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US Tech earnings reports: Complete breakdown

Ben Weiss, Tuesday, 12 February 2019

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A simple guide to what the earnings reports were and how they affected the markets.

If you’re a follower of ETX Capital on Twitter or Facebook, or read our weekly reviews, you’ll have heard that the last fortnight or so has been earnings report season for the major US tech companies. Tesla, Amazon and co. have periodically released their reports, which in turn has caused markets to react to the (perceived) positive or negative figures. Here’s a complete rundown of all the major companies’ reports, including how the markets reacted and what equities could be good investments for 2019.

Alibaba

When was Alibaba’s earnings report release?

Alibaba released their earnings report on 30 January, 2019.

What were the important figures in Alibaba’s report?

-Revenue increased 41% compared to the last year to $17,057 million.-Annual active consumers rose by 35 million, to 636 million from the year ending in September 2018.-Mobile MAUs hit 699 million in December 2018, which was an increase of 33 million from the previous period.

Source: Alibaba

What was Alibaba’s price before the report?

Alibaba price Q4

In the run-up to the earnings release, Alibaba’s price was trading around its average for the year going into their earnings reports. The trade war between China and the US has significantly impacted upon Alibaba’s price in the second half of 2018, with uncertainty surrounding relations and an implied economic slowdown in China being factors. Its price was trading at around the 15800.0 in the week before.

Price directly before release: 15594.5

What was Alibaba’s price after the report?

The price of Alibaba following the report increased over the next 24 hours. 

Price of Alibaba when market opened on 31 January: 16875.0

Why did Alibaba’s price react like this?

Although there was scepticism surrounding the company in the lead up to the report, mainly due to Chinese-related economics, the strong earnings figures were enough to overcome the negative potential implications of anything that happened prior. Over the past week, the price has settled at around the 16800.0 mark.

Future projection: Should you invest in Alibaba in 2019?

How Alibaba’s price will change in the next couple of months may depend on how relations between the US and China play out. Any permanent, prosperous trade deal struck between the two economic heavyweights could see more stability and consumer confidence in the stock, helping its price in the long run. A healthy report shows that the company is heading in the right direction, but external factors could prove to be a more implicating indicator.  

Alphabet

When was Alphabet earnings report release?

Alphabet released their earnings report on 4 February, 2019.

What were the important figures in Alphabet’s report?

-Quarter revenue (Q4) increased 22% from the last year, up to $39,276 million.
-Revenue from advertising rose 19.9% to $32,635 million.
-Number of employees up 23.3% to 98,771.

Source: Alphabet

What was Alphabet’s price before the report?

Alphabet price Q4

Prior to the Alphabet release of their Q4 earnings, expectations were strong for Google’s parent company. Many expected them to eclipse fellow FAANG companies. Since the beginning of the month, Alphabet’s price rose, perhaps in anticipation for strong results. The price was fairly stagnant in the days leading up to the release.

Price directly before release:  111937.0

What was Alphabet’s price after the report?

Alphabet’s price was volatile in reaction to the report. It ultimately fell over 2%, before picking up to a high of 115357 within 24 hours. Alphabet’s price then plummeted over the course of the next two days, before picking back up slightly to sit around the 110523 mark.

Price of Alphabet when market opened on 5 February:  111201

Why did Alphabet’s price react like this?

Alphabet could feel pretty hard done by, with strong earnings figures not being represented in the post-report market. The damaging fall in price could be attributed down to high expectations or misses from the Google Play store. A main contributing factor though, could be down to expenditure exceeding estimations. It seems that analysts and traders alike were looking at factors other than just revenue to determine their confidence in Google and Alphabet.

Future projection: Should you invest in Alphabet in 2019?

Given that revenues are increasing with expenditure, Alphabet and Google may be incentivised to continue to spend heavily in return for greater revenue increases. The future for Google over the coming year does seem bright, with opportunities with Google Cloud and new ad formats potentially going to further boost earnings. Maybe something revolutionary is needed for traders to oversee the high expenditure though. 

Amazon

When was Amazon’s earnings report release?

Amazon released their earnings report on 31 January, 2019.

What were the important figures in Amazon’s report?

