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    Stocks making the biggest moves premarket: Enbridge, Roku, Gitlab and more

    The Roku app on a television in Hastings-On-Hudson, New York, US, on Tuesday, July 25, 2023.
    Tiffany Hagler-Geard | Bloomberg | Getty Images

    Check out the companies making headlines in premarket trading on Wednesday.
    Roku — The streaming stock jumped 12.5% after announcing plans to lay off 10% of its staff. Roku also lifted its third-quarter revenue guidance, saying it now expects revenue to range between $835 million and $875 million, versus prior guidance of $815 million. Along with the workforce reductions, Roku said it plans to consolidate office space and review its content slate to trim expenses.

    Zscaler — The cloud security company lost 1.2% after reporting better-than-expecting earnings in its fiscal fourth quarter and strong current-quarter guidance. Zscaler posted adjusted earnings of 64 cents per share while analysts polled by LSEG, formerly known as Refinitiv, expected 49 cents. Revenue also topped consensus by $25 million, coming in at $455 million. Additionally, the cybersecurity company said earnings and revenue should come in ahead of what analysts anticipate in the current quarter.
    Enbridge, Dominion Energy — Enbridge shares lost 7.1% premarket after Dominion, which is down 1.1%, said Tuesday it would sell its three natural gas distribution companies to the pipeline operator for $9.4 billion.
    ResMed — Shares added 2% after Needham upgraded the medtech device company to buy from hold. ResMed, which makes CPAP devices for sleep apnea, is down 30% in the third quarter over concerns about the potential impact of weight-loss drugs on the demand for its devices.
    Gitlab — Shares of the technology platform jumped 6.5% in premarket trading following a strong second-quarter report postmarket Tuesday. GitLab posted adjusted earnings of 1 cent per share on $140 million in revenue, while analysts polled by LSEG anticipated a loss of 3 cents per share and revenue of $130 million. The company’s current-quarter revenue outlook beat analyst expectations.
    Toast — Shares of the restaurant tech stock added 3.8% after UBS upgraded shares to buy from neutral in a Wednesday note, citing improved potential for quarterly net new additions as well as margin expansion.

    Asana — The work management stock fell 5.7% despite a strong report and outlook. Asana posted an adjusted loss of 4 cents per share on revenue of $162.5 million, while analysts polled by LSEG anticipated a loss of 11 cents per share on $158 million in revenue. It also raised its full-year guidance to an expected loss of 39 to 43 cents per share, lower than a previously expected loss of 50 to 55 cents per share. 
    Southwest Airlines — Shares of the Dallas-based carrier fell more than 4% after Southwest said August bookings were on the “lower-end” of expectations. Southwest expects third-quarter revenue per average seat mile to come in at the low end of its previous guidance, adding that fuel costs have risen.
    C3.ai — The artificial intelligence software company rose 1.5% ahead of its earnings due after the close Wednesday. Analysts expect an adjusted loss of 12 cents per share on $73.8 million in revenue in the second quarter, and an adjusted loss of 4 cents per share on $78 million in revenue in the third.
    Novo Nordisk — Shares of the pharmaceutical giant gained 0.8% premarket. The Danish company launched its Wegovy weight loss drug in the U.K. on Monday, advancing the drug’s rollout in Europe despite supply constraints.
    AeroVironment — Shares of the unmanned aircraft systems maker rose 15.8% after AeroVironment beat analysts’ expectations in its fiscal first quarter. AeroVironment posted adjusted earnings of $1 per share on revenue of $152 million, while analysts polled by LSEG called for earnings of 26 cents per share on revenue of $129 million.
    — CNBC’s Sam Subin, Michelle Fox Theobald and Jesse Pound contributed reporting. More

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    Treasury yield jump is not ‘death to equities,’ BofA’s Savita Subramanian says

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    The latest jump in Treasury yields is not “death to equities,” BofA Securities’ Savita Subramanian told CNBC’s “Fast Money” on Tuesday.
    In fact, Subramanian sees the bond move as a positive signal — rather than an ominous sign for the economy.

