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BenzingaEditorial

Big Tech Keeps Amazing Wall Street Even After Winning the Pandemic

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The first anniversary of the pandemic has been marked by stellar first quarter results delivered by Big Tech. In the last year, the five tech titans, Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Google (NASDAQ: GOOG), Microsoft (NASDAQ: MSFT) and Facebook (NASDAQ: FB), had combined revenue of more than $1.2 trillion. It was a strange and amazing year for Big Tech with some companies growing faster and becoming more profitable than they have been in years.

As the world is starting to recover after being thrown into chaos by COVID-19, increased activity and monetization brought accelerating revenue and profits to Big Tech, suggesting an enduring effect of the digital way of life. Apple has so much extra cash that it’s spending an additional $90 billion to buy its own stock, nearly the equivalent of Kenya’s GDP. Amazon’s Jeff Bezos alone is worth more than Goldman Sachs Group Inc (NYSE: GS).

Q1 results

The stellar first-quarter performance is obvious across all areas, including digital advertising that jumped sharply. Google and Facebook each registered their strongest advertising growth in years, with Google’s ad revenue increasing 32 per cent and Facebook’s being ahead with 46 per cent.  Consumers are now willing to lavish on gadgets as seen in a 66 per cent leap in Apple’s revenue from the sale of iPhones. Even the market for PCs, which had been in decline, saw a strong rebound, with unit sales leaping by around a third in the first quarter, fueling revenue and raising earnings at Microsoft. The rise of remote work, learning and entertainment enabled all three cloud operators, Amazon, Microsoft and Google, to maintain steady growth rates even as they continued growing and with many of their customers were heavily hit during the pandemic.

Expanding into services

Meanwhile, the tech companies have taken advantage of their deep ties with millions of users to extend their reach deeper with services delivered over their platforms. Apple’s move into services contributed to a profit jump that lifted its gross profit margin to more than 42%, jumping from about 38% it maintained throughout many quarters.

At Amazon, newer services have brought a transformation in the company’s profit profile. Company’s “other revenue” which consists mainly of ads, jumped 73% with the first quarter result being a record quarterly profit for a company once notorious for its persistent losses. To give you a better idea, Amazon’s $8.1 billion in after-tax earnings in the quarter was equivalent to the company’s net earnings in its entire first 22 years of existence.

Their success secret

Besides being the perfect model for the era of social distancing, Big Tech was the place any business that still had money to spend on would spend it on. Second, the tech giants used the pandemic to get even stronger. In some cases, that meant cutting costs on travel, entertainment and marketing with Google saving more than $1 billion a year on those types of expenses. On the other end, the tech giants spent heavily to fortify their advantage like Amazon spending $50 billion in the last year on warehouses and cloud computing hubs to increase its capacity. That’s more than double what Exxon Mobil Corporation (NYSE: XOM) spends to dig oil and gas out of the ground each year.

Lawsuits are spoiling the party

Big Tech’s success isn’t all sunshine and rainbows due to regulators. The European Commission has accused Apple with breaking antitrust law by charging high commission fees in its App Store and forbidding app developers from offering their customers other ways to pay for their product. This is only one of approximately four billion investigations of tech superpowers but these charges relate to a complaint filed two years ago by the music streaming service Spotify (NYSE: SPOT) accusing Apple of depriving users of cheaper music streaming choices and distorting competition by raising their costs, reducing their profit margins as well as their attractiveness. A similar accusation has been made by Epic Corporation (OTC: EPOR), the creator of Fortnite that was removed from the App Store due to offering other ways to subscribe to their services. Although these cases take many years through courts and any verdict is likely to be appealed against, if Apple is found to have breached EU law, it is facing a fine that could trim up to 10 per cent of its global turnover.

Success beyond the pandemic

Big Tech reported an impressive surge in growth and profits that stunned Wall Street, but more importantly, it delivered powerful evidence that the digital dependence that was forced upon a large part of the world’s population over the past year could be an enduring trend. Its increasingly outsized impact on the world of business can best be summed up by just two numbers. One is the combined revenue of Alphabet, Amazon, Apple, Facebook and Microsoft, which jumped 41% in the first three months of this year to $322 billion. The other is the even more spectacular companies’ profit growth as after-tax earnings for the five soared to $75 billion, which is 105% up from the previous year.

