 2.2% to $16.11 after the company said revenue in the fiscal 2022 third quarter rose 12.5% to $118 million from $104.9 million a year ago.
Net income in the quarter rose to $7.6 million from $3.01 million and diluted earnings per share increased to 82 cents from 31 cents a year ago.
CarMax, Inc plunged 23.7% to $65.98 after the used-car retailer reported weaker-than-expected quarterly results.
The auto retailer also said that rising rates and prices kept many buyers away in the final month of the latest quarter.
Energy Markets Flirt Gave Up Early Gains
Crude oil prices gained in early trading after U.S. oil inventories declined unexpectedly in the previous week.
Investors are also awaiting the OPEC+'s decision as the oil cartel is expected to cut supply and shore up falling price of the commodity.
Crude oil fell 60 cents to $81.58 and natural gas decreased 8 cents to $6.87 a thermal unit.
Gold, silver and iron ore closed nearly unchanged but copper gained 2% to $3.45 a pound.
Bond Yields Edge Lower After Pushing Higher
The yield on 2-year Treasury notes increased to 4.20%, on 10-year Treasury notes inched up to 3.79% and 30-year bonds advanced to 3.72%.
Eurozone Economic Sentiment Worsens
The economic sentiment - an aggregate index of business and consumer sentiment - in the euro declined to 93.7 in September from 97.3 in August, the European Commission said on Thursday.
The index dropped to a two-year low, the lowest level seen since November 2020.
Inflation expectation index increased to 41.3 in September from 37.0 in August.
Consumer Prices Jump Record 10% In Germany
Consumer prices in Germany shot up a record 10.0% from a year ago in September, according to a preliminary report released by the Federal Statistics Office or Destatis on Thursday.
Consumer price inflation accelerated after rising 7.9% in August.
On a monthly basis, prices rose 1.9% in September, slower than
The goods price surged 17.2% in September from 14.7% in August and services prices rose 3.6% from 2.2% in the corresponding period.
Italian Wholesale Prices Jump Record 40%
Wholesale prices in Italy surged to record 40.1% in August after rising 36.9% in July, the National Institute of Statistics said on Thursday.
The producer price increase was driven by a surge in energy costs of 126.8% followed by intermediate goods price increase of 17.8%, consumer goods 9.5% and capital goods 9.1%.
European Markets Accelerate Declines
Benchmark indexes in Europe resumed their declines after recession worries gripped the market.
Benchmark indexes across Europe opened weaker a day after the Bank of England intervened to stabilize bond and currency trading in the UK.
However, the boost from the emergency operation faded in less than 24 hours and the market averages and the pound resumed their slides again.
Major averages accelerated the declines after the release of the U.S. jobs report indicating the strength in the labor market.
The DAX index declined 1.6% to 11,995.17, the CAC-40 index dropped 1.44% to 5,681.94 and the FTSE 100 index fell 1.2% to 6,919.76.
Brent crude rose 80 cents to $90.111 a barrel and TTF natural gas futures plunged 9.9% to 186.50 megawatt per hour.
The euro inched higher to 97.16 U.S. cents and the British pound rebounded slightly to $1.093.
China Stocks Mixed Ahead of Holiday Week, Sensex Extends 7-day Losses
Markets in Asia traded higher following the gains in Europe and rising commodities prices.
China benchmark indexes ended flat ahead of the 7-day Golden Week holidays between October 1 and 7.
The Shanghai Composite Index eased 0.1% lower to 3,041.20, erasing most of the early gains in the day.
The Hang Seng Index ended down 0.5% to 17,165.87, after dropping to the low last seen in October 2011.
The Hang Seng index has lost about 26.5% in the year so far and dropped about 40% in the last five years.
Shanghai Composite is down 16.2% in the year so far.
In Tokyo, the Nikkei 225 index gained 1.0% to 26,422.05 and the broader Topix increased 0.7% to 1,868.80.
For the year so far, the Nikkei index is down 10.5%.
Fast Retailing Co Ltd jumped 2.2% following a similar rise in Softbank.
Pharmaceuticals and resource sector stocks led the gainers and Eisai Co Ltd soared 13.5% after the company reported an unexpected positive trial results for an experimental Alzheimer's drug.
The Japanese yen held steady at 144.52 to a dollar.
Benchmark indexes in Mumbai turned lower for the seventh day in a row ahead of the rate decision from the Reserve Bank of India on Friday.
The RBI is expected to lift the key lending rate by at least 40 basis points and stem the slide in the rupee.
