Stocks – GM Rises in Premarket; Merck Falls on Spin-Off News

By Geoffrey Smith

Investing.com — Stocks in focus in premarket trade on Wednesday, 5th February. Please refresh for updates.

8:50 AM ET: Ford Motor (NYSE:) stock fell 8.3% after forecasting that this year’s earnings before interest and taxes would fall, without giving a clear explanation why.

JPMorgan (NYSE:) and Royal Bank of Canada both downgraded their price targets for the stock on Wednesday, Reuters reported.

• 8:41 AM ET: Snap Inc (NYSE:) stock fell 7.3% to a three-week low after the parent company of social media network Snapchat said its net loss widened and its revenue fell short of Wall Street expectations in the fourth quarter.
• The results showed the company still struggling to lure advertising dollars away from Google (NASDAQ:) and Facebook (NASDAQ:), even though daily average users hit 218 million, up some 16% on the year.
• • Walt Disney (NYSE:) stock was up 0.6%, but underperforming the and contracts, after the company reported earnings after the bell that contained both good and bad news.
• The good news was that quarterly earnings per share were ahead of forecasts, while the Disney+ streaming service now has 28.6 million subscribers, up from 10 million at launch in November.
• The bad news was that Disney expects the closure of its theme parks in Shanghai and Hong Kong, caused by the coronavirus outbreak, to cost it some $175 million in operating profit in the current quarter.
• 8:27 AM ET: Spotify (NYSE:) stock fell 2.8% after the streaming company said it swung to an operating loss in the fourth quarter, despite a better-than-expected 29% rise in premium subscribers, who generate almost all of its revenue.
• Revenue was some 2% below forecasts, and the company’s guidance for first-quarter revenue at around $1.81 billion was also some 5% below consensus forecasts, reflecting – among other things – some aggressive discounting to gain new subscribers in the face of increasing competition from the likes of Apple (NASDAQ:).
• 8:15 AM ET: Merck (NYSE:) stock fell 1.5% after the pharma giant said it will spin off its lower-margin businesses into a new company, allowing it to focus on higher-margin, higher-cost drugs. Pfizer (NYSE:) and GlaxoSmithKline have taken similar steps in recent months.
• The future Merck will concentrate on oncology, vaccines, hospital and animal health. It expects annual cost savings of $1.5 billion by 2024 and is targeting an operating margin of over 40%.
• The company’s quarterly earnings were broadly in line with expectations.
• General Motors (NYSE:) stock rose 1.1% after the company said it swung to a net loss of $194 million in the fourth quarter due to a six-week strike that took $2.6 billion of its basic operating profit. Adjusted earnings per share also fell short of expectations at 5 cents rather than the 11c consensus.
• GM said it expects adjusted EPS of between $5.75 and $6.25, while cash flow will be between $13 billion and $14.5 billion.
• GlaxoSmithKline ADRs (NYSE:) were down 1.0% after the company missed quarterly earnings forecasts by a wide margin. The company also said it expects additional costs from the proposed spin-off of its consumer healthcare unit of between 600 and 700 million pounds ($780-$910 million).
• GSK said it expects adjusted earning per share to fall by as much as 4% at constant exchange rates, but said it would likely keep its dividend unchanged at 80 pence a share.

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