On Tuesday, U.S. stock futures exhibited a subdued performance, consolidating gains from the previous session as investors awaited a flurry of significant corporate earnings releases. By 06:30 ET (11:30 GMT), the Dow Futures contract showed a marginal decline of 45 points, or 0.1%, the S&P 500 Futures remained largely unchanged, and the Nasdaq 100 Futures held a broadly flat position.
In the previous trading day, major U.S. indices closed higher, extending the recent rally. The Dow Jones Industrial Average, a blue-chip index, gained nearly 140 points or 0.4%, achieving a historic close above 38,000 for the first time.
The recent upswing in the stock market, following a lackluster start to the year, is attributed to optimism surrounding potential interest rate cuts by the Federal Reserve, aiming for a “soft landing” for the U.S. economy. The focus now shifts to key economic data scheduled for later in the week, including fourth-quarter GDP on Wednesday and December’s personal consumption expenditures data on Thursday.
Investors are particularly attuned to corporate earnings, with the momentum hinging on whether the upcoming results justify the currently elevated valuations. Streaming giant Netflix (NASDAQ:NFLX) is set to report results after the market close, with positive expectations fueled by measures such as cracking down on password-sharing and the introduction of paid sharing in major revenue-contributing countries.
Other notable companies scheduled to release quarterly results include pharmaceutical giant Johnson & Johnson (NYSE:JNJ), consumer goods leader Procter & Gamble (NYSE:PG), as well as manufacturing conglomerates 3M (NYSE:MMM) and General Electric (NYSE:GE).
In the premarket, United Airlines (NASDAQ:UAL) experienced a notable surge of over 6% after reporting fourth-quarter adjusted profit per share that exceeded estimates, citing its “busiest travel period in history” last month. Competitors American Airlines (NASDAQ:AAL) and Delta Air Lines (NYSE:DAL) also saw positive movement in response to the results.
Meanwhile, oil prices retreated on Tuesday, reversing earlier gains, as U.S. and British forces conducted strikes on Houthi sites in Yemen. The aim was to degrade the missile and surveillance capabilities of the Iran-aligned group, which has disrupted Red Sea shipping. U.S. crude futures traded 0.9% lower at $74.08 a barrel, while the Brent contract dropped 0.9% to $79.34 a barrel.
Later in the session, the American Petroleum Institute is expected to release the latest U.S. crude inventories data, with forecasts suggesting a decline of approximately 3 million barrels in the week ending Jan. 19.
In other markets, gold futures edged up by 0.1% to $2,024.65/oz, while the EUR/USD pair traded 0.2% lower at 1.0864.
Lockheed Martin Beats Expectations with Strong Q4 Earnings and Record Backlog, Eyes Optimistic FY2024 Projections
Lockheed Martin (NYSE:LMT) experiences a marginal premarket dip as it surpasses analyst expectations in its latest quarterly earnings report. The company reports adjusted Q4 earnings of $7.90 per share, outperforming the estimated $7.28 per share, and records revenue of $18.87 billion, exceeding the consensus estimate of $17.95 billion. With net sales reaching $67.6 billion in 2023, Lockheed Martin also highlights a “record backlog of $160.6 billion.”
Jim Taiclet, Chairman, President, and CEO of Lockheed Martin, expresses satisfaction with the company’s robust finish to 2023, attributing it to the sustained strong demand for their advanced defense technology solutions across all domains.
Looking ahead to FY2024, Lockheed Martin projects adjusted EPS in the range of $25.65 to $26.35, slightly below the consensus of $26.62. The revenue forecast for FY2024 is optimistic, ranging from $68.5 billion to $70 billion, surpassing the consensus estimate of $68.65 billion.
United Airlines Surpasses Q4 Estimates, Faces Q1 Loss Amid 737 Max 9 Grounding, Optimistic Full-Year Guidance
United Airlines surpasses Q4 estimates but anticipates a wider loss in the current quarter, impacted by the recent grounding of Boeing’s 737 Max 9 jet. Chicago-based United (NASDAQ:UAL) experiences a premarket surge, influencing gains in American Airlines (NASDAQ:AAL) and Delta Air Lines (NYSE:DAL).
The Q4 results reveal United’s adjusted earnings per share at $2.00 on revenue of $13.63 billion, attributed to its record-breaking travel period in the last two weeks of December, offsetting “unpredictable headwinds.” Analysts’ expectations of $1.70 per share on revenue of $13.55 billion are exceeded. The decrease in aircraft fuel expenses during the quarter also contributes to a 0.1% reduction in cost per average seat mile, indicating improved efficiency compared to the same period last year.
Despite the positive Q4 performance, United anticipates a wider loss in Q1, ranging from $0.35 to $0.85, primarily due to the grounding of the 737 Max 9. This follows a mid-air cabin panel blowout on a model operated by Alaska Airlines. Wall Street projections had anticipated a loss of $0.18 per share.
United, having the largest number of 737 Max 9s in its fleet, estimates an approximately 3 percentage-point increase in incremental adjusted expenses per available seat mile in Q1 due to the ongoing issues.
However, analysts at Morgan Stanley find United’s guidance for full-year adjusted diluted earnings per share of $9.00 to $11.00 “comfortably above consensus” and “very encouraging,” indicating optimism despite challenges posed by the 737 Max 9.
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