    “Companies are refocusing on efficiency and productivity rather than juicing up earnings through leverage buybacks and cheap financing costs,” the firm’s head of equity and quantitative strategy said. “Companies are finally focused on efficiency and they have new tools. They have AI [artificial intelligence]. They have automation.”
    Subramanian describes herself as having the most positive view on stocks since the 2008 financial crisis, saying that productivity will drive the next leg of the bull market.
    “We’re past this experiment of QE [quantitative easing] and zero interest rates and negative real rates and all of this really kind of unnerving stuff that has been hard to allow us to actually value equities appropriately,” she said. “Maybe we don’t see as strong of returns from here, but we see more real returns.”
    In May, Subramanian hiked her S&P 500 year-end target by 7.5% to 4,300, with a range as high as 4,600. On Tuesday, the index closed at 4,496.83. The S&P is now up 17% year to date.
    “Companies have actually gotten very disciplined about leverage,” Subramanian said. “That’s the lesson that everybody learned in ’08 and even consumers have gotten disciplined.”

    She also finds industrials, energy and financials as sectors that should withstand the higher rates. “These are companies that were denied capital for the last 10 years and have gotten very, very lean and disciplined and now are at a better position to handle a higher interest rate environment,” Subramanian said.
    Even though she believes the corporate America has learned to do more with less, Subramanian suggests stocks won’t go up in a straight line.
    “I don’t think it’s just gravy forever. But I do think we are at a point where we have some visibility with what the Fed is going to do,” Subramanian said. “They’ve already done a lot of the hard work. We are at 5% on short rates. I think we should be happy about that because that means we have some … latitude to ease our way in the next downturn.”
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    Stocks making the biggest moves after hours: GitLab, Zscaler, AeroVironment and more

    People celebrate the GitLab initial public offering at the Nasdaq, Oct. 14, 2021.
    Source: Nasdaq

    Check out the companies making headlines in after-hours trading.
    Zscaler — The cloud security stock slipped 1% even after a better-than-expected report for its fiscal fourth quarter and strong current-quarter guidance. Zscaler reported adjusted earnings of 64 cents per share while analysts polled by LSEG, formerly known as Refinitiv, expected 49 cents. Revenue also topped consensus by $25 million, coming in at $455 million. Additionally, the company said earnings and revenue should come in ahead of what analysts anticipate for the current quarter.

    GitLab — The technology platform jumped 4% following a strong second-quarter report and current-quarter guidance. GitLab posted adjusted earnings of 1 cent per share on $140 million in revenue. Meanwhile, analysts polled by LSEG anticipated a loss of 3 cents per share and revenue of $130 million. The company’s current-quarter revenue outlook was also better than analysts’ forecast.
    Gogo — The broadband stock advanced 3.5% after the company announced the approval of a share repurchase program of up to $50 million.
    Asana — The work management stock slipped 2.8% despite a strong report and outlook. Asana posted a loss of 4 cents per share on revenue of $162 million, while analysts polled by LSEG anticipated a loss of 11 cents per share and $158 million in revenue.
    AeroVironment — Shares added nearly 12% after the maker of unmanned aircraft systems beat analysts’ expectations in its fiscal first quarter. AeroVironment posted adjusted earnings of $1 per share on revenue of $152 million. Analysts polled by LSEG called for earnings of 26 cents per share and revenue of $129 million.
    — CNBC’s Darla Mercado contributed reporting. More

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    Stocks making the biggest moves midday: Halliburton, Warner Bros. Discovery, Oracle and more

    In this photo illustration, the Warner Bros. Discovery logo is displayed on a smartphone screen.
    Rafael Henrique | SOPA Images | Lightrocket | Getty Images

    Occidental Petroleum, Halliburton, EOG Resources — Shares of oil and gas companies were higher Tuesday after Saudi Arabia earlier extended its one million barrel per day voluntary crude oil production cut until the end of the year. Occidental Petroleum gained about 2.5%. Halliburton added 2.7% and EOG Resources rose 1.8%. The cut, which led oil prices higher during the day, adds to other voluntary crude output declines that some members of OPEC have put in place until the end of 2024.
    Oracle — The software stock climbed 2.5% on the back of an upgrade to overweight from equal weight by Barclays. The firm said the company’s cloud business should be helped by artificial intelligence.

