Zscaler Stock Slides on Disappointing Guidance

32 minutes ago

Zscaler (ZS) shares fell Tuesday morning, a day after the cloud-based cybersecurity platform reported a slowdown in billings and issued underwhelming guidance. In addition, it announced the company’s finance chief would be stepping down.

Zscaler posted first-quarter fiscal 2025 adjusted earnings per share (EPS) of $0.77, with revenue up 26% year-over-year to $628.0 million. Both exceeded forecasts of analysts polled by Visible Alpha.

However, billings came in at $516.7 million, a 43% decline from the previous quarter and the lowest total since the first quarter of fiscal 2024.

Zscaler sees current-quarter adjusted EPS of $0.68 to $0.69 and revenue of $633 million to $635 million. Analysts surveyed by Visible Alpha were looking for $0.69 and $634.8 million, respectively.

The company also announced that Chief Financial Officer (CFO) Remo Canessa has decided to retire once his replacement is named. It added that a search for a new CFO is under way.

Zscaler shares were down 6% in recent trading. The stock is now down 12% since the start of 2024.

–Bill McColl

AT&T Jumps to 3-Year High After Unveiling Strategic Plan

1 hr 2 min ago

AT&T (T) outlined an ambitious strategic plan Tuesday, pledging to return more than $40 billion to shareholders via dividends and buybacks in the next three years, while forecasting more than $18 billion in free cash flow in 2027.

Shares of the telecom giant were up 4% in recent trading, hitting their highest level in more than three years, after it laid out the three-year plan, which also included increases in its outlook for earnings, expanding its fiber network delivering broadband internet and modernizing its 5G wireless network. That expansion, it said, would drive the "more robust shareholder returns."

“Over the last four years, we’ve achieved durable and profitable subscriber growth, generated attractive returns on network investment, and strengthened our balance sheet,” AT&T Chief Executive Officer (CEO) John Stankey said. “Our plan expands the country’s largest fiber network to more than 50 million total locations, modernizes our wireless network and rewards our shareholders.”

AT&T said free cash flow, excluding the funds raised from the sale of its remaining 70% stake in satellite provider DirecTV to private equity firm TPG (TPG), would exceed $16 billion in 2025 and surpass $18 billion in 2027. Under Stankey, the company has reduced its high debt levels and pivoted to focusing on the telecom business, by offloading DirecTV and spinning off its WarnerMedia business several years ago.

The company forecast 2024 adjusted earnings per share of $2.20 to $2.25, including the funds raised from its DirecTV stake sale, which is expected to close in mid-2025.. That raises the lower end of the range from the previous $2.15 to $2.25 range.

–Nisha Gopalan

US Steel Slides as Trump Vows to Block Takeover

2 hr 3 min ago

U.S. Steel (X) shares tumbled in early trading Tuesday after President-elect Donald Trump said that he would block Nippon Steel’s planned $14 billion acquisition of its American rival.

In a post on his Truth Social platform, Trump wrote he was “totally against” the takeover of the company by a foreign firm, reiterating his previous opposition to the bid. The Japanese company had agreed to buy U.S. Steel last year, but has faced pushback from the Biden administration, which extended the foreign security review period for the deal.

"Through a series of Tax Incentives and Tariffs, we will make U.S. Steel Strong and Great Again, and it will happen FAST!," Trump said. "As President, I will block this deal from happening."

Both Trump and the White House have argued the deal would hurt U.S. workers.

However, U.S. Steel CEO David Burritt has said that without the $3 billion promised by Nippon Steel if the deal passes, the company would have to close plants and move out of its headquarters in Pittsburgh.

US Steel shares were down 9% this morning, and have now lost 23% since the start of the year.

–Nisha Gopalan

Supermicro Levels to Watch as Stock Continues Surging

2 hr 31 min ago

Super Micro Computer (SMCI) shares were rising again Tuesday morning after surging nearly 30% yesterday following news that an independent review of the server maker’s accounting practices found no wrongdoing.

The stock has reclaimed the lower trendline of a descending broadening formation that has been in play since the stock topped out in early March.

Investors should watch key overhead areas on Supermicro's weekly chart around $50, $64, and $97, while monitoring major support levels near $30 and $23.

The stock was up 7% at around $45 early Tuesday.

Read the full technical analysis piece here.

–Timothy Smith

Futures Point to Flat Open for Major Indexes

3 hr 56 min ago

Futures tied to the Dow Jones Industrial Average were down less than 0.1%.

S&P 500 futures were up less than 0.1%.

Nasdaq 100 futures were down fractionally.

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