Earnings Recap of the Week of May 15th, 2017
NEW YORK, May 19, 2017 /PRNewswire/ --
On Wednesday, the S&P 500, Dow and NASDAQ had their worst day in about eight months, which is a direct result of the political atmosphere in Washington D.C. On Thursday, however, the markets showed strength once again, thanks to a positive jobless claims report and a rebound in technology stocks. Initial jobless claims dropped by 4,000 in the latest week, and the number of Americans on unemployment rolls tumbled to a 28-1/2-year low. In addition, a separate report from the Philadelphia Fed indicated that its index for current manufacturing activity in the mid-Atlantic region increased to a reading of 38.8 in May, from 22.0 in April. Alibaba Group Holding Limited. (NYSE: BABA), Sina Corp. (NASDAQ: SINA), Weibo Corp. (NASDAQ: WB), salesforce.com, inc. (NYSE: CRM), Cisco Systems, Inc. (NASDAQ: CSCO).
Make sure you check out last week's Video Recap, as we reported LIVE from the floor of the NYSE in New York City: https://www.youtube.com/watch?v=g5zxpy5XbTM.
"I think the biggest issue right now is what does this mean for the plan that we thought we were on," said Jeremy Bryan, portfolio manager at Gradient Investments in Arden Hills, Minnesota. "Is it delayed or is it dead?" Reuters reported. "We're largely through the earnings season, so political uncertainty is probably going to be the largest source of risk in the next three to six months," Bryan said. Yet, despite the unstable atmosphere created by the White House, the economic data show strong fundamentals, therefore even if pullbacks will occur again, they are likely to be short term. "Even though optimism for Trump's pro-growth agenda has mostly unwound, if this political crisis deepens and elevated volatility persists, equities could see further weakness in the short-term driven by deleveraging across fundamental and systematic strategies... fundamentals remain supportive," J.P. Morgan wrote in a note to clients, MarketWatch reported.
Alibaba Group Holding Limited. (NYSE: BABA), the Chinese e-commerce giant, on Thursday reported first-quarter revenue that beat analysts' estimates, but earnings fell short of estimates as the company expanded in new business lines and had higher tax expenses during the quarter. Alibaba said revenue rose about 60 percent to 38.58 billion yuan ($5.60 billion) in the first quarter, boosted by new business unit such as cloud computing and entertainment. Its core e-commerce business remains strong due to robust consumption in the world's second largest economy. Adjusted earnings per share came in at 4.35 yuan, missing analysts' estimates of 4.48 yuan. The company also announced a $6 billion share buyback program over two years.
Chinese online media Company Sina Corp. (NASDAQ: SINA) on Tuesday posted better-than-expected first quarter revenue and profit, boosted by strong performance at its subsidiary Weibo Corp. (NASDAQ: WB) Adjusted quarterly revenue rose 40% year-over-year to $275.5 million. Analysts had anticipated adjusted earnings of $0.14 per share on revenue of $265.1 million. Strong result in both advertising segment and non-advertising segment drove the revenue growth. The company also said gross margin rose to 69 percent from 59 percent a year earlier. Weibo, a Chinese microblog launched by Sina in 2009, reported its first-quarter results separately on the same day. Beijing-based Weibo said first-quarter profits surged 254% to $57.8 million, or $0.26 per share, compared with $0.07 per share a year earlier. Revenue rose 67% to $199.2 million in the quarter ending March 31. Monthly active users in March 2017 rose 30 percent to 340 million year-over-year, 91 percent of which were mobile users. Sina's shares jumped 17.85 percent on Tuesday, while Weibo's shares were up nearly 25 percent.
salesforce.com, inc. (NYSE: CRM) Thursday after market reported Q1 2018 revenue of $2.39billion, an increase of 25% year-over-year, and 25% in constant currency. Subscription and support revenues were $2.2 billion, an increase of 24% year-over-year. Professional services and other revenues were $187 million, an increase of 32% year-over-year. "With our outstanding first quarter results, we are thrilled to be raising our fiscal 2018 revenue guidance by $100 million and raising our GAAP and non-GAAP earnings per share expectations for the year," said Marc Benioff, chairman and CEO, Salesforce. "Salesforce has once again been named the CRM market leader, and we continue to grow our share in CRM -- the fastest growing enterprise software market." For the current quarter, the company forecast revenue of $2.51 billion to $2.52 billion, and EPS of 31 cents to 32 cents. That compares to consensus of $2.48 billion and 31 cents per share. For the full year, the company raised its outlook to $10.25 billion to $10.3 billion, and EPS of $1.28 to $1.30, up from a prior forecast of $10.15 billion to $10.2 billion, and $1.27 to $1.29, and above consensus of $10.18 billion and $1.29.
Cisco Systems, Inc. (NASDAQ: CSCO) reported earnings on Wednesday for the 3rd quarter 2017 fiscal year. Shares of the company fell more than 8% after the markets closed. Revenue was $11.9 billion, down 1%, with product revenue flat and service revenue down 2%. Net income on a generally accepted accounting principles (GAAP) basis of $2.5 billion or $0.50 per share, and non-GAAP net income of $3.0 billion or $0.60 per share. 31% of total revenue was from recurring offers, up from 29% for the third quarter of fiscal 2016. "We executed well in Q3, delivering $11.9 billion in total revenue, while driving solid profitability and cash generation as we deliver on our strategic priorities," says CFO Kelly Kramer.
Make sure you check out last week's Video Recap, as we reported LIVE from the floor of the NYSE in New York City: https://www.youtube.com/watch?v=g5zxpy5XbTM
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