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Markets Up on Strong Q3 Earnings: NFLX, UAL, ISRG After the Bell

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We closed Tuesday’s regular trading session higher across all major indexes, helping set stocks back on track higher as Q3 earnings season gains traction. After wallowing through an unsure September and early October, generally solid Q3 results have propped up stocks in a growing number of industries. The Dow marked its fifth straight day higher, +0.57 and a hair below +200 points. The S&P 500 gained +0.74% and, like the Dow, is now less than 1% from all-time highs. The Nasdaq is +0.71% on the day, and the Russell 2000 +0.36%.

Moments after the closing bell, Netflix (NFLX - Free Report) released its Q3 earnings results. The streaming giant beat estimates on its bottom line, $3.19 per share versus $2.56 expected, while coming in exactly in-line with revenue estimates at $7.48 billion, +16.3% year over year. Subscriber growth outperformed estimates: 4.38 billion in the quarter, from 3.8 billion analysts had been looking for. Encouragingly, Netflix keeps its Q4 guidance on net subscriber adds at a much-higher 8.5 million. Overall, Netflix has 213.6 million total subscriptions.

Strength in the quarter came from surprise hit show “Squid Game,” a survival drama based on a children’s game of the same name. Netflix announced this afternoon the South Korea-based series is the service’s biggest show ever, eclipsing 2020’s “Bridgerton,” and currently shows in 142 million households. This is an even more remarkable statistics when we consider that the show, which uses subtitles in non-Korean markets, came out September 17th, barely one month ago.

Netflix shot up over 3% in late trading on the news, but has since settled down somewhat, though still in the green at this hour. Its Q3 report also accounts for only the second earnings beat in the last seven quarters, pulling the trailing four-quarter average to a positive figure. Nevertheless, shares remain trading near their all-time highs and are +22% year to date, slightly under this going back one full year.

United Airlines (UAL - Free Report) outperformed Q3 expectations Tuesday afternoon, posting a loss of -$1.02 per share versus a consensus -$1.65 — which is still worlds better than the year-ago pandemic-deflated -$8.16 per share — on top-line growth more than 200% to $7.75 billion — better than the estimated $7.64 billion. Firming bookings were the clear signal for the turnaround; the Chicago-based airline sees corporate and international bookings strengthening for the full-year, but declined to give clear guidance. Shares are +1.7% after the bell.

Innovative surgical procedure developer Intuitive Surgical (ISRG - Free Report) met expectations in its Q3 earnings release after today’s closing bell, bringing in $1.19 per share that matched the Zacks consensus exactly, +29.4% year over year, on $1.4 billion in quarterly sales which notched a small gain over the $1.39 billion expected. The company’s da Vinci minimally invasive, robotic surgical system — for operations including cardiac, gynecological, colorectal and more — gained +20% in the quarter. Shares are down slightly in late trading, +26% year to date.

In the S&P 500 and the Nasdaq, today’s close has already brought us the longest winning streak for each index since August. Only Consumer Discretionary, of the 11 sectors listed in the S&P, was down for the day. We remain hopeful that further Q3 beats on earnings and revenues — and hopefully higher guidance going into Q4 and beyond — will lead to fresh all-time high indexes, such as the kind we enjoyed back during the latter half of Q2 earnings season.

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