In a nutshell, the iPhone, Google’s search engine and Instagram became our deeply ingrained habits as screens came to play a central part in our lockdown lives. America’s five tech titans didn’t do well in the Great Recession more than a decade ago, but this time around, they were more than fine and there’s no sign of them hitting the wall yet. They showed they are invincible against COVID-19, but only time will tell if they are they winning at everyone else’s expense or benefit.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

BenzingaEditorial

This Week’s Recap

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The market and the economy continue to open, which is probably a result of bottled-up demand for many products and services affected by the pandemic. Maybe the inflation or rising bond yields will trigger the selloff on the market at some moment, but the current Fed’s transitory inflation message has been accepted by many investors. Also, the best way to deal with inflation is to stay with your investments and keep your faith in the market. So, despite the jump of May’s consumer-price index, that did not affect the investors who adopted a different mindset, so all three major averages finished in a positive zone.

The Dow Jones Industrial Average managed to recover from one of the steeper declines, thanks to gains from companies like IBM (NYSE: IBM), Microsoft (NASDAQ: MSFT), and Salesforce (NYSE: CRM). The Nasdaq Composite Index has also risen 49.09 points to 14,069.42. The tech-heavy index continued with the positive run, led by DocuSign (NASDAQ: DOCU), Zoom Video (NASDAQ: ZM), and CrowdStrike (NASDAQ: CRWD).

Tuesday brought us an earnings report from Oracle

Although it was a slim week for the earnings reports, Oracle (NYSE: ORCL) announced its last quarter results, as well as plans and guidance. The results are better than expected, as the achieved revenues were $11.23 billion (compared to the expected $11.04 billion) and the achieved adjusted earnings of $1.54 per share (compared to the expected $1.31). On the other hand, the company revealed its quarterly revenue guidance, which is lower than expected due to the plans to increase investments to support its cloud strategy and keep migrating existing on-premises customers to the cloud. This all led to a share fall of 5%, as many investors are skeptical if Oracle can successfully compete with major “cloud” players like Amazon (NASDAQ: AMZN), Salesforce, or Workday (NASDAQ: WDAY).

Adobe reported impressive results on Thursday

The Wall Street analysts recognized the work-from-home trend and this second digitization era as the main reasons for Adobe’s (NASDAQ: ADBE) sustained growth and therefore a monster quarter. And they were right. The company reported revenues of $3.84 billion, which is an increase of 23% compared year to year. That is also above the Wall Street estimate of $3.73 billion. The digital media business revenues, consisting of Creative Cloud and Document Cloud, grew by 25% compared to the previous year. The adjusted earnings per share were $3.03, which is higher than the estimated $2.81. For the following quarter, the company expects revenues of $3.88 billion and adjusted earnings per share of $3.00.

Conclusion

All these factors taken together, proven by positive index movements and earnings results better than anticipated, support the fact that the economic recovery is firmly underway, and those are very encouraging news.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Several new earnings reports and more management presentations this week

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We might be witnessing the lower volume of quarterly earnings reports this week, but that only means we passed last quarter’s report peak and we are getting ready for the June-quarter earnings season, which will hit us not long after the 4th of July. However, we do not lack many management presentations, which are typical after announcing earnings reports. This week brings us news for future result expectations from more than 30 companies, so let’s try and not miss any important clues. Besides earnings reports, this week is bringing us a total of 9 new IPOs like Marqeta, Inc. (NASDAQ: MQ), TaskUs, Inc. (NASDAQ: TASK), LifeStance Health Group, Inc. (NASDAQ: LFST), monday.com Ltd. (NASDAQ: MNDY), Zeta Global Holdings Corp.(NYSE: ZETA) and Jaws Hurricane Acquisition Corp (NASDAQ: HCNEU).

Monday

Yesterday we saw the first quarter report of fiscal 2022 for Marvell Technology (NASDAQ: MRVL), a Delaware-based company that develops and produces semiconductors and related technology. Marvel Technologies reported new revenues of $832 million, which is an increase of 20% year-to-year. GAAP gross profit margin was 50.2% and non-GAAP gross margin was 64.3%, while GAAP diluted loss per share was $0.13 and non-GAAP diluted income per share was $0.29.

Also, Vail Resorts, Inc. (NYSE: MTN) which owns and operates several premier mountain resorts in Colorado and California, reported fiscal 2021 third-quarter results yesterday. The report showed a net income of $274.6 million which is an increase of 80% compared to the third fiscal quarter of 2020. The reported EBITDA was $462.2 million, which is a significant increase from last year same quarter’s $304.4 million.

