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Markets Close at Session Lows: Good Earnings for MSFT, GOOGL & More
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Markets opened lower this morning, and that turned out to be the session highs on all four major indices. Market participants resumed pricing in either recession fears — based on some weaker-than-expected results from First Republic yesterday afternoon and UPS (UPS - Free Report) this morning — or that inflation will be sticky enough to disallow any Fed interest rate cuts after it presumably reaches its plateau next month. Odds are firming rapidly that another 25 basis-point (bps) hike to the Fed funds rate a week from tomorrow will set the highest interest rate levels in over 15 years.
The Dow shed -334 points on the day, -0.99%, while the Nasdaq gave up -236 points of its own, -1.97%. The S&P 500 split the difference on the session, -1.57%, while the small-cap Russell 2000 got buried -2.40% today. This moves the five-day trading average to negative across the board. For the month, only the Russell has crossed into the red, where it has also gone year to date as of today’s closing bell.
No rest for the weary, as they say: earnings reports among industry leaders are out in rapid succession this afternoon. Microsoft (MSFT - Free Report) has reported fiscal Q3 results with typical beats on both top and bottom lines: earnings of $2.45 per share is notably above the $2.22 expected and reported in the year-ago quarter, while revenues of $52.86 billion surpassed the $50.95 billion in the Zacks consensus. The software giant has only missed on earnings once in the past five years.
Azure revenues came roughly in-line with expectations at +27% (though this illustrates notable deceleration within the company’s cloud-based business overall). Office Commercial came in +13% (+17% constant currency; Microsoft does a ton of business overseas), and Office Consumer — which was negative last quarter — came in +1% (+4% constant currency). Shares are up +4.8% after hours, pushing the stock higher than +15% year to date.
Google parent Alphabet (GOOGL - Free Report) also outperformed expectations on both earnings and sales in its Q1 report after the close. Earnings of $1.17 per share outstrode the $1.06 analysts were looking for, though not quite to the $1.23 per share the company reported a year ago. Revenues, subtracting traffic acquisition costs (TAC), came in at $58.07 billion for the quarter, better than the $57.20 billion expected (GOOGL reported $69.8 billion, without TAC removed).
In its first profitable quarter in its cloud space, revenues there were a tad light of estimates: $7.45 billion versus $7.49 billion expected. YouTube was slightly stronger than expected in the quarter, $6.7 billion versus $6.6 billion estimated. The company also announced a $70 billion share buyback, though Alphabet appears to be less aggressive in reducing overhead by laying off staff, at least compared to companies like Meta (META - Free Report) .
Chipotle (CMG - Free Report) posted an impressive beat on the bottom line in its Q1 report: earnings of $10.50 per share swept past the $8.89 in the Zacks consensus, whereas revenues of $2.37 billion outpaced the estimated $2.34 billion for the quarter. Comps came aheads of expectations as well: +10.9% versus +8.6%. Operating Margins also performed better, partly on lower prices for avocados and delivery costs. CMG shares are up +6.3% in late trading, +30% year to date.
Visa (V - Free Report) , a company that literally does not miss on earnings expectations, beat once again in its fiscal Q2 report — $2.09 versus the consensus $1.97 per share, favorable to the year-ago quarter’s $1.79. Revenues in the quarter also solidly beat estimates: $7.99 billion versus $7.74 billion, for +11% revenue growth year over year. If consumers have slowed down use of their credit cards, there’s very little evidence here: Payments Volume was +10%, cross-border (indicating overseas card use) beat expectations, +32% in the quarter.
