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Q4 Earnings & Revenue Beats: Tesla (TSLA), IBM and ServiceNow (NOW)
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Market indices fought back from the depths of today’s pre-market, when a deeper analysis of Microsoft (MSFT - Free Report) earnings and continued uncertainty regarding an economic recession, etc. kept market participants from running up higher. After all, with the Nasdaq +9% and the Russell 2000 +8% year to date, the lat thing investors want to do after 2022 is get too far ahead of themselves.
For the session, the Dow settled in -0.06%, with the Nasdaq -0.20% and the S&P 500 -0.18% — flat again, for thew third straight trading day. The Vix looks broken, but it’s not. The Russell was the only gainer at the close, +0.24%. But the come-up intraday suggests that people do want to be positioned in equities going forward, for better or worse.
Tesla (TSLA - Free Report) came into its Q4 earnings report carrying a Zacks Rank #5 (Strong Buy), and then outperformed on both top and bottom lines for the quarter: earnings of $1.19 per share surpassed the Zacks consensus by a solid dime, while $24.32 billion in sales easily swept past the $23.81 billion analysts were expecting. In the quarter, Tesla announced a price cut in markets outside the U.S.
Gross margins on its autos ex-zero emission credits came in at +24.3%, below the +26.2% expected and +26.8% the previous quarter. Operating margins for the full year reached +16.8%. Considering Tesla shares’ major sell-off over the past year (-54%), these are not horrid figures for a major auto manufacturer. That said, Tesla has — for years — not traded so much as an auto manufacturer and more like a software company.
Tesla expects deliveries of 50%+ over time, meaning the longer-term. In its earnings statement this afternoon, the company suggests 2023 production ahead of this +50% number, although the math related to the cited 1.8 million deliveries for the year is actually less than +40%. We assume these sorts of wrinkles will hopefully be ironed out in the company’s conference call.
IBM (IBM - Free Report) is also out with Q4 results this afternoon, missing the Zacks consensus by a penny on the bottom line to $3.60 per share, on revenues that surged past estimates in the quarter. The company also expects full-year revenues to come in mid-single-digits higher. Its Red Hat segment gained +10% in the quarter. The company also continues its healthy +4.6% dividend yield. Shares are trailing off -1.5% in late trading.
ServiceNow (NOW - Free Report) shares are selling off -5.5% in late trading on its Q4 results this afternoon, even with solid beats on both top and bottom lines: earnings of $2.28 per share outpaced the $2.01 expected, on $1.94 billion which was a hair above expectations, +20% year over year. Subscriptions rose +22% year over year. However, as we saw with Microsoft’s report yesterday, the enterprise software business is hitting some headwinds, so investors appear to be selling the news today.
Image: Bigstock
Q4 Earnings & Revenue Beats: Tesla (TSLA), IBM and ServiceNow (NOW)
Market indices fought back from the depths of today’s pre-market, when a deeper analysis of Microsoft (MSFT - Free Report) earnings and continued uncertainty regarding an economic recession, etc. kept market participants from running up higher. After all, with the Nasdaq +9% and the Russell 2000 +8% year to date, the lat thing investors want to do after 2022 is get too far ahead of themselves.
For the session, the Dow settled in -0.06%, with the Nasdaq -0.20% and the S&P 500 -0.18% — flat again, for thew third straight trading day. The Vix looks broken, but it’s not. The Russell was the only gainer at the close, +0.24%. But the come-up intraday suggests that people do want to be positioned in equities going forward, for better or worse.
Tesla (TSLA - Free Report) came into its Q4 earnings report carrying a Zacks Rank #5 (Strong Buy), and then outperformed on both top and bottom lines for the quarter: earnings of $1.19 per share surpassed the Zacks consensus by a solid dime, while $24.32 billion in sales easily swept past the $23.81 billion analysts were expecting. In the quarter, Tesla announced a price cut in markets outside the U.S.
Gross margins on its autos ex-zero emission credits came in at +24.3%, below the +26.2% expected and +26.8% the previous quarter. Operating margins for the full year reached +16.8%. Considering Tesla shares’ major sell-off over the past year (-54%), these are not horrid figures for a major auto manufacturer. That said, Tesla has — for years — not traded so much as an auto manufacturer and more like a software company.
Tesla expects deliveries of 50%+ over time, meaning the longer-term. In its earnings statement this afternoon, the company suggests 2023 production ahead of this +50% number, although the math related to the cited 1.8 million deliveries for the year is actually less than +40%. We assume these sorts of wrinkles will hopefully be ironed out in the company’s conference call.
IBM (IBM - Free Report) is also out with Q4 results this afternoon, missing the Zacks consensus by a penny on the bottom line to $3.60 per share, on revenues that surged past estimates in the quarter. The company also expects full-year revenues to come in mid-single-digits higher. Its Red Hat segment gained +10% in the quarter. The company also continues its healthy +4.6% dividend yield. Shares are trailing off -1.5% in late trading.
ServiceNow (NOW - Free Report) shares are selling off -5.5% in late trading on its Q4 results this afternoon, even with solid beats on both top and bottom lines: earnings of $2.28 per share outpaced the $2.01 expected, on $1.94 billion which was a hair above expectations, +20% year over year. Subscriptions rose +22% year over year. However, as we saw with Microsoft’s report yesterday, the enterprise software business is hitting some headwinds, so investors appear to be selling the news today.
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