Earnings season in numbers - how did Netflix, Amazon or Alibaba fare?

Published by: 04.08.2021 08:38:17

We've prepared the results of US as well as Chinese companies, which often appear in our porftolio investment fund K&L Rock. Let's take a look together at their predicted end-of-period value for Q2 and their real current value. 

Netflix 

 

Earnings per share EPS

• Expectation: $3.16

• Reality: $2.97

Markets

• Expectations:$7.32 billion

• Reality: $7.34 billion (in line with expectations) 

Further Information

• The number of new subscriptions was 1.54 million, although only 1.19 million were expected. The total number of subscriptions is 209 million
• Covid accelerated the arrival of new subscribers in early 2019, now it is slowing it down
• The outlook for the next quarter is 3.5 million new subscribers, analysts were expecting 5.46 million
• Company invested $8 billion in content in first 6 months, will add another $4 billion by end of year
• Many new series will be released on Netflix by the end of the year 
• Gaming - mobile subscription games, some will be based on Netflix movies and series

AT&T 

 

Earnings per share EPS

• Expectation: $0.79

• Reality: 0.89 USD

Markets

• Expectations:$42.66 billion
• Reality: $44.05 billion (up 3.2%) 

Further Information

• Company added 789,000 new mobile plan customers, 278,000 expected - low churn rate
• New customers are a result of people migrating to 5G, in which the company has invested tens of billions of USD - investment is starting to pay off 
• Net profit was US$1.5 billion, up from US$1.2 billion a year ago; Warner media generated US$8.8 billion - a 30.7% year-on-year increase 
• Warner media added 2.8 million subscribers to HBO, firm raised its projected growth for the rest of the year 
• 70-73 million subscribers, previous estimate was 67-70 million, which means streaming is trendy (the Discovery merger is a good start)
• Company executives say they are registering a fourth consecutive quarter of growth in wireless, fiber services and even HBO 

Intel

 

Earnings per share EPS

• Expectation: $1.06

• Reality: 1.28 USD (20% higher)

Markets

• Expectations:  $17.8  billion
• Reality: $18.5 billion (up 4%) 

Further Information

• Intel raised its growth guidance, with revenue expected to be $73.5 billion and EPS of $4.8, at a current P/E of around 11 
• The downside remains a decline in margin from 59.2% to 55% - supply issues, costs associated with transition to new technologies
• Company to invest 20 billion to improve processes at new Arizona plant
• Client Computing Group $10.1 billion, up 60 percent year-over-year, on the other hand, average price per chip sold decreased
• Datacenter Group $6.5 billion, down 9% year-over-year, highly competitive environment
• Mobileye $327 million, up 47%, Internet of Things Grop - $984 million, up 47% 

Apple 

 

Earnings per share EPS

• Expectation: $1.01

• Reality: 1.3 USD (29% higher)

Markets

• Expectations:$73.3 billion

• Reality: $81.41 billion (up 11%) 

Further Information

• iPhone beat expectations by 16%, +49.78% YoY, Services beat expectations by 7%, +33% YoY
• Mac beat expectations by 2%, YoY +16%, iPad 3%, YoY +12%, Gross margin 43.3% vs. expected margin of only 41.9%
• Did well in the US (+33%), but also in China (+58%), a lot of users switched from Android
• Distance learning and homeoffice helped the company, 700 million people use the services, up from 550 million a year ago
• Dividend per share will be $0.22, spent $29 billion on divi+buybacks last quarter
• But the company still has problems - chip shortages, high shipping costs, etc. 

Alibaba

 

Earnings per share EPS

• Expectation: $2.24

• Reality: 2.57 USD (15% higher)

Markets

• Expectations:$32.43 billion

• Reality: $31.86 billion (down 1.6%) 

Further Information

• Sales up 34% year-on-year, profits up 23%, firm benefits from country's economic recovery
• Not only Alibaba itself grew nicely, but also Cainiao - the logistics division, which boasted a +50% growth
• Alibaba expanded its buyback program from $10 billion to $15 billion by the end of 2022, about 3% of the company
• The company has 1.18 billion customers (912 million in China), a growth of 45 million since the last results
• Cloud grew 29%, generating approximately $2.5 billion, media segment grew 17%, generating $1.2 billion
• Performance was quite good, although the company has had many problems in the past 

Amazon 

 

Earnings per share EPS

• Expectation: $12.3

• Reality: 15.12 USD (up 23%)

Markets

• Expectations:$115.2 billion

• Reality: $113.8 billion (down 1.8%) 

Further Information

• Sales grew 27% year-on-year, up 41% in the same quarter last year, but the reasons are clear
• In addition to the incorrect revenue estimate, the projected growth for 3Q2021 was worse, $106-112 billion, analysts expected $119.2 billion
• 3Q2021 earnings are expected to be $2.5-6 billion, so even Amazon doesn't know what will happen
• The company is in the middle of a multi-year investment cycle, which is causing high costs for the company
• Cloud did well, growing 37%, from $14.2 billion to $14.81 billion
• Number of employees is 1.33 million, up 52% year-over-year, Amazon won't require vaccinations

Finally, we've put together a Q2/2020 and Q2/2021 year-over-year comparison of large technology companies for you

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*Source:XTB