Icahn Enterprises Shares Slump After Slashing Its Dividend Following Short-Seller Attack

1 hr 4 min ago

Icahn Enterprises (IEP) shares tumbled over 24% in intraday trading on Friday after the company cut its dividend in half in the wake of a scathing report targeting the firm by short-seller Hindenburg Research.

The investment firm owned by Carl Icahn said it would hand out $1 per depositary unit to its investors for the second quarter, which is half of its usual payout of $2 per unit. The company has been under pressure since a short-seller report by Hindenburg Research accused the company of running a “Ponzi-like” structure to pay dividends. That was followed by a federal investigation.

Since the report’s release, shares of Icahn Enterprises have shed half of their value, but Hindenburg is still bearish on the firm, writing on the X platform, “On May 2nd, we predicted that Icahn Enterprises will eventually cut or eliminate its dividend entirely, barring a miracle turnaround in investment performance… We remain short.”

Carl Icahn said in a letter published Friday that his company would refocus its strategy on activist investing after some short bets on stocks went sour.

-Kevin George

Booking Holdings Stock Takes Flight on Strong Travel Demand

3 hr 20 min ago

Shares Booking Holdings (BKNG), the parent company of Booking.com, jumped almost 10% as robust travel demand boosted the company’s sales in the latest quarter.

The company also raised its third-quarter guidance, citing persistent pent-up travel demand. It now expects gross bookings to grow more than 20% in the current quarter, compared with earlier estimates in the low teens.

The news helped lift shares of rival Expedia, which rose 4.5% after tumbling up to 18% yesterday after the company’s bookings and sales missed estimates.

-Mack Wilowski

Oil Futures Continue to Climb on Saudi Production Cut

3 hr 45 min ago

Oil futures rose more than 1% Friday morning, a day after Saudi Arabia said it would extend a production cut into September.

Saudi state media said Thursday that a 1 million barrel per day production cut, first implemented in July and repeated in August, would remain in effect through September. The cut could be extended or deepened at any time, the agency added.

The announcement sent oil futures soaring, with West Texas Intermediate and Brent crude contracts both rising about 2% yesterday.

The production cut could further drive up the price of gasoline, which has already risen 8.5% in the past month. That increase is largely attributable to earlier production cuts by Saudi Arabia, Russia, and other OPEC and OPEC+ members totaling more than 1.6 million barrels per day.

Earlier this week, the Biden administration cited high oil prices when it canceled a planned purchase of 6 million barrels for the U.S. strategic petroleum reserve.

Amazon Stock Jumps After Earnings Beat, Ad Revenues Offset Slower Cloud Growth

4 hr 41 min ago

Amazon (AMZN) shares jumped 11% Friday following the company’s stronger-than-expected second-quarter earnings, with robust ad revenue helping offset slower cloud services growth.

The e-commerce giant reported a net income of $6.7 billion in the second quarter, or $0.65 per diluted share, compared with a net loss of $2.0 billion, or $0.20 a year ago. The performance was well above Wall Street analysts’ expectations of $0.35 per share.

Net sales increased 11% to $134.4 billion in the second quarter, with double-digit gains in the company’s North America, international, and AWS segments.

Analysts may be concerned that the 12% growth in Amazon’s cloud computing business to $22.1 billion, was lower than the 33% growth rate a year ago.

Jassy said growth in AWS stabilized “as customers started shifting from cost optimization to new workload deployment.” He also referenced a host of generative AI releases that he hopes will maintain the company’s leadership position.

-Kevin George

Apple’s Growing Services Revenue Can’t Offset Slipping Product Sales

5 hr 27 min ago

Apple (AAPL) on Thursday afternoon reported a third consecutive quarter of declining revenue, with weaker demand for consumer products overshadowing growth in the company’s services business.

iPhone sales, which account for half of Apple’s revenue, fell 2% to $39.7 billion. But iPad sales, down 20% year-over-year, were the biggest drag on product revenue that fell 4.4% from last year to $60.6 billion.

Meanwhile, services revenue—including revenue from the App Store, Apple TV+, and Apple Music—hit a record $21.2 billion, an 8% increase over last year.

Despite the drop in total revenue, the company earned $1.26 a share, a 5% improvement from last year. That’s because the gross margin on products is 35%, a paltry figure compared to the services unit’s 70% margin.

Higher margins are just one reason the company has been expanding its service offerings. It’s also an attempt to reduce Apple’s dependence on iPhone sales, which at one point accounted for nearly 70% of all revenue.

The company has found some success with its services. It launched high-yield savings accounts in April, and those accounts have since attracted $10 billion in deposits. And executives boasted in their most recent earnings release that the company surpassed 1 billion paid subscriptions.

Nonetheless, Apple shares fell more than 3% Friday morning.

Stocks Making the Biggest Moves Premarket

6 hr 51 min ago

Gainers:

• DraftKings Inc. (DKNG): Shares of the sports betting company jumped as much as 12% after its earnings beat Wall Street’s estimates. The company reported a loss of 17 cents a share on $875 million in revenue. Analysts had expected a 25-cent loss per share on revenue of less than $800 million.
• Cloudflare Inc. (NET): The cloud-based cybersecurity company’s stock jumped 9% after it raised its full-year earnings outlook, citing a resurgence in tech spending fueled by a rosier economic outlook among business leaders.
• Amazon.com Inc. (AMZN): Shares of the e-commerce company rose 9% after it reported double-digit revenue growth in the second quarter and earnings of 65 cents a share, handily beating analysts’ forecasts of 35 cents a share. 

Losers:

• Fortinet Inc. (FTNT): Shares of the cybersecurity company fell more than 18% after it reported mixed second-quarter earnings and offered current-quarter revenue guidance below analysts’ expectations. 
• Apple Inc. (AAPL): Shares fell nearly 3% after the company reported a third-consecutive quarter of falling iPhone and other product sales. The premarket drop jeopardizes the tech giant’s $3 trillion market capitalization. 
• Block Inc. (SQ): Shares of the payments tech company fell more than 6% despite second-quarter results that exceeded analysts’ forecasts. Block reported earnings of 39 cents a share on $5.53 billion of revenue, while the Street expected earnings of 36 cents a share on $5.1 billion in revenue.

5 Things to Know Before Markets Open

7 hr 26 min ago

Here’s what investors need to know to start their day:

1. Job growth slowed in July, with the U.S. economy adding 187,000, below economists’ predictions of 200,000. Though wages rose slightly more than expected, growing 0.4% last month.
2. Amazon (AMZN) shares surged nearly 9% in premarket trading after the e-commerce giant reported earnings, revenue, and guidance for the third quarter that all topped analyst expectations.
3. Shares of Apple (AAPL) declined almost 2% in the pre-market after it posted quarterly revenues of $81.8 billion, in line with analyst expectations, but a decline from the $82.96 billion the iPhone maker posted last year.
4. Sports betting site DraftKings (DKNG) reported better-than-expected earnings for the second quarter, while also boosting its full-year revenue and earnings guidance.
5. Booking Holdings (BKNG) shares jumped more than 11% after the travel website beat analyst revenue expectations for the second quarter, showing that travel demand remains high.

-Terry Lane

Stock Futures Mixed on Big Tech Earnings

7 hr 44 min ago

Futures contracts tied to the Dow Jones Industrial Average were down 0.07% an hour before markets opened Friday.

E-mini S&P 500 futures contracts rose 0.05% ahead of the market open.

Nasdaq-100 futures were a little higher, up 0.07%.