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Caterpillar raised the expected annual and quarterly impact of tariffs on its results. (0:15) Marvell Technology slumps on disappointing outlook. (0:58) Venture capitalist to be interim head of CDC. (2:02)
The following is an abridged transcrtipt:
Caterpillar (NYSE:CAT) is boosting its expected impact of tariffs.
Shares are under pressure premarket after the company said it now expects the net impact from tariffs to be $1.5 billion to $1.8 billion this year, up from a previous estimate of $1.3 billion to $1.5 billion. For Q3 it sees an impact of $500 million to $600 million, up from earlier outlook of $400 million to $500 million.
Including the net impact from incremental tariffs, Caterpillar said in filing that it now expects its full-year adjusted operating profit margin to come in near the bottom of the target margin range. But it left its full-year sales outlook unchanged.
“While the company continues to take initial mitigating actions to reduce this impact, trade and tariff negotiations continue to be fluid,” the company said.
In a further worry to the AI trade, Marvell Technology (MRVL) is tumbling before the bell following disappointing revenue guidance.
For the quarter in progress, Marvell expects a net revenue midpoint of $2.06 billion, less than the $2.11 billion consensus. Adjusted EPS for the third quarter is forecast at $0.74, just above the estimate of $0.73.
For fiscal Q2, the semiconductor company reported adjusted EPS of $0.67, which mirrored the consensus estimate of $0.67. Revenue for the quarter came in at $2.006 billon, which just missed the estimate of $2.01 billion.
Q2 revenue jumped 58% year over year. The gains were led by its data center segment, which surged 69% year over year to $1.49 billion.
But data center revenue is expected to be flat sequentially in Q3.
On the earnings call, CEO Matthew Murphy said “lumpiness” in the custom design business is “normal to see, particularly with the large hyperscale builds that happen and especially as you ramp them into production, which we’ve done this year on a number of programs.”
Investors “should expect a strong fourth quarter for custom,” he added.
And reports say the White House has picked Jim O’Neill, the deputy secretary at Robert F. Kennedy, Jr.’s Department of Health and Human Services, to serve as interim CDC director.
The top CDC post was vacated after the White House said Director Susan Monarez was removed from that office.
O’Neill has an investor background. He was CEO of the Thiel Foundation from 2009 to 2012 and managing director at venture capital firm Mithril Capital Management from 2012 to 2019. Although he has never worked at CDC nor has a public health background, O’Neill has served at HHS in prior Republican administrations. Roles included associate deputy secretary and principal associate deputy secretary.
The AP says a flashpoint is expected in the coming weeks as a key advisory committee, which Kennedy has reshaped with vaccine skeptics, is expected to issue new recommendations on immunizations. The panel is scheduled to review standard childhood shots for measles, hepatitis and other diseases.
Now Here’s What’s Trending on Seeking Alpha:
Alibaba (BABA) reported quarterly earnings that missed on the top and bottom lines.
UnitedHealth (UNH) is under pressure for loans it made to healthcare providers after its cyberattack.
And NBC will offer its Peacock Plus streaming service on Amazon Prime.
Taking a look at the markets, stock index futures are giving some back after the S&P 500 closed above 6,500 for the first time. Tech is weighing after Marvell’s results. In the Treasury market, yields are slightly higher across the curve ahead of the release of Fed’s favorite inflation gauge.
And on the economic calendar today:
- 8:30 a.m. ET – The July Personal Income and Spending report arrives. That comes with the aforementioned Fed’s favorite inflation gauge, the core PCE price index, which is expected to have risen 0.3% on the month.
- 8:30 a.m. ET – July Wholesale and Retail Inventories.
- 9:45 a.m. ET – August Chicago PMI.
- 10:00 a.m. ET – August Michigan Consumer Sentiment Final.
Read the full article here
