Check out the companies making headlines in extended trading: Microsoft — The technology giant added about 1% after surpassing Wall Street estimates on the top and bottom lines in the fiscal first quarter . Microsoft reported earnings per share of $3.30 on revenue of $65.59 billion, while analysts polled by LSEG forecast $3.10 in earnings per share and $64.51 billion in revenue. Booking Holdings — Shares of the online reservation company jumped almost 6%. In the third quarter, the company reported adjusted earnings of $83.39 per share and revenue of $7.99 billion, while analysts surveyed by LSEG expected $77.52 in earnings per share and $7.63 billion in revenue. Starbucks — Shares ticked nearly 1% lower. The coffee chain said its global same-store sales dropped 7% in the fiscal fourth quarter, as demand in the U.S. and China sagged. Results in the period disappointed, with earnings coming in at 80 cents per share on revenue of $9.07 billion. Analysts polled by LSEG were looking for $1.03 per share in earnings and $9.36 billion in revenue. Meta Platforms — The Facebook parent company pulled back 2% after Meta posted third-quarter user numbers that fell short of the Street’s expectations. Meta said it had 3.29 billion daily active people in the third quarter, missing analysts’ forecast for 3.31 billion. Coinbase — The cryptocurrency trading platform was almost 3% lower after missing analysts’ third-quarter estimates . Coinbase reported 28 cents in earnings per share on $1.21 billion in revenue, compared to a forecast from analysts surveyed by LSEG that called for 41 cents in earnings per share and $1.26 billion in revenue. Robinhood — Shares of the brokerage platform tumbled 10% as third-quarter results missed Wall Street’s expectations. Robinhood reported earnings of 17 cents per share on revenue of $637 million. Analysts polled by LSEG sought 18 cents per share in earnings and $658 million in revenue. eBay — Weak guidance weighed on the e-commerce company, dragging shares lower by 7%. Ebay forecast fourth-quarter earnings to range between $1.17 and $1.22 per share on revenue of $2.53 billion to $2.59 billion. Analysts polled by LSEG were looking for $1.22 per share in earnings and $2.65 billion in revenue. DoorDash — Shares of the food delivery company were roughly 1% lower in extended trading. DoorDash surpassed analysts’ estimates on the top and bottom lines in the third quarter, with earnings of 38 cents per share and $2.71 billion in revenue. Analysts surveyed by LSEG were looking for 22 cents per share in earnings and $2.66 billion in revenue. Carvana — Shares of the used-car seller advanced more than 20% after Carvana topped analysts’ third-quarter estimates. The company posted 64 cents per share in earnings and $3.66 billion in revenue. Analysts polled by LSEG sought earnings of 25 cents per share and revenue of $3.45 billion. Etsy — The e-commerce stock gained more than 12%. Etsy’s board of directors approved a $1 billion stock buyback . Etsy also beat third-quarter revenue estimates with $662.4 million, while analysts polled by LSEG were expecting $652.5 million. MGM Resorts — Shares of the casino operator tumbled 5% on disappointing results. MGM Resorts reported adjusted earnings of 54 cents for the third quarter, while analysts polled by LSEG predicted 61 cents per share. Revenue also missed the mark, coming in at $4.18 billion, versus the Street’s estimate for $4.21 billion. — CNBC’s Darla Mercado contributed reporting.
Attendees cheer as a broadcast of former US President and Republican presidential candidate Donald Trum speaking at his Florida election party is shown on a screen at the Nevada GOP election watch party in Las Vegas, Nevada on November 6, 2024.
Ronda Churchill | Afp | Getty Images
Wall Street dealmakers and corporate leaders expect the flood gates to open on merger and acquisition activity after President-elect Donald Trump takes office in January.
And he’ll likely have congressional help. Trump defeated Democratic candidate Vice President Kamala Harris, and Republicans claimed a majority of the Senate in elections this week. That red wave is expected to spell loosening regulations on deal-making, with plenty of pent-up demand.
“We know kind of where the world is headed in a Trump environment because we’ve seen it before,” said Jeffrey Solomon, president of TD Cowen, on CNBC’s “Money Movers” Wednesday. “I think the regulatory environment will be much more conducive to economic growth. There will be lighter and targeted regulation.”
