Cybersecurity provider CrowdStrike (CRWD) shares are diving after it was tied to a worldwide computer outage that also in sending shares of Microsoft (MSFT) lower; Delta Air Lines (DAL), United Airlines (UAL), and American Airlines (AAL) grounded planes as a result of the tech disruptions; Netflix (NFLX) shares are turning higher on an earnings beat despite disappointing third-quarter guidance; Hawaiian Electric (HE) shares are soaring after the utility reportedly reached a settlement over a series of lawsuits related to last year’s Maui fires; and American Express (AXP) shares are declining on a revenue miss. U.S. stock futures are little changed as the market looks to shake off yesterday’s selloff. Here’s what investors need to know today.
1. CrowdStrike, Microsoft Shares Fall on Worldwide IT Outage
Shares of cybersecurity provider CrowdStrike (CRWD) are plummeting 12% and Microsoft (MSFT) shares are down about 1.5% in premarket trading after an IT issue affected computer systems around the world. The outage hit global businesses, including airlines, broadcasters, and banks. The issue appeared to be caused when CrowdStrike initiated an update, taking down Windows computers. “We have been made aware of an issue impacting Virtual Machines running Windows Client and Windows Server, running the CrowdStrike Falcon agent, which may encounter a bug check (BSOD) and get suck in a restarting state,” Microsoft said. CrowdStrike Chief Executive Officer (CEO) George Kurtz confirmed the cybersecurity firm’s role in the outage, blaming an update “defect.”
2. Outage Grounds Airlines, Disrupts Early Morning Operations
The widespread computer outage led the Federal Aviation Administration (FAA) to issue ground stop orders for Delta Air Lines (DAL), United Airlines (UAL) and American Airlines (AAL) on Friday morning. The FAA said that the airlines requested the ground stop in order to work on this issue, as social media posts showed blue screens on airport terminals, leaving passengers unable to retrieve bags or rebook flight and occurring while airport staffing was light. American Airlines said it had resumed operations as of 5 a.m. ET. Shares of all three airlines moved slightly lower in premarket trading.
3. Netflix Shares Turn Higher on Earnings Beat
Netflix (NFLX) shares reversed course and are edging higher in premarket trading as the streaming giant’s results for the second quarter topped analysts’ expectations despite initially disappointing investors with soft third-quarter guidance. The company reported $9.56 billion in revenue and net income of $2.15 billion, topping estimates. Netflix added more than 8 million new subscribers in the second quarter, also ahead of expectation. Its forecast of $9.73 billion in third-quarter revenue came in lower than projections and initially stoked investor worries after hours Thursday.
4. Hawaiian Electric Stock Jumps on Reported Maui Wildfire Settlement Deal
Shares of Hawaiian Electric (HE) are soaring by 37% in premarket trading after a Bloomberg report that the utility was among companies that agreed to pay more than $4 billion to resolve hundreds of lawsuits over last year’s Maui wildfires. The proposed settlement would have Hawaiian Electric putting up about $1.5 billion and be paid out to affected homeowners and businesses over four years, the report said. The deal would also cover state and local governments, along with a unit of Charter Communications (CHTR), whose shares are little changed.
5. American Express Slips on Revenue Miss
American Express (AXP) shares are declining about 2% in premarket trading after it posted second-quarter revenue below expectation. The credit card issuer reported year-over-year revenue growth of 8% to $16.33 billion, short of the consensus estimate of $16.56 billion of analysts polled by Visible Alpha. Its earnings per share (EPS) of $4.15 came in higher than the $3.26 per share analysts projected. Citing strong performance in its core business, the company also raised its outlook for full-year EPS to between $13.30 and $13.80, up from the prior guidance of between $12.65 and $13.15.
