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  • Jamie Adams

Earnings Season Wrap-Up: 6 Of The Most Important Earnings Reports

The madness of earnings season is drawing to a close, so we take a look back at 6 of the most important reports from the third-quarter of 2019. 



Photo by Sharon McCutcheon on Unsplash

Quarterly earnings reports for companies are often shrouded in anticipation and nervous energy, and also gives us a good indication as to what direction the company will take going forward. 


With the latest quarterly corporate parade all but done with, we take a look at those we believe surpassed expectations in the past quarter, and those who surprised us with poor results in Q3.


Positive Reports


American Tower

One of the leaders in telecommunication towers worldwide, the relatively unknown American Tower (NYSE: AMT) was one of Q3’s big winners, reporting increased revenue of 9.4% to $1.9 billion as well as a 34% to over $500 million. 


As of the time of this report on October 31, the company was operating nearly 170,000 towers worldwide. Growth looks set to increase for the company in the coming years, as the implementation of 5G networks worldwide begins to pick up the pace. Tenants of American Towers will require more assets and will be willing to pay more in rent as the necessity for more towers becomes crucial to maintaining a 5G network. 


Despite a recent drop in AMT’s stock, its Q3 earnings outline a clear upward trend that has not slowed, meaning its Q4 report will be an important one.


Netflix

The odds were stacked against a successful third-quarter for Netflix (NASDAQ: NFLX) after missing out on domestic subscriber growth in its summer earnings. Despite this, the king of streaming ended up as one of the big winners of Q3, with revenue of more than $5 billion, up 31%, as well as 6.2 million new subscribers worldwide. The company saw its stock jump 11% on the day. 


The big takeaway for investors will have been the strong report coming mere weeks before the launch of Disney+ and Apple TV+. Off the back of a promising quarter, Netflix can now fully concentrate on subscriber retention and content creation for the coming year as its main rivals get settled in. One key advantage will be that Netflix has been competing at this level for over a decade compared to the many would-be challengers.

Tesla

One of the biggest single-day stock moves came from Tesla (NASDAQ: TSLA) upon release of its third-quarter earnings; stock price increased by 20%. Announcing earnings per share of $1.86 on top of $6.3 billion in revenue and a record 97,000 car deliveries, the electric-car manufacturer smashed expectations and most importantly, showed a return to profitability.


Tesla looks set to take another leap forward from next year as it announced it would be doubling its manufacturing plants to 4, with ‘Gigafactories’ opening in both China and Germany. The move represents a clear plan to expand the company’s global presence and may also represent a cunning strategy for the company which now has a factory presence in the world’s second-largest economy as well as its largest trading bloc.



Negative Reports


Ford

The automobile giant saw its shares slide almost 3% immediately following its earnings report, and remains 2% down almost a month later. Q3 was previously expected to be Ford’s (NYSE: F) weakest period in 2019, mainly due to an ongoing $11 billion restructuring plan under CEO Jim Hackett through 2022. On an unadjusted basis, Ford’s net income fell 57% compared to a year ago to $425 million, or 11 cents per share.


There is still much room for optimism though, as the company adjusts to changing consumer demands, unveiling its first all-electric SUV in mid-November — the Mach-E. The company has been going through a rough period, hitting its lowest point last December at $7.63 a share and failing to climb above $10 since. It’s restructuring plan certainly has a lot riding on it.


Roku

Less than two months ago, our money would have been on swapping the places of Netflix and Roku (NASDAQ: ROKU) in this list. The brand-agnostic streaming platform saw its stock price tank more than 14% following its earnings, despite beating revenue expectations with $261 million and an increase in active accounts. 


Despite this sudden drop, the company has recovered well, up more than 20% in the past month. The company appears to have a bright future for now, as it targets international expansion as well as looking to profit from the bounty of streaming services quickly becoming available to consumers. 

Twilio

As if things weren’t bad enough following Twilio’s (NYSE: TWLO) disappointing Q3 earnings — where its stock fell 17% — the cloud communications company was forced to re-report its full-year forecast the following week due to a miscalculation. Full-year guidance dropped from $0.17 cents per share to just $0.12. The gaffe caused a further stock price fall of more than 5%. 


It may be a little unfair to call the earnings a complete disaster, considering revenue grew 75% in the third quarter to $295.1 million. However, there is no denying that the quarter is a massive setback for the company which had been up 22% in 2019 by the time of the earnings call. 


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

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