Peloton produces profit for the first time amid pandemic-demand spike, stock pushes toward new record


Peloton Interactive Inc. reported fiscal fourth-quarter earnings Thursday afternoon.


MarketWatch photo illustration/iStockphoto

A year after its initial public offering, Peloton Interactive Inc. is pedaling toward new highs amid a pandemic that is forcing people into their homes and away from gyms, creating demand for at-home fitness equipment.

Peloton
PTON,
-3.75%

on Thursday wrapped up its fiscal year by reporting that sales and subscribers roughly doubled in the 12-month period, and revealed its first profitable quarter as a public company and record quarterly revenue a little less than a year after its September 2019 IPO. Shares fell 3.8% Thursday from Wednesday’s record closing price of $91.17 — more than three times the IPO price of $29 a share — but pushed back toward record highs in after-hours trading following the release of the report, with gains of more than 7%.

Peloton reported fiscal fourth-quarter profit of $89.1 million, or 27 cents a share, on sales of $607.1 million, up from $223 million a year ago. Peloton reported a net loss of $47 million in the fiscal fourth quarter a year ago, just ahead of its IPO. Analysts on average expected earnings of 10 cents a share on sales of $586 million, according to FactSet.

“It has been another staggering year of growth, and I know all parts of the organization have had to work together to do everything possible to meet the incredible demand for our products and services,” Chief Executive James Foley said in a conference call Thursday. “The strong tailwind we experienced in March as the COVID-19 pandemic took hold has continued to propel demand for our products into the fourth quarter and first couple of months of Q1 fiscal year 2021.”

While still attempting to catch up to a flood of orders amid the COVID-19 pandemic — Peloton said Thursday it does not expect order-to-delivery times to normalize until around the end of the calendar year — the company is also looking to expand its customer base. On Monday, Peloton announced that it will reduce the price of its standard exercise bike and introduce a lower-priced treadmill, which could clear a path for potential buyers who were not willing to pay the large upfront costs for its products. It will also introduce a premium bike for fans who want top-of-the-line equipment.

Wedbush analysts noted that in a previous survey of 1,200 people, they found that Peloton could “dramatically improve” sales at a lower price point, especially in treadmills.

“42% of non-Peloton owners that were interested in fitness and familiar with the brand showed some level of interest in a $2,500 Tread, compared to just 30% showing interest in the current Tread,” the analysts wrote in a Sept. 9 note, after Peloton announced its new lineup. “Among existing Peloton bike owners, the number of respondents saying they would be ‘very interested’ in owning a treadmill from Peloton doubles based on the lower price, from 14% based on the $4,295 price point to 28% assuming a theoretical (at the time) $2,500 price point.”

While lower sales prices could hurt hardware margins and average selling prices, much of Peloton’s long-term prognosis focuses on the subscriptions for interactive workout media that owners continue to pay after they have received the equipment. Peloton announced Thursday that it now has 1.09 million subscribers, nearly doubling the 511 million that it reported at the end of its last fiscal year, topping its forecast of 1.04 million to 1.05 million.

In total for the fiscal year, Peloton collected revenue of $1.46 billion from the sale of equipment and $363.7 million from subscription services, up from $719 million and $181 million, respectively, in the previous fiscal year. Combined with other revenue from merchandise and other offerings, Peloton ended the year with $1.83 billion in sales, up from $915 million.

“By the end of FY 2020 our Peloton membership base grew to approximately 3.1 million, compared to 1.4 million members in the prior year,” Peloton detailed in a letter to shareholders Thursday. “Fueled in part by the challenges associated with COVID-19, member engagement reached new highs with 164 million Connected Fitness Subscription workouts completed in FY 2020.”

For the current fiscal year, which began in August, Peloton predicted htat subscribers and revenue would roughly double yet again. The company guided for revenue of $3.5 billion to $3.65 billion, with connected subscribers swelling to 2.05 million to 2.1 million. Analysts on average were predicting revenue of $2.74 billion and subscribers of 1.78 million ahead of the report, according to FactSet.

Peloton stock has gained more than 260% since its IPO; the S&P 500 index
SPX,
-1.75%

has returned 17.7% in that time. In after-hours trading Thursday, shares topped $94 following the release of the report.



