Stock Market Rally Navigates Earnings From Apple, Tesla, Google, Facebook, Microsoft, Amazon

The stock market rally trended higher, with the S&P 500 and Nasdaq hitting record highs while the Russell 2000 advanced amid a crush of earnings reports.


Facebook (FB) and Google parent Alphabet (GOOGL) surged on earnings, while fellow FANG stock (AMZN) also rallied. But an Apple (AAPL) breakout fizzled despite blowout results. Tesla (TSLA) sold off following its quarterly report while Microsoft (MSFT) also retreated. Those are the six largest S&P 500 stocks by market cap.

Ford (F) slashed Q2 production plans on a chip shortage hitting automakers. ServiceNow also was a big loser. But Shopify (SHOP) jumped while oil producers rallied on earnings and rising crude prices.

Stock Market Rally Navigates Earnings

The S&P 500 and Nasdaq hit record highs amid a flood of earnings, from Apple to Tesla. But those indexes were flat for the week, while the Dow Jones edged lower. A number of stocks broke out while some fizzled and others plunged. Economic data continued to point to a rapid recovery but the Federal Reserve said it wants “substantial further progress.”

Apple Delivers Blowout Quarter

Apple (AAPL) smashed Wall Street’s targets, with EPS up 119% and revenue up 54% to $89.58 billion. IPhone sales soared 66% to $47.94 billion. Mac computer sales rose 70% to $9.1 billion and iPad tablet sales increased 79% to $7.8 billion. The work-from-home and school-at-home trends spurred by the Covid-19 pandemic have fueled Mac and iPad sales over the past year. However, Apple’s cautious guidance for the June quarter dampened investor enthusiasm. Apple predicted a more dramatic seasonal sales decline than in prior years. It expects iPhone sales growth to slow and sees semiconductor shortages impacting Mac and iPad production in the quarter.

Microsoft Gets Cloud Boost

Microsoft (MSFT) reported 39% EPS growth on an 18% revenue gain to $41.71 billion, fueled by strong cloud-computing demand. The tech titan guided higher for June-quarter revenue. But shares fell from record highs after earnings.

Google Earnings Skyrocketed

Google-parent Alphabet (GOOGL) reported GAAP earnings of $26.29 per share, up 166% from a year earlier, including a $4.8 billion gain on equity investments. Gross revenue, which excludes traffic acquisition costs, jumped 34% to $55.31 billion. Google said cloud-computing revenue rose 46% to $4.05 billion, just below views. YouTube ad revenue climbed 49% to $6.01 billion, topping estimates. Alphabet also authorized $50 billion in additional stock buybacks. Shares jumped to record highs.

Facebook Soars, Twitter, Pinterest Dive

Facebook (FB) rocketed to a record high after reporting a 93% EPS gain as revenue jumped 48% to 26.17 billion, easily beating views. But Twitter plunged as user growth and revenue guidance fell short. Pinterest (PINS) plunged on the heels of first-quarter results that revealed a slowdown in user growth connected to the Covid-19 recovery, with more people going outside than staying at home. Revenue surged to its best growth in three years, up 78% to $485 million.

Amazon Earnings Triple (AMZN) reported a 215% EPS gain, obliterating views, as revenue jumped 44% to $108.5 billion. The e-commerce and cloud giant also guided high. Shares rose slightly on Friday, solidly for the week. EBay topped views but guided low on EPS. Shares fell.

AMD, Other Chipmakers Top Views

Earnings reports for semiconductor stocks were mostly upbeat in the past week amid the stock market rally. Chipmakers delivering strong beat-and-raise March-quarter reports included Advanced Micro Devices (AMD), Qualcomm (QCOM) and Texas Instruments (TXN). Skyworks Solutions (SWKS) beat views while Cirrus Logic (CRUS) missed, with both Apple chipmakers plunging Friday. Semiconductor equipment vendors posting better-than-expected results and guidance included KLA (KLAC), Teradyne (TER) and Ultra Clean Holdings (UCTT).

