Darden Restaurants Just Rocked Earnings

Good morning. It's December 19th, and today we’ll look at why Accenture and Darden Restaurants are surging while Micron Technology has plunged in premarket trade, along with a tiny biotech stock that is up 120% before the market opens.

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U.S. stock markets experienced significant declines yesterday following the Federal Reserve's announcement of a 0.25 percentage point interest rate cut, accompanied by projections of fewer rate reductions in 2025 than previously anticipated.

Investor sentiment was further dampened by the Federal Reserve's revised inflation expectations, indicating a more cautious economic outlook for the coming year.

Futures

Futures are showing modest gains this morning, suggesting a potential rebound from the previous day's losses. Dow Futures have risen by 149.00 points (+0.35%), S&P Futures are up +0.39%, and Nasdaq Futures have increased by +0.29%.

What to Watch

Several major companies will announce their quarterly earnings before the opening bell today, including Accenture (ACN), Cintas (CTAS), Paychex (PAYX), Darden Restaurants (DRI), FactSet Research Systems (FDS), Conagra Brands (CAG), CarMax (KMX), and Lamb Weston Holdings (LW).

Keep an eye out for several key economic reports to be released today. The Initial Jobless Claims for December, the GDP (second revision) for Q3, and the Philadelphia Fed Manufacturing Survey for December will all be released at 8:30 a.m. ET.

At 10:00 a.m. ET, Existing Home Sales for November and the U.S. Leading Economic Indicators for November will also be published.

After the market closes, Nike (NKE) and FedEx (FDX) will also release their results.

Technology

Accenture Exceeds Expectations, Raises FY25 Revenue Growth Outlook

Accenture (NYSE: ACN) is seeing a 5% increase in its stock price during premarket trading today after delivering better-than-expected first-quarter earnings and revenue. The global consulting firm’s earnings per share (EPS) of $3.59 is better than the $3.10 figure from the previous year and the $3.42 consensus estimate.

Revenue for the quarter is at $17.69 billion, reflecting a 9% year-over-year increase and beating analyst expectations of $17.13 billion. Key growth drivers include the Product segment, with a 12% rise to $5.43 billion, and the Health & Public Service segment, which is up 13%, reaching $3.81 billion.

Accenture’s operating cash flow is $1.02 billion, nearly twice that of the figure of the same period last year, though it is marginally lower than the $1.06 billion estimate. The company’s operating margin is 16.7%, up from 15.8% a year earlier.

CEO Julie Sweet is highlighting the company's strong start to fiscal 2025, noting $18.7 billion in new bookings for the quarter, with $1.2 billion tied to generative AI projects.

Looking ahead, Accenture has raised its fiscal 2025 revenue growth forecast to 4%-7% in local currency, up from the previous 3%-6%. Second-quarter revenue is expected to land between $16.2 billion and $16.8 billion, aligning closely with market expectations.

Restaurants

Darden Restaurants Sees Q2 EPS Jump 10.3% Amid Strong Brand Performance

Darden Restaurants, Inc. (NYSE: DRI) reported a strong fiscal second quarter, with revenue climbing 6% year-over-year to $2.9 billion. This growth was fueled by a 7.5% increase in same-restaurant sales at LongHorn Steakhouse and contributions from new acquisitions, including 103 Chuy’s locations.

Shares in the firm are up 9.3% in premarket trade.

Adjusted earnings per share (EPS) are up 10.3%, touching $2.03 and surpassing analyst expectations. Revenue from Olive Garden grew to $1.29 billion, while LongHorn Steakhouse contributed $710.1 million, up 10.4% from the previous year. The Fine Dining segment experienced a 3.8% drop, reflecting challenges in that category.

President and CEO Rick Cardenas highlighted the company’s resilience and effective long-term strategy, mentioning that the company’s brands, including Olive Garden, LongHorn, Yard House, and Cheddar's, continued to outperform despite a competitive environment.