The Indian rupee dropped to a new low of 81.80 to a dollar.
The Sensex index fell 188.32 points or 0.33% to 56,409.96 and the Nifty index declined 40.50 points or 0.24% to 16,818.10.
Australian stocks closed higher after crude oil and gold prices rebounded from the 9-month lows.
The ASX 200 Index increased 1.4% to 6,555.00 and the broader All Ordinaries Index added 1.5% to 6,760.60.
BHP Group, Fortescue Metals Group, Woodside Energy Group and Santos Ltd gained between 2% and 3%.
Movers: Apple, Bed Bath & Beyond, CarMax, Cintas, Occidental, Miller, Rite Aid, Vail, Worthington
Barry Adams
29 Sep, 2022
New York City
Apple Inc plunged 5.6% to $141.39 after Bank of America analyst downgraded the stock to "neutral" from "buy" on the expectations of weakening consumer demand.
Bed Bath & Beyond Inc plunged 9.2% to $5.87 after the troubled retailer of home and kitchen goods reported a large quarterly loss.
The retailer's gross margin plunged after the company marked down prices on several goods to clear inventories ahead of holiday season.
Bassett Furniture Industries Inc declined 2.2% to $16.11 after the company said revenue in the fiscal 2022 third quarter rose 12.5% to $118 million from $104.9 million a year ago.
Net income in the quarter rose to $7.6 million from $3.01 million and diluted earnings per share increased to 82 cents from 31 cents a year ago.
CarMax, Inc plunged 23.7% to $65.98 after the used-car retailer reported weaker-than-expected quarterly results.
The auto retailer also said that rising rates and prices kept many buyers away in the final month of the latest quarter.
Cintas Corporation declined 1.7% to $387.86 after the company reported revenue in the fiscal first quarter 2023 ending in August 14.2% to $2.17 billion from $1.90 billion a year ago.
Net income in the quarter increased to $351.7 million from $331.2 million and diluted earnings per share rose to $3.39 from $3.11 a year ago.
The company also lifted its annual revenue expectations from a range of $8.47 billion to $8.58 billion to a range of $8.58 billion to $8.67 billion and diluted earnings per share from a range of $11.90 to $12.30 to a range of $12.30 to $12.65.
Jefferies Financial Group fell 1.3% to $29.34 after the financial services company reported better-than-expected quarterly profit despite the weak merger and acquisition related revenues.
The increase in corporate banking services revenues helped to mitigate the weak merger revenues.
Occidental Petroleum Corporation increased 0.7% to $61.88 and Warren Buffett-controlled Berkshire Hathaway bought nearly 6 million shares this week, according to a regulatory filing with the SEC.
Miller Knoll Inc fell 12.7% to $17.35 after the furniture maker reported mixed quarterly results.
The company also announced a plan to cut costs, lower inventories, reduce staff and improve cash flow.
Rite Aid Corporation plunged 26.5% to $5.17 after the pharmacy chain lowered its adjusted earnings estimate for the full-year.
Vail Resorts, Inc rose 2.4% to $214.66 after the ski resort operator reported smaller-than-expected quarterly loss and said that the customer demand has surpassed the pre-pandemic levels.
Worthington Industries, Inc plunged 11.6% to $43.53 after the steel processor and maker of pressure vessels said it plans to separate two businesses in two publicly traded companies.
The company reported revenue in the fiscal 2022 first quarter ending in August rose 27% to $1.4 billion from $1.1 billion a year ago.
Net income in the quarter declined to $64.08 million from $132.4 million and diluted earnings per share fell to $1.30 from $2.55 a year ago.
Asia: Nikkei Jumps 1%, Hang Seng and Sensex Extend Losses
Arjun Pandit
29 Sep, 2022
New York City
Markets in Asia traded higher following the gains in Europe and rising commodities prices.
China benchmark indexes ended flat ahead of the 7-day Golden Week holidays between October 1 and 7.
The Shanghai Composite Index eased 0.1% lower to 3,041.20, erasing most of the early gains in the day.
The Hang Seng Index ended down 0.5% to 17,165.87, after dropping to the low last seen in October 2011.
The Hang Seng index has lost about 26.5% in the year so far and dropped about 40% in the last five years.
Shanghai Composite is down 16.2% in the year so far.
In Tokyo, the Nikkei 225 index gained 1.0% to 26,422.05 and the broader Topix increased 0.7% to 1,868.80.
For the year so far, the Nikkei index is down 10.5%.
