As Thursday’s go, it was quite the busy one on Wall Street with 4 of the biggest companies in the world reporting at the same time, a price hike on the world’s most popular streaming platform, and the closing of a merger between two of the most exciting names in the healthcare industry.
Big Tech Earnings
The iPhone maker posted adjusted earnings per share (EPS) of $0.73 on overall revenue of $64.7 billion barely beating the Street. Despite strong Mac and iPad sales, its earnings disappointed as iPhone revenue of $26.44 billion missed estimates sending shares down 5% Thursday evening in after-hours trading. Tim Cook, CEO of Apple, said the lack of a new iPhone in China in Q3 negatively affected sales, which fell 29% in the country.
Amazon posted revenue growth of 37% to hit $96.15 billion, setting a record for most sales in a quarter. Adjusted earnings per share smashed expectations at $12.37 versus the $7.41 estimate in its Q3 earnings report. CEO Jeff Bezos predicts Amazon to beat its sales record in Q4 as he suspects ‘an unprecedented holiday season’ as customers shop early for gifts.
Google’s crushed earnings with revenue up 14% to $46.17 billion and earnings per share of $16.40, far surpassing analyst estimates. Shares jumped by 8% on Thursday evening following a strong rebound in its core advertising revenue — especially with Google Search and YouTube — which was hit hard by customer spending pullbacks amid the COVID-19 pandemic. Despite confronting the biggest tech antitrust lawsuit in over two decades and contesting accusations of censorship, CEO of Alphabet Sundar Pichai owed its success to ‘the deep investments we’ve made in AI and other technologies.’
Revenue was up 22% year-over-year to $21.47 billion, as well as beating on earnings with $2.71 per share. However, it’s not all plain sailing as its user base in North America fell by 2 million and Zuckerberg & Co warned of flat user growth due to premature elevation relating to COVID lockdowns earlier this year.
Netflix Price Hike
Netflix stock jumped 4% yesterday on the news that it’s increasing the price of its standard and premium plans in the U.S. It will increase the cost of its most popular pricing plan to $14 from $13 a month, as well as hiking the premium subscription to $18, up from $16. The basic plan will remain at $9 a month.
The news was well received by investors as Netflix tests its pricing power on its largest, and most profitable market. The price hike was introduced so that Netflix “can continue to offer more variety of TV shows and films,” according to a spokesperson for the company. As competition in the streaming space intensifies, Netflix will need to continue to create original content to maintain its spot at the helm and this bump in price will allow them to stay ahead of the game.
The Teladoc & Livongo Merger is Approved
Teladoc held a special shareholders meeting yesterday in which it was expected to approve the merger with Livongo, and approve it, it did. In an overwhelming show of support for the move, 99% of voting shareholders voted in favor of the merger. CEO Jason Gorevic had this to say on the joining of the two companies: “By combining with Livongo, Teladoc Health will be able to connect consumers and health care professionals from hospital to home with data insights and personalized support that deliver better health outcomes. We are excited to move another big step closer to making this vision a reality.”
The finalizing of the merger comes just a day after both Teladoc and Livongo posted blockbuster earnings. Both companies increased revenue by over 100% year-over-year! Teladoc also raised its guidance and now expects to take in over $1 billion this year without Livongo. I’m excited to see the synergies created between these two companies as they form one of the largest disruptors in the healthcare space.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in the companies mentioned above. Read our full disclosure policy here.
Financial Analyst at MyWallSt
Michael's first and favorite stock is Square, which he sees becoming a massive player in the payments industry and a leader in the war on cash.