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Last Week’s Highlights
Boeing slips as NASA picks SpaceX
Two NASA astronauts who flew to the International Space Station in June aboard Boeing’s faulty Starliner capsule will need to return to Earth on a SpaceX vehicle early next year due to issues with Starliner’s propulsion system. Consequently, Boeing shares slipped 1.4%. The astronauts are now expected to return in February 2025 on a SpaceX Crew Dragon spacecraft. Five of Starliner’s 28 thrusters failed during flight, and it sprang several leaks of helium, which is used to pressurize the thrusters. NASA officials and Boeing representatives made the decision for Crew Dragon to bring the astronauts home, despite Boeing voting for Starliner. Boeing struggled for years to develop Starliner, and the drawn-out mission has cost Boeing $125 million.
Workday jumps after Q2 revenue beat
Workday reported second-quarter revenue that beat Wall Street expectations and announced a $1 billion stock buyback plan, leading to an 11% surge in its shares. The company saw increased corporate spending on human resource and payroll, particularly in small-to-medium business segments. However, lower hirings affected its outlook, with third-quarter subscription revenue forecasted below estimates. The company is revising its medium-term plans to accelerate margin expansion and moderate subscription revenue growth. Despite challenges such as longer sales cycles and a macroeconomic environment consistent with the previous quarter, Workday raised its forecast for full-year adjusted operating margin and reported strong financial performance, including a 17% increase in subscription revenue and earnings of 49 cents per share.
Coming Up This Week
Ross Stores shares go up on higher profit forecast
Ross Stores raised its fiscal 2024 profit forecast and exceeded second-quarter expectations. The company’s success is attributed to its strategy of offering discounted branded clothing and footwear, resulting in increased store visits and customer spending. However, the CEO expressed caution due to inflationary pressures on low-to-middle income customers. The company saw increased operating margins but also experienced margin pressure due to higher discounts. Despite this, it plans to offset the impact through cost-saving measures. Ross Stores’ sales and earnings per share surpassed analysts’ estimates, leading to an upward revision of its annual earnings forecast. Nevertheless, it maintained its comparable sales growth forecast for the second half of the year at 2% to 3%.
Intuit revenue forecasts exceed expectations
Intuit announced a forecast for fiscal 2025 revenue that surpasses Wall Street estimates due to the increasing demand for its AI-driven financial management tools, despite recent price increases. The company plans to focus on customer growth with QuickBooks Online and QuickBooks Advanced, and it also disclosed an intention to hire around 1,000 employees focused on AI. However, the forecast for first-quarter revenue growth fell below market expectations due to the transition of QuickBooks desktop products to a recurring subscription model. Intuit also revealed plans for a significant workforce restructuring, including laying off 10% of its workforce, and a new $3 billion share repurchase authorization.