Fast Retailing Co Ltd jumped 2.2% following a similar rise in Softbank.
Pharmaceuticals and resource sector stocks led the gainers and Eisai Co Ltd soared 13.5% after the company reported an unexpected positive trial results for an experimental Alzheimer's drug.
The Japanese yen held steady at 144.52 to a dollar.
Benchmark indexes in Mumbai turned lower for the seventh day in a row ahead of the rate decision from the Reserve Bank of India on Friday.
The RBI is expected to lift the key lending rate by at least 40 basis points and stem the slide in the rupee.
The Indian rupee dropped to a new low of 81.80 to a dollar.
The Sensex index fell 188.32 points or 0.33% to 56,409.96 and the Nifty index declined 40.50 points or 0.24% to 16,818.10.
Australian stocks closed higher after crude oil and gold prices rebounded from the 9-month lows.
The ASX 200 Index increased 1.4% to 6,555.00 and the broader All Ordinaries Index added 1.5% to 6,760.60.
BHP Group, Fortescue Metals Group, Woodside Energy Group and Santos Ltd gained between 2% and 3%.
European Markets Accelerate Declines, Record German CPI and Italian PPI
Bridgette Randall
29 Sep, 2022
New York City
Benchmark indexes in Europe resumed their declines after recession worries gripped the market.
Benchmark indexes across Europe opened weaker a day after the Bank of England intervened to stabilize bond and currency trading in the UK.
However, the boost from the emergency operation faded in less than 24 hours and the market averages and the pound resumed their slides again.
Major averages accelerated the declines after the release of the U.S. jobs report indicating the strength in the labor market.
Initial weekly jobless claims rate dropped less-than-expected to 196,000 in the week ending September 24.
The fewer-than-expected claims offered yet another impetus to the Federal Reserve in continuing its campaign to lift by a large amount of 75 basis points.
In other economic news, a measure of sentiment weakened in September, the European Commission reported Thursday.
Eurozone Economic Sentiment Worsens
The economic sentiment - an aggregate index of business and consumer sentiment - in the euro declined to 93.7 in September from 97.3 in August, the European Commission said on Thursday.
The index dropped to a two-year low, the lowest level seen since November 2020.
Inflation expectation index increased to 41.3 in September from 37.0 in August.
Consumer Prices Jump Record 10% In Germany
Consumer prices in Germany shot up a record 10.0% from a year ago in September, according to a preliminary report released by the Federal Statistics Office or Destatis on Thursday.
Consumer price inflation accelerated after rising 7.9% in August.
On a monthly basis, prices rose 1.9% in September, slower than
The goods price surged 17.2% in September from 14.7% in August and services prices rose 3.6% from 2.2% in the corresponding period.
Record Jump In Italian Wholesale Prices
Wholesale prices in Italy surged to record 40.1% in August after rising 36.9% in July, the National Institute of Statistics said on Thursday.
The producer price increase was driven by a surge in energy costs of 126.8% followed by intermediate goods price increase of 17.8%, consumer goods 9.5% and capital goods 9.1%.
European Markets Accelerate Declines
The DAX index declined 1.6% to 11,995.17, the CAC-40 index dropped 1.44% to 5,681.94 and the FTSE 100 index fell 1.2% to 6,919.76.
Brent crude rose 80 cents to $90.111 a barrel and TTF natural gas futures plunged 9.9% to 186.50 megawatt per hour.
The euro inched higher to 97.16 U.S. cents and the British pound rebounded slightly to $1.093.
Hong Kong Extend Losses Ahead of Week of Holiday
China benchmark indexes ended flat ahead of the 7-day Golden Week holidays between October 1 and 7.
The Shanghai Composite Index eased 0.1% lower to 3,041.20, erasing most of the early gains in the day.
The Hang Seng Index ended down 0.5% to 17,165.87, after dropping to the low last seen in October 2011.
The Hang Seng index has lost about 40% in the last five years.
In Tokyo, the Nikkei 225 index gained 1.0% to 26,422.05 and the broader Topix increased 0.7% to 1,868.80.
Pharmaceuticals and resource sector stocks led the gainers.
The Japanese yen held steady at 144.52 to a dollar.
Benchmark indexes in Mumbai turned lower ahead of the rate decision from the Reserve Bank of India on Friday.
The RBI is expected to lift the key lending rate by at least 40 basis points and stem the slide in the rupee.
The Indian rupee dropped to a new low of 81.80 to a dollar.