After a streak of reports from big banks, the earnings stream became more diverse this week. Investors were served financial statements from tech firms, consumer goods companies and the auto sector. In this short commentary we will take a quick look at the most interesting reports from this week.
Tesla - fourth profitable quarter in a row
Quarterly report from Tesla (TSLA.US), the US electric vehicle carmaker, was one of the most awaited releases of the week. In spite of the coronavirus pandemic and decline in car demand, the company showed a surprise profit and unexpected free cash inflow. This was the fourth profitable quarter in a row meaning that Tesla is now eligible to join the S&P 500 index. Tesla reiterated on its goal of delivering 500,000 vehicles this year. US company reported a relatively small revenue drop of 4.9% YoY, to $6.04 billion, and announced that it will be building another factory in the United States - this time in Austin, Texas.
Shares of Tesla (TSLA.US) are trading higher in pre-market today so one should expect stock to open higher. As the quarterly report was really good, there is a chance that price will move toward the all-time high near $1,790. Near-term support can be found at $1,435. Source: xStation5
Microsoft - cloud segment remains strong
Microsoft (MSFT.US), US tech heavyweight, reported Q2 results on Wednesday. The company generated $38 billion in revenue, marking a 12.7% YoY increase. However, earnings per share declined 14.6% YoY, to $1.46. Nevertheless Microsoft managed to beat expectations in both terms. Solid revenue growth was possible thanks to good performance of the cloud computing segment. Company said that its cloud platform grew 47% YoY in Q2. Gaming division of Microsoft benefited from stay-at-home orders with Xbox hardware sales increasing 49% YoY.
Microsoft shares (MSFT.US) have seen strong recovery in the past few months. Stock managed to print a fresh all-time high before pulling back to 30-day EMA. Note that retests of this moving average offered a good buying opportunity in the previous months. Source: xStation5
Coca-Cola - sales are recovering
Report from Coca-Cola (KO.US) was one of the first to show how pandemic affected consumer spending and habits when it comes to products used everyday. Adjusted earnings of $0.42 were slightly higher than expected $0.40 while adjusted revenue of $7.2 billion was marginally weaker than forecasted $7.21 billion. However, when it comes to dynamics, revenue dropped 28% YoY while global unit sales were 16% lower. A point to note is that unit sales were only 10% YoY lower in June (-25% in April) therefore demand looks to be recovering fast after bars and restaurants reopened around the world.
Coca-Cola (KO.US) is locked in a sideways move between support at $43.40 and resistance at $49.70. Stock caught a bid following earnings release and may be set to retest post-pandemic high,that also serves as the upper limit of the aforementioned trading range. However, stock may fail to break out of the range amid lack of big surprise in the quarterly report. Source: xStation5
Twitter - solid beat in daily active users
Twitter (TWTR.US) reported earnings today ahead of the US session open. It was the first social media company to report results for Q2 therefore it was expected to be a hint on how ad revenue looks like during a pandemic. Twitter had $683.4 million revenue in April-June period, slightly weaker than expected $704.6 million and 18.8% YoY lower. Net loss per share turned out to be $1.39. However, Twitter was expected to have 173.8 million daily active users in Q2 2020 but turned out to have 186 million. This bodes well for the future but next few quarters could be tough due to cost-cutting measures implemented by many companies that also include ad spending reductions.
Twitter (TWTR.US) has dropped out of the upward channel at the turn of May and June. However, upward move was resumed and stock reached pre-pandemic levels earlier this week. Earnigns report was decent given what was expected therefore we may see another attack on resistance at $39. Source: xStation5
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