Check out the companies making headlines in premarket trading. Pfizer — Shares climbed more than 2% after New York City-based Pfizer beat Wall Street’s first-quarter revenue forecast and raised its full-year profit guidance. The drugmaker now expects adjusted earnings of $2.15 to $2.35 per share for the full-year, up from a previous forecast of $2.05 to $2.25. CVS Health — Shares tumbled 12.4% after the drugstore chain and pharmacy benefit manager’s first-quarter adjusted earnings and revenue fell short of estimates and it cut its full-year profit outlook, citing higher medical costs. CVS expects adjusted earnings of at least $7 per share for 2024, down from previous guidance of $8.30 per share. Analysts were expecting $8.28 per share, according to LSEG. Marriott International — The hotel chain slipped 1.8% on the heels of weak earnings and current-quarter guidance. Marriott earned $2.13 per share, excluding items, in the first quarter, missing the consensus forecast of $2.17 from analysts polled by LSEG. Marriott expects current-quarter earnings of between $2.43 and $2.48 per nshare, less than Wall Street’s estimate of $2.52. Marriott issued first-quarter revenue that was better than anticipated. Estée Lauder — The beauty and skincare stock pulled back more than 5% before the opening bell after earnings guidance for the fiscal fourth quarter ending June 30 missed Wall Street’s forecast. Estee Lauder now expects earnings per share of 19 cents to 29 cents excluding items, below analysts’s estimate of 75 cents, according to FactSet. Amazon — The e-commerce platform added about 2% on the heels of strong first-quarter profit . Amazon’s forecast for current quarter revenue growth of 7% to 11%, or $144 billion to $149 billion, was below the Street’s 12% growth estimate to $150.1 billion, according to LSEG. Starbucks – Shares tumbled 13% following weaker-than-expected fiscal second quarter adjusted earnings and revenue – 68 cents per share on revenue of $8.56 billion, compared to estimates of 79 cents per share on revenue of $9.13 billion, according to LSEG – fueled by a decline in same-store sales. The coffee chain also slashed its forecast for full year, fiscal 2024 earnings and revenue. Pinterest — Shares soared 16% after the social media platform surpassed Wall Street estimates on the top and bottom line in the first quarter. A second-quarter revenue forecast also surpassed expectations, with Pinterest forecasting sales of $830 million to $850 million vs an LSEG consensus estimate of $827 million. AMD — Shares declined 7% after the chipmaker issued an in line forecast for sales in the second quarter. AMD expects sales of $5.7 billion in the current quarter, equal to 6% annual growth. Super Micro Computer — The maker of high efficiency servers tumbled more than 13%, extending Tuesday’s 3.5% loss. Fiscal third-quarter revenue of $3.85 billion missed the Street’s consensus estimate of $3.95 billion, according to LSEG. Yum Brands – Shares of the KFC and Taco Bell operator fell more than 4% after first quarter earnings of $1.15 per share missed analysts’ estimate of $1.20 per share, according to LSEG. Revenue of $1.6 billion trailed expectations of $1.71 billion as Yum blamed results at Pizza Hut and KFC, where same-store sales declined in the quarter. Kraft Heinz — Shares dropped 3.5% after the ketchup and prepared food maker posted first-quarter revenue of $6.41 billion, missing the LSEG consensus estimate of $6.43 billion. Adjusted earnings per share of 69 cents matched expectations. Powell Industries — The Houston-based electrical infrastructure stock soared more than 24% after fiscal second-quarter results beat analyst expectations. Powell earned $2.75 per share on revenue of $255 million, topping analysts’ consensus of $1.78 and $201.4 million, according to FactSet. — CNBC’s Tanaya Macheel, Alex Harring, Sarah Min and Michelle Fox contributed reporting
OMAHA, Nebraska — Warren Buffett said Saturday his designated successor Greg Abel will have the final say on Berkshire Hathaway’sinvesting decisions when the Oracle of Omaha is no longer at the helm.
“I would leave the capital allocation to Greg and he understands businesses extremely well,” Buffett told an arena full of shareholders at Berkshire’s annual meeting. “If you understand businesses, you’ll understand common stocks.”
Abel, 61, became known as Buffett’s heir apparent in 2021 after Charlie Munger inadvertently made the revelation at the shareholder meeting. Abel has been overseeing a major portion of Berkshire’s sprawling empire, including energy, railroad and retail.
Buffett offered the clearest insight into his succession plan to date after years of speculation about the exact roles of Berkshire’s top executives after the eventual transition. The investing icon, who’s turning 94 in August, said his decision is influenced by how much Berkshire’s assets have grown.