    Airbnb — Shares rose 7.2% on the back of S&P Dow Jones Indices’ Friday announcement that the stock would join the S&P 500 starting Sept. 18. The S&P 500 is widely tracked by large index funds, which could create buying pressure on Airbnb’s stock in the weeks ahead.
    Blackstone — Shares of the asset management company gained 3.6% on news that the stock will join the S&P 500 before the open on Sept. 18, as part of a quarterly rebalance for S&P Indices.
    Warner Bros. Discovery — The media stock added 0.7% during Tuesday’s trading session after Warner Bros. said it still expects to hit its net leverage target, despite taking a hit of $300 million to $500 million in its adjusted earnings before interest, taxes, depreciation and amortization. That puts its adjusted earnings in the full-year range of $10.5 billion to $11 billion. Warner Bros. said its adjusted full-year expectation assumes the financial effect of the writers and actors strikes will persist through the end of the year.
    NextGen Healthcare — Shares of the health-care company popped 6.3% Tuesday following a Bloomberg report Monday that the company was in late-stage talks with potential acquirer Thoma Bravo.
    Brady — The manufacturing stock gained 11.4% after the company reported quarterly results. Brady posted an adjusted $1.04 in profit per share for its fiscal fourth quarter, while analysts polled by FactSet forecast 93 cents.

    PulteGroup, Lennar — Homebuilder stocks took a breather Tuesday. The industry has been on fire in 2023, propelled by a shortage of homes for sale. PulteGroup and Lennar fell during the day’s trading session, losing 5.7% and 4.9%, respectively.
    — CNBC’s Brian Evans, Alex Harring and Hakyung Kim contributed reporting. More

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    The $100trn battle for the world’s wealthiest people

