Earnings season sum up

06/05/2024

Earnings season usually brings some surprises when companies publish results above expectations or eventually miss their marks.

We are more than halfway through the first quarter earnings season, and most of the biggest American companies have already reported quarterly earnings, so it’s a good moment to review some of the earnings season winners and eventual losers (in terms of stock price impact).?

In general, so far results have been positive. According to a Factset report (03/5/2024) 80% of the S&P 500 listed companies have published their quarterly results. 77% have beat analysts’ forecasts with their earnings or profits, while 61% announced better-than-expected revenue or sales. In total, companies have been reporting earnings that are 7.5% above estimates.

That’s quite good considering we are amid reports that the American economy may be slowing and inflation remains stubbornly on the high side. Of course not every company has fulfilled expectations with their Q1 results. Many companies have missed the mark or offered weak forward guidance, having felt a negative impact on their stock price.?

Although everyday we find news of companies going up or down after publishing their earnings reports, here is an overview of some companies that have had quite some price impact on their stock price after reporting earnings.?

Positive stock price impact:

Alphabet (GOOG/GOOGL)

Google parent company Alphabet is up to now the biggest winner of the Q1 earnings season. The stock rose +14% immediately after reporting incredible first-quarter earnings, declared its first dividend payment and announced a new USD 70 billion stock buyback program.?

GOOGL stock has now increased +59% over the past 12 months, and +20% year to date. (Source: Yahoo.finance)

Amgen (AMGN)

The biotechnology company Amgen has reported a strong start to 2024, with significant sales growth (22% increase) and advancements in its product pipeline, as per the latest earnings call.?

The shares surged 12% after reporting earnings, the biggest one-day jump for Amgen in nearly 15 years, after encouraging interim data on its experimental weight-loss drug MariTide which fueled optimism about the company’s future in the lucrative market for weight-loss drugs.

AMGN stock has increased +27% in the last 12 months and +4% year to date.?

(Source: Yahoo.finance)

Domino’s Pizza (DPZ)

Restaurant chain Domino’s Pizza also had a very good first quarter, sending its stock up +6% after earnings.

Domino’s first-quarter financial results beat Wall Street forecasts on the top and bottom lines. The company currently has more than 20,000 outlets worldwide, and has been following a growth strategy that aims to open 1,100 new stores by 2028, increase retail sales by 7% a year and grow operating income by 8% per year. During the first quarter the company also repurchased USD 25 million worth of its own stock.

DPZ stock has gained +67% in the past 12 months and +26% year to date. (Source: Yahoo.finance)

Eli Lilly (LLY)

Shares of Eli Lilly rose +5% after the pharmaceutical company reported a better-than-expected first-quarter profit and raised its forward guidance, as sales of its popular weight-loss drugs are taking off. Eli Lilly’s results are being driven by growing sales of its “star” diabetes drug Mounjaro and recently launched weight-loss drug Zepbound.

LLY stock has increased +77% in the last 12 months and +31% year to date.?

(Source: Yahoo.finance)

Negative stock price impact:?

Meta Platforms (META)

Meta Platforms could be seen as a big loser, after falling -16% from delivering forward guidance that disappointed investors and outlined plans to continue spending heavily on new products (particularly on artificial intelligence (AI)).?

However, Meta’s outlook overshadowed what were otherwise very strong quarterly results, beating estimates on all grounds.

META stock has increased +98% in the last 12 months and +30% year to date.?

(Source: Yahoo.finance)

Starbucks (SBUX)

Starbucks (SBUX) stock plummeted -14% in its worst intraday move since 2020, following disappointing second quarter guidance that fell short of Wall Street's expectations.? The company’s management called it a "highly challenged environment.", with decreased sales in the US and its overseas operations, with a 11% decline in China sales.?

SBUX stock has decreased -30% in the last 12 months and -24% year to date.?

(Source: Yahoo.finance)

Netflix (NFLX)

Like Meta Platforms, Netflix posted strong Q1 results. However, NFLX stock fell -9% after publishing results because it announced that it will no longer report quarterly membership numbers and average revenue per membership. Netflix’s management said they want investors to instead focus on metrics such as revenue and free cash flow.

NFLX stock has increased +84% in the last 12 months and +22% year to date.?

(Source: Yahoo.finance)

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