Earnings that Surprise and Dismay

The time has come when traders tap potential lucrative opportunities and rejoice handsome profits. Yes, it's the last financial quarter and most companies are to, and many already have published their quarterly earnings reports. These reports are the benchmarks relying on which, traders plan their future investments. Basically, this is the time to make the most out of the packed reports schedules as these are released on a daily basis and provide grounds to effectuate a multitude of worthy investments. Amongst the most popular stocks, this month we bring to you, reports of three most performing and of three weakly performing companies.

Over the bar

1- Alphabet Inc

This name is to be well remembered as it is google's new parent company. Alphabet Inc (GOOGL.O), Google's successor was able to live up to forecasts as it reportedly displayed an excellent earnings report on Thursday 22nd. Introducing its first share buyback, Alphabet surged to unprecedented heights on Wall street consequent to brilliant performance in mobile and video advertising. The company is deemed to rule the roosts in the advertising arena, thus emerging with revenue and profits way higher that analysts' forecasts. Shares were up by 9% while earnings hit the $7.35 per share on revenue of $18.68 billion, beating the predetermined $7.21 per share on $18.53 billion barem.

Note that Alphabet counts as the second most worthy S&P 500 company. Aggregate paid clicks of the company hiked by 23% against an expected 18.6%. Future plans remain Google's cloud strategy, connected home products maker Nest, venture capital arm Google Ventures, Google Capital and a new corporate structure which will set parts as the secretive research arm and Google X in limelight. Otherwise, search, advertising, maps, YouTube and Android shall remain part of Google under Alphabet's structure.

2- Alibaba

Alibaba Group Holding Ltd was quite of a pleasant surprise as it managed to make the most out of online shopping and set unexpected records of earnings on laurels of the ever growing mobile shopping. Following a rise of a phenomenal 8.4%, U.S-listed shares of the company ended 4% higher. Alibaba's major revenues originate from Chinese online buyers investing in domestic businesses. The last quarter's growth is attributable to Tmall. As such, the company's revenue ticked to $3.49 billion leaving behind the estimated bar of $3.44 billion while net income hit $3.58 billion or $1.40 per share.

Reportedly, Alibaba bids to replace the slowing volume growth in online shopping using new online buying methods in which it already invested. Amongst, $4.6 billion in Suning Commerce Group and $3.5 billion in Youku Tudou, also famous as china's YouTube. With Chinese users ready to spend more on high-quality online streaming services, Alibaba's future seems bright.

3- Apple

The giant finally gave its verdict. The world's biggest profit maker, Apple Inc amazed more than one with its earnings report. The company hit hard by leaving estimated figures far behind to set a new record. The giant phone maker's brilliant performance is to be accredited to the extensive sales of its all-time trump card, the iPhone. Besides, Apple's most significant market, China, is where the company recorded $12.52 billion of sales, a figure accounting for one quarter of the recorded earnings. China counts 25 Apple stores already while the giant plans to open one additional store practically every month.

The last financial quarter witnessed the sales of 48.05 million iPhones and 9.8 million iPads globally. Last quarter's incomes soared to $11.12 billion or $1.96 a share. On the laurels of a 22% surge in net sales, quarterly revenue ticked to $51.50 billion, way above the $51.11 billion bar. Shares were selling at $114.80 in regular Nasdaq trade. The present quarter's revenue is forecasted to hover between the $75.5 billion and $77.5 billion. Late September released iPhones recorded phenomenal sales given the availability of a new pink or rose gold color option. This last quarter, the most profitable one of the phone maker, is to be dedicated to the crazy sales of the iPhone 6s and 6s plus.


Hanging below

1- Yahoo

Internet firm Yahoo missed the barem set by analysts and displayed disappointing earnings on October 20th. Along with that, came also the announcement of a decisive search advertising deal the company reportedly signed with Google making itself eligible to receive search ads from the segment leader. Yahoo will reportedly have the liberty to decide which search queries it would like to send to Google. Third quarter earnings pointed to 15 cents per share instead of an expected 17 cents, thus translating into revenue hitting the $1.23 billion instead of $1.26 billion. Growth in mobile and social areas were found overtaken by the stud, Facebook.

Traffic acquisition costs quadrupled to $223 million, thus adding to Yahoo's frailing posture. The company set its fourth quarter earnings' barem between $1.16 billion and $1.20 billion lower than the estimated $1.33 billion and its shares plunged by 1.6% given the disappointing report. Interestingly, Yahoo's CEO remained confident on boosted growths in the future as result of the deal with Google.


2- American Express

Increased market spending and a firm dollar played against the company to drag its earnings below analysts' set bar. Released on October 21st, quarterly earnings ticked to $1.24 per share on $8.19 billions in sales instead of $1.31 per share on $8.32 billion in revenue, or an 11% slide in earnings. As such, AMEX dipped by 3% in extended trading. The company forecasts full year earnings to waver between $5.20 and $5.35 per share and looks forward, with conviction, to better earnings in 2016. As for this year, shares are down by 17%.


3- Ford

The American carmaker surprisingly published report of earnings that missed the forecasts of analysts. Take in account earnings per share of 45 cents instead of an expected 46 cents. Ford's stock took a 4% downhill slide while quarterly revenue hit the $35.80 billion dollar bar rather than the expected $35.07 billion. Higher than expected taxes are attributable to the company's disappointing earnings. Nonetheless, in North America, revenue pointed at $23.70 billion, way better than last year's $3.8 billion. As per Ford's CFO, the company is sure to keep a good performance onwards.


A piece of advice

These earnings reports have been extensive references for winning trades and wise investors will definitely continue keeping track of the important movements of these stocks. Coupled with all the halloween promotional offers, upcoming earnings would definitely present themselves as great pronostics to bank on.


Warren Tancredi By: Warren Tancredi