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.

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi