Netflix stock dives, AT&T, GE Vernova, and Hilton rise as Tesla earnings loom

GE Vernova (GEV) stock rose nearly 4% in premarket trading as the company reported “robust” orders and backlog, a sign that the industrial company continues to benefit from the build-out of artificial intelligence infrastructure.

Orders rose 55% during the quarter to $14.6 billion, led by its power and electrification equipment division. GE Vernova's backlog also grew to $6.6 billion.

While GE Vernova's third quarter profits of $1.64 per share were lighter than analysts' expectations for $1.86 per share, the company reiterated its full-year revenue forecast, seeing sales on the higher end of $36 billion to $37 billion.

Year to date, GE Vernova stock is up over 77% as orders for equipment to power data centers and other projects pick up. GE Vernova also noted it's seeing “favorable price” and EBITDA margin growth as utilities are willing to pay up to keep up with demand.

“This era of increased electricity investment has just started,” CEO Scott Strazik said in the earnings release.

Hilton (HLT) reported adjusted third quarter earnings that beat Wall Street expectations as hotel occupancy remained subdued as consumers pulled back on travel. Shares of the hotel operator rose 3% in premarket trading.

Revenue per available room (RevPAR), a key performance metric in hospitality, declined 1.1% compared to Q3 a year ago. For the full year, Hilton expects the metric to be flat to up 1%.

Adjusted earnings per share of $2.11 beat expectations for earnings of $2.05, according to S&P Global Market Intelligence. Including one-time charges, profits came in at $1.78 per share.

Hilton CEO Christopher Nassetta said in a statement, “We remain optimistic, that in the U.S., lower interest rates, a more favorable regulatory environment, certainty on tax policy and a significant investment cycle will accelerate economic growth and travel demand.”

The company raised its full-year profitability outlook. Hilton now expects adjusted profits to be between $7.97 and $8.06, up from its previous projection of between $7.83 and $8.00.

Texas Instruments (TXN) stock dived 7% following a weaker-than-expected forecast for the fourth quarter.

The chipmaker expects to bring in $4.22 billion to $4.58 billion in sales in Q4, which has a midpoint below the Street's estimate of $4.49 billion. Texas Instruments also guided for earnings per share of between $1.13 and $1.39, less than the consensus estimate of $1.40 per share.

“The overall semiconductor market recovery is continuing but at a slower pace than prior upturns, likely related to the broader macroeconomic dynamics and uncertainty,” executives said on the call (listen here).

For the third quarter, Texas Instruments reported a profit of $1.48 per share in the third quarter, in the middle of its guidance for between $1.36 per share and $1.60 and slightly below analyst expectations for earnings of $1.49 per share, according to S&P Global Market Intelligence.

Revenue grew 14% year over year to $4.74 billion, above analysts' expectations.

Capital One (COF) reported strong revenue growth in the third quarter, bouncing back from a net loss in the second quarter due to its acquisition of Discover.

Capital One's total net revenue increased 23% to $15.4 billion, surpassing consensus estimates for revenue of $15 billion, according to S&P Global Market Intelligence. Earnings per share were $4.83 for the quarter, also above expectations of $4.36.

Capital One executives are expected to provide an update on consumer health during the earnings call at 5 p.m. ET. You can listen to the call in real-time here.

Notably, the financial services company reduced its provisions for credit losses to $2.7 billion from $8.7 billion previously.

Shares of Philip Morris (PM) fell as much as 8% after the tobacco giant reported third quarter earnings.

Growth in the company's smokeless segment offset expected declines in cigarette sales.

Cigarette shipments fell 3.2% in the third quarter, while shipments of smoke-free products, which include Zyn nicotine pouches, vapes, and heated tobacco products, increased 16.6%. Philip Morris's smoke-free products, which make up about 42% of the company's revenue, also became more profitable, the company said.

“Our global smoke-free portfolio is outgrowing the industry by a clear margin, driving positive total volumes, strong top-line growth and impressive margin expansion,” CEO Jacek Olczak said in the release.

Overall, Philip Morris reported earnings per share of $2.23, above consensus estimates of $1.98 per share, according to S&P Global Market Intelligence. The company also raised the lower end of its full-year earnings per share guidance by $0.03 to $7.46-$7.56, which assumes 13.5% to 15.1% earnings growth.

Industrial conglomerate 3M (MMM) raised its annual earnings outlook after revenue slightly beat estimates. 3M's stock rose less than 1% ahead of the opening bell.

Sales rose to $6.3 billion, compared to Wall Street estimates of $6.2 billion, according to S&P Global Market Intelligence. Adjusted earnings per share of $2.19 increased 10% year over year and topped estimates of $2.07.

The company noted strong demand in electronics, industrial adhesives, and tapes, as well as advanced materials, aerospace, and defense. However, its auto aftermarket segment was challenged.

3M's consumer segment, which produces items like Post-It notes, was also soft, and the company said that consumer discretionary spending remains subdued.

3M raised its full-year profit guidance to $7.95-$8.05 from $7.75-$8.

Halliburton (HAL) grew its total revenue in the third quarter, even as oil prices fell on oversupply concerns. Its shares rose over 5% in premarket trading.

Impairment charges weighed on overall earnings, but adjusted for those one-time charges, earnings of $0.58 per share topped Wall Street estimates for earnings of $0.50.

Overall revenue slipped to $5.6 billion from $5.69 billion a year ago. Though revenue still beat estimates of $5.38 billion, according to S&P Global Market Intelligence.

