Salesforce, Palantir, Dick's: 5 Things You Must Know Wednesday

Stock futures fluctuate following the S&P 500's fourth straight day of gains and another record high; Salesforce soars on earnings beat; Palantir to go public via direct listing.
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Here are five things you must know for Wednesday, Aug. 26:

1. -- Stock Futures Point to a Mixed Wall Street Open

Stock futures fluctuated Wednesday, following the S&P 500's fourth consecutive day of gains and another record high.

Contracts linked to the Dow Jones Industrial Average fell 48 points, S&P 500 futures were up 2 points and Nasdaq futures gained 36 points.

Stocks ended higher Tuesday and the S&P 500 rose 0.36% to 3,443 as Wall Street cheered trade progress between the U.S. and China.

The Nasdaq jumped 0.76% on Tuesday, while the Dow declined 60 points, or 0.21%, to 28,248.

The Dow's Pending Changes Show Why the Dow Should Be Ignored

Investors have been digesting mixed signals on the strength of the economy as the U.S. reopens amid fresh outbreaks of the coronavirus. For instance, U.S. consumer confidence in August fell to the lowest since 2014, while new home sales in July surged 13.9%, greater than expected.

“Depending on your point of view, data and developments may be encouraging or gloomy,” said Hayaki Narita of the Asia & Oceania Treasury Department at Mizuho Bank.

2. -- Oil Prices Steady Ahead of Hurricane Laura

Oil prices steadied near five-month highs as Laura strengthened into a hurricane and headed toward refining facilities on the Gulf Coast.

Forecasters said the hurricane could slam the upper Texas or southwest Louisiana coasts as a major hurricane late Wednesday or early Thursday, according to The Weather Channel. More than half a million people were ordered to flee the Gulf Coast.

Winds from Laura have strengthened to 105 mph, making it a Category 2 hurricane, as of early Wednesday. Predictions are the storm could escalate to a Category 3 when it makes landfall.

Roughly more than 80% of Gulf-region crude output and nearly 60% of natural gas production remains offline ahead of the storm.

West Texas Intermediate crude contracts for October delivery, the new U.S. benchmark, traded down 0.25% at $43.23 a barrel.

3. -- Salesforce Soars on Earnings Beat, $5 Billion of Revenue

Salesforce.com  (CRM) - Get Report, which was just added to the Dow Jones Industrial Average effective next week, was rising 13.29% to $244.76 in premarket trading Wednesday after the cloud software company's adjusted earnings in the second quarter beat forecasts and revenue surged past $5 billion for the first time ever.

Salesforce reported adjusted earnings of $1.44 a share on sales of $5.15 billion.

The company also lifted its guidance for the year, saying it now expects sales of $20.7 billion to $20.8 billion, up from previous guidance of $20 billion, and annual adjusted earnings to $3.72 to $3.74 a share.

“It’s humbling to have had one of the best quarters in Salesforce’s history against the backdrop of multiple crises seriously affecting our communities around the world,” CEO Marc Benioff said in a statement accompanying the earnings release.

Salesforce's subscription and support revenue for the second quarter was $4.84 billion, up 29% from a year earlier, while professional services and other revenue were $310 million.

"As we have repeatedly said in the past, the last thing enterprises will cut back on during uncertain times like these is their customer-relationship management spending," said Jim Cramer and the Action Alerts PLUS team, which holds Salesforce in its portfolio. "With everyone stuck at home in the Covid-19 era, CRM was even more relevant, because the world has become increasingly digitized. If you cut back on your digitization journey or ignore it all together, you risk falling behind the competition. Salesforce's durable growth and low attrition rate is once again proof of this concept."

4. -- Palantir to Go Public Via Direct Listing

Palantir Technologies, the secretive Silicon Valley data analytics company, released its initial public offering prospectus, giving investors a long-awaited look at its financials.

In the filing, Palantir revealed that it plans to list on the New York Stock Exchange under the ticker "PLTR," and will pursue a direct listing rather than a traditional IPO. Slack  (WORK) - Get Report, Spotify  (SPOT) - Get Report and a handful of other tech companies also have done the same in recent years.

Palantir, which sells software to U.S. and foreign government agencies and commercial businesses, reported revenue $742.5 million in 2019 and a loss of $580 million. In the prior year, the company posted sales of $595.4 million and a loss of $580 million. 

Palantir was founded in 2003 by a group of Silicon Valley entrepreneurs that includes Peter Thiel, a co-founder of PayPal, venture capitalist and right-leaning political financier. Thiel is Palantir's chairman and its Peter Karp is the company's CEO.

It reported 125 customers in the first half of 2020, a group that includes the U.S. Army and other government agencies. It cautioned that just three large customers made up 29% of its revenue as of June 2020, with a single government customer accounting for 11% of its total revenue in that period. Another large commercial customer made up an additional 10% of its revenue.

The filing indicated that Palantir generally does "not enter into business with customers or governments whose positions or actions we consider inconsistent with our mission to support Western liberal democracy and its strategic allies.”

5. -- Dick's Earnings, Durable Goods Orders Highlight Wednesday's Calendar

Earnings reports are expected Wednesday from Dick's Sporting Goods  (DKS) - Get Report, Splunk  (SPLK) - Get Report, Box Inc.  (BOX) - Get Report, Tiffany  (TIF) - Get Report, Express  (EXPR) - Get Report, Williams-Sonoma  (WSM) - Get Report, NetApp  (NTAP) - Get Report and PVH  (PVH) - Get Report.

The economic calendar in the U.S. Wednesday includes MBA Mortgage Applications for the week ended Aug. 21 at 7 a.m. ET, Durable Goods Orders for July at 8:30 a.m. and Oil Inventories for the week ended Aug. 21 at 8:30 a.m.