Solomon added that the scaled-back regulation will be focused on certain areas “of particular interest to the Trump administration,” rather than a broad based reassessment of the entire landscape.
In recent years, there has been greater scrutiny of pending deals by the Biden administration’s Department of Justice and Federal Trade Commission, headed by Chair Lina Khan. Some have pointed to that dynamic as a chilling factor on deal flow. High interest rates and soaring company valuations have contributed, too.
Khan said in September that “when you see greater scrutiny of mergers, you can see greater deterrence of illegal mergers.” Her hard line has drawn harsh criticism, but now, there’s optimism around a forthcoming FTC with a lighter hand.
“Assuming interest rates drop and you see corporate tax rates go down, the ingredients are there for a really active M&A market,” said one top dealmaker, who talked to CNBC on the condition of anonymity to speak candidly.
Some sectors, including financial and pharmaceutical industries in particular, are likely to get a lift under a second Trump regime, experts said.
“We could see domestic manufacturing benefit from increased tariffs as well as a growth in technology, which slowed down from a tighter antitrust environment,” said Howard Gutman, private equity strategy and coverage lead for MorganFranklin Consulting. “Additionally, we expect the aerospace and defense industry to grow as it has historically done during past Republican administrations paired with the broader geopolitical environment.”
Other industries, such as tech, may still face an uphill battle in getting deals done.
One M&A advisor, who also spoke to CNBC anonymously, noted that Trump’s disdain for Big Tech companies — historically active deal-makers — might keep them on the sidelines. On Wednesday, tech leaders took to social media to congratulate Trump.
Apparent GOP opposition to the CHIPS Act means that semiconductor consolidation might be challenging, the advisor noted, while cautioning it is still too early to know what a Trump presidency would mean. CNBC previously reported that Qualcomm recently approached Intel about a potential takeover.
“I think the simplest way to put it is more deals, less regulation with the administration having its thumb on the scale, perhaps with a willingness to pick winners and losers,” said Jonathan Miller, chief executive of Integrated Media, which specializes in digital media investments.
Regional banks, many of which recognize the need for scale, will also likely look to consolidate, said one former industry executive. That advisor noted that smaller banks had been getting gobbled up for “some time,” but that the pace and size of those acquisitions would likely ramp up under a Trump presidency.
Pharmaceutical executives are also optimistic that lighter antitrust enforcement could clear the way for deal-making, said one health-care-focused M&A advisor, who added that antitrust enforcement could have “hardly gotten worse” under either administration but now believes things will improve “meaningfully.”
Khan has taken on scores of biopharma mergers over the last four years, arguing that monopolies will stifle the development of new drugs in certain disease areas and hurt consumer choice. Biotech company Illumina last year said it would divest diagnostic test maker Grail after heated battles with the FTC and European antitrust regulators.
Also last year, the FTC blocked Sanofi’s proposed acquisition of a drug in development for Pompe disease, a genetic condition, from Maze Therapeutics. Sanofi ultimately terminated that deal.
“Whether or not Lina Khan is bounced day one is a key consideration, but even if fewer changes at the FTC take place, there is no doubt this administration — at least on paper — will be far more amicable when it comes to business combinations,” Jared Holz, Mizuho health-care equity strategist, said in an email on Wednesday.
One top dealmaker expected an M&A uptick broadly, but agreed that the financial sector and pharmaceuticals were particularly poised for a resurgence. That deal-maker also noted that with the Senate flipping, more outspoken antitrust voices like Sen. Elizabeth Warren, D-Mass., could find it more difficult to push for DOJ or FTC investigations.
Eyes on retail, media
David Zaslav at the Allen & Company Sun Valley Conference on July 9, 2024 in Sun Valley, Idaho.
David Grogan | CNBC
A Trump presidency could usher in a number of retail deals that have been hamstrung by the FTC. Kroger’sbid to take over grocery chain Albertsons could have a better chance of getting approved under Trump, as could Tapestry’s proposed acquisition of Capri.
The merger between Kroger and Albertsons is currently under review by a federal judge, while Tapestry is working to appeal a federal order that granted the FTC’s motion for a preliminary injunction against the tie-up.