    The uber-rich hire all kinds of people to make their lives easier. Landscapers maintain gardens, housekeepers tidy homes, nannies raise children. Yet perhaps no role is as important as that of the wealth manager, who is hired to protect capital.These advisers are scattered across the globe in cities such as Geneva and New York, and are employed as fiduciaries, meaning they are required to act in the interest of their clients. As such, they become privy to the intimate lives of the rich and famous, who must expose their secrets so that advice may be offered on, say, the inheritance of a child born of an extramarital affair. Advisers also help families allocate investments, stash cash in boltholes, minimise tax bills, plan for retirement, arrange to pass down their vast wealth and follow unusual wishes. A Singapore-based manager recalls being told to invest a “double-digit” percentage of a family’s wealth in “bloodstock horses”—steeds bred especially for racing—a term he hurriedly looked up after the meeting.For decades, wealth management was a niche service, looked down upon by the rest of finance. Now it is the most attractive business in the industry. Capital and liquidity requirements set after the global financial crisis of 2007-09 have made running balance-sheet-heavy businesses, such as lending or trading, difficult and expensive. By comparison, doling out wealth advice requires almost no capital. Margins for firms that achieve scale are typically around 25%. Clients stick around, meaning that revenues are predictable. Competition has crushed profits in other formerly lucrative asset-management businesses, such as mutual funds. And whereas the pools of assets managed by BlackRock and Vanguard, the index- and exchange-traded-fund giants, are huge, they collect a fraction of a penny on every dollar invested. A standard fee for a wealth manager is 1% of a client’s assets, annually.Wealth management is all the more appealing because of how quickly it is expanding. Global economic growth has been decent enough over the past two decades, at more than 3% a year. Yet it has been left in the dust by growth in wealth. Between 2000 and 2020 it rose from $160trn, or four times global output, to $510trn, or six times output. Although much of this is tied up in property and other assets, the pool of liquid assets is still vast, making up a quarter of the total. Bain, a consultancy, estimates that it will almost double, from just over $130trn to almost $230trn by 2030—meaning that a $100trn prize is up for grabs. They anticipate the boom will help lift global wealth-management revenues from $255bn to $510bn.image: The EconomistIt will be fuelled by geography, demography and technology. The biggest managers are attempting to cover ever more of the globe as dynastic wealth is created in Asian and Latin American markets. Baby-boomers are the last generation that can rely on defined-benefit pensions for their retirement; more people will have to take decisions about how their own wealth will support them. Meanwhile, software is streamlining the bureaucracy that once waylaid wealth managers, allowing them to serve more clients at lower cost, and helping firms automate the acquisition of new ones. These gains will allow big banks to serve the merely rich as well as the uber-wealthy. Firms are already climbing down the rungs of the wealth ladder, from ultra-high-net-worth and high-net-worth, who have millions of dollars to invest, into the lives of those with just $100,000 or so.Markus Habbel of Bain sees a comparison to the booming luxury-goods industry. Handbags were once prized for their exclusivity as much as their beauty, but have become ubiquitous on social media, with influencers touting Bottega Veneta pouches and Hermès bags. “Think about Louis Vuitton or Gucci. They have basically the same clients as [wealth managers] target and they increased from 40m [customers] 40 years ago to 400m now,” he notes. Upper-crust buyers have not been put off.Which firms will grab the $100trn prize? For the moment, wealth management is fragmented. Local banks, such as btg in Brazil, have large shares of domestic markets. Regional champions dominate in hubs, including Bank of Singapore and dbs in Asia. In America the masses are served by specialist firms such as Edward Jones, a retail-wealth-mananagement outfit in which advisers are paid based on commissions for selling funds. Only a handful of institutions compete on a truly global scale. These include Goldman Sachs and JPMorgan Chase. But the two biggest are Morgan Stanley and a new-look ubs, which has just absorbed Credit Suisse, its old domestic rival. After acquiring a handful of smaller wealth-management firms over the past decade, Morgan Stanley now oversees around $6trn in wealth assets. After its merger, ubs now oversees $5.5trn.To the victorThis patchwork is unlikely to last. “The industry is heading in a winner-takes-all direction,” predicts Mr Habbel, as it becomes “very much about scale, about technology and about global reach”. Jennifer Piepszak, an executive at JPMorgan, has reported that her firm’s takeover of First Republic, a bank for the well-heeled that failed in May, represents a “meaningful acceleration” of its wealth-management ambitions. Citigroup has poached Andy Sieg, head of wealth management at Bank of America, in an effort to revamp its offering. In 2021 Vanguard purchased “Just Invest”, a wealth-technology company.ubs and Morgan Stanley have grander ambitions. The firms’ strategies reflect their contrasting backgrounds and may, ultimately, end up in a clash. Morgan Stanley competes around the world but is dominant in America, and is focusing on wealth services for the masses, as shown by its purchase of e*trade, a brokerage platform, in 2020. James Gorman, the bank’s boss, has said that if the firm keeps growing new assets by around 5% a year, its current growth rate, it would oversee $20trn in a decade or so.This would be built on Morgan Stanley’s existing scale. In 2009 the bank agreed to acquire Smith Barney, Citi’s wealth-management arm, for $13.5bn, which helped boost margins to the low teens from 2% or so in the years before the financial crisis. Today they are around 27%, reflecting the use of tech to move into advising the merely rich. Andy Saperstein, head of the wealth-management division, points to the acquisition of Solium, a small stock-plan-administration firm, which Morgan Stanley purchased for just $900m in 2019, as crucial for building a strong client-referral machine. “No one was looking at the stock-plan-administration companies because they didn’t make any money,” he says. But these firms “had access to a huge customer base and [clients] were constantly checking to see when the equity was going to vest, what it was worth and when they would have access to it.”ubs is employing a more old-school approach, albeit with a global twist. Having taken over its domestic rival, the Swiss bank has a once-in-a-generation chance to cement a lead in places where Credit Suisse flourished, such as Brazil and South-East Asia. Deft execution of the merger would make the firm a front-runner in almost every corner of the globe. Thus, for now at least, the new-look ubs will focus more on geographic breadth than the merely rich.In differing ways, both Morgan Stanley and ubs are seeking even greater scale. When clients hire a wealth manager they tend to want one of two things. Sometimes it is help with a decision “when the cost of making a bad choice is high”, says Mr Saperstein, such as working out how to save for retirement or a child’s education. Other times it is something exclusively available, such as access to investments unobtainable through a regular brokerage account.Being able to offer clients access to private funds or assets will probably become increasingly important for wealth managers. Greater scale means greater bargaining power when negotiating with private-markets firms to secure exclusive deals, such as private funds for customers or lower fees. Younger generations, which will soon be inheriting wealth, are expected to demand more environmentally and socially conscious options, including those that do not just screen out oil companies, but focus on investing in, say, clean energy. A decade ago a client would tend to follow their wealth adviser if he or she moved to a new firm. Exclusive funds make such a switch more difficult.The winner-takes-all trend may be accelerated by artificial intelligence (ai), on which bigger firms with bigger technology budgets already have a head start. There are three kinds of tools that ai could be used to create. The first take a firm’s proprietary information, such as asset-allocation recommendations or research reports, and spit out information that advisers can use to help their clients. Attempts to build such “enterprise” tools are common, since they are the easiest to produce and pose few regulatory difficulties.WealthbotsThe second type of tool would be trained on client information rather than companies’ proprietary data, perhaps even listening in on conversations between advisers and clients. Such a tool could then summarise information and create automatic actions for advisers, reminding them to send details to clients or follow up about certain issues. The third kind of tool is the most aspirational. It is an execution tool, which would allow advisers to speak aloud requests, such as purchasing units in a fund or carrying out a foreign-exchange transaction, and have a firm’s systems automatically execute that transaction on their behalf, saving time.It will take money to make money, then. The biggest wealth managers already have more substantial margins, access to products their clients want and a head start on the technology that might put them even further ahead. “We are a growth company now,” claims Mr Saperstein of Morgan Stanley, a sentence that has been rarely uttered about a bank in the past 15 years. “We are just getting started.”Yet the two giants atop the industry are both going through periods of transition. ubs has barely begun the open-heart surgery that is required when merging two large banks. Meanwhile, Mr Gorman, architect of Morgan Stanley’s wealth strategy, will retire some time in the next nine months. The succession race between Mr Saperstein, Ted Pick and Dan Simkowitz, two other executives, is already under way. Either firm could falter. Although the two are chasing different strategies, it is surely only a matter of time before they clash. ubs is on an American hiring spree; Morgan Stanley is eyeing expansion in some global markets, including Japan.And despite the advantages offered by scale, smaller wealth-management firms will be difficult to dislodge entirely. Lots of different outfits have a foothold in the industry, from customer-directed brokerage platforms like Charles Schwab, which also offer their richest customers independent advice from a fiduciary, to asset-management firms, such as Fidelity and Vanguard, which have millions of customers invested in their funds, who might seek out wealth-management advice. When Willie Sutton, a dapper thief also known as Slick Willie who died in 1980, was asked why he decided to rob banks, he replied that it was simply “because that is where the money is”. This is also a useful aphorism to explain strategy on Wall Street, as firms race to take advantage of the $100trn opportunity in wealth management. Once the business was a sleepy, unsophisticated corner of finance. Now it is the industry’s future. ■ More

