Auto Parts Maker Drops After Earnings

By George Banko

May 31, 2023

Good morning Wake-up Watchlisters! While you’re sipping coffee you’ll see European stocks and US equity futures pared losses sparked by China’s economic woes, while bonds gained amid signs of easing inflation. Investors are paying close attention to the debt-limit deal forged by President Joe Biden and House Speaker Kevin McCarthy. The bill is heading for a House vote Wednesday after clearing a crucial procedural hurdle with just days remaining to avoid a US default.

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Here’s a look at the top-moving stocks this morning.

Advanced Auto Parts Inc. (NYSE: AAP)

Advanced Auto Parts is down 20.86% premarket after reporting its financial results for the first quarter. Despite a 0.4% decline in comparable store sales, the company experienced a 1.3% increase in net sales, reaching $3.4 billion. Operating income for the quarter was $90.0 million, with an operating income margin of 2.6%. Tom Greco, the president and CEO, acknowledged the challenges faced during the quarter and expressed gratitude towards the Advance team members and independent partners for their dedication to customer service. He attributed the lower-than-expected operating margin to higher investments aimed at reducing competitive price gaps in the professional sales channel and an unfavorable product mix.

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HP, Inc. (NYSE: HPQ)

HP is down 4.82% premarket despite exceeding expectations with its quarterly earnings. The company experienced pressure on unit sales in its PC and printing segments, attributed to cautious financial management by businesses and consumers post-pandemic. However, HP’s cost-cutting measures implemented over the past year helped maintain margins in both divisions. HP CEO Enrique Lores credited disciplined execution and strong innovation in a challenging macro environment for delivering non-GAAP EPS at the higher end of their target for Q2.

SoFi Technologies (Nasdaq: SOFI)

Sofi Technologies is up 4.98% in premarket trading after reports the debt-ceiling agreement, on track for a House vote Wednesday, would reinstate government student load repayments after more than three years. The news would benefit the online personal finance company SoFi Technologies, which refinances student loans.

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Twilio Inc. (NYSE: TWLO)

Twilio is up 4.9% premarket after activist investor Legion Partners, who holds a stake in the software company, is urging Twilio to make changes to its board and consider potential divestitures. Legion Partners has reportedly held multiple meetings with Twilio’s board and executives. The article also suggested the possibility of more assertive lobbying from investors, as Twilio’s use of super-voting shares is expected to expire in less than a month. The expiration of these shares would diminish the CEO’s disproportionate voting power, which had previously deterred other activist investors from involvement in the company, according to The Information.