| | | An energy major just missed its earnings, while another did better than expected. A power management firm is surging upon making record-breaking profits, and a tiny biotech stock is soaring after sealing a game-changing merger. Keep reading for the latest updates. | |
|
| | | | | What to Watch | Earnings: | Abbvie [ABBV]: Premarket Charter Communications [CHTR]: Premarket W.W. Grainger [GWW]: Premarket Phillips 66 [PSX]: Premarket Broadridge Financial Solutions [BR]: Premarket | Economic Reports: | Employment Cost Index [Q4]: 8:30 a.m. Personal Income (nominal) [Dec]: 8:30 a.m. Personal Spending (nominal) [Dec]: 8:30 a.m. Core PCE Index [Dec]: 8:30 a.m. Chicago Business Barometer (PMI) [Jan]: 9:45 a.m. |
|
| | Energy | Chevron’s Q4 Earnings are Below Wall Street Expectations, But CEO Sees Growth in New Projects | | Chevron announced a 5% dividend increase today, even as its fourth-quarter earnings are below expectations due to weaker oil prices and tighter refining margins. The company’s adjusted earnings per share of $2.06 are below analysts' estimates by five cents. The results follow a similar earnings miss from competitor Shell. | Chevron’s stock is down 1.8% in premarket trade. | Despite the earnings shortfall, CEO Mike Wirth is optimistic, pointing to major developments such as the ramp-up of production at the Tengiz project in Kazakhstan and disciplined capital spending as key drivers for future financial strength. | Chevron expects an additional $10 billion in free cash flow by the end of 2026, fueled by new ventures in Kazakhstan and the Gulf of Mexico. | Shares of Chevron have risen nearly 8% this year, outperforming Exxon’s 1.9% gain. The Tengiz project, in which Chevron holds a 50% stake, is set to increase output to 1 million barrels per day later this year. However, the company generated $4.4 billion in free cash flow last quarter, falling short of the $7.5 billion it distributed in dividends and share buybacks. | Chevron is set to reduce capital expenditures in 2025 for the first time since the pandemic, signaling a shift toward maximizing cash flow. Meanwhile, its $53 billion acquisition of Hess remains in limbo due to Exxon’s legal challenge over Hess’s stake in Guyana’s Stabroek Block, with arbitration proceedings set for May and a decision expected by September. |
|
| | Energy | Exxon Beat Q4 Expectations with Higher Production, Eyes 2025 Refining Challenges | | Exxon Mobil reported fourth-quarter earnings today that are higher than Wall Street expectations, as increased oil and gas production helped offset weaker refining margins and lower crude prices. The company posted a profit of $7.39 billion. Its earnings per share of $1.67 are better than analyst projections of $1.56. | For the full year 2024, Exxon’s total earnings are at $33.46 billion, down from $38.57 billion in the previous year. The company solidified its position as the top oil producer in the Permian Basin following its acquisition of Pioneer Natural Resources in May. Meanwhile, its operations in Guyana continued to deliver strong returns despite industry-wide pricing pressures. | Exxon had previously warned that lower refining margins could reduce quarterly earnings by $300 million to $700 million compared to the third quarter. Increased refinery capacity in Asia and Africa has led to greater global fuel supply, even as gasoline and diesel demand remains subdued. | CFO Kathryn Mikells acknowledged the ongoing pressure on refining margins and emphasized that the company is closely monitoring market conditions heading into 2025. Additionally, Exxon remains engaged in arbitration regarding Chevron’s planned acquisition of Hess, asserting its contractual rights to Hess’ stake in the Guyana oil venture. | Despite these challenges, Exxon maintained strong shareholder returns, distributing $36 billion in buybacks and dividends in 2024, up from $32 billion the prior year. The company’s free cash flow of $36.2 billion fully covered these payouts, reinforcing its commitment to investor value. |
|
