UPS (UPS) turned in a +5% performance today following the company’s earnings report.
The shipping company showed strong results for its third quarter with earnings per share beating expectations. The strong performance followed a big miss last quarter.
Revenue grew 5.4% year-over-year to $22.2 billion, led by robust volume growth in the U.S. Domestic segment. Growth in the U.S. was the highest in over three years. That, along with effective cost cutting reduced UPS’ cost per piece by 4.1%.
Despite the positive results, the company’s outlook reflects a tough environment.
UPS adjusted its 2024 revenue outlook down to $91.1 billion. The adjustments come as the company prepares for a challenging macro environment with slowing online sales and manufacturing activity.
Despite the earnings success, UPS's stock struggled to maintain momentum above its 200-day moving average, a critical trendline for Wall Street.
The shorter 50-day moving average turned bullish at the start of October, suggesting higher prices in the short term.
The stock’s failure to breach the 200-day line indicates that today’s rally may be short lived.
UPS’s long-term trend remains bearish with a price target of $112.
IBM's (IBM) stock dropped following its Q3 earnings release, despite surpassing earnings per share expectations.
The company posted a revenue increase of 1.5% year-over-year to $14.97 billion. That number slightly missed analysts’ forecasts.
This was mainly due to underperformance in its Consulting and Infrastructure segments. Management noted that IBM is seeing cautious spending from clients due to an uncertain macroeconomic environment.
IBM’s Software segment emerged as a strong performer. The business posted a 9.7% increase to $6.5 billion. That number was bolstered by a 14% jump in Red Hat revenues.
This Software business line now comprises nearly 45% of IBM's total revenue, up significantly since 2018. The increase reflects IBM's successful shift towards more innovative and higher-margin software solutions.
IBM's forward-looking strategy in generative AI, with $1 billion in new bookings this quarter, positions it well for future growth. The company is optimistic about 2025, expecting continued software revenue growth, particularly from Red Hat.
Today’s selling was the result of profit-taking from the stock as IBM shares have rallied more than 40% since June.
Shares still benefit from technical support from their 50-day moving average. That bullish trendline is just below today’s lows, ready to provide technical support.
Investors should keep an eye on the $220 price level as the stock consolidated at this price in early October.
IBM shares remain in a long-term bullish trend with a price target of $300.
ServiceNow (NOW) delivered impressive Q3 results, surpassing both earnings and revenue expectations.
The company reported earnings of $3.72 per share, which was $0.27 better than the consensus of $3.45. Revenue for the quarter rose 22.2% year-over-year to $2.8 billion, exceeding the $2.75 billion consensus.
A significant component of this growth was the strong performance in subscription revenues, which reached $2,715 million, marking a 23% increase year-over-year. The company’s growth highlights robust demand for its cloud-based services.
Furthermore, the company's current remaining performance obligations—a key indicator of future revenue—stood at $9.36 billion as of Q3 2024. That figure represents a 26% growth year-over-year, underscoring the strong and growing commitment from customers.
Looking ahead to the fourth quarter, ServiceNow forecasts subscription revenue in the range of $2.875 billion to $2.880 billion.
Shares rallied more than 5% to close the day above $950 after posting highs of $979.78. the close represents new all-time highs for the stock.
Over the short-term, investors should expect to see some light resistance at $1000 given its psychological round numbered effect.
That resistance is likely to be short-term as ServiceNow’s stock remains in incredibly strong long- and short-term trends.