-Revenue hit at $72.4 billion, which was slightly above estimates.
-Amazon enjoyed its most lucrative holiday season to date, with the Echo Dot topping the purchase list.
-Amazon Web Services (AWS) generated $7.43 billion.

Source: Amazon.com

What was Amazon’s price before the report?

Amazon price Q4

Amazon has turned its attention to profit-making, as opposed to just generating as much revenue as possible. Its price was volatile from day to day, but more gradual when split down into hours in the days prior to the report, seeing more gradual changes. The 48 hours before the release saw a steady increase in price, peaking at 173616.

Price directly before release: 171665

What was Amazon’s price after the report?

Amazon’s price experienced a yo-yo effect after the report, with its price rising drastically before plummeting in the space of around 100 minutes.  

Price of Amazon when market opened on 1 February:  162600

Why did Amazon’s price react like this?

The quick U-turn experienced by Amazon’s price is somewhat peculiar, seeing as nothing seemed to change from when the price rose after the report to when it fell. Traders were perhaps buoyed by the company beating estimates, but also worried by slowing sales internationally.

Future projection: Should you invest in Amazon in 2019?

Amazon seems to be going for the ‘Jack of all trades’ title as they delve into multiple different markets. Of course in their case, they are most definitely a master of one trade – online commerce, but will their ambition turn into genuine results in the future? Search an industry, and you’ll find Amazon dealing within it in some form. Their explorations into coding education, solar energy, physical retail, autonomous delivery (and so on) are all reasons why Amazon could see continued success. However, failure to successfully implement these ventures may hinder the price of Amazon more than it would benefit should one of them catch on.

Facebook

When was Facebook’s earnings report release?

Facebook released their earnings report on 30 January, 2019.

What were the important figures in Facebook’s report?

-Total revenue for the year reached 55,838 million, a rise of 37% from the previous year.
-There were 2.32 billion monthly users, a 9% increase from last year.
-Mobile advertising increased to a staggering 93% of all advertising revenue compared to the same period last year.

Source: Facebook

 

What was Facebook’s price before the report?

Facebook price Q4


Facebook began the day of their release trading at around the 14500.0 mark. It crept up throughout the day right up until the release, in anticipation of a strong report. Just before the release, Facebook’s price surpassed 15000.0.

What was Facebook’s price after the report?

Facebook’s price shot up in the aftermath of the release. It reached a high of 16946.0 before closing a little down from that. 

Price of Facebook when markets closed on 30 February:  16756.1 ↑

Why did Facebook’s price react like this?

It’s a testament to just how well Facebook has done last year, amidst a number of PR disasters, that even with strong expectations, their figures surpassed estimates.  Due to beating revenue projections, Facebook’s price rose drastically over 7.7% in the space of minutes.

Future projection: Should you invest in Facebook in 2019?

In terms of revelations coming out of Facebook, 2019 might not be the year. Such was the backlash felt from the multiple data breaches suffered, their aim is very much focussed on cleaning up their act, improving public image and securing data. One thing they have suggested they will focus on is integrating Instagram, Facebook and WhatsApp with one another to improve functionality and communication abilities between users of one or two of the apps, but not all of them. Depending on its success and time of implementation, that may be something to look out for this year that could potentially affect the price of Facebook.

Intel


When was Intel’s earnings report release?

Intel released their earnings report on 24 January, 2019.

What were the important figures in Intel’s report?

-Revenue hit $70.8 billion, up 12.7% from the previous year.
-Earnings per share more than doubled in 2018, from $1.99 to $4.48.
-Generated $29.4 billion cash from operations.

 Source: Intel

What was Intel’s price before the report?

Intel price Q4

Intel’s price was volatile in the hours before the earnings report. After an initial fall, the price rose by 3.3% in a matter of hours in the lead up to the release. The price of Intel lingered around the 5000.0 mark just before the figures came out.

Price of Intel before the report: 4989.6

What was Intel’s price after the report?

Following the lower-than-expected figures, Intel Corp. was trading at 4568.4, falling nearly 10% in a few minutes following the report.

Price of Intel when markets closed on 24 January, 2019: 4646.1

Why did Intel’s price react like this?

