Wednesday’s Headlines: Is YouTube Holding Google Back?
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Zendesk (ZEN) +0.9%
Boston Beer Co. (SAM) +0.4%
Monster Energy (MNST) -0.5%
Moving Down ⬇️
Tesla Motors (TSLA) -12.2%
Roku Inc. (ROKU) -9.5%
Lovesac (LOVE) -9.3%
Zillow (Z) -9.0%
Nautilus (NLS) -8.6%
1. Google’s (GOOG) parent company Alphabet posted less than stellar earnings in its first-quarter 2022 call last night. The Big Tech firm posted earnings per share (EPS) of $24.62 against analyst estimates of $25.91, on revenue of $68.01 billion versus an anticipated $68.11 billion. One of the major culprits behind this notable miss was the underperformance of YouTube. The video-sharing platform was expected to see an increase in ad revenue of 25%, but could only muster a 14% rise for the quarter. An inflationary environment is hitting digital advertising hard, while current social darling TikTok continues to eat away at the market share. This follows poor performances from companies such as Netflix (NFLX) and Snap, showing that we could be undergoing a significant change in the digital media landscape. Find out more here.
2. Microsoft (MSFT), in stark contrast to Google, posted earnings that beat expectations across the board. Adjusted EPS came in at $2.22 versus a predicted $2.19, while revenue of $49.36 billion beat analyst expectations of $49.05 billion for the quarter. While this does represent the company’s smallest earnings beat since 2018, it’s still a beat — which is a hard thing to come by lately. Microsoft’s cloud segment boasted its largest growth, with Azure and other cloud-based revenue displaying a 46% increase, matching that of the year-ago quarter. As Chairman and CEO Satya Nadella put it, “going forward, digital technology will be the key input that powers the world’s economic output,” and Microsoft seems to be continuing to grow with that in mind. Azure deals worth over $100 million doubled during the quarter, showing just how valuable effective cloud computing is becoming to global business. Read more here.
3. Chipotle Mexican Grill (CMG) is trading up close to 3.5% pre-market following a largely positive earnings call yesterday evening. The restaurant chain posted EPS of $5.70 versus an expected $5.64, on revenue of $2.02 billion against a consensus analyst estimate of $2.01 billion. The company has seen a significant bounce back following the COVID pandemic, with in-person sales rising by 33% compared to the year-ago quarter. Interestingly though, digital sales still account for 41% of orders processed by the firm. Chipotle invested heavily into this throughout the early stages of the pandemic in a bid to stay profitable, and these digital-only drive-thru lanes — brilliantly named “Chipotlanes” — are continuing to provide a significant return on investment. You can read more by clicking here.
There are 9 companies on the MyWallSt shortlist that will report earnings today:
Get this week’s full earnings calendar here.