Amazon Soars, Spotify Sinks: Here Are the Key Insights From This Week’s Q2 Earnings Reports – Info Entrepreneurship
Amazon surpassed analysts’ estimates of per-share earnings by 103 percent. Here’s everything else you should know.
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“Follow the money, and see where it goes.” That’s a line from Lin-Manuel Miranda’s hit musical Hamilton, but it’s just as applicable when public companies release their quarterly earnings reports.
This week, a large swath of big names — including Amazon, Facebook, Twitter and Spotify — divulged revenue numbers.
Some results weren’t staggering: Prominent chains including Starbucks, Coca-Cola and Chipotle Mexican Grill released Q2 earnings on par with analysts’ estimates, and telecommunications giants including AT&T, Verizon and Comcast reported revenue just slightly above predictions.
As for the outliers? SunCoke Energy, Inc. — a raw material processing and handling company in the steel and power arena — led the charge this week when it came to surprise Q2 earnings growth, reporting earnings per share at 650 percent above analysts’ estimates. And on the other end of the energy spectrum, solar panel manufacturer First Solar Inc. shattered predictions of earnings per share with a 2,400 percent spike.
We looked at analysts’ estimates of earnings per share, then compared them to the companies’ reported numbers. Here’s a rundown of the big names that surprised us.
At noon on Thursday, Amazon dropped a bombshell earnings report. Analysts pegged the ecommerce giant’s earnings at $2.50 per share, but the report revealed almost double that, at more than $5 per share. That’s a positive surprise of close to 103 percent. Overall, the company reported $2.5 billion in Q2 profits, or 13 times more than it reported in the same period last year. Much of this success is attributed to its cloud and ad businesses.
Related: Jeff Bezos Reveals 3 Strategies for Amazon’s Success
The micro-blogging platform announced its third profitable quarter in a row on Friday, raking in $711 million for Q2 compared to analysts’ expected $696 million. However, a notable drop in expected users by 1 million — due in part to Twitter’s purging of bot accounts — meant that when the market opened Friday, shares were already down 14 percent.
This week, the social media giant reported earnings of $1.74 per share, just about 1 percent more than analysts’ estimates. That relative steadiness is surprising in itself, especially in the wake of Facebook’s infamous and ongoing user data sandal — and the fact that on Thursday, the company’s stock price dropped a record $124 billion in a single day, making it the largest one-day loss of value in history for a U.S. traded company.
Analysts predicted Alphabet stock would net earnings per share of $9.59, but after the European Union charged its subsidiary, Google, with a $5 billion fine for an antitrust violation, the company released two different sets of quarterly earnings — including and excluding fines. If you count the fines, the company reported earnings of just $4.54 per share — less than half of analysts’ estimates. But without taking fines into account, that per-share revenue jumps to $11.75, surpassing predictions. The company’s global digital ad business likely had a heavy hand in revenue.
Related: What’s Behind the Employee Revolts at Amazon, Microsoft and Google?
Spotify disappointed investors on Thursday with reported losses of $2.20 per share, an almost 224 percent drop compared to analysts’ estimates, which pegged per-share losses at 68 cents. This was only Spotify’s second quarter as a public company, and although it’s still not profitable — royalties for artists and record labels are proving costly — it did report significant gains for user numbers. The streaming service now boasts 83 million paid subscribers, up 40 percent year over year.
Analysts lowballed Columbia’s earnings, estimating losses of 1 cent per share, but the sportswear giant exceeded expectations on a wide scale, reporting 16 cent gains per share — totaling a positive surprise of 260 percent. That’s especially notable when compared to foot- and sportswear company Under Armour, which reported a loss of 8 cents per share.
Article Prepared by Ollala Corp