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Where to start" The biggest of the Big Tech companies are all reporting earnings Thursday after the close of regular trading. Based on market cap, this is the biggest day of Q3 earnings season (not all are reporting for Q3), though the biggest of the big — Apple — always waits to make its appearance. Let’s check the others first:
Amazon AMZNposted a big beat on its Q3 bottom line: $12.40 per share was miles ahead of the $7.30 expected, and nearly 3x the year-ago earnings number of $4.23 per share. Revenues also posted a solid outperformance, with $96.2 billion in the quarter beyond the $92.9 billion analysts were looking for. Sales growth rose 37% in the quarter. Both North America and International sales were slightly above estimates. AWS cloud business was in-line with estimates at $11.6 billion, while Operating Cash Flow was up 56%.
Guidance for Amazon’s all-important holiday shopping season Q4 took a big step up, now expecting $112 billion - $121 billion next quarter. Operating income guidance was down, however, which must be the main reason shares are trading down more than 1% on the news. Then again, this is what can happen when your stock is up 70% year to date, even after Wednesday’s big sell-off. For more on AMZN’s earnings, click here.
Alphabet GOOGLalso blew the doors off EPS estimates, to $16.40 per share versus $11.40 expected, with $46.17 billion in sales far outpacing the $35.36 billion consensus. YouTube new adds brought in $5 billion for the quarter, while its Cloud business came in at $3.44 billion, ahead of the $3.22 billion expected. Shares have shot up 7.5% on the earnings report; Alphabet had been lagging its Big Tech counterparts a bit previously. For more on GOOGL’s earnings, click here.
Facebook FB also surpassed expectations on its top and bottom lines: $2.71 per share on $21.47 billion beat the $1.94 per share and $19.89 billion in revenues. The social media staple’s EPS swung to a positive from expectations year over year. Daily and Monthly Active Users (DAU & MAU) came in slightly lower than anticipated, which the company expects to continue into Q4; its Q2 adds were tremendous during the heart of the “shelter in place” period of the pandemic. For more on FB’s earnings, click here.
Stepping out of Big Tech a moment, Starbucks SBUXsurprised to the upside in what was expected to be a pull-back quarter as pandemic conditions have wreaked havoc on foot traffic. Earnings of 51 cents per share beat the 33 cents in the Zacks consensus, with $6.2 billion in sales topping the $6.08 billion we were looking for. Both figures are still down year over year. Same-store sales were down in the U.S., International and Chinese markets, but all performed better than expected. For more on SBUX’s earnings, click here.
Apple AAPLshares are down 4% in late trading upon its fiscal Q4 earnings release: 73 cents per share amounts to a 4-cent beat on the consensus estimate, with $64.7 billion beating estimates of $63.4 billion. However, lower-than-expected iPhone sales in the quarter — 26.4 billion units, versus 27.9 billion anticipated — are hitting the stock after hours.
Gross Margins of 38.2% were even, with Services better than expected at $14.5 billion. Mac and iPad sales were relatively in-line. However, the company gave no guidance for fiscal Q1. For more on AAPL’s earnings, click here.
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Qorvo is leveraging industry’s most comprehensive product portfolio, advanced packaging technologies, and system-level expertise to gain unrivalled competitive advantage.
Sensata’s cost-effective operations, robust M&A strategies and augmented geographical presence makes it poised to generate positive cash flow for long-term growth.
Stanley Black & Decker is poised to benefit from favorable e-commerce business, solid product line and acquired assets. It cost actions and solid liquidity might aid in the near term.
WESCO enjoys a strong market position and a global account model, and its business is currently being driven by strengthening end markets and its One WESCO value proposition.
QIAGEN’s business is expected to get a boost from its growing molecular diagnostic market, international expansion, expanded test menu and growth driving strategic collaborations.
Principal Financial Group Inc (PFG)Downgraded: 10/28/20
Increasing opearting expenses, rise in benefits, claims and settlement expenses as well as operating coupled with higher leverage inducing increase in interest expenses weigh on margin expansion.
Northrop Grumman’s unfavorable EV/Sales ratio coupled with exposure to workplace related fatalities raise concerns. The rapid spread of the COVID-19 pandemic also poses risk for the stock
The increasing competition from e-commerce players like Amazon, Alibaba and other small players remain concerns. Also, integration risks, increasing investments and a weak global economy are overhangs.
The geo-political crisis relating to global operation, irregular hydrocarbon prices, OPEC quotas and increasing competition in the space could dent the company’s profitability.
Weakened travel demand due to the coronavirus outbreak is a major concern. Also, cyclical nature of the hotel industry and the dilutive impact of asset dispositions on earnings add to its woes.
Broadcom is a leading player in the semiconductor market based on its expanding product portfolio, multiple target markets, accretive acquisitions and strong cash flow.
A dominant position among the nation’s largest grocery retailers enables Kroger to boost its market share by expanding store base, introducing new items and digital coupons.
We believe the huge untapped potential in emerging markets will act as a positive catalyst for Edwards Lifesciences. The company is consolidating its foothold across all its operating businesses through strong pipeline development.
Intel’s leading position in PC market, strength in servers, growing clout in software, IoT & ADAS domains and headway in process technology are positive indicators of future growth prospects.
