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January 28, 2019 | NVDIA and CAT Hammered on Warnings, Soft Demand in China

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
 

NVDIA fell 12.82% and CAT fell 9.13% on revenue warnings and a slowdown in China.

Apple led the way on January 2 blaming slowing sales of smartphones and other devices in China. Apple Lost a Record $463 Billion in Market Cap in Three Months.

Shares of Caterpillar, the world’s largest heavy equipment maker, fell 9.13 percent and had their worst day since 2011 after the company’s quarterly profit widely missed Wall Street estimates, hit by softening demand in China and higher manufacturing and freight costs.

Nvidia tumbled 13.82 percent after the chipmaker cut its fourth-quarter revenue estimate by half a billion dollars on weak demand for its gaming chips in China and lower-than-expected data center sales.

Whirlpool

Whilrpool is down 6% after hours after missing forecasts.

As for the key reason why the stock is getting hit after hours, the company now forecasts non-GAAP EPS of $14.00 to $15.00, far below the $15.98 consensus estimate, as “favorable product price/mix, restructuring benefits and reduced share count are offset by a higher tax rate and cost and currency increases.”

In other words, not even the company’s buybacks, and Whirlpool announced it repurchased $1.2 billion in stock in 2018, up from $750MM in 2017, will be enough to offset rising input costs, the stronger dollar, and the company’s higher (?) tax rate.

Who’s Next?

Broadcom (AVGO), Micron Technology (MU), Qualcomm (QCOM), Qorvo (QRVO), Skyworks Solutions (SWKS) and Wynn Resorts (WYNN) get more than half their sales from Greater China, according to Goldman Sachs.

Mike “Mish” Shedlock

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January 28th, 2019

Posted In: Mish Talk

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