Markets Take a Breather; Late Q4 Earnings Stronger

Thursday, February 20, 2025

Market indexes started out in a cranky mood this morning after cautious guidance from Walmart WMT regarding potential tariff hits to its imports in the coming quarters. It provided a good excuse for the market rally to take a breather and book some profits as the final leg of Q4 earnings season proceeds.

We finished off session lows, but the Dow lost -450 points on the day, -1.01%, while the S&P 500 came in -26 points, -0.43% — breaking its two-day streak of all-time closing highs. Nasdaq dropped -93 points, -0.47%, while the small-cap Russell 2000 slid -20, -0.91%. The Dow and the Russell are now in the red over the past five trading days.

January LEI Dips Lower than Expected

U.S. Leading Economic Indicators (LEI) from the Conference Board for January came in at -0.3% earlier today, slightly below the -0.2% anticipated and the +0.1% reported for December. LEI numbers over the trailing six months is now -0.9%, which is still better than the -1.7% from the prior six months.

As its title would indicate, Leading Economic Indicators is a gauge of business confidence for the near term. But while LEI has been on a downturn over the past year, its Coincident Economic Indicators (CEI) — a print of the current state of the economy — remains on an upward trajectory after a steep drop during the Covid pandemic.

After-Market Earnings Roundup: BKNG, DBX, RIVN

Online travel giant Booking.com BKNG outperformed expectations in its Q4 report released this afternoon, with earnings of $41.55 per share easily surpassing the $235.64 analysts were looking for. Revenues similarly made easy work of outpacing estimates to $5.5 billion in the quarter. Gross Bookings performed better than expectations, +17% from the year-ago quarter. Shares had been up strongly on the news, but have now come back down to closing-bell levels. The stock is up +35% over the past year.

Check out the updated Zacks Earnings Calendar here.

Cloud-based content-sharing service Dropbox DBX also came out with Q4 figures after the bell, with earnings of 73 cents per share zipping past the 62 cents in the Zacks consensus. Revenues of $644 million neatly outperformed the $638.5 million projected. This company has not missed a quarterly earnings estimate in its entire publicly traded history. Slowing customer growth has put a drag on shares in late trading, down -5% at this hour.

EV competitor Rivian RIVN posted a better-than-expected loss per share in its Q4 report in late trading, with -46 cents per share a nice improvement from the -66 cents analysts had been expecting (and much improved from the -$1.36 per share reported a year ago). Revenues of $1.73 billion also nicely improved over the estimated $1.43 billion. Gross profit reached $170 million in the quarter, and shares are +5% in the after-market.

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Walmart Inc. (WMT): Free Stock Analysis Report
 
Booking Holdings Inc. (BKNG): Free Stock Analysis Report
 
Dropbox, Inc. (DBX): Free Stock Analysis Report
 
Rivian Automotive, Inc. (RIVN): Free Stock Analysis Report

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