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    Fed Governor Waller agrees the central bank can ‘proceed carefully’ on interest rates

    Fed Governor Christopher Waller told CNBC on Tuesday that “a hell of a good week of data” will buy the central bank some time on policy decisions.
    While he was encouraged by the recent reports on where prices are trending, he said they also indicate that the Fed can afford to hold rates higher until it is sure inflation is on the run.

    Federal Reserve Governor Christopher Waller said Tuesday that the recent round of strong economic data will buy the central bank some time as it decides whether additional interest rate hikes are needed to control inflation.
    “That was a hell of a good week of data we got last week, and the key thing out if it is it’s going to allow us to proceed carefully,” Waller told CNBC’s Steve Liesman during a “Squawk Box” interview. “We can just sit there, wait for the data, see if things continue.”

    Highlighting those data points was Friday’s nonfarm payrolls report, which showed better-than-expected growth of 187,000 jobs in August while average hourly earnings rose just 0.2% for the month, lower than forecast.
    Earlier in the week, other reports showed that the Fed’s preferred inflation gauge rose just 0.2% in July, and that job openings, a key measure of labor market tightness, fell to their lowest level since March 2021.
    “The biggest thing is just inflation,” Waller said. “We got two good reports in a row.” The key now is to “see whether this low inflation is a trend or if it was just an outlier or a fluke.”
    Waller is generally considered one of the more hawkish members of the rate-setting Federal Open Market Committee, meaning he has favored tighter monetary policy and higher interest rates as the central bank battles inflation that in the summer of 2022 was running at its highest rate in more than 40 years.
    While he was encouraged by the recent reports on where prices are trending, he said they also indicate that the Fed can afford to hold rates higher until it is sure inflation is on the run.

