Earnings live: Pinterest stock tanks, AMD and Supermicro falter, Rivian pops amid flurry of Q3 reports

The Q3 earnings season is off to a positive start, with S&P 500 companies projected to achieve a 10.7% EPS increase, albeit a deceleration from Q2. Company-specific results were highly varied: Pinterest shares plummeted 16% after missing Q4 revenue forecasts, and Cava cut its full-year guidance, while Hertz soared 42% on a return to profitability and Toast gained 6% after raising its EBITDA outlook. Additionally, Apollo's CEO dismissed systemic risks in private credit, attributing issues to 'bad actors,' and ADM cut its 2025 profit outlook due to weaker margins, underscoring diverse sector performance and market sensitivities.

Analysis

The third-quarter earnings season is demonstrating a positive trajectory, with 64% of S&P 500 companies reporting by October 31st. Analysts now anticipate a 10.7% year-over-year earnings per share increase for Q3, exceeding initial expectations of 7.9%, marking the fourth consecutive quarter of double-digit growth despite a deceleration from Q2's 12%. This indicates a robust, albeit moderating, corporate earnings environment.

Individual company performances, however, presented a highly bifurcated landscape. Hertz (HTZ) soared 42% on a significant return to profitability, reporting $0.42 EPS against an expected $0.03, driven by a 7-year high 84% fleet utilization. Conversely, Pinterest (PINS) shares plummeted 16% after missing Q4 revenue forecasts and EPS estimates, while Cava (CAVA) cut its full-year guidance for both same-store sales and adjusted EBITDA following mixed Q3 results and a 1.9% same-store sales increase below the 2.67% expectation.

Several firms offered forward-looking insights, with Toast (TOST) raising its full-year adjusted EBITDA guidance to $610-$620 million, leading to a 6% stock gain. In contrast, ADM (ADM) cut its 2025 profit outlook due to weaker crush margins, causing a 9% stock slump, and Molson Coors (TAP) cited "added pressure" on consumers impacting sales. Apollo's CEO dismissed systemic risks in private credit, attributing issues to "bad actors," while Marriott (MAR) saw luxury outperform despite modest overall RevPAR growth.

Key Decisions for Investors

• Investors should prioritize companies demonstrating robust forward guidance and clear pathways to profitability, such as Hertz and Toast, while scrutinizing those with reduced outlooks like Cava and ADM.
• Maintain vigilance on sectors facing heightened competitive pressures, as seen with Pinterest in the digital advertising space, or shifting consumer demand, exemplified by Match Group and Molson Coors.
• Conduct thorough bottom-up analysis to identify idiosyncratic strengths or weaknesses, as the broad positive S&P 500 earnings trend masks significant performance divergence among individual firms.
• Consider the nuanced commentary on private credit, where Apollo's CEO suggests risks are more localized to "bad actors" rather than systemic, necessitating careful due diligence on specific exposures.