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Takeaways in this week’s 2nd Quarter Earnings by the Biggest Companies

Discussion in 'Money, Accounts & Finance' started by Erik, Jul 29, 2016.

  1. Erik

    Erik

    Joined:
    Sep 26, 2012
    Messages:
    2,446
    This week marks the 2nd of the quarterly earnings calendar made by publicly offered companies to its stockholders, giving us a glimpse on how well did they fare in the last 3 months and compare their performance as to what they did last year.

    We’ll take note of the biggest names so far and pick our brains out on what do these mean to our industry and what are the options on how to adapt with these changes.


    Twitter

    2Q2016 Revenue: $602 million, 20% year over year increase
    Earnings per Share: $0.13
    Monthly active users: 313 million; 3 million more than Q1

    Analysts may have overshot their expectations to Twitter this quarter, as Twitter fell $5 million short from the expected $607 million by analysts, earnings per Share however is up to $0.13 from the $0.09 expected. What’s noteworthy though is that revenue is actually lower compared to last year’s earnings, with a 61% growth. It comes to an idea that Twitter is now in a decline, which makes it fairly obvious with just an additional 3 million active users from last quarter.

    This could be a trying year with Twitter, as it does not see an exponential growth with this quarter alone. We could blame the additional competition coming in the Social Media space which might cause the slow growth of the company, this does not mean, however, that regular businesses must steer clear of Twitter just yet. We just have to wait as to how they would make up for it to be of better interest to its users and shareholders the next quarter.


    Facebook

    1.71 billion monthly active users – 15% increase
    1.57 billion mobile users – 20% increase
    1.13 billion daily active users – 16% increase
    1.03 billion daily mobile users – 22% increase

    2Q Revenue: $6.44 billion
    Earnings per share (adusted): $0.97

    [​IMG]
    Image source: Daily Wire

    Facebook is on a roll this quarter, exceeding expectations made by analysts. I think Facebook is on the right track with its ad placements, which I personally came on with giving some of them clicks. As ad placement is the biggest revenue generating stream of the giant, the updated look of its ads, which make them look like a part of the overall newsfeed, makes it more enticing for a user to be Facebook’s money maker. This I believe will be well noticed by investors, and by the numbers alone, the billions of users are still growing. Businesses big and small, must take it as a good sign to stick to Facebook for bigger chances of ad views and site visits.


    Apple

    3Q Revenue: $42.4 Billion
    Earnings per Share: $1.42
    40.4 million iPhones sold
    10 million iPads sold
    $6 billion revenue earned in services


    This quarter (3rd Quarter in Apple’s financial year) is a balanced quarter by Apple. Many thought that because of better competitors, along with a suspected decline of sales, marks Apple may be in for a steep downfall this quarter. It’s not actually bad, as this quarter’s revenues still exceeds investor expectations, it’s not that good either as it’s in a decline when compared to last year. This does not mean a total failure though as this quarter usually is the duration when revenues of Apple are the lowest, given they only release new iterations of the iPhone once a year. People are also holding up their current devices and not yet upgrading to the 6S, instead possibly waiting for the upcoming device this September.

    Regardless whether they will shift to a 3 year new device rollout or not, it is still expected that consumers are holding off to get the latest device this coming quarter of the earnings calendar, which would again pull Apple’s sales up, and, being a premium device maker, all sales are expected to pull in revenue and as such, earnings to its shareholders. Expect more third party accessories coming in as Apple unveils their next iPhone expected to arrive September this year.


    Google / Alphabet

    2Q Revenue: $21.5 Billion
    Earnings per Share: $8.42

    There’s not much needed to know about how Alphabet is raking money, given it is handling multiple markets from advertising, search, mobile, and soon, cars. This quarter’s revenues exceeded expectations by a huge margin, making ESP giving a high 8-dollar per share. Kudos to the new technologies that coming in and the company’s efforts to use them, the incoming Android Nougat platform, the undying Youtube, and other projects to make us all live in the Internet-of-things era.

    Expect new products to come in from Nest, and the strength of the Android platform is umatched, which means we will be seeing more and more Android devices in the foreseeable future. I also think Google Ads is one of the common ad platforms used by most businesses, so there’s not much to say to think that next quarter of the earnings calendar will again be a huge success by Alphabet.



    Amazon

    2Q Revenue: $30.4 Billion
    Earnings per Share: $1.78
    Amazon Web Services: $2.9 Billion

    Amazon is also another winner this quarter, surpassing estimates by less than $1 Billion. Notable enough is the growth of Amazon Web Services which grew upwards of 58%. They have mentioned that over 50% of US households are now using Amazon Prime, a subscription service offering a same day delivery service, and sales of the Amazon Echo rose to 3 million, with Kindle devices getting steady sales all over the quarter.

    Amazon admitted that fulfillment services are now getting expensive, however that does not budge in the market giant’s growth despite the number of users enjoying Prime. As duly noted, Amazon is also experimenting in drone deliveries in the UK which could boost its same day delivery service. Overall Amazon is still a good name to come with businesses as more and more people are using Prime, and with FBA, easing up the worries of most shoppers, this trend will not get a huge drop anytime soon.



    Other major names have unveiled their quarterly earnings this week (Coca-Cola , Shell , Under Armour, etc) and we see big movers and shakers in today’s market. Stock prices are on a frenzy this week, and we might soon see changes in major trends from the tech sector, to even service providers. Come next week and a few will stabilize, but until then, best to figure out which markets are best to utilise for your business!
    Last edited: Jul 29, 2016
    Cody likes this.
  2. psxgamer

    psxgamer

    Joined:
    Jul 14, 2009
    Messages:
    3,459
    You forgot Ebay :p

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