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3 Earnings Reports From Tuesday That Investors Need To See

Netflix, Snapchat, and Lockheed Martin reported on Tuesday night as earnings season truly kicks off with a taste of what’s to come.

Entertainment, social media, and defense: three massive sectors of the U.S. economy, and they don’t come much bigger than these three representatives — ok, maybe that’s pushing it in Snap’s (NYSE: SNAP) case.

However, Netflix (NASDAQ: NFLX), Snap, and Lockheed Martin (NYSE: LMT) are the first and biggest in their respective sectors to report on Q3 performance, so let’s see how they got on, and what might be in store for other similar businesses.

Netflix Q3 earnings report highlights

We’ll start with the biggest name of the day, and also the biggest disappointment. While I predicted Netflix to smash earnings out of the park, today I stand corrected. Here’s how the streaming giant did:

Company Q3 PerformanceAnalysts’ ExpectationsQ4 Forecast
Revenue: $6.44 billionRevenue: $6.38 billionRevenue: N/A
EPS: $1.74EPS: $2.14EPS: N/A
Net subscriber additions: 2.2 millionNet subscriber additions: 3.57 millionNet subscriber additions: 6 million

As of September 30, Netflix reported 195.15 million paid streaming customers worldwide, up 23.3% year over year. Meanwhile, forecast free cash flow for the full-year 2020 has been revised to approximately $2 billion, up from its prior expectation of break-even to positive.

In more positive news, the company also reported that its 2021 lineup of content has been virtually unhindered by the coronavirus, with production almost completely returned to normal. 

Lockheed Martin Q3 earnings report highlights

The leading Pentagon aerospace and defense contractor reported third-quarter revenue that rose above expectations and raised its full-year outlook. Increasing revenue from its fastest-growing business, space, helped get the company over the line with net income of $1.70 billion, up from $1.61 billion in the year ago period. 

Company Q3 PerformanceAnalysts’ Expectations2020 Forecast
Revenue: $16.50 billionRevenue: $16.11 billionRevenue: $65.25 billion
EPS: $6.25EPS: $6.05EPS: $24.45

The company also provided some disappointing 2021 guidance, forecasting low-single-digit growth in aeronautics and missiles, way down from Q3’s pace. Much of this comes from rising competition in the form of Elon Musk’s SpaceX, which Lockheed CFO Ken Possenriede described as “more than an emerging threat right now.”

Snap Inc Q3 earnings report highlights

The surprise of the day came in the form of Evan Spiegel’s social media sensation, Snap Inc, as the company reported positive user and revenue growth in its third-quarter earnings.

Company Q3 PerformanceAnalysts’ ExpectationsQ4 Forecast
Revenue: $679 millionRevenue: $555.9 millionRevenue: + 47% – 50% YOY
EPS: $0.01EPS: -$0.05EPS: N/A
Daily Active Users: 249 millionDaily Active Users: 244.12 millionDaily Active Users: 257 million

“The adoption of augmented reality is happening faster than we had previously anticipated, and we are working together as a team to execute on the many opportunities in front of us,” Snap CEO Evan Spiegel said in a statement.

Not short of some snips at bigger players like Facebook, Snap reported that it took advantage of the third-quarter’s opportunity to engage with brands that wanted “to align their marketing efforts with platforms who share their corporate values.”

I’m sure that has nothing to do with the StopHateForProfit Facebook ad boycott from last quarter…

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MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.

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