“The hostile approach of the FTC to mergers and acquisitions will almost certainly be reset and replaced with a worldview that is more favorable to corporate dealmaking,” said GlobalData managing director Neil Saunders. “This does not necessarily mean that big deals like Kroger-Albertsons will be waved through, but it does mean others like Tapestry-Capri will receive a far warmer reception than they have under the Biden administration.”
Meanwhile, ongoing turmoil in the media industry has led many to consider consolidation as the next step for the sector.
Warner Bros. Discovery CEO David Zaslav on Thursday highlighted opportunities that could come up if regulations were to loosen, doubling down on comments he made earlier this year at Allen & Co.’s annual Sun Valley conference.
“We have an upcoming new administration. … It’s too early to tell, but it may offer a pace of change and opportunity for consolidation that may be quite different, that would provide a real positive and accelerated impact on this industry that’s needed,” Zaslav said on an earnings call.
Broadcast station group owner Sinclair on Wednesday echoed a similar sentiment.
“We’re very excited about the upcoming regulatory environment,” CEO Chris Ripley said during an earnings call. “It does feel like a cloud over the industry is lifting here.”
Still, the track record between the previous Trump administration and the Biden administration for media industry deals is split.
Trump’s DOJ allowed Disney to buy Fox’s assets, but then sued to block AT&T’s deal for Time Warner.
Under the Biden administration, Amazon’s $8.5 billion deal for MGM and the merger of Warner Bros. and Discovery Communications were both waved through, but a federal judge blocked the $2.2 billion sale of Simon & Schuster to Penguin Random House.
Skydance Media and Paramount Global agreed to merge earlier this year and expect to receive regulatory approval in 2025.
Check out the companies making headlines in premarket trading. Lyft — The rideshare stock advanced more than 23% after a stronger-than-expected fourth-quarter outlook. Lyft expects bookings in the current quarter of $4.28 billion to $4.35 billion, while analysts polled by FactSet expected $4.23 billion. Arm Holdings — Shares of the semiconductor company slipped about 7% despite second-quarter results surpassing Wall Street estimates. Arm reported adjusted earnings per share of 30 cents on revenue of $844 million, while analysts polled by LSEG forecast a profit of 26 cents per share and revenue of $808 million. Wolfspeed — Stock in the semiconductor manufacturer plummeted more than 25% after a revenue miss and a lower-than-expected outlook. Wolfspeed forecasts fiscal second-quarter revenue in the range of $160 million to $200 million, while analysts surveyed by LSEG were looking for $215 million. Take-Two Interactive Sotftware — Shares of the video game designer gained more than 4% after its second-quarter revenue of $1.47 billion surpassed an expected $1.43 billion from analysts polled by LSEG. HubSpot — Shares gained about 7% in premarket trading. The customer platform company’s third-quarter results of $2.18 per share on revenue of $669.7 million beat the forecasted earnings of $1.91 per share on $647 million in revenue from analysts surveyed by FactSet. SolarEdge — The solar panel inverter stock slipped more than 16% after a third-quarter revenue miss. SolarEdge reported revenue of $261 million, while analysts surveyed by LSEG were looking for $269 million. Dutch Bros — Stock in the coffee franchise added 18% on the heels of better-than-expected third-quarter results. The company posted adjusted earnings per share of 16 cents and $338 million in revenue, while analysts polled by LSEG forecast earnings of 12 cents per share and revenue of $325 million. Bumble — Shares of the online dating company were down nearly 6% after posting a loss of $5.11 per share, due to an impairment charge. Third-quarter revenue surpassed Wall Street estimates, and the company expects fourth-quarter revenue of $256 million to $262 million, compared with an estimate of $260 million. Duolingo — The learning app company’s shares fell 5% despite posting a top- and bottom-line beat in the third quarter. However, the number of paid subscribers — 8.6 million — came in slightly below the consensus estimate for 8.66 million, per StreetAccount. AppLovin — Shares surged 32% after the software publisher’s third-quarter results surpassed analysts’ expectations. AppLovin expects adjusted EBITDA of $740 million to $760 million in the fourth quarter, which is higher than the $667 million StreetAccount forecast. Match Group — Shares pulled back about 14% after posting mixed third-quarter results. The dating platform company’s fourth-quarter revenue outlook