Synchrony Financial stock zooms on Walmart news, ASML starts parade of chip earnings

A handful of Walmart Inc.-related announcements are setting Synchrony Financial shares up for a big day.

Synchrony SYF, +10.40% posted stronger-than-expected financial results for the fourth quarter Wednesday morning, and announced several updates about its relationship with Walmart WMT, +0.99% which Jefferies analyst John Hecht said “represents the lifts of major overhangs in the stock.” For one, Synchrony extended its credit-card deal with Walmart’s Sam’s Club and said that Walmart was dismissing a lawsuit accusing the card company of being too risky with its underwriting. Synchrony also confirmed that it was selling its Walmart loan portfolio to Capital One Financial COF, -6.08% (which announced earnings yesterday).

Synchrony shares are up more than 11% in morning trading. The stock is on pace for its best single-day gain in the company’s history.

There were two Dow Jones Industrial Average DJIA, +0.50% components on Wednesday morning’s docket, both of which are seeing their shares zoom higher.

United Technologies Corp.UTX, +4.43% easily beat earnings and revenue expectations, and Chief Executive Greg Hayes expects the company’s segment profit to grow faster than sales for the year ahead, as the company prepares to split itself into three businesses.

Procter & Gamble Co.PG, +4.93% also reported better-than-expected results in its fiscal second-quarter report, though Stifel analyst Mark Astrachan will be looking for more information about why the company didn’t lift its full-year earnings forecast despite beating estimates in the first half of the fiscal year.

•Shares of Abbott LaboratoriesABT, -1.75% are trading lower on Wednesday after the company reported a revenue miss.

Kimberly-Clark Corp.KMB, -2.58% announced a new strategic plan ahead of its 150-year anniversary in 2022, but investors are focused on the company’s earnings and revenue misses for its just-reported fourth quarter.

Comcast Corp.CMCSA, +5.00% said it lost 29,000 net video customers in the fourth quarter, though the telecommunications stock is up Wednesday after the company posted revenue and earnings beats. MoffettNathanson analyst Craig Moffett pointed out that even though the number of video subscribers is falling, Comcast exceeded expectations on the metric, and investors seem to have shifted their focus to the company’s broadband business.

In Europe, semiconductor manufacturing company ASML Holding NVASML, +1.98% topped revenue and earnings estimates, though Susquehanna analyst Mehdi Hosseini said that the earnings beat was driven by a change in the company’s tax rate. ASML Chief Financial Officer Peter Wennink said that he expected the memory business to be down by more than 20% in 2019, a forecast that Hosseini called “constructive in resetting expectations.” ASML’s shares are up 2.5% in morning trading. See more about the company’s results.

Investors will get another read on the outlook for chip equipment this afternoon, when Lam Research Corp.LRCX, +0.30% reports its latest numbers. Look for commentary from the semiconductor manufacturing company about demand from memory makers and the expected timing of an industry recovery. Other chip companies on the docket for Wednesday afternoon include Xilinx Inc.XLNX, -0.86% and Texas Instruments Inc.TXN, -0.01% Cowen & Co. analyst Matthew Ramsay will be looking at Xilinx’s results for evidence that the company is continuing to benefit from early 5G revenue.

Ford Motor Co. F, -1.53% posts numbers as well, after the company revealed weak preliminary earnings earlier in the month. The auto maker’s lack of a concrete financial forecast for the year ahead left analysts and shareholders frustrated after that announcement, and a key question is whether Ford will say anything more of substance in regards to the outlook when it delivers its full report Wednesday.

Evercore analyst Chris McNally is concerned about several elements of Ford’s business going forward, including what he views as a “significant North America product hole” for 2019 and the first half of 2020, before the refreshed Ford 150 hits in the second half of next year. McNally also said that the company has been talking up the potential for profit gains in Europe and China, which he deems “too early to call.”

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