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Often shrouded in anticipation and nervous energy, quarterly earnings reports give us a good indication as to what direction the company will take in the months ahead.
Image source: Unsplash.
With the latest quarterly corporate parade all but done with, we take a look at those we believe surpassed expectations in the past quarter, and those who surprised us with poor results.
Positive reports
American Tower
One of the leaders in telecommunication towers worldwide, the relatively unknown American Tower (AMT -0.48%) was one of Q3's big winners, reporting a revenue increase of 9.4% to $1.9 billion, as well as a 34% rise in net income to over $500 million.
As of Oct. 31, the company was operating nearly 170,000 towers worldwide. Growth looks set to increase for the company in the coming years, as the implementation of 5G networks worldwide begins to pick up the pace. Tenants of American Towers will require more assets and will be willing to pay more in rent as the necessity for more towers becomes crucial to maintaining a 5G network.
Despite a recent drop in AMT's stock, the company's third-quarter earnings outline a clear upward trend that has not slowed, meaning its Q4 report will be an important one.
Netflix
The odds were stacked against a successful third quarter for Netflix (NFLX -3.92%) after the streaming giant missing out on domestic subscriber growth in the prior quarter. Despite this, the king of streaming ended up as one of the big winners of Q3, with revenue of more than $5 billion, up 31%, as well as 6.2 million new subscribers worldwide. The company saw its stock jump 11% on the day.
The big takeaway for investors will have been the strong report coming mere weeks before the launch of Disney+ and Apple TV+. Off the back of a promising quarter, Netflix can now fully concentrate on subscriber retention and content creation for the coming year as its main rivals get settled in. One key advantage will be that Netflix has been competing at this level for over a decade compared to the many would-be challengers.
Tesla
One of the biggest single-day stock moves came from Tesla (TSLA 12.06%) upon release of its third-quarter earnings; the stock's price increased by 20%. Announcing earnings per share of $1.86 on top of $6.3 billion in revenue and a record 97,000 car deliveries, the electric-car manufacturer smashed expectations and, most importantly, showed a return to profitability.
Tesla looks set to take another leap forward next year as it announced it would be doubling its manufacturing plants to four, with Gigafactories opening in China and Germany. The move offers a clear plan to expand the company's global presence and may also represent a cunning strategy for the company, which now has a factory presence in the world's second-largest economy, as well as its largest trading bloc.
Negative reports
Ford
The automobile giant saw its shares slide almost 3% immediately following its earnings report, and remains 2% down almost a month later. The third quarter was expected to be Ford's (F 0.08%) weakest period in 2019, mainly due to an ongoing $11 billion restructuring plan under CEO Jim Hackett through 2022. On an unadjusted basis, Ford's net income fell 57% from a year ago to $425 million, or $0.11 per share.
There is still much room for optimism, though, as the company adjusts to changing consumer demands, unveiling its first all-electric SUV in mid-November -- the Mach-E. The company has been going through a rough period, with shares hitting their lowest point last December at $7.63 a share and failing to climb above $10 since. The restructuring plan certainly has a lot riding on it.
Roku
Less than two months ago, our money would have been on swapping the places of Netflix and Roku (ROKU 0.15%) in this list. The brand-agnostic streaming platform saw its stock price tank more than 14% following its earnings, despite beating revenue expectations with $261 million and an increase in active accounts.
But the company has recovered well, up more than 20% in the past month. It appears to have a bright future for now, as it targets international expansion and looks to profit from the bounty of streaming services quickly becoming available to consumers.
Twilio
As if things weren't bad enough for Twilio (TWLO 1.08%) -- its stock fell 17% following disappointing Q3 earnings -- the cloud communications company was forced to re-report its full-year forecast the following week due to a miscalculation. Full-year guidance dropped from $0.17 per share to just $0.12. The gaffe caused a further stock price fall of more than 5%.
It may be a little unfair to call the earnings a complete disaster, considering revenue grew 75% in the third quarter to $295.1 million. However, there is no denying that the quarter is a massive setback for the stock, which had been up 22% in 2019 until the earnings call.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in all of the companies mentioned above. Read the full disclosure policy here.
