Stock Market Futures Sink Following Weak Earnings Report From Meta Platforms
U.S. stock futures are well in the red in early morning trading today. This appears to be the case as tech giant Meta Platforms (NASDAQ: FB) posted lackluster results in its latest quarterly update yesterday. Considering that this is in comparison to strong quarters for stay-at-home focused tech firms this is understandable. Alongside this, there is also the latest data on initial jobless claims rolling in today. As it stands, economists are expecting about 250,000 claims, suggesting improvement over the prior week’s 260,000.
Weighing in on the current state of the stock market now is Tony DeSpirito, the CIO of BlackRock’s (NYSE: BLK) U.S. Fundamental Active Equity arm. He says, “In some ways, we might be at peak hawkishness in terms of market expectations.” DeSpirito continues, “We certainly saw that in January, and late last year — a change in tone from the Fed, and now the market has reset expectations and starting to price them in.” Regardless, investors will likely continue watching more major firms reporting earnings this week. As of 5:36 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading lower by 0.29%, 1.07%, and 2.12% respectively.
Amazon Earnings Preview: What To Know
To begin with, investors will likely be keeping a watchful eye on Amazon (NASDAQ: AMZN) today. This would especially be the case as the company is set to report its latest quarterly financials after the closing bell. Overall, there would be plenty of data points to consider on this front. Firstly, Wall Street analysts are projecting earnings of $3.78 a share on revenue of $137.7 billion for the quarter. For those who have been keeping track, this would mark a significant slowdown from its earnings of $14.09 a share the same quarter last year. This could be the case as demand for Amazon’s e-commerce services continues to normalize in the current market.
Now, while analysts are citing decelerating digital retail momentum, investors could be shifting their focus towards Amazon’s cloud computing arm. Namely, this would be its Amazon Web Services (AWS) division. For one thing, this would be another prominent revenue stream for the company now. Through AWS, businesses of varying sizes have access to a comprehensive suite of cutting-edge software solutions. This ranges from computing, storage, database, analytics, and machine learning among others. For the current quarter, consensus estimates for Amazon’s AWS revenue currently sit at about $17.3 billion. Should this be the case, it would mark a respectable 36% year-over-year increase.
In the larger scheme of things, some would argue that AWS’ business operates at higher margins than Amazon’s core retail services. While it accounts for less of the company’s total revenue, AWS contributed to about 59% of its total operating income for the previous fiscal year. As Amazon attempts to navigate the shifting markets with its massive portfolio, AMZN stock would be in focus now.
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Meta Platforms Slumps After Substantial Earnings Miss
Unlike some of its FAANG stock peers, Meta Platforms seems to be coming under fire after its fourth-quarter earnings report. In detail, the company posted an earnings per share of $3.67, missing expectations of $3.84. For the quarter, Meta raked in a total revenue of $33.67 billion, topping estimates of $33.4 billion. Not to mention, the company reportedly fell short on the daily active users (DAUs) front. As of yesterday, the company reports DAUs of 1.93 billion versus consensus expectations of 1.95 billion. Because of this, FB stock is tumbling by nearly 20% in premarket trading today.
Despite the current downturn in the company’s user count and stock price, there is one positive worth noting. That is, the company beat forecasts for average revenue per user (ARPU). According to Meta, its ARPU for the quarter is at $11.57, above estimates of $11.38. Following this less-than-ideal performance, Meta is reeling in expectations further for the current quarter. The company sees first-quarter revenue coming in between $27 billion to $29 billion while Wall Street expects sales of over $30.15 billion. Between changes in privacy policies to shifting user behaviors, Meta would, arguably, be looking at headwinds moving forward. The real question now is whether or not investors should be jumping on amidst the current weakness in FB stock.
Spotify (SPOT) Stock On The Decline On Lackluster Earning And Moderate User Growth Guidance
Alongside Meta Platforms, Spotify (NYSE: SPOT) seems to be under pressure as well. After reporting its fourth-quarter results yesterday, the company’s shares are down by over 7% in premarket trading today. This comes as the music streaming giant missed on the earnings per share front. To elaborate, Spotify posted an earnings per share of $0.24 on revenue of $3.04 billion for the quarter. For comparison, this is versus expectations of $0.49 and $2.99 billion respectively. It seems that investors are not taking too kindly to Spotify’s earnings miss.
Even so, the company’s current active user count continues to grow in line with its projections. According to Spotify, its monthly active user (MAU) count is now at 406 million. This would fall within its prior guidance range of 400 million to 407 million. Additionally, Spotify also grew its premium, paying subscribers by 16% year-over-year, totaling 180 million. The company notes that solid promotional campaign performance is to thanks for this. Looking towards the current quarter, Spotify expects to grow its MAUs to 418 million, barely exceeding analyst forecasts of 417.8 million. All this alongside the ongoing controversy surrounding content creators on the platform seems to be putting SPOT stock in the headlines now.
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Stock Market Earnings To Note Today
Not forgetting, today is yet another exciting day in the stock market with plenty of earnings to consider. In the pre-market, we seem to have a rather comprehensive spread of companies operating in varying industries on tap. This includes Nokia (NYSE: NOK), Penn National Gaming (NASDAQ: PENN), Merck (NYSE: MRK), ConocoPhillips (NYSE: COP), Eli Lilly & Company (NYSE: LLY), and Honeywell (NASDAQ: HON) among others.
Alternatively, there is a rather impressive array of leading names in the tech world reporting in the post-market hours. Aside from Amazon, Snap (NYSE: SNAP), Pinterest (NYSE: PINS), Activision Blizzard (NASDAQ: ATVI), Unity (NYSE: U), and Fortinet (NASDAQ: FTNT) will be reporting earnings. Moreover, the likes of automotive giant Ford (NYSE: F) and retail firm Skechers (NYSE: SKX) are also set to report quarterly financials as well. Whether it is keeping up with the jobs report or following earnings, there is plenty to keep investors occupied in the stock market today.
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