Original source link

California grid operator warns of rotating power outages in record heat wave By Reuters


2/2
© Reuters. Surfers walk out of the Pacific Ocean on the first day of a record heat wave in Hermosa Beach, near Los Angeles

2/2

(Reuters) – The California Independent System Operator (ISO) declared a “Stage 2” power emergency late on Saturday, warning that rotating power outages were possible amid a record heat wave.

A Stage 2 power emergency means the ISO has taken all mitigating actions but can no longer provide its expected energy requirements.

Temperatures of up to 125 degrees Fahrenheit (49 Celsius) were set to punish California through the Labor Day weekend, raising the risk of wildfires and rolling blackouts.

California Governor Gavin Newsom on Friday declared a state of emergency, a proclamation that allows power plants to operate beyond normal limits through the three-day holiday weekend.

The National Weather Service (NWS) forecast a heat wave carrying “rare, dangerous and very possibly fatal” temperatures across Southern California for the holiday weekend.

State officials urged Californians to turn off unnecessary appliances and lights to help avoid blackouts from an overwhelmed power grid.

Authorities also asked power generators to delay any maintenance until after the weekend to prevent blackouts like the two nights of rolling outages in mid-August as residents cranked up their air conditioning.

This weekend was expected to be hotter than the one in mid-August that helped trigger the second- and third-largest forest fires in California history. Those fires are still burning.

Death Valley in California’s Mojave desert registered one of the hottest air temperatures recorded on the planet of 130F (54C) on Aug. 17, and highs of around 124 were expected there on Sunday, the NWS said.

San Francisco-based power provider PG&E Corp said on Saturday that it may be asked by the grid operator to turn off power due to the “extreme heat.” It urged customers to conserve power.

The company said it may have to cut power early on Monday and Tuesday in parts of Northern California as hot, dry winds are expected to threaten the region.

PG&E said its potential power shut-offs may impact parts of 17 counties, which would include about 103,000 customers.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Original source link

Indian companies raise record $31 billion equity capital in shrinking economy By Reuters


© Reuters. A general view of Mumbai’s central financial district

By Scott Murdoch and Patturaja Murugaboopathy

HONG KONG/BENGALURU (Reuters) – Indian companies have raised a record $31 billion in equity capital in 2020, Refinitiv data showed, as banks strengthen their balance sheets to prepare for future economic uncertainty and corporates tap into the elevated global liquidity levels.

The record raising comes despite India’s economy contracting 23.9% in the June-quarter, year on year, which puts it on track for the first annual contraction since 1980.

The rush of deals though has not been extended to initial public offerings (IPOs), which have fallen to a five-year low to be worth just $1.5 billion, in the eight months year to date, the data showed.

(Graphic: Indian companies’ equity offerings, https://fingfx.thomsonreuters.com/gfx/mkt/xlbvglmewpq/equity%20offerings.jpg)

Banks have been the most active issuers, raising $13.68 billion, followed by the energy and power sector with $7.05 billion, and consumer products with $3.41 billion.

(Graphic: FII investments this year, https://fingfx.thomsonreuters.com/gfx/mkt/rlgvdoqzapo/FII%20investments.jpg)

Reliance Industries ‘ (NS:) $7-billion raising in June was the country’s largest, the data showed, as the company turned net debt-free and is now looking to expand its consumer business by acquiring Future Group’s retail arm.

Real estate companies were identified by corporate advisors as the most likely candidates to tap the markets further in 2020 as property demand is expected to return after the disruption caused by the coronavirus crisis.

Surging cash levels – helped by $15 trillion of stimulus made available for economies to withstand the fallout of the pandemic was primarily responsible for the raising rush, advisors said.

“We expect issuance to expand further to growth capital in the coming weeks and months, and the pipeline is developing across sectors,” said Citigroup ‘s (N:) India head of banking and capital markets Ravi Kapoor.

EY India partner Sandip Khetan said the banks’ raisings helped created “a cushion to the potential losses on account of credit losses” that could occur in the future.

Foreign appetite to buy Indian equities has risen sharply, with investors outside India buying $10.3 billion of new shares in the three months to August, the Refinitiv data showed.

