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Afternoon of Internet & Videogame Earnings: PINS, ATVI & More

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Markets could not get out from underwater today, aside from a brief tick above the surface this afternoon from the blue-chip Dow index. The Dow wound up -0.62% on the day, while the S&P 500 slid -0.62%. The Nasdaq lost a full percentage point (-1.00%) while the Russell 2000 wound up -1.38%. Year to date, the Nasdaq and Russell are +14% and +11% so far, leading the major indices.

It may be something of a reallocation — out of beaten-down tech/growth stocks from 2022 to a sunnier economic outlook both domestically and in China, to portfolios spread out a little more evenly across sectors. Remember, we’re not seeing indices acting on any specifics news aside from earnings reports from companies that represent bellwethers in their industries, such as Tyson Foods (TSN - Free Report) this morning.

This may be expected to change somewhat this week, but next week brings us much bigger economic prints, even as Q4 earnings season begins to wind down. CPI, PPI, and housing data are among the potential market movers next week. From now until Friday, we’re mostly looking toward Disney’s (DIS - Free Report) earnings on Wednesday and weekly Jobless Claims Thursday morning.

We see some interesting earnings results after the closing bell today. We’re no longer in the FAANG realm of earnings season, but these companies still carry some heft in their respective segments. Pinterest (PINS - Free Report) , for instance, beat earnings estimates by a penny to 29 cents per share, while revenues of $877 million came in well short of $885 million. Shares have traded as low as -15% in the after-market.

Monthly active users (MAU) at the popular Internet platform came in 2 million short of expectations for the quarter, to 5 million and 450 million total. The company also expects low-single-digit sales growth in the current quarter, down from 7% previous expected. Pinterest did announce a $500 million stock buyback, although reports are this service publicly traded firms provide to their investors is going to come under attack from President Biden’s State of the Union address tomorrow night.

Activision Blizzard (ATVI - Free Report) , aside from its pending acquisition by Microsoft (MSFT - Free Report) , posted mixed Q4 results Monday afternoon: earnings of 78 cents per share was well short of the $1.51 expected on revenues of $3.57 billion, which easily outperformed the Zacks consensus $3.23 billion for the quarter. It’s recent release of a new Call of Duty bolstered the company’s results. Shares are up +1% in late trading.

Competing videogame maker Take Two Interactive (TTWO - Free Report) missed on both top and bottom lines for its fiscal Q3 this afternoon, as the Grand Theft Auto and NBA2K creator posted -91 cents per share for the quarter, a wide swing to the negative versus the +88 cents expected. Revenues of $1.38 billion came up shy of the $1.44 billion, and next quarter’s revenue guidance has been lowered to $1.36 billion from the Zacks consensus $1.49 billion. This is the company’s third-straight quarterly earnings miss.

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