Tesla, Netflix, Snap, and Bank of America: Weekly Digest (17 October – 21 October)
This week the focus was on quarterly earnings reports. Today, we tell you whether Tesla, Netflix, Snap, and Bank of America managed to please investors and shareholders.
Bank of America report: revenue increased 8%
On Monday 17 October, Bank of America Corp. published its report for the third quarter of 2022. One of the largest US banks reported that July-September revenue rose 7.5% to $24.5 billion, net income fell 7.8% to $7.1 billion, and earnings per stock sagged 4.7% to $0.81 compared to the same period a year ago.
It should be noted that EPS and revenue exceeded analysts' forecasts: the figures were expected to reach $0.78 and $23.5 billion, respectively. The bank repurchased $0.45 billion in stocks and paid $1.8 billion in dividends last quarter. Earlier this week, the strong financials pushed Bank of America Corp. (NYSE:BAC) up 6.06% to $33.62.
Netflix report: stocks up 13%
On Tuesday 18 October, US-based Netflix Inc., which owns the streaming service of the same name, reported its third-quarter 2022 results. Financial results for July-September exceeded Wall Street expectations.
Netflix Inc. revenues for the third quarter rose 5.9 percent to $7.93 billion, up 1 percent from experts' estimates. At the same time, net income fell 3.5% to $1.4 billion and earnings per stock declined 2.8% to $3.1. The consensus forecast was $2.18.
The number of subscribers to the world's largest streaming service increased by 4.5% to 223.09 million. During July-September the audience grew by 2.4 million – the total influx was expected not to exceed one million. The Asian region accounted for the largest number of new users with 1.43 million.
Netflix Inc.'s management is forecasting $7.77 billion in revenue, $166 million in profit, and 227.59 million subscribers for the quarter. Netflix Inc. (NASDAQ:NFLX) stock gained 13.09% to $272.38 per unit on 19 October on the back of the report and forecast.
Snap report: loss up 400%
Snap Inc., which owns the popular messenger Snapchat, reported its third-quarter 2022 results on Thursday, 20 October. The financial statistics turned out disappointing and collapsed the value of Snap Inc. (NYSE:SNAP) stock by 27.06% to $7.87 per unit after the close of trading.
Revenue rose 6% to $1.13 billion but fell just short of experts' estimates of $1.14 billion. Note that this is the lowest growth rate since the firm went public in 2017.
Net losses increased 400% to $360 million, roughly in line with Wall Street expectations. $155 million of this amount was allocated to a radical restructuring that was announced at the end of August. It is a programme that involves laying off 20% of the workforce and reducing the investment in new projects. Losses per stock rose 340% to $0.22.
Snap Inc.'s quarterly results negatively affected not only its own stock but also those of other corporations that rely on digital ad sales for revenue. After the close of Thursday's trading session, Pinterest Inc. (NYSE:PINS) was down 7.14% to $21.33, Meta Platforms Inc. (NASDAQ:META) lost 3.95% to $126.33 and Alphabet Inc. (NASDAQ:GOOGL) was down 1.88% to $98.09.
Tesla report: risk of disruption to the annual delivery plan
The world's most expensive electric car maker, Tesla Inc., shared its results for the third quarter of 2022 on Thursday. Revenue rose 56% to $21.45 billion but failed to beat the consensus forecast of $21.5 billion. Net income increased 103% to $3.3 billion and earnings per stock rose 69% to $1.05. Analysts had anticipated earnings of $1.03 per stock.
Electric car deliveries increased 42% to 343,830 units but were 7.3% below experts' expectations. Earlier, Tesla Inc. had ambitiously announced a 50% increase in deliveries this year, to around 1.4 million electric vehicles. This means the company needs to deliver 490,000 cars this trimester to meet the plan.
CFO Zachary Kirkhorn, unlike CEO Elon Musk, doubts that this goal will be achieved because the logistics issues have not been solved.
In addition to falling behind its annual production and delivery plan, the company's stock continues to be under pressure from the Twitter deal because of possible sales of the carmaker's stock by Mr. Musk. As a result, Tesla Inc. (NASDAQ:TSLA) is down 6.65% to $207.28.
This week, Bank of America Corp., Netflix Inc., Snap Inc., and Tesla Inc. published their quarterly reports. While the presented statistics had a positive impact on a couple of stocks, they sent the stock of other companies down: the bank and streaming service quotations surged 6% and 13% respectively, while the messenger and carmaker's stocks plunged 27% and 7% respectively.