Fed’s rate hike roils stocks, mortgage rates spike, oil climbs| September 22, 2022

The Boeing Company and former CEO Dennis Muilenburg agreed to settle a complaint by the Securities and Exchange Commission that they mislead investors about the 737 MAX.

The SEC charged Boeing and Muilenburg with making materially misleading public statements following crashes of Boeing airplanes in 2018 and 2019. The crashes involved Boeing’s 737 MAX airplane and a flight control function called the Maneuvering Characteristics Augmentation System (MCAS).

The SEC’s orders against Boeing and Muilenburg find that they negligently violated the antifraud provisions of federal securities laws. Without admitting or denying the SEC’s findings, Boeing and Muilenburg consented to cease-and-desist orders that include penalties of $200 million and $1 million, respectively.

A Fair Fund will be established for the benefit of harmed investors pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002.

CostCo is lower in after-hours trading as operating expenses rose. Merchandise costs grew 16% to $63.56 billion.

The membership only big-box retailer beat Wall Street revenue and profit estimates.

Fiscal fourth total revenue rose 15% to $72.10 billion. The analysts’ average estimate was $72.04 billion. Comparable sales grew 13.7%, with e-commerce up 7.1%. U.S. sales were 15.8%.

Net income for the three months ended August 28 was $1.87 billion, up from $1.67 billion.

Diluted earnings per share was $4.20. The estimate was $4.17.

DocuSign is higher Thursday in extended trading. The electronic document manager announced Allan Thygesen
as Chief Executive Officer, effective October 10.

He joins DocuSign from Google where he served as President, Americas & Global Partners, leading the company’s more than $100 billion advertising business across North and South America.

Allan replaces Dan Springer, who stepped down in June.

DocuSign shares are down down 65% year to date.

U.S. stocks end lower across the board for the third session with the Nasdaq Composite pacing the declines for equities as investors wrestle with rising interest rates and recession fears. In commodities, oil rose 0.6% to $83.49 per barrel.

Goldman Sachs has lifted its forecast for interest rate increases by the Federal Reserve.

Economists at the investment bank expect the Fed to continue raising the benchmark federal funds rate through February 2023 until it hits a target range of 4.5% to 4.75%.

Comments by Fed chair Jerome Powell, which Goldman described as “somewhat hawkish” – were behind the more aggressive forecast.

FreshPet jumped in late trading Thursday. The Wall Street Journal reported that activist investor Jana Partners has acquired a stake in the company to boost share prices and explore a sale.

People familiar say Jana has acquired nearly 10% of the company specializing in high-end refrigerated pet food.

The company has a market capitalization of about $2.1 billion, down from $8 billion at its peak.

Kohl’s CEO Michelle Gas is under fire from an activist investor who says she is “no longer ideally suited to lead Kohl’s to long-term value creation.

FedEx is out with more detail about its fiscal first quarter financial results. The package delivery company said it expects to generate total cost savings of $2.2-2.7 billion in fiscal 2023, including reduction in variable incentive compensation, compared to the company’s prior plan.

In the first quarter ended August 31, the company realized approximately $300 million of these savings and expects to realize approximately $700 million in savings in the second quarter.

Expected cost savings in fiscal 2023 will consist of:

• $1.5-1.7 billion at FedEx Express, including reducing flight frequencies and temporarily parking aircraft;

• $350-500 million at FedEx Ground, including closing select sort operations, suspending certain Sunday operations, and other linehaul expense actions; and

• $350-500 million across shared and allocated overhead expenses, including reducing vendor utilization, deferring certain projects, and closing certain FedEx Office and corporate office locations.

Last week the package delivery company issued a profit warning along with a report of preliminary results for the three months ended August 31.

The announcement triggered a selloff with the Dow Jones Industrial Average plunging more than 400 points. FedEx fell 21.4%, the largest percentage decrease on record.

FactSet Research Systems Inc. on Thursday reported fiscal fourth-quarter net income of $104.4 million.

The Norwalk, Connecticut-based company said it had net income of $2.69 per share. Earnings, adjusted for one-time gains and costs, came to $3.13 per share.

The results fell short of Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $3.25 per share.

The financial data firm posted revenue of $499.3 million in the period, beating Street forecasts. Six analysts surveyed by Zacks expected $492.1 million.

For the year, the company reported profit of $396.9 million, or $10.25 per share. Revenue was reported as $1.84 billion.

FactSet expects full-year earnings in the range of $14.50 to $14.90 per share, with revenue in the range of $2.1 billion to $2.12 billion.

Upwork fell more than 6% in Thursday morning trading. The platform that connects businesses with freelancers announced its chief financial officer is leaving.

Current CFO Jeff McCombs will remain through the end of the calendar year to support the transition plan.

Prior to joining Upwork, McCombs served as CFO for several organizations, including Doctor On Demand, OpenTable, and Flipboard.

The company reaffirmed its third-quarter 2022 guidance.• Revenue between $156 million and $158 million• Non-GAAP basic and diluted loss per share between $(0.06) and $(0.08)

Ball Corp said on Wednesday that it has completed the sale of its beverage packaging business in Russia to Arnest Group for $530 million.

In March, the sustainable metal packaging maker reduced operations at its three manufacturing facilities in Russia immediately after the country’s invasion of Ukraine and were looking to pursue a sale of its Russian business to a new owner.

The company said Arnest Group, a manufacturer of perfume, cosmetic and household products in aerosol packaging in Russia, has acquired all of Ball’s Russia-based business and the sale is not expected to impact the company’s business outside of Russia.

“We believe this is a sound outcome for Ball in these geo-political circumstances,” said Dan Fisher, Ball’s chief executive officer.

Earlier on Wednesday, Russian President Vladimir Putin ordered his country’s first wartime mobilization since World War Two, shocking citizens with what Western countries described as an act of desperation in the face of a losing war.

Ford is restructuring its vehicle development and supply chain operations, shuffling multiple executives just days after announcing that it would build up to 45,000 vehicles with parts missing due to shortages.

Early Thursday, Ford announced that CFO John Lawler would run a makeover of its supply chain operations until the company finds a new supply chain chief.

Doug Field, who was hired from Apple Inc., will now become chief advanced product development and technology officer. He’ll lead vehicle design and hardware engineering, and continue duties overseeing electric vehicles, software and digital systems, and driver assistance systems.

The company also announced two new hires from Hewlett-Packard and Google to develop vehicle software and driver assistance systems.

The company has plans for half of its global production to be electric vehicles by 2030, but like its main competitors, Ford will need to keep selling gas-burning vehicles to fund the massive transition.