In a world that balances on high-stakes finance, quarterly earnings reports are more than just numbers on a spreadsheet – every digit reflects the ever-evolving market dynamics and futuristic trends. As the earnings calendar neared its quarterly term end, most titans of the US market stepped into the ring of the ‘US earnings report’ spotlight, evincing their financial prowess and vulnerability. After all, all investors and shareholders deserve to paint a picture of their shares of companies and if their fruits of labor have begun to show.
On Thursday, Wall Street closed on a negative note, primarily due to tech and tech-related megacap stocks. This decline followed mixed quarterly earnings reports and indications of economic resilience, which may lead the Federal Reserve to maintain high-interest rates for an extended period.
In this insightful yet pulse-pounding roundup, we have curated nearly all the standout revelations of US earnings reports disclosed in the last few days as we also discuss market-altering and strategic moves that emerged from Wall Street giants to all tech disruptors.
US Earnings Report: Meta’s Q3 Earnings Report
Meta, led by Mark Zuckerberg, reported a strong Q3 with a revenue of $34.15 billion, exceeding Wall Street’s expectations, and a profit of $11.6 billion, which is more than double that of the previous year.
The growth factor in this US earnings report was driven by a rebound in digital advertising and cost-cutting measures, reducing expenses by 7 percent to $20.4 billion. Despite earlier challenges during the pandemic, Meta’s user base continued to expand, with 3.14 billion daily and nearly four billion monthly users across their apps. The company also saw success with Threads, their Twitter competitor. Meta anticipates Q4 revenue of $36.5 billion to $40 billion and lower expenses next year. They continue to invest in the metaverse and artificial intelligence, aiming for long-term success. However, Zuckerberg acknowledged that the chatbots and AI initiatives are a work in progress.
“It’s going to take time to tune all of these experiences before hundreds of billions of people are going to use them.”
Zuckerberg expects to hasten up the hiring process of AI-focused technologists.
Whirlpool’s Earnings Report Q3 Is A Rollercoaster
Whirlpool Corporation reported a 3 percent YoY revenue growth in Q3 2023, reaching $4.926 billion, and exceeded earnings expectations with $5.45 per share (adjusted). However, the company’s shares dropped by 15.3 percent as it revised its full-year earnings guidance downward.
Whirlpool reaffirmed its 2023 revenue target of $19.4 billion but adjusted its earnings outlook to $16 per share, down from its previous range of $16 to $18 per share.
The market reacted negatively to the disparity between the strong quarterly performance and the lowered earnings forecast.
Whirlpool cited demand weakness in Europe and soft consumer sentiment in Asia as challenges impacting its outlook, leaving investors cautious.
Mercedes-Benz’s Q3 Earnings Report: A Fall From Grace
Mercedes-Benz reported a 7 percent decline in third-quarter group earnings before interest and taxes (EBIT) to €4.8 billion ($5.06 billion) and a 1.4 percent drop in revenue to €37.2 billion.
Passenger car sales fell by 5 percent, partly due to supply chain issues. Shares of the company closed down 5.7 percent in Frankfurt, marking their worst performance since May. The challenges include a competitive electric vehicle (EV) market with price pressures, inflation, supply chain problems, and currency losses. Mercedes-Benz aims to achieve 50 percent hybrid and EV sales by 2025 and transition to electric-only models from then on, despite fierce competition from companies like Tesla and BYD.
Chipotle’s Earnings Report Of Q3: US Earnings Report Blew Expectations
Chipotle Mexican Grill exceeded earnings expectations in its recent quarterly report. The company reported adjusted earnings per share of $11.36, surpassing the expected $10.55, and revenue of $2.47 billion, in line with expectations. The third-quarter net income rose to $313.2 million from $257.1 million the previous year. Increased costs for beef and queso offset last year’s menu price hikes, prompting Chipotle to raise menu prices again due to inflation.
Despite earlier hesitation on price increases, the company believes it has pricing power.
Same-store sales grew by 5 percent, credited to higher transactions and menu prices. Chipotle plans to pass on higher labor costs in California, where the minimum wage for fast-food workers is increasing to $20 an hour in April. The company remains positive about its future, with plans to open 285 to 315 new restaurants in 2024, and anticipates same-store sales growth in 2023.
Q3 Earnings Report Of UPS: A Hard Blow
UPS’ earnings call gave away a significant decline in earnings for the third quarter, with adjusted net income at $1.3 billion or $1.57 per share, marking a 48 percent drop from the previous year. Despite this, it exceeded analyst forecasts of $1.52 per share. The company cited a slowdown in the global economy, not recent labor disputes, for its pessimistic outlook.
Labor negotiations led to concerns about a strike, causing many customers to switch to other services. Although the diverted volume is returning to UPS, it revised its full-year revenue and profit margin expectations downwards, from $93 billion to $91.3 billion to $92.3 billion and an adjusted operating margin of 10.8 percent to 11.3 percent. Global economic uncertainty is driving this change.
UPS is considered an economic indicator, moving approximately 6 percent of the US GDP and 3 percent of global GDP.
The announcement led to a 3 percent drop in UPS shares during premarket trading.
How Could We Miss Amazon’s Earnings Report?
Amazon’s third-quarter earnings and revenue surpassed expectations. The company reported earnings per share of 94 cents, higher than the expected 58 cents, and revenue of $143.1 billion, exceeding the expected $141.4 billion. Notable segment results include Amazon Web Services at $23.1 billion (slightly below expectations) and Advertising at $12.1 billion (beating expectations).
For the fourth quarter, Amazon anticipates sales between $160 billion and $167 billion, with the midpoint at $163.5 billion, representing 9.6 percent growth from the previous year.
Third-quarter results indicate a 13 percent increase in revenue, showing acceleration after challenges in 2022 due to inflation and rising interest rates.
Despite better-than-expected results, Amazon’s shares fell, influenced by recent market dynamics in the tech industry. The company has been focused on cost-cutting and restructuring over the past year. CEO Andy Jassy highlighted the positive impact of these efforts on operating income and free cash flow. Amazon’s core e-commerce business saw a 7 percent YoY growth in sales, boosted by this year’s Prime Day sale.
Digital advertising remains a strong area for Amazon, with ad revenue growing 26 percent YoY.
Intel’s Q3 Earnings Calendar: Bolstering Growth
Intel reported strong third-quarter earnings, surpassing profit and sales expectations, leading to a 7 percent increase in after-hours trading. Earnings per share were 41 cents (adjusted), exceeding the expected 22 cents, and revenue reached $14.16 billion, beating the $13.53 billion forecast.
Intel expects adjusted earnings of 23 cents per share and revenue between $14.6 billion and $15.6 billion for the fourth quarter.
Although revenue fell by 8 percent compared to the previous year, Intel foresees revenue growth in the upcoming quarter.
Intel believes its chips will play a significant role in artificial intelligence, despite competition from companies like Nvidia. The company also intends to compete in the PC market against Arm-based chips developed by Nvidia and AMD. Intel is working to catch up with Taiwan Semiconductor Manufacturing Co.’s chipmaking technology by 2025, aiming for “five nodes in four years.”