(Graphic: Equity offerings by sector, https://fingfx.thomsonreuters.com/gfx/mkt/xegpbobxbvq/sector-wise.jpg)

“The interest from foreign investors has been very strong and that reflects the fact that the quality of issuers that have come to market have been from the Top 100 companies.” said Morgan Stanley (NYSE:)’s executive director Samarth Jagnani.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Original source link

Dow fights for altitude early Tuesday as big tech stocks lead Nasdaq to fresh intraday record


U.S. stock indexes attempted to push higher Tuesday morning, as the buying momentum on Wall Street refused to be deflated, even as investors enter what is expected to be a seasonally challenging month for equities, following the best August returns in more than 30 years.

How are stock benchmarks performing?

The Dow Jones Industrial Average
DJIA,
+0.04%

was up 2 points at 28,433, a less-than 0.1% rise, reversing an opening slide; the S&P 500 index
SPX,
+0.18%

added 7 points to reach 3,507, a rise 0.2%; while the Nasdaq Composite Index
COMP,
+0.77%

advanced 87 points at 11,861, a rise of 0.7%, touching a record intraday high at 11,865.66.

On Monday, the Dow shed 223.82 points, or 0.8%, to end at 28,430.05. The S&P 500
SPX,
+0.18%

fell 7.70 points, or 0.2%, ending at 3,500.31. The Nasdaq rose 79.82 points, 0.7%, to end at a record 11,775.46, its 41st record close of 2020.

The S&P 500 clinched its best August return since 1986 and the Dow its best return for that month since 1984, while the Nasdaq recorded its strongest August since 2000

What’s driving the market?

Buying of large-capitalization growth and technology stocks, a major theme of trading since the coronavirus pandemic took hold in March, appeared set to continue to start trade in September.

Tesla and Apple, underscored that theme early Tuesday, with shares of the electric-vehicle maker and the iPhone creator on pace to extend a rally after splitting their popular shares on Monday.

Still, investors are anxious going into the new month as they wrestle with stock valuations elevated against a backdrop of a Federal Reserve that has implied that it will keep rates ultra-low even if inflation pressures begin to percolate.

Read: The stock market is on a tear, but now comes September, the worst month of the year

“Technology has regained leadership with broad-based movement back to new highs, and Growth dominating, but bifurcation is growing larger,” Mark Newton, technical analyst at Newton Advisors, said.

He cautioned that breadth, or the number of stocks rising versus those declining, is offering a cautious sign. “Breadth has tailed off ‘big-time’ with more than 5 occurrences in the last few weeks of more decliners than advancing issues,” he said.

Read:Here’s what could trigger more stock market pullbacks this year, says Schwab trading expert

The Fed’s new stance on inflation targeting is still being digested on Wall Street and has so far resulted in more pressure on the U.S. dollar, a factor that may also support further buying in stocks that boast large overseas businesses.

In U.S. economic news, the seasonally adjusted IHS Markit final manufacturing sector purchasing managers’ index rose to 53.1 in August, down slightly from the previously released ‘flash’ estimate of 53.6, but up from 50.9 at the start of the third quarter to post the fastest expansion since January 2019.

A closely watched PMI report on manufacturing activity from the Institute for Supply Management for August is due at 10 a.m., with a consensus forecast for 54.7.

Overnight the eurozone IHS manufacturing purchasing managers index pointed to improving conditions in August, as the region’s recovery from the coronavirus pandemic continued, while in China the Caixin purchasing managers index, which is weighted toward small, private manufacturers, rose to 53.1 in August from 52.8 in July.

A report on U.S. construction spending for July also is due at 10 a.m., with report on motor vehicle sales coming throughout the day.

Among Fed speakers, Fed Gov. Lael Brainard is slated to speak at 1 p.m.

Which stocks are in focus?
  • Shares of Tesla Inc.
    TSLA,
    -4.08%

    were down 2.5% on Tuesday after it announced a $5 billion offering, which deflated its momentum after its stock split on Monday.

  • Zoom Video Communications Inc.
    ZM,
    +42.52%

    shares soared 28% early Monday after the company made as much money in May, June and July as it did in all of 2019, beating even the outsize expectations of Wall Street and sending its stock, its recent quarterly results out on Monday revealed.

