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Earnings: Salesforce stock dips, Allbirds stock tanking, HP shares slide

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The Yahoo Finance Live panel discusses the earnings reports from Salesforce, Allbirds, and HP Enterprise.

Video transcript

JULIE HYMAN: Let's take a look at some other movers that we are watching here this morning. With all the focus on Omicron and still a lot of focus on the challenge of COVID, Merck shares are trading higher. They were trading higher in the pre-market, although they have eked away much of that gain, now only up almost 1%. They had been up as much as 5 and 1/2% or so in pre-market trading.

And this is after their treatment-- the company's treatment for COVID-19, the pill, it got a recommendation from advisors to the FDA, but it was a fairly narrow recommendation, saying that its antiviral drug to treat COVID could be approved, but it would be for folks who were higher risk and that there were concerns about some of the safety risks as well for this pill.

But we are seeing, again, an increase. But I think everything [AUDIO OUT] space right now is just getting increased attention, Brian.

BRIAN CHEUNG: Yeah, and I think, Julie, to the point that this approval from the FDA advisory panel, we have to also keep in mind that it was kind of a narrow vote, 13 to 10. But there is, look, this treatment that's going to be for those that are high-risk of becoming severely ill. And I think the most important thing about this, even though some members of the FDA advisory panel apparently had some concerns about the efficacy and just some of the risks that are associated with this, is that it is something that can be delivered orally.

It's definitely less expensive than the other options that are out there. When you consider, for example, Regeneron's antibody cocktail-- which, they call it a cocktail, but there's no vermouth in it. It's something that you get by injection. You can't take it orally, so the Merck pills are going to be a lot more deliverable and a lot easier, especially for those who might not have the ability to go check into a hospital and get hooked up to that IV drip.

So that is, I think, the kind of significance of all of this. And again, we'll see if that weighs on the stock here, but a narrow 13 to 10 vote from the FDA there.

BRIAN SOZZI: Brian, you're injecting vermouth?

JULIE HYMAN: Yeah, and just one more-- oh, s--

BRIAN SOZZI: Wow. Oh man.

BRIAN CHEUNG: No, I'm not, for the record.

JULIE HYMAN: Brian's hardcore. Just one more note on that. The analyst over BMO says that this ruling on this Merck medication strengthens his view that Pfizer has the best antiviral for COVID-19. Let's talk about some other companies here. out with its earnings after the close of trading yesterday, and revenue and profit forecasts for this current quarter short of analysts' estimates. The shares down by nearly 6%. Brian Sozzi

BRIAN SOZZI: Yeah, I think you're seeing the shares take their lead, Julie and Brian, off of their guidance, what they call CPRO. The way to look at this is it's like their backlog for Salesforce. So in the current quarter, they got to about 19% growth. That would be down about from 23% growth in the third quarter. So the street a little concern over there.

But there is still a lot of optimism on the street this morning regarding Salesforce. The Slack integration seems to be going very well. Not a lot of hiccups there. There is some concern on MuleSoft and other acquisition Salesforce made a couple of years ago looks to be seeing some growing pains, but by and large, you had a company that went on a call last night, announced a new co-CEO in Bret Taylor, who as we should know, also this week was announced as the chairman of Twitter.

It's going to be a busy 2022 for Bret Taylor, but he had a company talk very aggressively and upbeat about the return to office and the need for software. They came out and reiterated their 2026 sales guidance of $50 billion this year. They're looking for about $26, $27 billion in sales. So all in all, you know, pretty good quarter for Salesforce. I understand the selloff, but by and large, I think the bulls are staying with the name

BRIAN CHEUNG: Yeah, when it comes to Bret Taylor, we have to remember that the reporting about the deal, that $27.7 billion deal for Slack, apparently was that it was Taylor who engineered that whole acquisition right there. Obviously a blockbuster transaction. It was done in July of this year, which felt like a million years ago. But you know when you think about only about six months later, Bret Taylor who first engineered that deal becoming the co-CEO of Salesforce, he's going to have a lot of power there to help integrate that transaction because it is still very much in the early innings even though it's been already a few months that massive workflow company has been a part of the Salesforce ecosystem.

So again, Bret Taylor will have the ability to kind of consummate that transaction there. Whether or not he'll be distracted by Twitter, I think, is a whole separate question. Again, he's not going to be the only CEO. He's going to be the co-CEO of Salesforce, which reinstalls that co-CEO structure that they've had in place for a long period of their history. So Bret Taylor again having the real driver's seat there to be able to drive those synergies there.

JULIE HYMAN: Moving on to something distinctly non-technological, Allbirds, that company coming out with-- I believe this is its first earnings report since coming public, right. And the company coming out here with earnings that were-- with revenue, I should say, a little bit ahead of estimates. Loss a little bit better than estimates, but here too it seems that the outlook is the issue.

The company saying revenue will be $270 to $272 million and its EBITDA loss will be $17 million to $15 million. Brian Sozzi, not enough wool shoes being sold? What's going on here?

BRIAN SOZZI: Yeah, let me fly into this quarter here, Julie. I think there's two red flags to note. One, they acknowledged on the earnings call last night-- again, this is Allbirds first earnings call as a public company-- noting they just need more visibility for their brand. Secondarily, international sales, they acknowledge those were perhaps a little bit worse than they would have liked, of course blamed the COVID-19 pandemic continuing to hurt demand overseas.

And then also too, an interesting nugget that co-CEO Joey Zwillinger noted on the call, I'll mention it here. To quote, "As travel bans lifted and people at the border for the US in particular opened up in the earlier part of November, we kind of expected to see a bunch of traffic recover, particularly in the key metro areas, and we really haven't seen that as much."

So interesting nugget there by Allbirds. Immediately has me wondering, well, how is Macy's doing this holiday season. Its very key that they get that international customer back. How is Nordstrom doing? They have a lot of stores in urban market areas. Heck, how is Target doing in this environment? It has pushed aggressively into urban markets and are waiting for those international customers to come back, but just something to watch moving forward.

JULIE HYMAN: You think a lot about how Macy's is doing, I know. All right, let's talk about Hewlett Packard Enterprise as well. You know, we got one piece of the enterprise puzzle from Salesforce. We got another from HPE, and neither one of them is being greeted too positively by the market, Sozzi.

BRIAN SOZZI: Yeah, another one of these tech earnings reports, Julie, I don't really have a problem with. I understand why the market is selling this one here. That current quarter guidance a couple of cents below estimates, but by and large, had an upbeat earnings call yesterday. HP knowing that backlog remains very strong. CEO Antonio Neri noting several times that he has not seen any cancelations for orders from large customers in this environment.

Those are good things. The company also reiterated its long term-guidance. I think the market obviously is a little concerned about the near-term trends given everything going on with the pandemic, but by and large, a pretty, I would say, upbeat earnings call from them last night.

JULIE HYMAN: Yeah, and we're going to talk to the CFO of the company about it in the next hour and talk more about this outlook and what they are hearing from enterprise customers.

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