| | | | Power Management | Eaton Shares Rising Over 3% as Q4 Earnings Hit Record Highs | | Eaton Corporation reported record fourth-quarter earnings today, exceeding analyst expectations and driving a 3% increase in its stock price. | The intelligent power management company posted an adjusted earnings per share of $2.83, slightly ahead of the projected $2.82. Revenue is at $6.2 billion, reflecting a 5% year-over-year increase, though it is slightly below the anticipated $6.35 billion. | The company achieved record segment margins of 24.7% in Q4, marking a 190-basis-point improvement from the prior year. Organic sales growth stood at 6%, driven by strong demand across key business segments. CEO Craig Arnold highlighted the company’s ability to consistently meet its financial commitments while delivering strong profitability. | For the full year 2024, Eaton reported $24.9 billion in sales, up 7% from the previous year, with adjusted earnings per share surging 18% to $10.80. Looking ahead, the company has issued a positive forecast for 2025, projecting adjusted earnings per share between $11.80 and $12.20—an 11% increase at the midpoint, aligning with Wall Street expectations. | Eaton also anticipates organic growth of 7-9% and expects segment margins to remain strong at 24.4-24.8% for the year. Order growth has been particularly strong, with Electrical Americas orders up 16%, contributing to a 27% backlog increase in the Electrical segment and 16% in Aerospace. With solid financials and a strong demand pipeline, Eaton remains positioned for continued expansion in 2025. |
|
| | FMCG | Colgate-Palmolive Posted Record Annual Revenue Despite Q4 Shortfall | | Colgate-Palmolive reported fourth-quarter earnings today that are below revenue expectations, which is causing its stock to decline 1.5% during early trading. | The consumer goods giant’s revenue of $4.94 billion for the quarter is below the projected $5.03 billion. However, adjusted earnings per share (EPS) are at $0.91, slightly ahead of the expected $0.90. | Organic sales grew 4.3% year-over-year in Q4, driven by a 2.5% increase in volume and a 1.8% rise in pricing. Despite the quarterly revenue miss, Colgate-Palmolive reached a significant milestone in 2024, surpassing $20 billion in net sales for the first time. Full-year revenue climbed 3.3% to $20.1 billion, with organic sales increasing by 7.4%. | CEO Noel Wallace emphasized the company’s strong performance, citing improvements in gross profit, net income, and cash flow. Gross profit margins expanded by 70 basis points to 60.3% in the fourth quarter. | Looking ahead, Colgate-Palmolive has issued cautious guidance for 2025, expecting net sales to remain flat due to foreign exchange headwinds. Organic sales growth is projected to fall within the company’s long-term target of 3% to 5%. | The company continues to dominate the global oral care market, maintaining a 41.4% share in toothpaste and a 32.2% share in manual toothbrushes. However, with revenue growth expected to slow, investors appear concerned about near-term challenges. |
|
| | Movers and Shakers | | NLS Pharmaceutics Ltd. [NLSP] - Last Close: $1.98 | NLS Pharmaceutics Ltd. is a Swiss clinical-stage biopharmaceutical company that develops innovative therapies for rare and complex central nervous system disorders. | Its stock is surging by nearly 40% in premarket trading following the approval of its merger with Kadimastem Ltd. by Kadimastem's shareholders. This strategic merger will give NLSP a robust portfolio of advanced therapies for neurodegenerative diseases and diabetes. | My Take: This could be a key moment for NLSP to break out. Keep a close watch on how the merger progresses. |
|
|
|
| Atlassian Corporation [TEAM] - Last Close: $266.95 | Atlassian is the creator of market-leading collaboration and productivity software like Jira and Confluence. The company’s shares are surging today due to its strong Q2 results. | Its total revenue is up 21% year-over-year, reaching $1.29 billion and surpassing analyst expectations of $1.24 billion. Adjusted earnings per share are also above forecasts, coming in at $0.96 compared to the anticipated $0.78. | My Take: Atlassian has been struggling with its profit margins in the last two quarters but in this quarter they have come back strong. With a ~$70B market cap and nearly $4B in annual revenue, this is a solid stock to keep on your radar. |
|
|
|
| Cipher Mining Inc. [CIFR] - Last Close: $4.70 | Cipher Mining Inc. is a Bitcoin mining firm. Its stock is up 13% in premarket trading today after announcing a $50 million investment from Japan’s SoftBank Group. The stock has already gained 61% in the last year, signaling positive momentum. | My Take: CIFR’s quarterly net margins plunged -350% in the third quarter. Though the stock is up with the Bitcoin tailwind, and the new SoftBank investment is also good news, it might be worthwhile to remain cautious about this stock for now. |
|
|
|
| | | | | | That’s all for today. Thank you for reading. If you have any feedback, please reply to this email. | Best Regards, | — Adam Garcia Elite Trade Club |
|
| 📧 Like newsletters? Here are some newsletters our readers also enjoy. Explore | | | Click here to get our daily newsletter straight to your cell for free. | P.S. Just like this newsletter, it's 100% free*, and you can stop at any time by replying STOP. |
| |
|
|
|