After the Bell: Tech Earnings Crush Forecasts
Wall Street’s biggest technology companies reported incredible growth in the third quarter, quelling fears that earnings season was turning sour after a week of mixed results.
After the Bell
Four tech stalwarts reported earnings after the bell Thursday, and all of them crushed expectations. Amazon, Alphabet, Microsoft and Intel surged in after-hours trading as investors cheered another impressive quarterly outing.
Amazon (AMZN) reported per-share earnings of 52 cents on revenue of $43.8 billion. That came in way ahead of forecasts calling for 3 cents EPS. The company’s cloud platform, Amazon Web Services, exceeded $4 billion in quarterly sales. Amazon’s stock price spiked 7.6% in after-hours trading, reaching $1,046.10.
Alphabet (GOOGL), the parent company of Google, reported an EPS of $9.57 that crushed analysts’ expectations of $8.33. The stock rose 2.8% after hours to reach $1,019.00, according to Yahoo! Finance. Alphabet posted quarterly revenue of $27.8 billion, with the vast majority coming from advertising.
Shares of Microsoft (MSFT) rose 4.6% after the software giant reported EPS of 84 cents on revenue of $24.54 billion. That’s well ahead of forecasts of 72 cents and $23.56 billion. Microsoft’s biggest achievement is the growth of its Azure cloud platform, which included Office 365 and Dynamics 365. Sales in this category topped $20 billion.
Finally, Intel (INTC) reported per-share earnings of $1.01, which were 21 cents higher than the median forecast. Overall sales reached $16.15 billion, versus $15.73 billion expected. The chipmaker said data center revenue reached a record high for the quarter. Intel’s share price climbed 1.4% in after hours trading.
The four companies have a combined market cap of nearly $2 trillion. Their after-hours performances signals a strong start to the day for Wall Street. Microsoft and Intel are both members of the Dow Jones Industrial Average. The blue-chip index closed at 23,400.86 on Thursday.
Earnings Report Card
On Friday, financial research firm FactSet is expected to produce a weekly update on earnings. Last week, the researcher said the blended earnings growth rate for the S&P 500 was 1.7%, based on 17% of companies reporting actual results.
Dow blue-chip Exxon Mobil (XOM) is scheduled to deliver fiscal third-quarter results on Friday. The oil and gas giant is benefiting from the latest rebound in crude prices, which reached six-month highs this week.
On the data front, the U.S. Commerce Department will produce preliminary GDP results for the third quarter. The world’s largest economy is projected to grow 2.5% year-over-year. The economy expanded 3.1% in the second quarter, the highest in two years.
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