  • Shares of Eastman Kodak Co.
    KODK,
    +25.20%

    were up more than 36% Tuesday after the company disclosed that D.E. Shaw & Co. has taken a 5.2% stake in the company.

How are other assets trading?

In Asia, China’s CSI 300
000300,
+0.53%

rose 0.5% and Hong Kong’s Hang Seng
HSI,
+0.03%

finished virtually unchanged but in positive territory on the session.

The Stoxx Europe 600
SXXP,
-0.84%

traded 0.1% lower, while U.K.’s FTSE 100 benchmark
UKX,
-1.36%

tumbled 1.5% so far on Tuesday.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
0.716%

added 1.4 basis points to 0.72%, after adding 15.9 basis points during August. Bond prices move inversely to yields.

Gold
GCZ20,
-0.01%

jumped $19.90, or 1%, to $1,998.50 an ounce, trading around its highest level in about two weeks. West Texas Intermediate crude for October delivery
CL.1,
+1.61%

traded 40 cents, or 0.9%, at $43.02 a barrel on the New York Mercantile Exchange.

The ICE U.S. Dollar Index
DXY,
+0.02%
,
which tracks the currency versus a basket of six major rivals, fell 0.3% to extend its decline this year and trade around its lowest level since 2018.



Original source link

Weekend reads: How to invest with the S&P 500 at a record high


Welcome to the weekend!

The S&P 500
SPX,
+0.34%

ended the week at a record (after setting its first record close in six months earlier in the week) — a 52% surge from the low of that fast and brutal COVID-19-related mid-March plunge. The Nasdaq Composite
COMP,
+0.41%

notched its 36th record close of the year on Friday.

So where does the stock market go next? Here’s what you need to read now — on investing, retirement and more.

The stocks that hedge funds love right now

Here’s what the latest filings with the SEC show.

Also:Did Warren Buffett just bet against the U.S. economy?

And:You’re loving high-flying growth stocks now, but your money should be in these companies, this market pro says

Also:10 stocks positioned for an ‘abrupt’ rebound when normalcy finally returns — none of them are tech

A whodunit is rocking the exchange-traded world

When Credit Suisse delisted the VelocityShares Daily 3X Inverse Exchange Traded Note
DGAZF,
+400.00%
,
the price surged from $125 to $25,000 in a matter of days.


Getty Images

Who’s getting that extra $300 a week in unemployment?

Unlike the now-expired $600-a-week program, it’s not nationwide.

This is how far your retirement money will stretch

You’ll soon be seeing an estimate of how much your 401(k) balance translates into monthly income for the rest of your life. It could be a shock.

Also:The new savings target for a modest retirement: $8 million?

Colorado National Monument near Grand Junction, Colo.


iStockphoto

Go west, my man

As part of MarketWatch’s ongoing series on where to retire, we help a “young 68-year-old” who wants to move north or west of Colorado — and pay no taxes on his Social Security checks.

Also:Life will never be the same for people over 60 — even with a COVID-19 vaccine

What the post office controversy means for your next Amazon order

And yes, some people still get DVDs from Netflix
NFLX,
-1.12%
.

Game on for antitrust actions against Big Tech?

Lawsuits against the online stores of Apple and Alphabet’s Google over alleged punitive business practices could shine a bright light on these and other controversial behavior.

College? Not this semester

Here’s how many college students aren’t enrolling, even for online classes, because of COVID-19.

Also:Wealthier parents are more likely to send their kids back to physical classrooms — here’s why

Oleandrin comes from the oleander plant.


Erika Parfenova/iStock

Four facts to know about oleandrin

Another hydroxychloroquine? This toxic floral extract was touted as a COVID-19 cure to the White House.

Put this on your do-to list now

Get your flu shot ASAP. It’s even more important this year, given COVID-19.

Plan now for how you’ll vote

Whether by mail, an in-person early polling site or on Election Day, here’s what you need to work out now. Don’t be one of the 40% who didn’t bother in 2016.


MarketWatch photo illustration/Getty Images, iStockphoto

Should the U.S. impose a one-time pandemic wealth tax?

Billionaire wealth is surging during COVID-19 while more than 160,000 people have died and tens of millions have lost their jobs. These opinion writers say we face a stark choice.



Original source link