Eric Thayer
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Costco (COST) tops profit estimates, doles out $6.7B in special dividends. (00:25) Tesla (TSLA) bags incentives worth $153M for Mexico gigafactory. (01:25) FDA warns companies including Chewy (CHWY) over unapproved antimicrobial animal drugs. (02:22)
This is an abridged transcript of the podcast.
Costco Wholesale Corporation (NASDAQ:COST) reported sales growth of 6.2% for its FQ1.
The company beat estimates on the EPS line by $0.16 per share at $3.58.
Costco also reported revenue of $57.8B (+6.2% Y/Y) and in-line with expectations.
Membership fee income was $1.08B vs $1.09B consensus and $1.00B a year ago.
One of the questions on the earnings call was about a membership fee enhance. The company said there hasn’t been a need to raise the membership fee but it is a question of when and not if it’s going to happen.
Notably, Costco (COST) announced a special cash dividend of $15 per share will be doled out on January 12, 2024. The aggregate amount of the payment will be approximately $6.7B.
Premarket Costco (COST) is up 1.7%.
Tesla (NASDAQ:TSLA) will acquire incentives worth 2.63B pesos ($152.8M) from the Nuevo Leon government for the construction of its gigafactory in the Mexican state, amid concerns over repeated delays.
The incentives makeup 3.4% of the investment that Tesla (TSLA) will make in the factory.
“The approved incentives will allow the creation of basic infrastructure, such as drinking and treated water, roads and new transportation routes,” the Nuevo Leon government said in a statement. They also include a reduction in payroll tax.
Tesla (TSLA) CEO Elon Musk had asked the Nuevo Leon government to better electricity, water and transportation in the region before construction of the factory began. While the state agreed to his ask, the construction has faced delays.
Tesla (TSLA) is planning to invest ~$10B in the gigafactory over time, with an initial investment of $4.5B.
The U.S. Food and Drug Administration (FDA) on Thursday sent warning letters to nine companies including Chewy (NYSE:CHWY) for making and selling unapproved antimicrobial animal drugs over worries that it could direct to greater drug resistance.
The drugs referenced in the warning letters were being sold for minor species such as aquarium fish and pet birds. They contain antibiotics that are widely used in drugs for humans such as amoxicillin and penicillin.
“The agency is concerned because these products contain antimicrobials that are important in human medicine and using them without medical oversight contributes to the development of antimicrobial resistance,” the FDA said in a statement.
An enhance in antimicrobial resistance can direct to the development of superbugs.
Aside from Chewy (CHWY), the FDA also sent warning letters to American Aquarium Products, Aquanest Biotic, Aquarium Pharmacy LLC, California Veterinary Supply, Kraft Drug, Midland Veterinary Services LLC, Silver Lease LLC and Valley Veterinary Clinic LTD.
Plantation, Fla.-based Chewy (CHWY) is an online retailer of pet food, products and supplies. It held its first investor day event on Thursday where it set long-term financial targets.
Premarket Chewy is up 2.7%.
Other articles to look out for on Seeking Alpha:
GM Cruise autonomous vehicle unit slashes 900 jobs
AbbVie, Amgen among firms targeted for latest Medicare inflation penalties
What lies ahead for Baidu in 2024 as it runs AI race with efficiency in mind?
On our catalyst watch for the day,
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The tender offer for Eli Lilly (LLY) to acquire Point Biopharma (PNT) expires at 5pm today. The offer was previously scheduled to expire at 5pm on December 1 but it was extended two weeks.
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FREYR Battery (FREY) will hold an extraordinary general meeting of shareholders in connection with its previously announced process to redomicile from Luxembourg to the U.S.
U.S. stocks on Thursday ended slightly higher, as overall sentiment remained positive following the Federal Reserve’s long-awaited dovish pivot.
The Dow (DJI) climbed 0.43% to finish at a fresh record high. The S&P 500 (SP500) added 0.26%. The Nasdaq (COMP.IND) rose 0.19%.
Of the 11 S&P sectors, six ended in the green.
Treasury yields declined. The 10-year yield (US10Y) was down 11 basis points to 3.92%. The 2-year yield was down 10 basis points to 4.38%.
Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up 0.4%, the S & P 500 is up 0.3% and the Nasdaq is up 0.3%. Crude oil is up 0.2% at more than $71 per barrel. Bitcoin is down 1.1% and still below $43,000.
In the world markets, the FTSE 100 is down 0.5% and the DAX is up 0.4%.
The biggest movers for the day premarket: Scholastic (NASDAQ:SCHL) is down 12.7% after the company missed the consensus mark in FQ2.
On today’s economic calendar:
- 8:30 am Empire state manufacturing survey
