Stock Market Futures Mixed After Strong Earnings From Amazon & Snap
U.S. stock futures are mixed in the early morning Friday. This came as investors digested the upbeat quarterly results from Amazon (NASDAQ: AMZN) and Snap (NYSE: SNAP). If you ask me, that’s exactly what the market needs after Meta Platforms (NASDAQ: FB) posted a lackluster results that sent many tech stocks lower on Thursday’s intraday trading.
Alongside this, investors will be tuning in for the January jobs report that is due for release at 8.30 a.m. ET today. It will offer a picture of how the economic recovery has been impacted by the Omicron variant. As it stands, economists are expecting the Labor Department to show 150,000 non-farm payrolls returned in January. Meanwhile, oil prices surged to over $90 a barrel, a level not seen since 2014.
Weighing in on the current state of the stock market now is Mike Bell, global market strategist at J.P. Morgan Asset Management. He says, “In the U.S., the big tech stocks make up a very large part of the index. There’s been big differentiation between the big growth stocks. Those companies which have continued to deliver strong results have held up relatively well. Those companies which were priced as heavily valued growth stocks but then under-delivered are getting hit extraordinarily hard.” Regardless, investors will likely continue watching more major firms reporting earnings this morning as we wrap up the week. As of 6:25 a.m. ET, the Dow and S&P 500 futures are declining by 0.44% and 0.08% respectively. Meanwhile, the Nasdaq futures is edging higher by 0.59%.
Amazon (AMZN) Stock Poised For Biggest Ever Market Value Gain After Strong Earnings
To begin with, investors will likely be keeping a watchful eye on Amazon today. This would especially be the case after the company reported strong quarterly results, driven by growth in its cloud business and its growing advertising business. It’s worth mentioning that the company disclosed revenue for its advertising business for the first time. This segment generated $31.2 billion in revenue in 2021, with fourth-quarter sales rising 32%. At this scale, it is even bigger than Microsoft’s (NASDAQ: MSFT) online advertising revenue.
For Amazon’s fourth quarter, revenue came in 9.4% higher year-over-year to $137.4 billion. Profit rose to $14.3 billion, from $7.2 billion a year ago. To some analysts, the quarterly results were a surprise. After all, many expected earnings to be more subdued as Amazon dealt with rising costs on a variety of fronts. Nevertheless, the company guided first-quarter revenue of between $112 billion and $117 billion. That’s below the average estimate of $120 billion according to Refinitiv.
Overall, there are also a variety of factors pushing AMZN stock higher in the pre-market trading today. Firstly, the e-commerce giant saw a huge boost from its investment in electric truckmaker Rivian Automotive (NASDAQ: RIVN). From this investment alone, Amazon added $12 billion in profits. That accounted for the majority of its earnings for the quarter. Besides this, investors also responded favorably to the price hike of its Prime membership. The price change will go into effect for new members on February 18, and for current members after March 25. As Amazon attempts to navigate the shifting markets with its massive portfolio, AMZN stock would be in focus now.
Snap Stock Skyrockets On First Ever Net Quarterly Profit; Pinterest Stock Jumps On Big Earnings
Social media stocks such as Snap and Pinterest (NYSE: PINS) are making a comeback after posting strong quarterly earnings after the closing bell Thursday. The moves come after disappointing earnings from Meta Platforms that sent many stocks lower yesterday. In fact, the downturn was so drastic, it shaved off nearly $240 billion from its market value. If anything, this tells us that investors should consider looking at each of these companies individually versus lumping the sector together.
For Snap, the company reported its first ever quarterly net profit on Thursday, topping analysts’ estimates on earnings, revenue and user growth. Diving in, the company’s revenue rose 42% year-over-year to $1.3 billion. Also, Snap’s free cash flows was $161 million in the fourth quarter, compared to $69 million in the prior year period. In the larger scheme of things, the strength of its core businesses would allow the company to accelerate their investments in augmented reality, an area it believes could enhance user experience.
Similar to Snap, Pinterest stock is also surging in the pre-market trading after the company beat top and bottom line estimates. For the quarter, the company reported adjusted earnings of $0.49 per share on revenue of $847 million, according to FactSet. The company also said it reached its first full year of profitability under adjusted generally accepted accounting principles, or GAAP. All in all, social media stocks are likely to be among the most actively traded stocks in the stock market today.
Ford Stock Falter On Disappointing Earnings Amid Semiconductor Supply Crunch
Despite seeing early impressive demand for its electric vehicles, Ford (NYSE: F) stock is down after reporting its fourth quarter earnings. This came after the legacy automaker significantly missed Wall Street’s earnings expectations and slightly missed on revenue. In detail, revenue came in at $37.7 billion versus the Bloomberg estimates of $34.79 billion. Meanwhile, its adjusted earnings of $0.26 per share versus the estimates of $0.45 per share.
While the automaker hit its annual earnings guidance for 2021, it missed the production targets analysts were expecting. For the most part, it is reportedly due to supply chain problems and an ongoing shortage of semiconductor chips. However, even with the persistent supply chain uncertainties, the company provided a positive outlook for the upcoming quarter. For 2022, Ford expects adjusted pretax profits of between $11.5 billion and $12.5 billion, up 15% to 25% from 2021.
Looking ahead, Ford continues to invest heavily in clean energy and new technology in a push towards a more sustainable automotive future. According to a Bloomberg report, Ford will be increasing EV spending by as much as $20 billion. This is on top of the $30 billion it has already committed to the space through 2025. If you believe in what Ford would be able to offer over the long run, would you buy F stock on the post-earnings dip?
Stock Market Earnings To Watch Today
Even though today is the last trading day for the week, it is still another exciting day in the stock market with plenty of earnings to consider. Before the market opens, we have a rather comprehensive spread of companies operating in varying industries on tap. This includes Bristol-Myers Squibb (NYSE: BMY), Regeneron Pharmaceuticals (NASDAQ: REGN), Sanofi (NASDAQ: SNY), Aon (NYSE: AON), Royal Caribbean Cruises (NYSE: RCL), and Brookfield (NYSE: BAM) among others. Whether it is keeping up with the January jobs report or simply following earnings, there is plenty to keep investors occupied in the stock market today.
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