“I am pleased with Halliburton’s third quarter performance,” commented Jeff Miller, Chairman, President and CEO. “We are committed to returning cash to shareholders, maintaining cost and capital discipline, and investing in differentiated technologies that drive long-term performance.”

On Monday night, shortly before Tuesday's earnings report, Halliburton and energy technology developer VoltaGrid announced a partnership that will see Halliburton supply power generation equipment for VoltaGrid's data center customers.

The collaboration is expected to see an initial roll-out in the Middle East.

“The demand for power and for AI is like nothing I've ever seen in terms of demand growth and that we've watched that, and we also know that not only in the U.S. but around the world, the rest of the world is a really big opportunity set for the same level of growth,” Miller said.

“From a Halliburton perspective, we've got boots on the ground in 70 countries. We've got excellent execution skills, a proven manufacturing, and we also have global scale, industrial global scale, which I think is critical.”

GE Aerospace (GE) stock rose over 2.5% after the jet engine maker reported a big profit beat and raised its full-year guidance.

Adjusted revenue grew 26% over the previous year to $11.3 billion, powering adjusted earnings per share of $1.66, well above Wall Street estimates for earnings per share of $1.47, according to S&P Global Market Intelligence.

For the full year, GE Aerospace raised its EPS forecast to $6.00-$6.20 per share from $5.60-$5.80 previously.

The company's commercial engines and services business was a major driver during the quarter, with orders up 32% and revenue up 28%. The company now sees revenue in the segment growing in the mid-20s range for the year, up from prior guidance of revenue in the high teens.

“GE Aerospace delivered an exceptional quarter with revenue up 26%, EPS up 44%, and more than 130% free cash flow conversion,” GE's CEO Larry Culp said in a statement. “Given the strength of our year-to-date results and our expectations for the fourth quarter, we're raising our full-year guidance across the board.”

Yahoo Finance's Brooke DiPalma reports:

Read more here.

Yahoo Finance's Pras Subramanian reports:

Read more here.

Shares of Zions Bancorporation (ZION) rose 3% in after-hours trading after the bank suggested that a large loss during the quarter was limited to a couple of faulty loans and not a sign of widespread credit stress.

Zions stock dropped 13% in one day last Thursday after the regional bank disclosed it filed a lawsuit to recoup $60 million from investment funds Cantor II and Cantor IV. At the same time, another regional bank, Western Alliance (WAL), sued another Cantor fund for alleged fraud. However, commentary from several regional lenders in recent days has largely calmed the market's jitters about credit quality.

“The quarter’s credit results were marred by a $50 million charge-off, and a $10 million specific reserve established against the approximate remaining balance, arising from loans to two related companies in which apparent irregularities and misrepresentations were recently detected,” CEO Harris Simmons said in Zions' earnings release.

“Legal action has been initiated to pursue recovery of the amounts owed from guarantors of the credits. Excluding this loss, remaining net charge-offs were very benign at $6 million, or 4 basis points of average loans on an annualized basis.”

Zions reported that net interest income rose 8% year over year to $672 million while the bank's provision for credit losses rose to $49 million, compared with $13 million the previous year, primarily due to the specific charge-offs.

Diluted earnings per share of $1.48 beat estimates for $1.40 per share, according to S&P Global Market Intelligence.

Yahoo Finance's Jake Conley reports:

Read more here.

The earnings season is starting to pick up steam, with 13% of S&P 500 companies reporting this week. So far, investors have seen more positive earnings surprises than usual, but signs of worry still abound, according to Bank of America analysts.

The analysts estimated that 76% of S&P 500 companies that have shared results so far have reported earnings beats, which is ahead of the week one average of 68%. The artificial intelligence arms race and capital expenditures cycle remain strong themes, they noted.

Slated to report earnings this week are Netflix (NFLX), Tesla (TSLA), Procter & Gamble (PG), General Motors (GM), and Ford (F), among others. That tees up a rush of earnings the following week, with 44% of S&P 500 companies reporting in the final week of October (see chart below).

Ally Financial (ALLY), a digital bank and auto financing company, said it's not seeing significant deterioration in its subprime lending business.

“We're observing consumer behaviors that are honestly better than our expectations,” Ally CEO Michael Rhodes said on the company's third quarter earnings call. “And I appreciate there's a lot of macro uncertainty in the environment, but we're not seeing that impact our credit performance.”

In Q3, Ally reported earnings per share of $1.18, topping estimates for $0.96 per share, according to S&P Global Intelligence. Revenue of $2.17 billion also surpassed expectations for $2.10 billion.

The lender received a record 4 million auto financing applications during the quarter. Its auto net charge-off rate — or debt the company is owed that is unlikely to be repaid — fell by 36 basis points year over year to 1.88%, below the 2.24% charge-off rate in Q3 2024.

Listen to a replay of the earnings call here.

Truist (TFC) stock rose 1.5% in premarket trading as the Charlotte, N.C.-based bank recorded a rise in third quarter profit on Friday.

Net income rose to $1.3 billion, representing $1.04 per diluted share, which exceeded Wall Street analyst estimates of $0.99 per share. Noninterest income increased 11% to $158 million, versus the second quarter, due to greater activity in investment banking, trading, and wealth management.

The bank said it saw broad-based loan growth during the quarter, while average deposits decreased 1%.

It also noted that loans that were 90 days or more past due rose by 1 basis point quarter over quarter, totaling $584 million at the end of September. In general, regional bank earnings eased some of the market's concerns about credit stress on Friday after Zions (ZION) and Western Alliance (WAL) alleged fraud on some of their loans.