The poor figures released from Intel obviously wouldn’t have done its price any favours after the report. However, a more pressing issue (in the eyes of investors) is the fact that the tech firm has been CEO-less for the last seven months – with Bob Swan taking charge as interim CEO. Perhaps traders were waiting to see whether this factor was taking its toll on the company, and the earnings report suggested it has. These two confirming one another was perhaps a cause of the freefall in price.

Future projection: Should you invest in Intel in 2019?

Clearly, the CEO situation will continue to determine trader confidence in 2019. One thing to watch over this next year that may help to get their price back up is their planned expansion into Israel. With the help of government backing of 8%, they’re looking to set up a manufacturing facility which will create a number of new jobs.

Tesla

When was Tesla’s earnings report release?

Tesla released their earnings report on 30 January, 2019.

What were the important figures in Tesla’s report?

-Revenue rose 5.9% to $7.23 billion, which beat estimates.
-Three month earnings per share was $1.93.

Source: Teslarati


What was Tesla's price before the report?

Tesla price Q4

The price of Tesla rose gradually throughout the day on 30 January before the report.

Tesla price before the report: 30899.5

What was Tesla’s price after the report?

Tesla’s price fluctuated massively in the following hours, and also suffered heavy volatility, eventually ending up down after some large swings.

Price of Tesla when markets closed on 30 January, 2019: 30280.1

Why did Tesla’s price react like this?

Their mixed earnings report was fittingly met with mixed market reaction, before the unexpected announcement of the replacement of chief financial officer Depak Ahuja sent its price firmly in the red. This, among other unsettling factors surrounding the company, none more so than Elon Musk’s numerous complications, may have tipped already-nervy traders over the edge.

Future projection: Should you invest in Tesla in 2019?

Tesla is successful because it’s innovative. This comes directly from its leader and founder, Elon Musk, who can be eccentric and a little unconventional – but that’s what sparks such creation. The downside is unpredictability. Nobody would be surprised if Musk and Tesla suddenly lost millions trying to bring automated plane trips to the sun into the mainstream. Equally, he has the potential, ability and capital to revolutionise an industry.

As for certainties for 2019, the role out of the Tesla Model 3 to 100% of Europe and also a potential exploration into pickup truck designs. It seems Tesla will always be a very reactive market; the potential is there for its price to blow up, but equally, it could be a scandal away from completely crashing.

Twitter

When was Twitter’s earnings report release?

Twitter released their earnings report on 7 February, 2019.

What were the important figures in Twitter’s report?

-Earnings per share was $0.31, smashing the pre-report estimation of $0.25.
-There were 321 million monthly active users, which was down by nine million the previous quarter.
-Revenue came in at $909 million, surpassing estimations by just over $40 million.

Source: investor.Twitter

What was Twitter’s price before the report?

Twitter price Q4

The week before the report saw the price slightly fluctuate around 3400. On the morning of the report, it opened a little higher at 3514.1 and stayed rather consistent until the release. This slight increase could be attributed down to the fact that Twitter’s price rose 15% in the aftermath of their last earnings report after it read for strong viewing. Perhaps traders were getting in early in anticipation of a similar surge in price.

Twitter price before the report: 3513.5

What was Twitter’s price after the report?

Twitter suffered one of the worst price falls in the aftermath of their report. Their stock fell over 11% after their figures were released, and still have not recovered as they currently linger down around the 3000.0 range.

Price of Twitter when markets closed on 7 February, 2019: 3077.1

Why did Twitter’s price react like this?

Some would say it was a strange market reaction to Twitter’s figures. They beat most estimates and were showing sustained growth. One metric that seemed to hinder their price, clearly one that traders care about, was the number of monthly users. This number was one of the only ones to fall, but the drop was just nine million fewer users and this could even be attributed to Twitter’s effort to ‘clean’ up the platform by blocking and deleting a lot of users seen as inappropriate or harmful for the community. They’re also trying to improve the content that’s displayed on the platform, which consists of preventing the influx of fake news and clickbait articles among other things.

Future projection: Should you invest in Twitter in 2019?

Given the importance traders put on the number of monthly active users, Twitter would be foolish to not take note and try to improve this metric if they care about their share price. One major project they are working on is improved conversational options. Beta tests are imminent, with improved functionality surrounding the platform expected to come from the update. Could this impact positively upon Twitter’s price?

 

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