called for a range of $865 million to $875 million, below the forecast $905.1 million from analysts polled by FactSet. Qualcomm — The chipmaker rallied 5% before the bell on strong earnings and guidance . The company also said its board approved $15 billion in additional share repurchases. E.l.f. Beauty — Stock in the cosmetics company gained more than 7% after it raised its full-year earnings and revenue outlook. The firm now forecasts earnings in the range of $3.47 to $3.53 per share, compared with prior guidance of $3.36 to $3.41 per share. E.l.f. Beauty expects revenue in the range of $1.31 billion to $1.33 billion, up from a forecast of $1.28 billion to $1.30 billion. Zillow — Stock in the housing market site advanced more than 13% after beating Wall Street estimates on the top and bottom line in the third quarter. Zillow reported adjusted earnings per share of 35 cents on revenue of $581 million, while analysts polled by LSEG forecast 29 cents per share and $555 million, respectively. Gilead Sciences — Shares of the biopharmaceutical company added about 2% after surpassing Wall Street esitmates for its full-year earnings guidance. Gilead now forecasts earnings per share in the range of $4.25 to $4.45 per share, while analysts polled by LSEG were looking for $3.80. Moderna — Shares rallied 7% after Moderna’s third-quarter earnings and revenue topped expectations. Earnings of 3 cents per share was greater than the expected loss of $1.90 per share loss, per LSEG. Revenue of $1.86 billion surpassed the expected $1.25 billion. Under Armour — Shares gained 25% after stronger-than-expected second-quarter results. The athletic clothing company reported adjusted earnings per share of 30 cents on revenue of $1.40 billion while analysts polled by LSEG called for a profit of 20 cents per share and revenue of $1.39 billion. Hershey — Shares slipped more than 3% after weaker-than-expected third-quarter results. Hershey earned $2.34 per share after adjustments on revenue of $2.99 billion, while analysts surveyed by LSEG expected it to earn $2.56 per share on $3.08 billion in revenue. — CNBC’s Samantha Subin, Hakyung Kim and Sarah Min contributed reporting
A flag stall at the Yiwu Wholesale Market in Zhejiang province, China, on May 10, 2019.
Aly Song | Reuters
BEIJING — China emphasized the need for greater cooperation with the U.S., a day after it became clear President-elect Donald Trump would become the next leader of the White House.
“The Chinese side is willing, on the basis of mutual respect, peaceful coexistence and win-win cooperation, to increase communication with the U.S., expand cooperation and resolve differences,” He Yongqian, spokesperson at China’s Ministry of Commerce, told reporters Thursday in Mandarin, according to a CNBC translation.
She was responding to a question about China’s views and planned countermeasures, given the potential for increased U.S. tariffs and restrictions on high-end tech.
“Together [we can] push China-U.S. economic and trade relations toward a stable, healthy and sustainable direction, for the benefit of both countries and the world,” the commerce spokesperson said.
Her comments echoed those of Chinese President Xi Jinping, who earlier in the day noted the benefits of bilateral cooperation in a congratulatory message to Trump, according to a Ministry of Foreign Affairs readout.
Washington turned tougher on Beijing under Trump’s first four-year term that began in 2017. This year, the president-elect threatened additional tariffs on Chinese goods while campaigning for his second mandate.
Yue Su, principal economist at the Economist Intelligence Unit, said Trump will likely impose such tariffs in the first half of next year. She added that the Whiote House leader could speed up the process by invoking the International Emergency Economic Powers Act or Section 122 of the Trade Act of 1974, which allows the president to impose tariffs of up to 15% in response to a serious balance-of-payments deficit.
Other analysts are less concerned about a significant increase in U.S. tariffs targeting China.
“Trump’s current tariff proposal is likely the worst-case scenario,” David Chao, Global Market Strategist, Asia Pacific (excluding Japan) at Invesco, said in a note Thursday. “I suspect the new administration will hold off imposing these tariffs in order to win concessions, whether that may be more purchases of American soybeans or even geopolitical ones.”
He added, “More so, I don’t think Trump’s proposed 60% tariff policy on China will significantly impact [multinational corporations’] confidence or sentiment.”
Chao nevertheless said that a potential 10% tariff on all exports to the U.S. would likely have a bigger impact, weakening global demand and hitting China and the rest of Asia.