Stock prices went mainly sideways on low volume Friday after a busy week of earnings reports. The Dow Jones Industrial Average (DJINDICES:^DJI) fell slightly while the S&P 500 (SNPINDEX:^GSPC) managed a small gain.
Today's stock market
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Rate-sensitive utility stocks advanced as long-term interest rates continue a two-day decline. The Utilities Select SPDR ETF (NYSEMKT:XLU) rose 1%. Energy stocks pulled back after recent gains, with the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT:XOP) falling 1.8%.
As for individual stocks, Amazon.com (NASDAQ:AMZN) shares jumped after the company reported yet another quarter of surprising growth, and Expedia Group (NASDAQ:EXPE) advanced on better-than-expected bookings.
Amazon turns in another monster quarter
Amazon crushed expectations when it announced first-quarter results yesterday, sending shares up 3.6% today. Sales increased 43% to $51 billion, exceeding its previous guidance, as well as analysts' estimate of $49.9 billion. Earnings per share soared 121% to $3.27. The analyst consensus of $1.27 in EPS wasn't even close.
Sales in North America rose 46%, international sales were up 34%, and Amazon Web Services (AWS) posted a 49% sales gain. Operating income increased 92% to $1.9 billion, compared to Amazon's guidance of $300 million to $1 billion. AWS contributed $1.4 billion of that, up 57% from the period a year earlier.
Online store sales increased 13% excluding currency effects. Commissions and fees from third-party sellers grew 44%, and subscription services revenue, which includes Prime membership fees, jumped 56%.
Looking forward, Amazon plans to increase the annual fee for Prime membership in the U.S. from $99 to $119 starting next month. Second-quarter sales are expected to grow between 34% and 42% and operating income guidance is for a range of $1.1 billion to $1.9 billion, which would be an increase of 139% at the midpoint.
Amazon continues to surprise with yet another stellar quarter featuring rapid top-line growth and even higher operating income growth, thanks largely to AWS.
Expedia reports strong booking growth
Shares of online travel site Expedia Group jumped 8.2% after the company announced first-quarter revenue that beat expectations on strong bookings growth. Revenue increased 14.6% to $2.51 billion compared with Wall Street expectations of $2.44 billion. Gross bookings grew 15.2% after having increased 13.6% last quarter. Net loss per share came in higher than expected, though -- $0.46 compared with the consensus of a $0.44-per-share loss.
International bookings continue to drive Expedia's results, growing 25% since last year and now comprising 39% of worldwide bookings. Domestic bookings were up 10%. The HomeAway platform continues to perform well, with bookings jumping 46% and revenue up 26% to $234 million. Room nights increased 16% over last year.
In the conference call, CFO Alan Pickerill said that expenses in each category rose faster than revenue "due to a combination of our key strategic initiatives and ongoing investments along with elevated spending at Trivago and a foreign currency impact."
Although adjusted EBITDA fell 40% in the quarter, the company reiterated its guidance for full-year adjusted EBITDA growth of between 6% and 11%, with more than 100% of the growth coming in the second half of the year.
Expedia stock took a hit earlier this week when Trivago, in which Expedia owns a majority interest, reported disappointing earnings and gave a weak outlook. Today's rise more than recouped those losses, perhaps on relief that Expedia's business seems to be on track. Last quarter, the shares sank on a profit disappointment, but investors may now be starting to focus on bookings growth instead.