U.S. markets were fairly flat in premarket trading Tuesday, as the S&P 500 dipped a mere 0.2% andthe Dow Jones industrials were unchanged from Monday's close. Meanwhile, oil prices ticked up moderately, by about 0.1% to $45.30 a barrel, based on U.S. benchmark West Texas Intermediate.
After lowering earnings guidance for the third quarter as well as reporting less subscriber growth than expected, shares of Netflix (NFLX) were down about 14% in premarket trading Tuesday. Netflix said after the closing bell Monday that it added only 1.7 million new members in the second quarter -- comprising about 160,000 domestically and 1.52 million abroad -- falling short of the the 2.5 million expected in consensus estimates
And while earnings of $0.09 a share topped forecasts of $0.02 for the quarter, revenue of $1.97 billion fell short of expectations for $2.11 billion. Netflix also slashed its third-quarter earnings expectations to $0.05 a share, down from the $0.08 consensus forecast.
"We are growing, but not as fast as we would like or have been," CEO Reed Hastings said in a shareholder letter. "Disrupting a big market can be bumpy, but the opportunity ahead is as big as ever and we continue to improve every aspect of our business,"
Meanwhile, shares of Johnson & Johnson (JNJ) climbed more than 3% after the world's biggest maker of health care products topped second-quarter forecasts and raised its outlook for the year. The company reported a profit of $4 billion for the second quarter or $1.43 per share. Adjusted earnings of $1.74 per share topped Wall Street's estimates of $1.67 per share. Johnson & Johnson also posted revenue of $18.48 billion, which beat analysts' forecasts of $17.89 billion.
"We saw notable strength in our Pharmaceuticals business due to the continued success of new products, and also achieved significant clinical milestones, advancing our robust pipeline," said CEO Alex Gorsky in a statement.
The company increased its sales guidance range for the full year to $71.5 billion to $72.2 billion and raised its adjusted earnings guidance to between $6.63 and $6.73 per share.
VMWare (VMW) shares were trading up about 9% before the opening bell Tuesday on news that the Palo Alto, Calif.-based producer of cloud and virtual software beat analyst expectations for its second-quarter performance. After the market closed Monday, VMWare posted adjusted earnings of $0.97 per share, topping consensus estimates by $0.02, while sales of $1.69 billion slightly beat forecasts of $1.68 billion. CEO Pat Gelsinger attributed VMWare's better-than-expected performance to "building momentum for our newer growth businesses and in the cloud," he said in a statement.
Finally, shares of clothing retailer Guess (GES) were down about 5% after the company was downgraded to Underweight from Neutral by analysts at Piper Jaffray. The company's shares have been in a persistent decline, down 32% over the past 12 months.