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Thursday's Earnings Winners Are Rising After Hours

By Dan Caplinger – Dec 9, 2021 at 5:52PM

Key Points

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Two stocks in particular are gaining ground.

The stock market broke its upward streak on Thursday, with disparate performance across major benchmarks. The Dow Jones Industrial Average (^DJI 0.43%) was down by the narrowest of slivers as some of the more cyclical stocks of the market held up well. However, losses for the S&P 500 (^GSPC 0.57%) and Nasdaq Composite (^IXIC) were more pronounced.


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Data source: Yahoo! Finance.

After the market closed, a couple of companies reported earnings that were good enough to cause their stock prices to rise. Lululemon Athletica (LULU -0.82%) managed to live up to some pretty high expectations among investors, but Oracle (ORCL -0.12%) saw the bigger jump in its share price. Below, we'll look more closely at both companies to see what they said in their latest earnings reports.

Lululemon stretches higher

Shares of Lululemon were up about 2% in after-hours trading Thursday afternoon. The yoga apparel specialist gave some favorable readings in its third-quarter financial report, and investors were generally pleased with what they saw.

Six people practicing yoga.

Image source: Getty Images.

Lululemon's numbers looked strong. Revenue was higher by 30% year over year to $1.5 billion, led by a 32% rise in comparable-store sales. Direct-to-consumer revenue was also solid, but the 23% rise was slower in large part due to the extremely sharp gains Lululemon got from e-commerce sales in the year-ago period. Adjusted earnings of $1.62 per share were up nearly 40% from the third quarter of 2020.

Lululemon also provided some helpful comparisons to pre-pandemic financials two years ago. Overall, revenue has climbed by 58% since 2019, and earnings were higher by roughly 65%.

Investors were pleased with the guidance Lululemon gave as well. Full-year revenue should come in between $6.25 billion and $6.29 billion, and adjusted earnings should fall in a range between $7.69 and $7.76 per share.

Lululemon's international performance is helping drive overall gains, with growth rates faster than in its home North American market. If that can continue, then even after massive gains for the stock in recent years, Lululemon could still have further to run.

Oracle heads into the clouds

Rising more after earnings was Oracle, whose stock climbed more than 6% late Thursday afternoon. The software giant's fiscal second-quarter numbers looked good -- once you took out a truly expensive charge related to litigation.

Oracle's sales were up 6% year over year, rising to $10.4 billion. The company's cloud revenue jumped at a faster 22% and now makes up more than a quarter of its overall sales. Adjusted earnings of $1.21 per share were up 14% from year-ago levels and higher than the $1.11 per share guidance that Oracle had previously given. Oracle pointed to big wins in the cloud, particularly in relation to database products that are helpful for cloud infrastructure applications.

Oracle also made some shareholder-friendly moves. It boosted the size of its stock buyback authorization by $10 billion, as well as declaring its standard quarterly dividend.

Added to the footnotes was mention of litigation-related charges totaling $4.7 billion. At least a big chunk of that stems from the end of a decade-long dispute with Hewlett Packard Enterprise (HPE 1.29%) regarding Mark Hurd, who served as Oracle co-CEO until his death in 2019. That was enough to send Oracle's unadjusted financial results to a loss for the quarter, but investors didn't seem bothered by what they already knew about.

Dan Caplinger owns Lululemon Athletica. The Motley Fool owns and recommends Lululemon Athletica. The Motley Fool has a disclosure policy.

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