Stocks to watch: Clorox, Unity Software, Salesforce, Southwest Airlines

Yahoo Finance's Emily McCormick and Brad Smith discuss the four stocks they are watching today.

Video Transcript

EMILY MCCORMICK: Welcome back. It's time now for our 2&2, two stocks Brad is watching and two stocks I'm watching this afternoon. And I'll kick things off with Clorox. Now those shares were off as much as 16% at session lows today in their biggest slide since the year 2000. And as you can see, those shares still holding on to losses as we head into the closing bell. Now this is coming after the company's latest quarterly profit results and outlook missed estimates due to rising input costs. And for the second quarter, the fiscal second quarter, Clorox's earnings came in at $0.56 a share or well below the $0.84 consensus estimate.

Now Clorox also cut its full year adjusted earnings guidance to now see as much as $4.50 a share. It previously saw as much as $5.70 a share on the high end. Now margins for its latest quarter also contracted by 1.24 percentage points, even as the company tried to raise prices to offset some of these cost concerns.

Now during today's earnings call, Clorox chief financial officer Kevin Jacobson also said that he expected it would take, quote, "several years" for Clorox to rebuild its margins, given the current inflationary backdrop. Now with this latest stock drop, Clorox shares hit their lowest level since 2018, so the company has now erased its gains seen during the pandemic when demand for cleaning products had initially spiked.

Now switching gears to another earnings story, and that's with Unity Software. Now this is one of the holdings in Cathie Wood's ARK Innovation ETF, and those shares are rallying today after the company posted a forecast for 2022 that was well ahead of Wall Street's estimates. The company sees revenue for the full year coming in between $1.49 and $1.51 billion. Analysts were looking for $1.42 billion.

And for the latest reported quarter, revenue of nearly $316 million was well ahead-- actually, $20 million ahead of consensus expectations. And adjusted losses of $0.05 a share also narrower than anticipated. As you can see, that stock still climbing in the final 30 minutes of today's session, currently up nearly 18%. Brad.

BRAD SMITH: All right, so I'm going to be quick with it here. CRM, first ticker symbol that I'm keeping an eye on going into the close-- Salesforce.com, of course. We're taking a look at shares higher by about 3.6% right now. Biggest mover on a percentage basis in the Dow Jones Industrial average this afternoon and on today's session.

And particularly, the company, as we've seen over the course of this year thus far, has been trying to find footing. So this move, even though a move higher on the day, still, investors very closely watching this one to understand if this particular move that we're seeing here on the day is starting to price in a bottom and whether or not we've already hit that at the tail end of January or if there is more room yet to decline.

The company is also going to be delivering their fourth quarter and full year fiscal 2022 results. They announced that yesterday. They are going to be delivering them on March 1st of 2022. And so we're going to be watching closely for that.

All right, so off of CRM, now onto LUV, Luv, of course. But love is in the air right now as we are taking a look at Southwest Airlines, ticker symbol LUV, of course. They're one of my favorites out here to track. And this is up 1% on the day. I actually picked this name when it was down fractionally. And so it's moved higher. And particularly, one of the bigger things that we've been tracking with in the airline space is how they are anticipating the impacts from the Omicron variant to detrimentally impact their most recent quarter.

Now, we had already gotten results from some of the major airlines. We're going to be standing by for even more as we move on throughout the rest of this earnings season. And particularly for Southwest Airlines, they also made another big announcement, which is fitting for a Friday, because it's happy hour somewhere already. They're restoring onboard beverage options.

You may remember, though, this came to the chagrin of some of the workers that are involved within that broader passenger experience. And so we'll see exactly what this experience looks like going forward from here. But this is going to be on flights of 176 miles or more, they're going to be reprising that. And that's coming in February 16 that they're going to be offering that expanded selection. So we will see how they continue to navigate this, especially along with so much of the workforce that's necessary to make this happen in that passenger and in-air experience, if you will, Emily.