5 Things to Know Before the Stock Market Opens
Warner Bros. Discovery (WBD) stock is slipping after first-quarter results, hours after it and Disney (DIS) announced a new streaming bundle that includes Disney+, Hulu and Max; Arm Holdings (ARM) shares are tumbling after the artificial intelligence (AI) chip designer’s Wall Street-beating results were overshadowed by a weak outlook for fiscal 2025; shares of Airbnb (ABNB) are sliding after the short-term home-rental firm, too, was punished by tepid guidance that outweighed its quarterly results; shares of Robinhood Markets (HOOD), meanwhile, are jumping as the trading app’s results beat forecasts; and the bidding group led by Sony Pictures Entertainment and private-equity firm Apollo Global Management reportedly plan to break up Paramount Global (PARA) if they succeed in acquiring the U.S. media giant. U.S. stock futures are falling. Here’s what investors need to know today.
1. Warner Bros. Discovery Falls as Quarterly Earnings Miss Estimates
Warner Bros. Discovery (WBD) stock is down more than 4% in premarket trading after it reported quarterly results that missed estimates. The owner of the Max streaming service said total revenue for the first quarter fell 7% year-over-year to $9.96 billion, and reported a net loss of $966 million, a narrowing from the $1.07 billion loss posted in the same period last year. It reported a diluted loss per share of 40 cents, versus 44 cents in Q1 2023. The results came hours after it announced a plan to team up with Disney (DIS) to offer a bundle of their streaming services. Consumers will be able to sign up for a package that includes Disney’s Disney+ and Hulu and Warner’s Max, the latest bundling of streaming services by companies seeking to offer consumers something close to the traditional cable TV package.
2. Arm Plunges as Chip Designer’s Downbeat Outlook Raises Fears of Sagging AI Demand
Arm Holdings’ (ARM) was down more than 8% in premarket trading after the British semiconductor chip designer’s better-than-expected results for the fiscal fourth quarter were overshadowed by its weak guidance for fiscal 2025. While its 47% surge in quarterly revenue beat estimates, and Chief Executive Officer (CEO) Rene Haas talked of “strong tailwinds heading into FYE25” on the back of AI chip demand, Arm’s full-year revenue projection of between $3.8 billion and $4.1 billion lagged estimates—raising investor fears that companies are slowing their spending on AI chips. Arm ADRs are off highs hit in February but still nearly double the level of September, when the company was listed by SoftBank Group at $51 a share.
3. Airbnb Slumps as Tepid Guidance Overshadows Earnings Beat
Shares of Airbnb (ABNB) slid 9% in premarket trading after the short-term accommodation marketplace issued a weaker-than-expected current-quarter outlook, overshadowing its first-quarter earnings and revenue that came in ahead of analysts’ expectations. While the Paris Olympics may boost summer rentals, the company said in its shareholder letter that its current-quarter results face “a significant sequential headwind” from the timing of Easter, an added leap-year day in the prior quarter, and the impact of foreign exchange fluctuations.
4. Robinhood Jumps on Record Earnings; Crypto Revenue Surges
Robinhood Markets (HOOD) shares were up 5% in premarket trading after the trading app posted record quarterly revenue and profits that beat Wall Street forecasts. The company, which early this week said it may face enforcement action from the Securities and Exchange Commission (SEC) related to its cryptocurrency business, reported a 232% year-over-year surge in crypto-transaction revenue to $126 million in the first quarter, and said total net revenue soared 40% to $618 million. It said that more than 1 million customers had joined the waitlist for its new gold credit card, which is for its premium “gold” subscribers and offers 3% cash back.
5. Sony Pictures and Apollo Reportedly Plan to Break Up Paramount
The bidding group led by Sony Pictures Entertainment and private-equity firm Apollo Global Management reportedly plans to break up Paramount Global (PARA) if it succeeds in acquiring the U.S. media giant. The plan would include auctioning off CBS, cable channels like MTV, and the Paramount+ streaming service, The New York Times reported, while Paramount Pictures, whose blockbusters include the “Mission: Impossible” franchise and “Top Gun,” would be combined with Sony’s business. A special committee of Paramount’s board of directors met Saturday and signed off on beginning deal talks with Sony and Apollo, after a period of exclusive talks with the Hollywood studio Skydance lapsed, the Times previously reported. Paramount shares were up 1% in premarket trading.