“I used to think differently about how that would be handled, but I think that responsibility should be that of the CEO and whatever that CEO decides may be helpful,” Buffett said. “The sums have grown so large at Berkshire, and we do not want to try and have 200 people around that are managing a billion each. It just doesn’t work.”
Berkshire’s cash pile ballooned to nearly $189 billion at the end of March, while its gigantic equity portfolio has stocks worth a whopping $362 billion based on current market prices.
“I think what you’re handling the sums that we will have, you’ve got to think very strategically about how to do very big things,” Buffett added. “I think the responsibility ought to be entirely with Greg.”
While Buffett has made clear that Abel would be taking over the CEO job, there were still questions about who would control the Berkshire public stock portfolio, where Buffett has garnered a huge following by racking up huge returns through investments in the likes of Coca-Cola and Apple.
Berkshire investing managers, Todd Combs and Ted Weschler, both former hedge fund managers, have helped Buffett manage a small portion of the stock portfolio (about 10%) for about the last decade. There was speculation that they may take over that portion of the Berkshire CEO role when he is no longer able.
But it seems, based on Buffett’s latest comments, that Abel will have final decisions on all capital allocation — including stock picks.
“I think the chief executive should be somebody that can weigh buying businesses, buying stocks, doing all kinds of things that might come up at a time when nobody else is willing to move,” Buffett said.
Abel is known for his strong expertise in the energy industry. Berkshire acquired MidAmerican Energy in 1999 and Abel became CEO of the company in 2008, six years before it was renamed Berkshire Hathaway Energy in 2014.
Correction: Berkshire’s equity portfolio is worth $362 billion. A previous version misstated the figure.
Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024.
David A. Grogen | CNBC
OMAHA, Neb. — Warren Buffett revealed that he dumped Berkshire Hathaway’s entire Paramount stake at a loss.
“I was 100% responsible for the Paramount decision,” Buffett said at Berkshire’s annual shareholder meeting. “It was 100% my decision, and we’ve sold it all and we lost quite a bit of money.”
Berkshire owned 63.3 million shares of Paramount as of the end of 2023, after cutting the position by about a third in the fourth quarter of last year, according to latest filings.
The Omaha-based conglomerate first bought a nonvoting stake in Paramount’s class B shares in the first quarter of 2022. Since then the media company has had a tough ride, experiencing a dividend cut, earnings miss and a CEO exit. The stock declined 44% in 2022 and another 12% in 2023.
Paramount
Just this week, Sony Pictures and private equity firm Apollo Global Management sent a letter to the Paramount board expressing interest in acquiring the company for about $26 billion. The firm has also been having takeover talks with David Ellison’s Skydance Media.
Paramount has struggled in recent years, suffering from declining revenue as more consumers abandon traditional pay-TV, and as its streaming services continue to lose money. The stock is in the red again this year, down nearly 13%.
Buffett said the unfruitful Paramount bet made him think more deeply about what people prioritize in their leisure time. He previously said the streaming industry has too many players seeking viewer dollars, causing a stiff price war.
OMAHA, Neb. — Warren Buffett said that Berkshire Hathaway is looking into an investment in Canada.
“We do not feel uncomfortable in any shape or form putting our money into Canada,” he told an arena full of investors Saturday. “In fact, we’re actually looking at one thing now.”
The billionaire investor has placed bets in the country in the past. He’s previously taken a roughly $300 million position in Home Capital Group that investors took as a vote of confidence in the troubled Canadian mortgage underwriter.
The “Oracle of Omaha” said during the annual shareholder meeting that he does not expect to make significant bets outside the U.S., saying his recent investments in Japanese trading houses were a compelling exception. But Buffett noted the similarity in operations between the Canada and the U.S.
“There’s a lot of countries we don’t understand at all,” Buffett said. “So, Canada, it’s terrific when you’ve got a major economy, not the size of the U.S., but a major economy that you feel confident about operating there.”
Warren Buffett walks the floor and meets with Berkshire Hathaway shareholders ahead of their annual meeting in Omaha, Nebraska on May 3rd, 2024.
David A. Grogen | CNBC
Buffett did not reveal the specific company he’s looking at north of the border or whether it was public or private.
“Obviously, there aren’t as many big companies up there as there are in the United States,” Buffett said. “There are things we actually can do fairly well that Canada could benefit from Berkshire’s participation.”
Canada’s S&P/TSX Composite Index is up about 5% this year. The economy has large financial and commodity industries.