Microsoft, Alphabet, Meta, and Visa: Weekly Digest (24 October – 28 October)
It is the quarterly report season, and this week the focus was on such companies as Microsoft, Alphabet, Meta Platforms, and Visa. Let's see if the companies managed to please their investors.
Microsoft forecast compromised its share price
On Tuesday 25 October, a report for Q1, financial 2023 was presented by one of the largest software developers, the Microsoft Corporation. Compared to the results of last year, revenue in July - September increased 10.6% to $50.1 billion; net profit dropped 14.4% to $17.6 billion, and EPS lost 13.3%, reaching $2.35.
The total revenue of all Microsoft Cloud services amounted to $20.3 billion, recording a 20% growth. Microsoft expects revenue from selling software and hardware to shrink in financial 2023 due to the falling demand for PCs, while the general economic situation will make advertisers cut down on their budgets.
On 26 October, with the quarterly statistics being so mixed, and the forecasts for the financial year being far from optimistic, the share price of Microsoft Corporation (NASDAQ:MSFT) plummeted 7.72% to $231.32.
Alphabet report: profit dropped 27%
On Tuesday, the results of Q3, 2022 were published by Alphabet Inc. The corporation's revenue in July - September recorded only a 6.1% growth to $69.1 billion, which is 3.2% less than the consensus forecast. Net profit lost 26.5%, reaching $13.91 billion, and EPS dropped 24.3% to $1.06. Analysts had forecast that the decline of the EPS would be under 9%.
This is the third quarter in a row when Alphabet Inc.'s revenue and net profit did not live up to the expectations of analysts. Google Search revenue increased 4.3% to $39.5 billion, and Google Cloud revenue gained 37.6% to $6.9 billion, while YouTube's dropped 1.9% to $7.1 billion.
According to the management of Alphabet Inc., the main reason for the weak quarterly statistics is the shrinking of the digital ads market. They specified that they do not foresee any improvement in the situation yet. On the same day, the shares of Alphabet Inc. (NASDAQ:GOOG) plummeted 9.63% to $94.82.
Visa: revenue and profit exceeded Wall Street expectations
On 25 October, the Q4 results and the whole of financial 2022 were presented by Visa Inc. Revenue in July - September recorded a 19% growth to $7.8 billion, which is 3% higher than forecast. Net profit recorded a 10% increase to $3.9 billion, and EPS grew 13% to $1.86. Wall Street had expected EPS to reach $1.79 per share.
The annual revenue demonstrated a 22% growth to $29.3 billion, net profit increased 21% to $15 billion, and EPS grew 24% to $7. However, payment volume over the quarter only increased 10.5% to $2.93 trillion, which not only missed the expectations of experts but also recorded the smallest growth since early 2021.
On 26 October, the quarterly and yearly statistics pushed the stock quotes of Visa Inc. (NYSE:V) upwards by 4.6%, to $203.33. Note that the share price of the company had been growing for six trading sessions in a row.
The Meta report sent its prices down 25%
On Wednesday 26 October, Meta Platforms Inc. presented its report for Q3, 2022. Revenue dropped 4.5% to $27.7 billion, net profit declined 52% to $4.4 billion, and EPS dropped 49% to %$1.64. Wall Street had expected the revenue and EPS to reach $27.38 billion and $1.89, respectively.
The revenue of Reality Labs, a department that works on AR glasses and the metaverse, dropped 48.9% to $285 million. Its loss grew 39.6% to $3.67 billion.
While the advertising business of Meta Platforms Inc. is experiencing an extreme crisis due to the slowdown in the global economy, the corporation continues to focus on the development of Augmented Reality and increasing spending on it.
This disappointed investors, and on 27 October, the share price of Meta Platforms Inc. (NASDAQ:META) dropped 24.56%, to $97.94. The corporation lost $67 billion of its market price.
This week, quarterly reports were published by Microsoft Corporation, Alphabet Inc., Meta Platforms Inc., and Visa Inc. The reports sent the quotes of the first three corporations down. The largest decline of 25% was demonstrated by the shares of Mark Zuckerberg’s corporation. Out of the companies named above, only Visa Inc. pleased investors and analysts, as its shares responded to the July - September report with growth.