Software Earnings

Shopify (SHOP) Q1 earnings, revenue and gross merchandise volume easily topped estimates. EPS spiked 958%, buoyed by a $1.3 billion investment gain. Revenue jumped 110% to $988.6 million. Gross merchandise volume from merchant customers jumped 114% to $37.3 billion. The e-commerce company has declined to provide guidance for 2021 after a blowout year as merchants shifted to online storefronts. Shares jumped.

ServiceNow (NOW) Q1 earnings climbed 45% while revenue rose 30% to $1.36 billion, both topping. But updated 2021 subscription billings guidance disappointed while ServiceNow added fewer big contracts than in the prior quarter. Shares tumbled.

Fortinet (FTNT) reported EPS grew 35% as revenue climbed 23% to $710.3 million and billings grew 27% to $850.6 million. All beat views comfortably. The cybersecurity firm guided higher for Q2 revenue and billings.

Atlassian (TEAM) delivered 92% EPS growth as revenue rose 38% to $568.7 million, both beating fiscal Q3 views. The collaboration software maker also guided higher for Q4 revenue. TEAM stock rose Friday.

Private equity firm Thoma Bravo agreed to buy cybersecurity firm Proofpoint (PFPT) in an all-cash $12.3 billion deal. Thoma Bravo earlier bought security firms Imperva and Barracuda Networks.

UPS Earnings Soar On E-commerce Boom

UPS (UPS) earnings jumped 141% to $2.77, crushing views for $1.67. Sales rose 27% to $22.9 billion, as smaller businesses capitalized on the online shopping boom. The shipping giant withheld guidance but backed capital allocation plans, including the sale of its freight business. Separately, FedEx (FDX) and Adobe (ADBE) announced a multiyear e-commerce pact. UPS stock spiked while FedEx rose.

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Ford Slashes Production Plans On Chip Shortage

Ford (F) swung to earnings of 89 cents per share from a 23-cent loss in the year-earlier, pandemic-hit quarter. Revenue rose 6% to $36.2 billion. But the automaker warned that it expects to lose about half of its planned Q2 production, up from 17% in Q1, after extending downtime at some factories. That’s due to the worsening global chip shortage, which it now says could last through 2022. Ford backed 2021 EBIT guidance but slashed its free cash flow outlook. It announced a move to make its own EV batteries, following other automakers’ in-house moves.

Ford stock plunged, with other auto stocks retreating.

Tesla, Nio Growth Booming

Tesla (TSLA) topped Q1 earnings estimates, helped by sales of Bitcoin and regulatory credits that totaled nearly $800 million. EPS soared 304% to 93 cents and revenue jumped 74% to $10.39 billion. Tesla also revealed the value of its Bitcoin holdings as of March 31 was $2.48 billion. The company invested $1.5 billion in Bitcoin in February. Tesla also disclosed the EPA sent the company a notice to provide missing compliance records tied to its paint shop. Tesla stock sold off following earnings. Meanwhile, Nio (NIO) reported a wider-than-expected loss, but revenue shot up 529%. The China EV maker said Q2 deliveries will be about flat amid chip shortages.

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Oil Majors, Shale Plays Report

Chevron (CVX) reported a wider-than-expected Q1 EPS decline, while revenue rose 5% to $31.7 billion, beating estimates. Exxon Mobil (XOM) topped forecasts. The oil major said cash flow from operations was able to fully fund its dividend and capital expenditures. Meanwhile, shale producers Matador Resources (MTDR) and Continental Resources (CLR) beat views, with the latter reinstating its dividend. Rising oil prices helped boost energy stocks.

Boeing, Raytheon, GE Results Mixed

Boeing (BA) narrowed its Q1 loss vs. a year earlier to $1.53 per share, but it was worse than expected. Revenue fell 10% to $15.22 billion, beating views for $14.4 billion. Commercial aircraft revenue fell 31%. On the defense side, Boeing didn’t record a charge on the KC-46 tanker program but it booked a $318 million pre-tax charge on the Air Force One program. Raytheon Technologies (RTX) earned 90 cents per share, beating analyst estimates. But sales of $15.3 billion fell short. The conglomerate raised its full-year outlook and hiked its dividend. General Electric (GE) slightly beat EPS views, but sales missed, weighed down by its aviation unit.

