Good morning investors! The earnings season is now in full swing.
Fun fact: Since 1950, October has delivered more single-day 2 percent S&P moves than any other month.
Today we cover:
Netflix disappoints
More earnings
Making earnings work for you
📊 Economy and News
Netflix shares drop after streamer misses earnings estimates
Shares of Netflix fell as much as 7% after the company posted a third-quarter earnings miss after the closing bell Tuesday.
Here are the figures:
Earnings per share: $5.87 vs. $6.97, according to LSEG
Revenue: $11.51 billion vs. $11.51 billion, according to LSEG
Netflix reported net income of $2.55 billion, or $5.87 per share, up from $2.36 billion, or $5.40, in the same quarter a year prior.
For the full-year, Netflix is predicting $45.1 billion in revenue, a 16% jump from the year prior, and in line with previous expectations of revenue growth of between 15% and 16%.
The company did alter its operating margin forecast for the year, stating that it now expects it to be 29% instead of the prior projection of 30%. Netflix cited the impact of the Brazilian tax matter for that change.
Also, Netflix has signed on Mattel and Hasbro to make toys and consumer products based off “KPop Demon Hunters.”
Global hits:
Canada’s inflation rate rises in September on smaller drop in gasoline prices.
Argentina economic activity growth seen slowing to 2.5% in August.
Takaichi elected Japan’s premier, shattering glass ceiling with hard-right turn.
Controversial: Trump wants $230 million from DOJ for investigating him. Elsewhere, Take Back Tesla campaign urges shareholders to reject Musk $1 trillion pay plan. Lastly, Facebook founder Zuckerberg must take witness stand at social media safety trial.
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📈 Stocks
S&P 500 6,735.35 (+.00330%)
DJIA 46,924.74 (+0.47%)
NASDAQ 22,953.67 (-0.16%)
BRENT CRUDE 61.23 (-0.01%)
* Prices as of Mar 3rd, 12:20 AM UTC
Big earnings are here
General Motors beat earnings expectations on the top and bottom lines. The automaker also raised its guidance for the year and said it was expecting a smaller tariff impact than previously forecast. GM stock had its second best day, jumping 15%, on the market since its 2009 emergence from bankruptcy.
Coca-Cola beat Wall Street’s expectations for its third-quarter earnings and revenue. The beverage company also reiterated its full-year forecast. The company’s unit case volume rose 1%, a reversal from last quarter’s decline.
GE Aerospace, Northrop Grumman, RTX and Lockheed Martin all raised their 2025 outlooks in their earnings reports Tuesday morning, citing higher demand. The defense firms also topped earnings estimates for the third quarter. The reports come as investors weigh the impact of tariffs, the government shutdown and more.
Mattel missed earnings and revenue expectations for the third quarter. CEO Ynon Kreiz said the company was “challenged in the third quarter by industry-wide shifts in retailer ordering patterns.” During the third quarter, global sales of Barbie and Fisher-Price declined by double digits.
3M posted stronger margins and boosted guidance as its portfolio tilt toward higher-return products and cost discipline fed through to results. Supportive read-throughs include cash generation and operating leverage. Watch lingering legal and macro volume risks.
RTX delivered 12 percent sales growth, raised its outlook, and highlighted a large backlog, keeping defense demand in focus. Positives include free-cash acceleration and order visibility. Risks include program execution and any geopolitical procurement delays
Good to know: Warner Bros. Discovery-owned HBO Max is raising prices for all tiers: Basic with ads now costs $10.99, Standard costs $18.49, and Premium, $22.99. Also, Warner Bros. Discovery says it’s open to a sale, helping shares jump 10%.
DraftKings acquires predictions platform Railbird.
Amazon continues expansion of ultrafast 15-minute delivery to UAE after India launch.
Look here: Beyond Meat soars 146% after addition to meme ETF, Walmart deal.
Novo Nordisk chair and directors quit after boardroom rift.
OpenAI launched Atlas, a ChatGPT-centric web browser with summarization and agent-mode task automation, initially on macOS and rolling out to other platforms.
💵 Personal Finance
Make earnings week work for you
Corporate earnings can move stocks quickly, but the edge for individual investors is preparation.
Today is a great day to tighten your checklist before after-hours reports hit and pre-market commentary sets the tone.
Start by deciding what you actually need from a company in the next twelve months. If your thesis hinges on margins, prioritize operating margin and free cash flow per share. If it is a share-gain story, look for unit growth and customer adds rather than only revenue.
Compare reported growth to last quarter and to the company’s own guidance to see whether trends are accelerating or simply meeting expectations.
When management updates the outlook, translate it into a rough price-to-earnings multiple using the midpoint, then compare that to the stock’s five-year average. If the new multiple is higher than usual without a clear improvement in the business, you are paying more for the same output.
Volatility clusters around calls, so plan how you would act before the numbers hit. If you scale into positions, split your order across several days to avoid chasing the first reaction. If you hold long term, consider whether today’s news invalidates your thesis or simply changes timing. A one-time charge or a currency headwind rarely breaks a durable business, but a guidance cut tied to weaker demand in the core category is more serious.
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.