Please ensure Javascript is enabled for purposes of website accessibility

After Hours: Splunk and Nordstrom Q2s Top Expectations

By Eric Volkman - Updated Aug 21, 2019 at 9:09PM

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

The IT company and famous retailer both deliver bottom-line figures that are well above analyst estimates.

Today was a good day for shareholders of companies reporting their quarterly results -- hello, Target! -- since these were better than expected, by and large.

Happily, that trend is continuing after the closing bell. Several companies have reported their latest figures following market hours, and for the most part, they're quite good. Splunk (SPLK -4.70%) and Nordstrom (JWN -5.75%), to name two, handily beat analyst estimates for profitability. Read on for details.

A Nordstrom store in Toronto, Canada.

Image source: Nordstrom.com.

Nordstrom Q2: Big earnings beat on reduced estimates

How do you keep investor fears of the retail apocalypse at bay? Well, if you're a big-name retailer, you post a bottom-line result that exceeds their diminished expectations.

That's what happened with Nordstrom in its Q2 of fiscal 2019. The company's revenue for the quarter declined by over 5% on a year-over-year basis, to $3.87 billion. That didn't meet the average analyst projection of $3.92 billion. However, the retailer netted $141 million ($0.90 per share) in profit, and while that was below the $162 million of Q2 2018, it blew past the average prognosticator estimate of $0.77.

The company attributed its successes in the quarter to "inventory and expense discipline." 

Even though many analysts had cut their forecasts for Nordstrom in advance of the Q2 earnings release, the company's bottom-line beat is still convincing enough to juice the stock tonight -- it's up by nearly 11% in after-hours trading.

Nordstrom also made several minor adjustments to its full-year fiscal 2019 guidance. The company now expects a 2% year-over-year decrease in net sales. Previously, it believed that growth would be flat to 2% down. Per-share earnings are now forecast to fall between $3.25 to $3.50; formerly, this range was $3.25 to $3.65.

Splunk Q2: The cloud helps crush estimates

Another quarterly outperformer reporting after market hours was data analytics specialist Splunk, which also announced a fresh acquisition.

For the company's Q2 of fiscal 2020, total revenue was $517 million, a sturdy 33% over the same period of fiscal 2019. Non-GAAP (adjusted) net profit came in at nearly $47 million ($0.30 per share), well up from the year-ago tally of just under $12 million.

Collectively, analysts tracking the stock were modeling only $488 million on the top line and a per-share adjusted net profit of $0.12.

Splunk gave credit to the cloud for its improvements. "[T]he strength of our cloud business is driving a faster transition to a renewable software model," it said in the press release heralding the results.

Meanwhile, the company adjusted its revenue guidance for the entirety of fiscal 2020. It now anticipates it will book $2.3 billion for the period, a bump from the previous estimate of $2.25 billion. Splunk maintained its projection of adjusted operating margin, which is expected to be roughly 14%.

Splunk also announced that it's acquiring SignalFx, a privately held company that describes its core, eponymously named product as "the only real-time cloud monitoring platform for infrastructure, microservices, and applications." It didn't provide details regarding the price or terms of the acquisition. Regardless, SignalFx should add heft to Splunk's already weighty involvement in cloud solutions.

In spite of the much better-than-expected results and the complimentary asset buy, Splunk's shares are essentially trading sideways this evening.

 

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

Nordstrom, Inc. Stock Quote
Nordstrom, Inc.
JWN
$23.27 (-5.75%) $-1.42
Splunk Inc. Stock Quote
Splunk Inc.
SPLK
$92.93 (-4.70%) $-4.58
Target Corporation Stock Quote
Target Corporation
TGT
$144.52 (-3.40%) $-5.09

*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
332%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

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.