    “That depends on the data,” Waller said when asked whether the rate increases can stop. “We have to wait and see if this inflation trend is continuing. We’ve been burned twice before. In 2021, we saw it coming down and then it shot up. The end of 2022, we saw it coming down, then it all got revised away.”
    “So, I want to be very careful about saying we’ve kind of done the job on inflation until we see a couple of months continuing along this trajectory before I say we’re done doing anything,” he added.
    Markets are assigning a near certainty to the chances that the Fed skips a rate rise at its Sept. 19-20 meeting. However, there’s a 43.5% probability of an increase at the Oct.31-Nov. 1 session, according to CME Group tracking of futures pricing, indicating some uncertainty. Goldman Sachs this week said it expects the Fed is done.
    “I don’t think one more hike would necessarily throw the economy into recession if we did feel that we needed to do one,” Waller said. “It’s not obvious that we’re in real danger of doing a lot of damage to the job market, even if we raise rates one more time.”
    Waller’s remarks come less than two weeks after Fed Chair Jerome Powell said inflation is still too high and could require more rate increases, though he noted policymakers will “proceed carefully” before moving. More

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    Stocks making the biggest moves midday: PagerDuty, Dell, Tesla, Broadcom and more

    A sign is posted in front of a Broadcom office in San Jose, California, June 3, 2021.
    Justin Sullivan | Getty Images

    Check out the companies making headlines in midday trading:
    VMware — The cloud services company slid 2.8%, a day after giving a mixed second-quarter report. While VMware surpassed expectations for earnings per share, it missed on revenue.

    Lululemon Athletica — The stock popped 6% on Friday after the athletic apparel retailer reported an earnings beat following Thursday’s close. Fiscal second-quarter earnings per share came in at $2.68, versus the $2.54 expected from analysts polled by Refinitiv. Revenue was $2.21 billion, topping estimates of $2.17 billion. Lululemon also upped its guidance for the year.  
    Broadcom — The chip stock lost 5.5% after the company issued fiscal fourth-quarter revenue guidance that was slightly below Wall Street estimates amid concerns about competition in the networking chip space. Broadcom did report better-than-expected earnings and revenue for the latest quarter, however.
    Papa John’s — The pizza chain climbed 1.9% following a Wedbush upgrade to outperform from neutral. The firm said shares were too cheap.
    PagerDuty — The stock declined 7.7% after PagerDuty issued third-quarter earnings guidance that missed analysts’ expectations. The company expects earnings per share between 13 cents and 14 cents for the quarter, below a StreetAccount consensus of 15 cents per share. Baird also downgraded PagerDuty to neutral from outperform, saying its shares are in the “penalty box.”
    A-Mark Precious Metals — Shares of the precious metals trading company soared 10.9% during Friday’s trading session after the company posted its latest quarterly results and announced a $1 per share special dividend. Revenue totaled $3.16 billion, exceeding expectations of $2.31 billion. The company’s earnings per share came out at $1.71, however, which was lower than analysts’ expectations of $1.76, according to StreetAccount.

    Dell Technologies — Dell Technologies surged 21.3% Friday after exceeding analysts’ second-quarter expectations. The computer company reported adjusted earnings per share of $1.74 and revenue of $22.93 billion. Analysts polled by Refinitiv anticipated earnings per share of $1.14 and $20.85 billion. Morgan Stanley also named Dell a top pick in IT hardware.
    Walgreens Boots Alliance — The drugstore chain declined 7.4% after the company announced Roz Brewer had stepped down as the company’s chief executive and left the board.
    Tesla — Shares of Tesla dropped nearly 5.1% after the electric vehicle maker cut prices for some Model S and Model X vehicles in China.
    MongoDB — MongoDB gained just above 3% on Friday after topping Wall Street expectations in its latest quarter. The database software maker posted adjusted earnings of 93 cents per share on revenue totaling $423.8 million for the second quarter. Those results topped expectations of 46 cents in earnings per share and $393 million in revenue, according to a consensus estimate from Refinitiv.
    — CNBC’s Yun Li, Alex Harring and Michelle Fox Theobald contributed reporting. More