Texas Instruments (TXN - Free Report) makes it a clean sweep: earnings of $1.85 per share outperformed the Zacks consensus $1.76, though below the $2.35 per share reported a year ago, while revenues came in at $4.38 billion, slightly ahead of the $4.36 billion expected, which was still -11% year over year. Guidance for next quarter tightened up a bit, putting the midpoint of Zacks’ previous revenue guidance toward the high end of what the company expects now, as T.I. sees weakness across all end-markets, aside from autos. Questions or comments about this article and/or its author? Click here>>
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Markets Close at Session Lows: Good Earnings for MSFT, GOOGL & More
Markets opened lower this morning, and that turned out to be the session highs on all four major indices. Market participants resumed pricing in either recession fears — based on some weaker-than-expected results from First Republic yesterday afternoon and UPS (UPS - Free Report) this morning — or that inflation will be sticky enough to disallow any Fed interest rate cuts after it presumably reaches its plateau next month. Odds are firming rapidly that another 25 basis-point (bps) hike to the Fed funds rate a week from tomorrow will set the highest interest rate levels in over 15 years.
The Dow shed -334 points on the day, -0.99%, while the Nasdaq gave up -236 points of its own, -1.97%. The S&P 500 split the difference on the session, -1.57%, while the small-cap Russell 2000 got buried -2.40% today. This moves the five-day trading average to negative across the board. For the month, only the Russell has crossed into the red, where it has also gone year to date as of today’s closing bell.
No rest for the weary, as they say: earnings reports among industry leaders are out in rapid succession this afternoon. Microsoft (MSFT - Free Report) has reported fiscal Q3 results with typical beats on both top and bottom lines: earnings of $2.45 per share is notably above the $2.22 expected and reported in the year-ago quarter, while revenues of $52.86 billion surpassed the $50.95 billion in the Zacks consensus. The software giant has only missed on earnings once in the past five years.
Azure revenues came roughly in-line with expectations at +27% (though this illustrates notable deceleration within the company’s cloud-based business overall). Office Commercial came in +13% (+17% constant currency; Microsoft does a ton of business overseas), and Office Consumer — which was negative last quarter — came in +1% (+4% constant currency). Shares are up +4.8% after hours, pushing the stock higher than +15% year to date.
Google parent Alphabet (GOOGL - Free Report) also outperformed expectations on both earnings and sales in its Q1 report after the close. Earnings of $1.17 per share outstrode the $1.06 analysts were looking for, though not quite to the $1.23 per share the company reported a year ago. Revenues, subtracting traffic acquisition costs (TAC), came in at $58.07 billion for the quarter, better than the $57.20 billion expected (GOOGL reported $69.8 billion, without TAC removed).
In its first profitable quarter in its cloud space, revenues there were a tad light of estimates: $7.45 billion versus $7.49 billion expected. YouTube was slightly stronger than expected in the quarter, $6.7 billion versus $6.6 billion estimated. The company also announced a $70 billion share buyback, though Alphabet appears to be less aggressive in reducing overhead by laying off staff, at least compared to companies like Meta (META - Free Report) .
Chipotle (CMG - Free Report) posted an impressive beat on the bottom line in its Q1 report: earnings of $10.50 per share swept past the $8.89 in the Zacks consensus, whereas revenues of $2.37 billion outpaced the estimated $2.34 billion for the quarter. Comps came aheads of expectations as well: +10.9% versus +8.6%. Operating Margins also performed better, partly on lower prices for avocados and delivery costs. CMG shares are up +6.3% in late trading, +30% year to date.
Visa (V - Free Report) , a company that literally does not miss on earnings expectations, beat once again in its fiscal Q2 report — $2.09 versus the consensus $1.97 per share, favorable to the year-ago quarter’s $1.79. Revenues in the quarter also solidly beat estimates: $7.99 billion versus $7.74 billion, for +11% revenue growth year over year. If consumers have slowed down use of their credit cards, there’s very little evidence here: Payments Volume was +10%, cross-border (indicating overseas card use) beat expectations, +32% in the quarter.
Texas Instruments (TXN - Free Report) makes it a clean sweep: earnings of $1.85 per share outperformed the Zacks consensus $1.76, though below the $2.35 per share reported a year ago, while revenues came in at $4.38 billion, slightly ahead of the $4.36 billion expected, which was still -11% year over year. Guidance for next quarter tightened up a bit, putting the midpoint of Zacks’ previous revenue guidance toward the high end of what the company expects now, as T.I. sees weakness across all end-markets, aside from autos.
Questions or comments about this article and/or its author? Click here>>