During the quarter, Darden repurchased $142 million in shares and declared a quarterly dividend of $1.40 per share, payable on February 3, 2025.

Looking ahead, the company updated its fiscal 2025 outlook, now anticipating total sales of approximately $12.1 billion and same-restaurant sales growth of 1.5%. Darden plans to open 50 to 55 new restaurants and expects diluted net earnings per share from continuing operations to range between $9.40 and $9.60.

Technology

Micron Shares Tumble 11% as Weak Forecast Dampens AI Optimism

Micron Technology's shares are down 11% in premarket trading today after the company issued a lackluster quarterly forecast, highlighting persistent challenges in the PC and smartphone markets. The dismal outlook has overshadowed the company’s progress in AI-driven chip sales.

The DRAM market, which accounts for the bulk of Micron's revenue, remains under pressure from an ongoing supply glut. Analysts note that the segment is in poor health, with older technologies showing significant oversupply issues. This weakness has compounded concerns over tepid global PC demand, with shipments declining 1.3% year-over-year in the third quarter.

However, Micron reported encouraging growth in its high-bandwidth memory (HBM) chip business, a key component in AI and data center technologies.

Revenue from these chips more than doubled sequentially, underscoring the company’s potential to capitalize on rising AI investments. Analysts at Piper Sandler highlighted Micron’s strong positioning in the HBM market, where it competes with SK Hynix and Samsung.

Despite these gains, the company projects only modest smartphone growth for 2025 and faces cautious sentiment from investors. Several brokerages have slashed their price targets for the stock, reflecting lingering uncertainties.

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The Glimpse Group, Inc. [VRAR] - Last Close: $3.20

The Glimpse Group is up 30% in premarket trading following announcements of a $4M+ defense contract with the U.S. Department of Defense and a strategic pivot toward AI-driven Spatial Computing.

The contract focuses on developing immersive middleware solutions, further validating Glimpse's technology.

The company also achieved operational cash flow profitability without additional capital raises, signaling improved financial health.

In addition, Glimpse revealed ongoing negotiations for $5-10M in additional contracts and projected FY '25 revenues of $11-12M with strong gross margins of 60-70%.

KULR Technology Group, Inc. [KULR] - Last Close: $2.08

KULR Technology Group's stock is surging 40%+ in premarket trading.

This uptick follows the company's recent announcement of a significant contract with the U.S. Navy, enhancing its position in defense-related thermal management solutions.

Additionally, KULR has regained compliance with NYSE American listing standards, reflecting improved financial health.

These developments have bolstered investor confidence, contributing to the stock's rise.

Bio-Path Holdings, Inc. [BPTH] - Last Close: $0.67

Bio-Path Holdings (BPTH) is experiencing a 120%+ premarket surge today.

This uptick follows the company's announcement of promising preclinical results for BP1001-A, a potential treatment for obesity and related metabolic diseases in Type 2 diabetes patients.

The studies demonstrated enhanced insulin sensitivity, indicating BP1001-A's potential effectiveness.

Bio-Path plans to initiate animal studies to further confirm these findings, aiming to commence a first-in-human Phase 1 clinical trial in 2025.

Investors are responding positively to this development, anticipating the expansion of Bio-Path's therapeutic pipeline beyond oncology into metabolic diseases.

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Everything Else

• The Biden administration finalized a $458-million award for SK Hynix’s U.S. semiconductor expansion.

• Amazon denies union claims as thousands of workers walk off jobs in holiday shipping strike.

• Robinhood pivots to crypto and new trading products as it eyes tenfold growth in the next decade.

• TuSimple rebrands as CreateAI, pivoting from autonomous trucking to generative AI for gaming and animation.

• The Federal Reserve lowered rates but raised the inflation outlook amid economic uncertainty.

• The recession deepens in New Zealand as the GDP falls, and the central bank is expected to slash rates further.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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