With the majority of large-cap firms having now reported earnings for the final quarter of 2019, Opto looks at the share price winners and losers of the earnings season so far, with Amazon, Uber and Twitter ranking among the big-hitters.
77% of the S&P 500’s market cap have now reported Q4 earnings, according to Credit Suisse, so it feels like a good time to take a look at which share prices are hitting – or exceeding – their predicted outlooks, and which companies are faltering during this earnings season.
So far earnings are beating by 5.1% on average, Credit Suisse notes, with 62% of companies exceeding their bottom-line estimates. The tech sector has performed best this earnings season as its largest stocks - including Amazon and Twitter - surpassed expectations. Elsewhere, transport, industrial and energy stocks have struggled, with many key players missing the mark, seeing sinking share price performance as a result.
of companies that exceeded their bottom-line estimates
Below is Opto’s list of some of the best and worst-performing companies, and share prices, of the earnings season so far.
Earnings season big-hitters
Amazon share price
It’s been a productive earnings season for Amazon [AMZN] shareholders, with the firm’s share price having climbed 11% in extended trading after reporting Q4 results on 30 January; and it’s been on the up since, hitting an all-time high of $2,160 on 12 February.
Amazon smashed expectations for Q4, with earnings results coming up at $6.47 per share, compared to the $4.03 per share expected by Refinitiv. Meanwhile, revenue arrived at $87.44bn versus the $86.02bn expected.
Amazon put down its revenue gains to the company’s investments in speedier shipping, which it says are leading to more purchases. The e-commerce powerhouse is also upbeat about future earnings, saying it expects to report revenue between $69bn and $73bn in Q1.
Twitter share price
Twitter’s [TWTR] share price soared by 15% when it reported results on 6 February this earnings season, which showed it had gained its biggest quarterly user growth ever. Monetisable daily active users came in at 152 million versus the 147.5 million expected by FactSet, a 21% rise on the past quarter.
Number of daily active users
Twitter also beat revenue expectations, which arrived at $1.01bn versus the $996.7m expected. However, it missed earnings figures, reporting earnings per share of $0.25 versus the $0.29 expected. The mixed results may explain why its share price has fallen by around 3% overall since its steep gains on results day.
Twitter’s results remain impressive as it continues to deal with technical difficulties, which led to a revenue shortfall for Q3. The platform found issues with its Mobile Application Promotion product last quarter, which it said has hurt its ability to target ads and share measurement data with partners. It hopes to resolve this issue in the first half of 2020.
Uber share price
Uber’s share price rose as much as 10% in after-hours trading, after the company bumped its EBITDA profitability forecast forward to Q4 2020 — ahead of its previous promise of profitability in 2021.
Losses per share arrived at $0.64 versus the $0.68 expected by analysts, according to Refinitiv figures. Meanwhile, revenue arrived at $4.07bn compared to the $4.06bn expected, highlighting accelerated revenue growth on an annualised basis to 37%, up from 30% one quarter ago.
The good news came despite the fact that Uber [UBER] faced tighter regulations across London and California in Q4.
Stocks sliding low this earnings season
Ford share price
The automaker’s share price lost more than 9% in after-hours trading when it released results on 4 February. By 14 February Ford’s share price had slumped by 11% since reporting. This was after the company revealed that it had lost $1.67bn during the fourth quarter and missed earnings expectations.
Ford's Q4 losses
Earnings arrived at $0.12 per share versus the $0.15 per share consensus estimates expected. Ford [F] also disappointed with its 2020 earnings projections, where it forecast between $0.94 and $1.20 per share for the full-year, or adjusted earnings before interest and taxes between $5.6bn and $6.6bn.
Ford put its missed expectations down to contributions it had added to its employee pension plans and retirement benefits. The company is set to execute an $11bn global restructuring plan as its bids to “return to world-class levels of operational execution”, Ford CEO Jim Hackett said.
Lyft share price
Despite beating analyst estimates on revenue and active riders, as well as narrowing its EPS loss, Lyft’s [LYFT] share price has slid by more than 12.4% since reporting its earnings on 11 February.
The company’s misfortunes were largely due to the fact that Uber pipped their rival to a successful report announcement, which included a profitability timeline — something Lyft cannot offer shareholders at the moment.
Lyft’s revenue arrived at $1.02bn versus the $984m expected, according to Refinitiv consensus estimates. Its adjusted EBITDA loss came in at $130.7m versus the $164m estimated. But despite these strong figures, competition is heating up.
Snap share price
Missed revenue expectations sent Snap’s [SNAP] share price plunging by 14% on 4 February. The platform’s figures came in at $561m versus the $563m forecast by Refinitiv. Average revenue per user was also down, coming in at $2.58 versus the $2.62 forecast.
There was lots of good news packed into the results though. Snap’s earnings beat expectations to come in at $0.03 compared to the $0.01 expected. Daily active users grew to 218 million —more than the 215 million forecast.
Revenue guidance for 2020 also arrived ahead of analyst expectations, with the company forecasting that it will generate between $450m and $470m for the full-year, slightly higher than the expected $462m.
Such figures have allowed the share price to recover some of its losses in the days after results, although, at $17.20 as of 19 February’s market close, its share price remains lower than its pre-result price.
Disclaimer Past performance is not a reliable indicator of future results.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.
*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.