US Earnings
In case you missed it! The scores are out! So how did some of our most popular USD stocks on the EasyEquities platform do during the week? Let’s check it out!
The Coca-Cola Company (KO)
“Open Happiness” as yet another pricing power company that topped estimates despite higher prices is the Coca-Cola Company (KO). The soft-drink company reported strong second quarter (Q2) results as EPS of $0.70 topped estimates of $0.67. Coca-Cola's adjusted revenue was reported at $11.3 billion, which topped the $10.56 billion expected by Wall Street. The company’s organic revenue soared by16% to smash the analyst consensus of +8.19%.
Coca-Cola increased its organic revenue growth guidance from 12% to 13% for the entire year, which is higher than the prior outlook, calling for 7% to 8%. Over the last five days of trading, the share price has been up over 2% but could be volatile for the rest of the week.
McDonald’s Corporation (MCD)
Pricing power companies seem to be the clear winner this week, and one such company is McDonald's, which topped sales estimates as consumers continue eating out. Second quarter adjusted EPS of $2.55, topping the consensus estimates, and Net income in the quarter stood at $1.19 billion, down from $2.22 billion in the year-ago quarter. McDonald’s revenue came in at $5.72 billion, missing the consensus projection of $5.81 billion and down 3% year-over-year.
The famous golden arches reported global same-store sales grew by 9.7% in Q2 compared to the year-ago period, driven by robust international sales. US same-store sales rose 3.7% Year-over-Year, topping the consensus projection of 2.8% growth.
Chipotle Mexican Grill (CMG)
Consumers continue to enjoy fast food despite price hikes which were clear with Chipotle Mexican Grill’s earnings release. Chipotle reported Q2 adjusted EPS of $9.30, compared to $7.46 in the year-ago period and above the consensus estimates of $9.09. The fast-food chain's revenue came in at $2.21 billion, up 17% YoY but slightly below the consensus projection of $2.25 billion. Looking forward, Chipotle expects comparable full-year sales growth in mid to high-single-digits and has seen Morgan Stanley increase the price target to $1,808, reflecting better margins. The share price has been over 14% since the earnings release on Tuesday after the market close.
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Alphabet Inc. (GOOGL)
Alphabet’s share price is up over 7% this week despite narrowly missing some Q2 estimates after the close on Tuesday. Google's parent company reported EPS of $1.21, coming in worse than the consensus estimates of $1.28. The company’s revenue grew 13% year-over-year to $69.69 billion, which also missed estimates by $110 million. Operating income ticked slightly, to $19.45billion from $19.36 billion as operating margins fell to 28% from 31% a year ago.
Google Search revenue came in at $40.689 billion, compared to the $35.845 billion in the same quarter last year. YouTube ads revenue was $7.34 billion, slightly higher than the $7 billion generated in the previous year, while Google Cloud revenue was $6.276 billion, versus $4.628 billion a year ago.
Microsoft Corporation (MSFT)
Microsoft and other tech favorites were hot on the pecking order at the start of the year as the January tech downturn offered retail investors great opportunities at lower prices. Unfortunately, the headwinds persisted, which showed in Microsoft's Q4 earnings report. The tech giant's EPS of $2.23 missed consensus estimates of $2.29, while revenue also came up short at $51.87 billion compared to the consensus projection of $52.45 billion.
Microsoft’s saving grace came in the form of its forward guidance in which the software company expects double-digit sales growth for the fiscal year 2023. This excited investors and soon saw the share price increase by 4%. MSFT shares are up over 6% this week.
Visa Inc (V)
No surprise here that payment stocks like Visa crushed its third quarter (Q3) estimates, which showed how resilient its business model is. Visa reported it processed transactions of $49.3 billion to beat the $48.82 billion consensus. Adjusted EPS of $1.98, higher than the $1.75 consensus, while revenue came in at $7.3 billion, which also came in higher than the average analyst estimate of $7.09. Payment volume of $2.94 trillion was slightly lower than the estimates of $2.97 trillion, but Cross-border payment volumes soared 40% to crush forecasts on the back of the strong recovery in travel.
Alfred Kelly, Chairman and Chief Executive Officer of Visa, said: Sustained growth in overall payments volume, cross-border volume, and processed transactions demonstrated the resiliency of our business model. Consumers are back on the road, visiting various corners of the world, resulting in cross-border travel volume surpassing 2019 levels for the first time since the pandemic began in early 2020.
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Meta Platforms Inc (META)
The artist, formerly known as Facebook, has been under much pressure in 2022, as evident from its latest Q2 earnings release, and there might be more headwinds ahead. The social network and Metaverse pioneer reported worse than expected earnings per share (EPS) of $2.46 vs. $2.56 as revenue came in slightly lower at $28.82 billion from the $28.94 billion estimate.
The bad news did not stop there, though, as Meta also gave its Q3 guidance, which was worse than Wall Street analysts’ expectations. Meta expects revenue for Q3 to be in the range of $26-28.5 billion, reflecting a continuation of the weak advertising demand environment experienced throughout the year's second quarter.
Mark Zuckerberg, Meta founder, and CEO, said: "It was good to see positive trajectory on our engagement trends this quarter coming from products like Reels and our investments in AI."
Amazon.com, Inc. (AMZN)
There is no stopping the world’s largest marketplace, Amazon shares increased over 10% in after-market trading following its Q2 earnings report. Revenue and forward guidance impressed investors although Amazon missed earnings expectations, posting a loss of 20 cents per share, 33 cents worse than the analyst estimated.
Revenue for the quarter increased 7% year-over-year to $121.2 billion, topping the Wall Street consensus estimates of $119.18 billion. Some challenges the tech giant faced during the quarter were inflationary pressures in fuel, energy, and transportation costs. Looking to the third quarter Amazon expects net sales to be between $125 billion and $130 billion, representing growth of between 13% and 17% compared with the third quarter of 2021.
Apple Inc. (AAPL)
The largest company by market capitalization on the globe has beat expectations once again which boosted share higher by nearly 3% in the premarket today. Apple’s third-quarter earnings report showed that iPhone sales are still going strong and grew to $40.665 billion versus $39.57 billion a year ago. EPS of $1.20 topped the consensus estimate of $1.16 as revenue grew 2% year-over-year to $83 billion, beating estimates of $82.59 billion, and representing a Q3 record.
Apple’s CFO Luca Maestri said Q3 results continued to demonstrate the company’s ability to manage its business effectively despite the challenging operating environment. The board of directors also declared a cash dividend of $0.23 per share of the company’s common stock, payable on the 11th of August to shareholders of record as of the close of business on the 8th of August.
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Sources – EasyResearch, Bloomberg, Reuters, The Coca-Cola Company, McDonald’s Corporation, Chipotle Mexican Grill, Alphabet Inc, Microsoft Corporation, Visa Inc, Meta Platforms Inc, Amazon.com Inc, Apple Inc, StreetInsider, Koyfin.
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Barry is a market analyst with GT247, with a wealth of experience in the investment markets. Now in his tenth year in the markets, Barry "The Beef" Dumas brings a combination of technical analysis and fundamental insights to the table.
