Finances

HP, Inc. (HPQ) released its third quarter earnings report on Wednesday, August 28. Despite the technology company reporting an increase in quarterly revenue, its stock fell over 2% following the release of the report.

HP reported quarterly revenue of $13.52 billion. This was up 2.4% from revenue of $13.20 billion during the same quarter last year and surpassed analysts’ expectations of $13.37 billion.

“We are pleased with our return to revenue growth and proud of the innovations delivered in the quarter, including the launch of our next-generation AI PC lineup,” said HP CEO, Enrique Lores. “We remain focused on our strategic plan and will prioritize opportunities that drive long-term profitable growth, while taking decisive action to navigate a dynamic environment.” 

The company announced net income of $640 million or $0.65 per adjusted share for the quarter. This was down from $766 million or $0.76 per adjusted share during the third quarter last year.

HP’s Consumer Personal Systems (PS) segment saw a 1% decrease in revenue to $2.7 billion, while Commercial PS sales experienced an 8% increase to $6.7 billion. Consumer Printing revenue also rose 2% to $293 million and Commercial Printing had a 5% decrease to $1.1 billion. For the fourth quarter, HP expects adjusted earnings per share to be in the range of $0.74 to $0.84 and for the full year and anticipates adjusted earnings per share of $2.62 to $2.72.

HP, Inc. (HPQ) shares ended the week at $36.18, remaining relatively unchanged for the week.

Chewy Announces Earnings

Chewy, Inc. (CHWY) released its second quarter earnings report on Wednesday, August 28. After reporting increased quarterly revenue, the online pet supply company's stock rose 14% following the release of the report.

The company reported net sales of $2.86 billion for the quarter. This was up 2.6% from $2.79 billion in the same quarter last year and in line with analysts’ expectations.

“Our Q2 performance reflects another quarter of strong execution, delivering net sales at the high end of our guidance range,” said Chewy CEO, Sumit Singh. “Chewy’s compelling value proposition is driving broader and deeper customer engagement, as reflected by our 20 million active customers, which grew sequentially in the quarter, and net sales per active customer of $565, which reached a new record for the company.”

The company reported net income of $299.12 million this quarter or $0.68 per adjusted share. This was an increase from net income of $20.21 million or $0.05 per adjusted share during the same time last year.

Chewy reported just over 20 million active customers in the quarter, this was down almost 2% compared to this time last year. The company’s net sales per active customer increased to $565, over 6% increase in the quarter. Chewy’s Autoship subscription program, which allows customers to automatically reorder and deliver products, increased sales by almost 6% to $2.24 billion for the second quarter. For the third quarter of fiscal 2024, Chewy expects 3% to 4% growth in net sales ranging between $2.84 billion and $2.86 billion.

Chewy, Inc. (CHWY) shares ended the week at $28.55, up 4.7% for the week.

Salesforce Posts Quarterly Report

Salesforce, Inc. (CRM) posted its quarterly earnings report for the second quarter on Wednesday, August 28. The business software producer reported revenue and earnings that beat analysts’ expectations, causing the company’s stock to increase 4% following the release.

The San Francisco-based company reported revenue of $9.33 billion, up over 8% from $8.60 billion in revenue at this time last year. This exceeded analysts’ expected revenue of $9.23 billion for the quarter.

“In Q2, we delivered strong performance across revenue, cash flow, margin and cRPO, and raised our fiscal year non-GAAP operating margin and cash flow growth guidance,” said Salesforce CEO, Marc Benioff. “With our new Agentforce AI platform, we are reimagining enterprise software for a new world where humans with autonomous Agents drive customer success together. Salesforce is the only company with the leading apps, trusted data and agent-first platform to deliver this vision at scale and help companies realize the incredible benefits of AI.”

Salesforce posted net income for the quarter of $1.43 billion or $1.47 per adjusted share. During the same quarter last year, the company reported net income of $1.27 billion or $1.28 per adjusted share.

Salesforce’s subscription and support revenue grew over 9% year-over-year to $8.76 billion. The company’s professional services and other revenues reached $561 million, a decline of 6% from the year prior. For the third quarter, Salesforce anticipates an increase in revenue ranging between $9.31 to $9.36 billion. For the full fiscal year 2025, Salesforce raised its earnings forecast to $6.05 to $6.13 per adjusted share on revenue of $37.7 to $38.0 billion.

Salesforce.com, Inc. (CRM) shares ended the week at $252.90, down 4.4% for the week.

The Dow started the week of 8/26 at 41,201 and closed at 41,563 on 8/30. The S&P 500 started the week at 5,640 and closed at 5,648. The NASDAQ started the week at 17,868 and closed at 17,714.

U.S. Treasury yields rose throughout the week after jobless data showed fewer Americans filing unemployment claims. Yields continued to rise towards the end of the week as the Federal Reserve’s preferred inflation gauge showed signs that inflation is continuing to slow down.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment fell by 2,000 to 231,000 for the week ended August 24. This came in lower than economists’ forecast of 232,000 claims for the week. Continuing unemployment claims increased by 13,000, reaching 1.87 million.

"The soft landing narrative for the economy remains intact for now," said chief economist at FWDBONDS, Christopher Rupkey. "Corporate profits bounced back as well in the second quarter which means companies are less likely to do any belt-tightening cost cuts to adjust their headcounts."

The benchmark 10-year Treasury note yield opened the week of August 26 at 3.80% and traded as high as 3.89% on Thursday. The 30-year Treasury bond opened the week at 4.09% and traded as high as 4.18% on Thursday.

On Friday, the Commerce Department announced that the Personal Consumption Expenditure (PCE) price index, the Federal Reserves’ inflation metric, rose 0.2% in July and 2.5% over the year. Both monthly and annual inflation rates met analysts’ expectations of 0.2% and 2.5%, respectively. Core PCE, which excludes food and energy, rose 0.2% and reached an annual increase of 2.6%.

“This is a double dose of good news on inflation and economic growth,” said head of U.S. economic research at Fitch Ratings, Olu Sonola. “Inflation prints are slowly but surely becoming boring again as this report continues the recent streak of benign core and headline inflation prints.”

The 10-year Treasury note yield finished the week of 8/26 at 3.91%, while the 30-year Treasury note yield finished the week at 4.20%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, August 29. The survey showed the 30-year mortgage rate falling to the lowest level seen since May 2023.

This week, the 30-year fixed rate mortgage averaged 6.35%, down from last week’s average of 6.46%. Last year at this time, the 30-year fixed rate mortgage averaged 7.18%.

The 15-year fixed rate mortgage averaged 5.51% this week, down from last week’s 5.62%. During the same week last year, the 15-year fixed rate mortgage averaged 6.55%.

"Mortgage rates fell again this week due to expectations of a Fed rate cut,” said Freddie Mac’s Chief Economist, Sam Khater. “Rates are expected to continue their decline and while potential homebuyers are watching closely, a rebound in purchase activity remains elusive until we see further declines."

Based on published national averages, the savings rate was 0.46% as of 8/19. The one-year CD averaged 1.85%.

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