CVS Health Corporation (CVS) reported quarterly earnings on Wednesday, November 6. The drug store company beat quarterly revenue expectations, causing its stock to rise by more than 10% after the release of the report.

Revenue for the third quarter came in at $95.43 billion, up 6% from $89.76 billion at this time last year. This surpassed analysts’ expected revenue of $92.75 billion.

“Our third quarter results reflect strong performance in the Health Services and Pharmacy & Consumer Wellness segments, and also highlight the continued need to work across our enterprise and address macro challenges to the Health Care Benefits segment,” said CVS Health CEO, David Joyner. “My commitment to our CVS Health colleagues and our customers is to drive focused execution of our integrated strategy to improve the health of the 185 million people we are privileged to serve.”

The company reported a net income of $71 million or $0.07 per adjusted share. This is down from a net income of $2.27 billion or $1.75 per adjusted share reported at this time last year.

During the third quarter, revenue for the company’s Health Care Benefits segment grew 25.5% to $33.0 billion compared to one year ago. Medical membership increased by 178,000 members to 27.1 million. Health Services revenue decreased 5.9% to $44.13 billion while the segment processed 484.1 million pharmacy claims during the third quarter. Pharmacy & Consumer Wellness revenue rose by 12.3% to $32.42 billion compared to last year.

CVS Health Corporation (CVS) shares ended the week at $55.54, remaining relatively unchanged for the week.

AMC Releases Earnings

AMC Entertainment Holdings, Inc. (AMC) released its third quarter earnings report on Wednesday, November 6. The company experienced a decrease in revenue for the quarter, causing its stock to fall by over 5% following the earnings release.

The company reported revenue of $1.35 billion during the quarter. This was down 4% from $1.41 billion in revenue during the same quarter last year, exceeding analysts’ estimates of $1.33 billion.

“Admittedly, some of our third quarter metrics of 2024 were behind those of last year,” said AMC CEO, Adam Aron. “However, we believe of much greater importance is our bullishness about the impressive movie slate that is coming to our theatres in November and December of 2024, and continuing in 2025 and again in 2026. Based on what we know now, we expect that the industry-wide box office should markedly rise at year-end and rise yet again for the next two years.”

AMC reported quarterly net losses of $20.7 million or $0.06 per adjusted share. This was a decrease from net income of $12.3 million or $0.08 per adjusted share last year at this time.

The Kansas-based movie theater operator experienced a quarterly record for food and beverage revenue per patron coming in at $8.49 per patron in the U.S. with an overall total of $490.4 million worldwide. AMC attributed its increased net losses to operating costs of $1.3 billion for the quarter. The company reported over 65.1 million attendees at its domestic and international theaters for the quarter compared to 73.6 million attendees in the prior year’s quarter. After opening a net of three new theaters, AMC ended the quarter with a total of 874 theaters.

AMC Entertainment Holdings, Inc. (AMC) shares ended the week at $4.27, down 5% for the week.

Red Robin Reports Quarterly Results

Red Robin Gourmet Burgers, Inc. (RRGB) reported its earnings for the third quarter on Wednesday, November 6. The restaurant chain exceeded expectations for quarterly revenue.

Red Robin posted revenue of $274.6 million for the third quarter. This was down from $277.6 million during the same quarter last year but was above analysts’ expectations of $271.6 million.

"Our third quarter results were largely in-line with our expectations and we continue to make progress against our North Star Plan,” said Red Robin CEO, G.J. Hart. "Despite the macroeconomic backdrop that has made our comeback journey more challenging, our team has remained focused on what we can control through effective execution of our strategic plan. Ultimately, we believe we are on the right path to drive sustainable long-term growth and return this beloved brand to prominence in the industry."

Net loss for the quarter came in at $18.9 million or $1.13 per adjusted share. Last year at this time, the company reported a net loss of $8.2 million or $0.79 per adjusted share.

The restaurant chain’s decreased revenue was attributed to a 9.4% decrease in guest traffic. Red Robin saw menu prices increase 5.4% during the quarter, down from 7.6% compared to a year ago. The company’s worsening net loss was due, in part, to a $2.5 million decrease in restaurant revenue along with increased labor and administrative expenses. During the quarter, the company relaunched its loyalty program which grew to 14.5 million members, compared to 13.1 million last year. The company updated its guidance for fiscal 2024 and anticipates total revenue to be approximately $1.25 billion.

Red Robin Gourmet Burgers, Inc. (RRGB) shares ended the week at $5.30, down 10.5% for the week.

The Dow started the week of 11/4 at 42,005 and closed at 43,989 on 11/8. The S&P 500 started the week at 5,725 and ended at 5,996. The NASDAQ started the week at 18,220 and finished at 19,287.

U.S. Treasury yields varied throughout the week as investors reacted to the Federal Reserve’s decision to approve an added interest rate cut. Yields fell toward the end of the week as the latest employment numbers revealed a rise in jobless claims with layoffs remaining low.

On Thursday, the Federal Reserve announced it lowered its benchmark interest rate by a quarter of a percentage point, resulting in the federal funds rate down in the range between 4.50% to 4.75%. This represents the Fed’s second consecutive rate cut following September’s interest rate reduction to help ease the cost of borrowing.

"Once a few more cuts happen over the next few months, the impact will add up to something that moves the needle for the average person struggling with debt," said LendingTree chief credit analyst, Matt Schulz. "For now, however, the effect of these cuts will not be very noticeable."

The benchmark 10-year Treasury note yield opened the week of November 4 at 4.40% and traded as high as 4.48% on Wednesday. The 30-year Treasury bond opened the week at 4.59% and traded as high as 4.68% on Wednesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment increased by 3,000 to 221,000 for the week ending November 2. Continuing unemployment claims climbed by 39,000 to 1.89 million.

"New claims are signaling the weak October payroll print was likely an aberration driven by storms and strikes and that we should see a rebound in November," said economist at JPMorgan, Abiel Reinhart.

The 10-year Treasury note yield finished the week of 11/4 at 4.31%, while the 30-year Treasury note yield finished the week at 4.47%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, November 7. The survey showed the 30-year mortgage rate steadily increasing back towards 7%.

This week, the 30-year fixed rate mortgage averaged 6.79%, up from last week’s average of 6.72%. Last year at this time, the 30-year fixed rate mortgage averaged 7.50%.

The 15-year fixed rate mortgage averaged 6.0% this week, up from last week’s 5.99%. During the same week last year, the 15-year fixed rate mortgage averaged 6.81%.

“Mortgage rates continued to inch up this week, reaching 6.79%,” said Freddie Mac’s Chief Economist, Sam Khater. “It is clear purchase demand is very sensitive to mortgage rates in the current market environment. As soon as rates began to rise in early October, purchase applications fell and over the last month have declined 10%.”

Based on published national averages, the savings rate was 0.45% as of 10/21. The one-year CD averaged 1.81%.

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