Tuesday

Besides earnings reports from Navistar International (NYSE: NAV) and Calavo Growers (NASDAQ: CVGW) on Tuesday, we are also expecting reports from Thor Industries (NYSE: THO), Casey’s General Stores (NASDAQ: CASY), and ABM Industries (NYSE: ABM).

Wednesday

Wednesday is reserved for earnings reports from Brown Forman (NYSE: BF-B), United Natural Foods (NYSE: UNFI), and Restoration Hardware (NYSE: RH). RH, the California-based furnishing company is expected to report earnings of $3.99 per share, which is growth of over 214% compared to the same period last year. Also, GameStop Corp (NYSE: GME), one of the world’s largest video game retailer’s earnings report is expected on Wednesday. The expected loss for the first quarter is $0.68 per share, which is an improvement from the same period last year (-%1.61 per share). In order to accelerate its transformation, the company decided to restructure its board, so it can keep up with industry growth and company expansion in the digital arena.

Thursday

On Thursday, we expect to see reports from National Beverage (NASDAQ: FIZZ), Chewy (NYSE: CHWY), and Dave & Buster’s (NASDAQ: PLAY). Chewy, the Florida-based pet store retailer, is expected to report a quarterly revenue growth of over 125%, compared year over year.

Friday

We are not expecting any major earnings reports on Friday.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

The week may be starting slowly but do not let that mislead you

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The celebration of Memorial Day in the U.S. caused the slower start, but the rest of the week will bring us plenty of news, updates, and earnings reports from companies like Zoom Video Communications (NASDAQ: ZM), Hewlett-Packard Enterprise (NYSE: HPE), Advanced Auto Parts (NYSE: AAP) and Slack Technologies, Inc. (NYSE: WORK). This week will also bring us news from the EV and the IPO worlds, as well as the 2021 Bitcoin conference, one of the biggest cryptocurrency events this year. Before we move to the day-to-day highlights, if you are a small business owner, do not miss today’s deadline to apply for the latest round of the Paycheck Protection Program funding.

Tuesday

This week’s earnings reports will be led by Kirkland’s Inc (NASDAQ: KIRK), and that is due before the market opens. It will be followed by HP’s and Zoom’s earnings reports, after the bell. SoFi Technologies (NYSE: SOFI) is a fintech startup IPO joining the trading world after its SPAC merger on Friday.

 

Wednesday

Before the market opens on Wednesday, we are expecting the earnings reports from Advance Auto Parts and Lands’ End Inc (NASDAQ: LE). The reports will keep coming after the bell as well, so we are keen to see how NetApp Inc (NASDAQ: NTAP), Endeavor Group Holdings (NYSE: EDR), Splunk Inc (NASDAQ: SPLK), and PVH Corp (NYSE: PVH) did in the previous period. Wednesday is also the day when we are expecting the Beige Book, which will give us the latest analysis of the economic conditions in the U.S. as the COVID-19 restrictions reduce.

Thursday

Thursday is expected to be the busiest of the week, when we expect earnings reports from Express Inc (NYSE: EXPR), Asana Inc (NYSE: ASAN), Duluth Holdings Inc (NASDAQ: DLTH), Broadcom Inc (NASDAQ: AVGO), The Toro Company (NYSE: TTC), The Cooper Companies (NYSE: COO), Science Applications International Corporation (NYSE: SAIC), Lululemon Athletica (NASDAQ: LULU), as well as Slack Technologies.

Thursday is a big day for NVIDIA Corporation (NASDAQ: NVDA) also. After reporting the record profits and earnings, highly affected by the company’s revenues from graphic cards for crypto mining, the shareholders will vote on a 4-for-1 stock split. That will increase the number of authorized shares of common stock, and if approved, each shareholder will receive an additional dividend of three additional shares.

Thursday will be also interesting in the automotive world. Kia will start taking reservations for its new EV6 crossover, while Nio Inc (NYSE: NIO), the Chinese automaker, will hold a general meeting so it can increase the diversity of its board.

This day will also be dominated by cryptocurrencies, as the 2021 Bitcoin conference, taking place in Miami, will kick-off.

Friday

The week’s end is reserved for the earnings report from Hooker Furniture Corporation (NASDAQ: HOFT), and that is expected before the opening bell. During the rest of Friday, we will focus on the latest unemployment rates and data.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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