Please ensure Javascript is enabled for purposes of website accessibility

Stock Market Today: Amazon Gives Disappointing Guidance, ExxonMobil Grows Profits

By Jim Crumly – Updated Apr 17, 2019 at 4:44PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Both of these huge companies reported strong profits, but expectations for the future are much higher for one of them.

Stocks moved up and down on Friday, but closed with small gains. The Dow Jones Industrial Average (^DJI -0.43%) and the S&P 500 (^GSPC -0.21%) were both up over 1% for the week.

Today's stock market

Index Percentage Change Point Change
Dow 0.26% 64.22
S&P 500 0.09% 2.43

Data source: Yahoo! Finance.

Energy stocks rallied, with the Energy Select Sector SPDR ETF (XLE 1.12%) up 1.7%. Consumer stocks lost some ground; the SPDR S&P Retail ETF (XRT 1.10%) slipped 0.7%.

As for individual stocks, Amazon (AMZN -0.64%) had a big holiday quarter but triggered some worry with its guidance, and ExxonMobil (XOM 2.10%) beat profit forecasts.

Check out the latest Exxon and Amazon earnings call transcripts.

Columns of numbers and rising graphs.

Image source: Getty Images.

Amazon reports strong results but disappoints with short-term guidance

Amazon beat expectations for fourth-quarter results but gave tepid guidance for Q1, and shares fell 5.4%. Net sales grew 19.7% to $72.4 billion and earnings per share increased 61% to $6.04. Analysts were expecting earnings of $5.67 on sales of $71.9 billion.

North American sales grew 18%, international sales were up a strong 19% excluding currency, and the company's highly profitable Amazon Web Services grew revenue by 45% to $7.4 billion. Sales in the "Other" category, which is mainly advertising, grew a whopping 97% excluding currency, to $3.4 billion. Operating income in the quarter soared 78% year over year and free cash flow for the full year grew 134%.

Amazon forecast first-quarter sales between $56 billion and $60 billion, which was less than the analyst consensus of $61 billion and may have gotten investors worried about slowing sales growth despite soaring profits. The company also said in the conference call that it expects to increase investments in operational efficiencies relative to what it spent in 2018.

ExxonMobil grows profits on rising production

ExxonMobile handily beat Wall Street expectations for profit in the fourth quarter despite a drop in oil prices, and shares rose 3.6%. The company earned $1.41 per share, which was down from $1.97 in the period a year ago but well above the $1.08 analysts were expecting.

Excluding the effect of tax reform and asset impairments, earnings actually rose 72% to $6.4 billion. Lower prices for crude were offset by higher production volumes, especially in the Permian Basin, where production was up 12% from last quarter and 93% from Q4 2017. Exxon also benefited from higher gas prices and improved efficiencies in its refining operations due to integration of logistics and manufacturing.

Revenue of $71.9 billion was an 8.1% increase over last year, but missed the analyst estimate of $78.4 billion. Still, Exxon's ability to increase production and generate profit growth, along with its strongest cash flow from operations and asset sales since 2014, had investors encouraged today.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jim Crumly owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$114.41 (-0.64%) $0.74
Exxon Mobil Corporation Stock Quote
Exxon Mobil Corporation
XOM
$85.74 (2.10%) $1.76
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$29,134.99 (-0.43%) $-125.82
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,647.29 (-0.21%) $-7.75
SPDR Series Trust - SPDR S&P Retail ETF Stock Quote
SPDR Series Trust - SPDR S&P Retail ETF
XRT
$58.10 (1.10%) $0.63
The Select Sector SPDR Trust - The Energy Select Sector SPDR Fund Stock Quote
The Select Sector SPDR Trust - The Energy Select Sector SPDR Fund
XLE
$69.52 (1.12%) $0.77

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.