Mixed U.S. earnings season continues on
Last week’s Big Tech earnings reports failed to paint a clear picture for investors, and those mixed results continued this week.
U.S. stock earnings highlights
All numbers below are presented in U.S. dollars.
- Airbnb (ABNB/NASDAQ): Earnings per share of $0.86 (versus $0.92 predicted), and revenues of $2.75 billion (versus $2.74 billion predicted).
- Reddit (RDDT/NASDAQ): Loss per share of $0.06 (versus $0.33 predicted), and revenues of $281 million (versus $254 million predicted).
- Disney (DIS/NYSE): Earnings per share of $1.39 (versus $1.19 predicted), and revenues of $23.16 billion (versus $23.07 billion predicted).
Airbnb’s earnings call was perhaps the most noteworthy. After the company shared that it missed earnings expectations, the shares dropped 14% in after-hours trading on Tuesday night. Citing slowing demand from U.S. customers as the main reason for lowered earnings, management was quick to point out that revenue was still up 11% year over year, and that Asia Pacific and Latin America were leading verticals for growth.
Despite the healthy earnings beat on Wednesday, Disney shares were down 4% as investors appear reluctant to jump back into the stock. The big highlight of the quarter was that Disney’s combined streaming platforms turned a profit for the first time, with the combination of Disney+, Hulu and ESPN+ posting an operating profit of $47 million.
That obviously compares favourably with a loss of more than half a billion for the quarter last year. Disney announced streaming price hikes were on the way
“We’re seeing growth in consumption and the popularity of our offerings, which gives us the pricing leverage we believe we have.” He went on to add, “I feel very bullish about the future of this business. We’re not saying much more about it, except you can expect it to grow nicely in fiscal 2025.”
—Bob Iger, CEO, Disney
Disney Parks and Experiences Division saw its operating income dip 6% in U.S. parks and had an uptick of 2% in its international locations.
“We saw a slight moderation in demand, I certainly wouldn’t call it a significant change. I would just call this a bit of a slowdown that’s being more than offset by the entertainment business.”
—Hugh Johnston, CFO Disney
It appears the market perceived declining profits as more of a “significant change” than the Disney executives did.
Reddit continues to show signs of eventual profitability, as the company’s net loss was down to $10.1 million from $41.1 million in the second quarter last year. Revenues were up 54% year on year, and online advertising sales continue to improve after dipping in 2022. Despite this good news, Reddit shares are down more than 20% over the last five trading days. They are still down slightly year-to-date.
Read: Disney earnings: Results show profit, stock falls 2%
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