Investors have had to deal with some crosscurrents in the stock market this week, as major market benchmarks remain close to their all-time record highs. The Dow Jones Industrial Average (^DJI 1.61%) wasn't able to gain ground on Thursday, but the S&P 500 (^GSPC 0.56%) and Nasdaq Composite (^IXIC 0.26%) posted solid gains that left them at their highest closing levels in history.
|
Index |
Daily Percentage Change |
Daily Point Change |
|---|---|---|
|
Dow |
(0.17%) |
(60) |
|
S&P 500 |
+0.34% |
+16 |
|
Nasdaq |
+0.45% |
+72 |
Data source: Yahoo! Finance.
After the closing bell, earnings results from a couple of well-known stocks caught the attention of investors. Intuit (INTU +6.05%) posted solid gains, but Farfetch (FTCH +0.00%) saw a sharp drop as investors didn't like what they saw from the company. Below, we'll look more closely at both sets of results.
Image source: Getty Images.
Intuit moves higher
Shares of Intuit were up 9% in after-hours trading Thursday. The financial-software specialist was able to give investors just about exactly what they wanted to see in its fiscal first-quarter financial report.
Intuit's growth was impressive. Revenue jumped 52% from the year-ago period, influenced in part from Intuit's recent acquisition of Credit Karma. Adjusted earnings also moved higher, with a 63% year-over-year gain to $1.53 per share.
Intuit pointed to several factors supporting growth. In the small-business and self-employed group, the QuickBooks line of accounting software saw a 32% revenue rise, and online services grew at an even faster 42% pace. Credit Karma posted record revenue due to strong conditions in personal loans and credit cards.
Finally, Intuit boosted its full-year fiscal 2022 guidance. The company now sees growth coming in between 26% and 28% for revenue, with about 8 percentage points coming from the recent acquisition of Mailchimp. Adjusted earnings of $11.48 to $11.64 per share would represent gains of 18% to 20% year over year, far better than the previous projection for 13% to 16% growth. Those results point to the success of Intuit's overall strategy, and investors are eager to see what comes next for the financial-software provider.
Farfetch takes a hit
Meanwhile, shares of Farfetch were down 23% after hours. The fashion-platform provider showed strong growth, but it wasn't able to match the high expectations of shareholders.
At first glance, Farfetch's numbers looked good. Gross merchandise value nearly doubled compared to pre-pandemic levels two years ago, topping the $1 billion mark. Digital platform GMV was higher by 23% year over year.
Revenue for the third quarter was up 33% from the year-ago period, and adjusted losses narrowed from the third quarter of 2020, even after taking out the positive impact of a favorable extraordinary item. Take rates exceeding 30% showed the power of the platform in supporting third-party transactions.
However, investors were hoping for a bigger top-line rise than what Farfetch managed to put up. In the current environment, companies are getting punished even for small shortfalls on the sales front, as revenue growth is generally seen as paramount in gaining market share and establishing a lasting leadership position in fast-growing areas.
Recent news that Farfetch might expand its partnership with luxury-goods giant Richemont buoyed the stock briefly last week. But investors appear impatient to see greater progress, and until they do, the path of least resistance for the share price appears to be down.
