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!
Activision Blizzard Inc (ATVI)
Iconic video game maker Activision Blizzard reported second-quarter earnings after the closing bell on Monday which has seen shares higher by 1.69%. The “Call of Duty” maker beat revenue expectations but adjusted sales declined 15% from a year ago due to a soft Call of Duty launch last fall and a slow year for the gaming industry overall. Revenue of $1.64 billion was booked which beat estimates by $70 million and adjusted EPS of $0. 47 cents were in-line with estimates.
Video game sales across the industry are forecast to contract 1.2% to $188 billion in 2022 which can be expected as we leave the pandemic lockdowns behind, which lifted video game sales by over 26%. Bloomberg reported that Activision expects revenue and earnings per share to “remain lower year-over-year in the second half.”
Uber Technologies, Inc. (UBER)
Uber is riding high after its recent earnings announcement which has seen the share price higher by 30% over the last 5 days and climbing. The ride-sharing and delivery company posted revenue of $8.07 billion vs the $7.39 billion expected and gross bookings rose 33% also ahead of estimates. Uber reported an adjusted EBITDA of $364 million to crush the average analyst estimate of $265.9 million.
Uber did however attribute a loss per share of $1.33 to “a $1.7 billion net headwind (pre-tax) relating to Uber’s equity investments, primarily due to aggregate unrealized losses related to the revaluation of Uber’s Aurora, Grab, and Zomato stakes.” according to the Nelson Chai, Uber’s CFO. Nelson Chai also said, “We became a free cash flow generator in Q2, as we continued to scale our asset-light platform, and we will continue to build on that momentum,” and “This marks a new phase for Uber, self-funding future growth with disciplined capital allocation while maximizing long-term returns for shareholders.”
The construction and mining equipment manufacturer faced some headwinds over the quarter but looking forward it is one to watch despite share only rising 0.42% since earnings. The second quarter (Q2) adjusted EPS of $3.18 to beat the consensus of $3.03. However, revenue came in at $14.25 billion, which is below the consensus of $14.37 billion, after the company’s biggest segment, Machinery, Energy & Transportation, also missed the consensus despite rising 11%.
Looking forward to the third quarter Caterpillar “anticipates 3Q sales to increase from higher sales to users and price realization,” it said in a press release. The company also expects its adjusted operating profit margin to improve in the second half of 2022. “Our second-quarter results reflect healthy demand across most of our end markets. We remain focused on executing our strategy for long-term profitable growth,” CEO said in remarks to investors
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Advanced Micro Devices, Inc. (AMD)
The semiconductor company Advanced Micro Devices has been an EasyResearch stock pick before for good reason and it looks like there could be a lot more upside potential to come. The chip maker reported an adjusted EPS of $1.05, but revenue which soared 70% to $6.55 billion, stole the show. AMD also reported an adjusted operating margin of 30% and the press release stated “Each of our segments significantly grew year-over-year, led by higher sales of our data center and embedded products. We see continued growth in the back half of the year highlighted by our next generation 5nm product shipments and supported by our diversified business model,”
Looking forward the company sees revenues between $6.5 billion and $6.9 billion with the midpoint of the guidance coming in below the consensus of $6.81 billion. AMD also said it expects to record an adjusted gross margin of 54%, again lower than the estimate of 54.2%. For the full year, AMD sees revenue of about $26 billion to $26.6 billion, higher than the estimates. Despite the soft Q3 outlook, analysts remain very positive about AMD shares. BofA analyst Vivek Arya hiked the price target to $120 from $110 as the company has a “generational share gain opportunity.”
The money transfer company smashed second-quarter estimates and analysts also expect the near-term outlook on the company to improve. PayPal reported Q2 adjusted EPS of 93c, topping the consensus estimates of 86c per share while revenue increased 9% to $6.81 billion. The company reported 429 million active users at the end of the quarter, up 6% YoY but below the consensus projection of 432.8 million.
Looking ahead, PayPal made significant progress in terms of capital efficiency, with the company estimating to slash costs by $900 million in 2022. It expects its annualized benefits from cost cuts to save a minimum of $1.3 billion next year. It also reached an information-sharing agreement on value creation with the activist investor Elliott Management, which could be interesting to watch.
The globes favorite vacation rental marketplace, Airbnb showed better than expected earnings for the quarter but a muted forward outlook on revenue could spoil the party. Airbnb reported Q2 EPS of 56c, compared to a loss per share of 11c in the year-ago period. The company’s Q2 revenue stood at $2.10 billion, in line with the consensus estimates. Looking at bookings Air Bed & Breakfast reported 103.7 million nights and experiences bookings, which missed the consensus projection of 106 million.
Looking forward to the third quarter (Q3) revenue is expected to be in the range of $2.78 billion to $2.88 billion and expects Q3 Nights and Experiences Booked to remain stable relative to the year-ago period. Airbnb announced a $2 billion share repurchase program, saying the company remains very confident in its long-term growth and profitability prospects.
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Robinhood Markets, Inc. (HOOD)
The Sherwood Forest gang reported a mixed bag of Q2 FY 2022 results and announced it will cut its band of merry men by approximately 23%. Robinhood did manage to beat estimates on earnings and posted a loss per share of $0.34 vs the $0.37 per share analysts expected. Total net revenue of $318 million was up from $299 million in the first quarter, but year-over-year revenue came in far below expectations, falling 44.0% as monthly active users fell by 1.9 million.
The FinTech platform's layoffs will be primarily across operations, marketing, and program management. HOOD CEO and co-founder Vladimir Tenev said, “deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash.” Robinhood forecast that both the April and August job reductions will lower GAAP total operating expenses in FY 2022 to between $2.5 billion to $2.6 billion, a decline of 25% to 29% from the previous year.
Alibaba Group Holding Limited (BABA)
“Here comes the Alibaba” the e-commerce platform has seen renewed vigor after its recent first quarter (Q1) earnings report as it signals a recovery. Alibaba’s report card beat expectations on both the top and bottom lines while indicating business conditions improved in June. The company reported adjusted earnings of $1.75 per American Depositary Share vs the $1.58 a share revenue analysts expected.
Alibaba faced a number of headwinds in the quarter including a resurgence of Covid in China that led to major cities, such as the financial metropolis of Shanghai, being locked down. Chief Executive Daniel Zhang said, "Following a relatively slow April and May, we saw signs of recovery across our businesses in June," and "We are confident in our growth opportunities in the long term given our high-quality consumer base and the resilience of our diversified business model catering to different demands of our customers."
The web infrastructure and integrated cloud-based security company posted earnings after the market close on Thursday with much fan fair driving the share price higher by 20%. The report card showed a second-quarter loss of $63.5 million, or 20 cents a share, compared with a loss of $35.5 million, or 12 cents a share, in the year-ago period. Revenue increased to $234.5 million from $152.4 million in the year-ago quarter.
Cloudflare’s chief executive and co-founder said, “We delivered another strong quarter, with revenue growth up 54% year over year, driven by strength in our large customers, and a record number of large customer additions,” and “Large customers now represent 60% of our revenue, and they are leaning forward to hear how Cloudflare can save them money and reduce IT complexity, all while increasing their security, performance, and reliability.”
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Sources – EasyResearch, Bloomberg, Streetinsider, Reuters, CNBC, Koyfin, Becca Schimmel, Investor’s Business Daily, MarketWatch, Ryan Browne.
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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.
