The US markets closed mostly higher on Wednesday with a strong earnings report from from Tesla, IBM, Verizon and Abbott Laboratories, driving the Dow Jones to fresh record highs.
The Dow closed 0.43% higher, S&P 500 rose 0.37% while the Nasdaq 100 fell by 0.05% as Paypal Holdings lost 4.91% on reports of Pinterest acquisition.
US Markets Major News
Pinterest Acquisition by Paypal
Shares of Pinterest, Inc., the image sharing and social media service, surged close to 10% on Wednesday after a report hinted that PayPal Holdings, Inc. could decide to enter an acquisition deal with the platform.
A report by Bloomberg suggested that the San Jose-based financial technology company “recently approached” the social media company with an offer valued at $45 billion, or $70 per share.
On Wednesday, PayPal shares fell 4.9%, valuing PayPal at about $304 billion.
Goldman Sachs Raises Netflix Target Price
Goldman Sachs on Wednesday raised Netflix’s price target from $590 to $595 on Wednesday after the streaming giant posted better-than-expected results for the third quarter of 2021.
The company said its revenue jumped 16% to $7.48 billion and the number of its subscribers rose 9% year on year to reach 213.56 million.
Netflix Inc. said global paid net subscriber additions surpassed expectations at 4.4 million.
“After a lighter-than-normal content slate in Q1 and Q2 due to COVID-related production delays in 2020, we are seeing the positive effects of a stronger slate in the second half of the year… We’re very excited to finish the year with what we expect to be our strongest Q4 content offering yet, which shows up as bigger content expense and lower operating margins sequentially,” the shareholder letter noted.
Facebook Rebrand
Facebook Inc. is planning to change its company name next week in an effort to build a so-called metaverse, the Verge reported, citing a source with knowledge of the matter.
CEO Mark Zuckerberg reportedly plans to talk about the move at the company’s Connect conference on October 28, but the announcement could come sooner.
The Facebook app will likely remain unchanged and moved under a parent company overseeing other services such as Instagram and WhatsApp.
Tesla’s Q3 Record Numbers
Tesla Inc. reported on Wednesday its earnings results for the third quarter of 2021, revealing that its revenue surged 57% year on year to reach $13.76 billion as diluted (GAAP) earnings per share rose 433% to $1.44.
Tesla also noted it produced and delivered a record number of vehicles in the third trimester.
READ; Tesla Vehicle Deliveries Hit 241,300 in Q3 2021
Commenting on the outlook, Tesla said that it expects to achieve 50% average annual growth in vehicle deliveries over a multi-year horizon. Short-term, it continued to target the first Model Y production builds in Berlin and Austin before the end of 2021.
IBM Q3
International Business Machines Corporation (IBM) on Wednesday reported its earnings for the third quarter of 2021 with revenue rising o.3% to $17.6 billion.
Net income fell 33% year-over-year to land at $1.1 billion in the same quarter.
“We continue to make progress in our software and consulting businesses, which represent our higher growth opportunities. With our increased focus and agility to better serve clients, we are confident in achieving our medium-term objectives of mid-single digit revenue growth and strong free cash flow generation,” CEO Arvind Krishna noted.
Biogen Q3
American biotechnology firm Biogen Inc. on Wednesday said its revenue in the third quarter of 2021 fell by 18% to $2.78 billion as net income fell by 53% to $329 million.
Verizon Q3
Verizon Communications Inc. on Wednesday said its total revenues for the third quarter rose slightly by 4.3% to $32.9 billion.
The company’s net income rose by 45.5% from $4.5 billion to $6.6 billion with a total of 129,000 broadband ent additions, both wireline, and fixed wireless. It said total wireless service revenue jumped 3.9% compared to last year to $17.1 billion.
Verizon Chairman and CEO Hans Vestberg: “Our disciplined strategy execution demonstrated growth in 5G adoption, broadband subscribers, and business applications. We are increasing our 2021 guidance, and we continue to expand our 4G LTE and 5G network leadership. We fully expect to have a strong finish to the year as we accelerate deployment of 5G to our customers across the country.”
Abbott Q3
Abbott Laboratories on Wednesday reported that its revenue in the third quarter of 2021 was up by 23.4% to $10.9 billion. The company’s earnings per share (EPS) was up by 42.9% on to $1.17 per share.
“We achieved another quarter of strong growth overall and across all four of our major business areas,” Abbott President and Chief Executive Officer (CEO) Robert B. Ford commented. “We’re particularly pleased with the continued advancements of our new product pipeline, including several recent launches in large, high-growth markets.”