Payment Firms Beat Views

Mastercard (MA), Visa (V) and Capital One Financial (COF) reported better-than-expected earnings and revenue as spending and payment volumes rise. Mastercard EPS fell 5% as revenue turned up, rising 5%. Gross dollar volume grew 8% on a local currency basis, but cross-border volume fell 17%. Visa EPS dipped 1% and revenue 2%. Service revenues rose 8% to $2.8 billion, while data processing revenues grew 11% to $3 billion. But international transaction revenues fell 19% to $1.5 billion. Capital One reported EPS of $7.03 on revenue of $7.11 billion. Capital One stock soared and Visa rose solidly. Mastercard fell on its results after rising on Visa earnings.

Housing Stocks Still Hot

D.R. Horton (DHI) reported EPS up 95% as revenue leapt 43% to $6.45 billion. Pulte Group (PHM) EPS grew 60% as revenue rose 19% to $2.73 billion. Century Communities (CCS) earnings skyrocketed 275% on a 67% sales increase to $1.01 billion. M/I Homes (MHO) earnings more than doubled to $2.85 on sales of $828 million, a 43% rise.

Building materials maker Owens Corning (OC) posted first-quarter EPS of $1.73, a 179% year-over-year surge, on revenue of $1.9 billion, a 20% increase, as the homebuilding boom continues.

Restaurants Top Profit Views

McDonald’s (MCD) and Domino’s Pizza (DPZ) reported first-quarter earnings that beat expectations. Restaurant Brands (QSR), which owns Burger King and Popeyes, also topped views. Starbucks (SBUX) missed sales views, but it raised its full-year outlook. Cheesecake Factory (CAKE) also beat, and cited “meaningful pent-up demand to dine at our restaurants.” The restaurant chains reported as they lap April of last year, when coronavirus-related shutdowns hurt the restaurant industry and forced a shift to digital, pickup and delivery orders. CAKE stock broke out, QSR stock hit highs while Domino’s rose solidly. MCD stock was little changed in a buy zone while Starbucks retreated.

News In Brief

Active-investment fund manager Artisan Partners (APAM) reported first-quarter EPS swelled 71% to $1.13 on a sales increase of 43% to $290.7 million.

Novocure (NVCR) reported a surprise loss while revenue growth came up short. The cancer-fighting medtech initially tumbled Thursday, but slashed losses.

Illumina (ILMN) reported adjusted earnings of $1.89 per share on $1.09 billion in sales, up a respective 15% and 27%. Both metrics easily topped forecasts.

Boston Scientific (BSX) jumped on Wednesday as adjusted profit rose 32% while revenue grew 8% to $2.75 billion.

Crocs (CROX) reported a 577% surge in Q1 EPS with revenue up 64% to $460.1 million. Both beat analyst estimates. The specialty footwear maker sees Q2 sales growing 60%-70%, well above the 40% analysts forecast.

Caterpillar (CAT), the construction-equipment giant, reported better-than-expected first-quarter results, as EPS and sales rebounded more than expected.

Polaris Industries (PII), a maker of motorcycles and off-road vehicles, crushed first-quarter estimates early Tuesday. But shares fell, even as it raised its full-year outlook, suggesting limited upside for the rest of the year. Polaris later announced a $1 billion buyback.

Cadence Design Systems (CDNS) reported Q1 EPS grew 38% with sales up 19% to $736 million, both beating. The electronics design software maker guided in line for EPS but lower for revenue. Shares tumbled.

Spotify (SPOT) added 3 million paying subscribers in Q1 for a total of 158 million. Analysts had forecast 2 million new subscribers for the streaming music leader. But total monthly active users, including ad-supported listeners, missed views.

Generac (GNRC) earnings soared 174% as sales jumped 70% to $807 million, topping estimates. The generator company raised its full-year sales growth outlook to 40%-45% from 25%-30%. Shares rose on earnings.


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