News & Analysis

A Summary of Major US Earnings Reports

April 24, 2020

By Deepta Bolaky
 @DeeptaGOMarkets

A Summary of Major US Earnings Reports

IBM, Netflix Inc, Snap AT&T, and Intel Corp were among the major large-cap corporations reporting earnings.Even though the pandemic is expected to portrait a dire outlook, earnings results are much awaited to gauge if large companies can muddle through the crisis and how they are preparing for an eventual recovery.

IBM

The company reported earnings of $1.84 per share and revenue of $17.57B. While earnings came above forecasts, revenue was slightly below the estimates. IBM withdrew its full-year 2020 guidance in the light of the current COVID-19 crisis. The company also stated that they will reassess this position based on the clarity of the macroeconomic recovery at the end of the second quarter.

All in all, unless business conditions deteriorate further, the company is flaring quite well during the pandemic crisis. As of writing, its share price is currently trading at $121.43 and has recouped all the losses made after the release of the earnings reports. 

Netflix Inc.

The company reported a $5.8billion in revenue with a year-on-year growth of 27.6%. The number of subscribers came was above estimates and more than double its target with 15.77 million paid subscribers. The substantial growth came in March as the lockdown, and social distancing measures forced many more households to join Netflix.

However, the company warned that revenue and growth might decline mostly due to probable lift of the confinement measures, strong US dollar that is impacting international revenue growth and the lack of high-quality content following the pause in production.

Its share price seesawed between a range of $420 and $440 as investors digest the buoyant results and the uncertain foreseeable outlook.

Snap Inc.

As people are practising physical distancing and remain at home, snap’s user base grew to 229 million daily active users, up by 20% from last year.

Q1 Financial Highlights:

  • Revenue increased 44% YoY to $462 million
  • Average revenue per user increased 20% YoY to $2.02

Given the uncertainties related to the ongoing COVID-19 pandemic and the rapidly shifting macro conditions, the company is not providing any expectations for revenue. However, while there is uncertainty about near-term growth rates, the company remains optimistic that there are numerous factors that position the business favourably in this current challenging environment.Its share price skyrocketed and rose to a high of just shy of $17 before paring some gains to finish at $16.06 on Thursday.

AT&T

The corporate results were weak but somewhat promising. While the TV subscribers continue to take a hit, the monthly phone subscribers were among the main area of strength for the first quarter- it has doubled in the same period last year.

  • Adjusted EPS of $0.84 ($0.89 without COVID-19 impact) compared to $0.86 in the year-ago quarter
  • Cash from operations of $8.9 billion
  • Capital expenditures of $5.0 billion
  • Free cash flow of $3.9 billion
  • Consolidated revenues of $42.8 billion

Overall, the company has enough cash flow to continue investment in critical growth areas. As of writing, the company’s share price is trading lower just below $30.

Intel Corp

Intel Corp reported above forecasts earnings per share and revenue in the first quarter.

  • First-quarter revenue was $19.8 billion, up 23% year-over-year (YoY).
  • First-quarter GAAP earnings-per-share (EPS) was $1.31, up51 per cent YoY; non-GAAP EPS of $1.45 was up 63 per cent.
  • Generated $6.2 billion cash from operations and $2.9 billion of free cash flow while strengthening liquidity with$10.3 billion in new debt and suspension of share buybacks.
  • Expecting second-quarter revenue of $18.5 billion.

Similarly, like other companies, Intel is not providing full-year guidance given the significant economic uncertainty. The company expects weaker demand from enterprises and government customers in the second half of 2020. As of writing, the company’s share price recovered from losses made during the week but struggled to trade above $60.

Coming Up Next Week 

Next week will be one of the busiest weeks for the earnings season with the remaining of the FAANG group reporting their quarterly earnings.

Facebook Inc.

Facebook, Inc. (NASDAQ: FB) announced today that the company’s first-quarter 2020 financial results will be released after market close on Wednesday, April 29, 2020. Facebook will host a conference call to discuss its results at 2 p.m. PT / 5 p.m. ET the same day.

Apple Inc.

Apple will release its second-quarter results on Thursday, April 30, 2020 after market close. Apple’s conference call to discuss second-quarter results on the same say at 2:00 p.m. PT / 5:00 p.m. ET.

Amazon.com, Inc.

Amazon.com, Inc. (NASDAQ: AMZN) will hold a conference call to discuss its first-quarter 2020 financial results on April 30, 2020 at 2:30 p.m. PT/5:30 p.m. ET.

Google

Alphabet Inc. (NASDAQ: GOOG, GOOGL) will hold its quarterly conference call to discuss first-quarter 2020 financial results on Tuesday, April 28, at 1:30 p.m. PT/4:30 p.m. ET.

Twitter, MicrosoftTesla and Berkshire Hathaway will also be among the major companies reporting quarterly results.

By Deepta Bolaky
 @DeeptaGOMarkets

Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs.  Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.

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