It's been another tough week on Wall Street, and investors seemed resigned to accepting more losses early Friday morning. The markets have had a difficult time digesting the latest moves on monetary policy from the Federal Reserve, with initial optimism giving way to concerns about the negative impact on discretionary spending and skepticism about its impact on supply driven inflationary pressures. As of 7:30 a.m., futures on the Dow Jones Industrial Average (^DJI 2.12%) were down 131 points to 32,779. S&P 500 (^GSPC 1.45%) futures had dropped 23 points to 4,120, while Nasdaq Composite (^IXIC) futures had fallen 98 points to 12,761.
Even with the downdraft in the broader market, there were some bright spots in premarket trading. Block (SQ 3.19%) and DoorDash (DASH 0.46%) were able to move higher following their latest financial reports. Below, you'll learn more about what each of these innovative businesses are doing to bolster their prospects for higher sales and profitability.
Block moves higher despite losses
Shares of Block were up almost 5% Friday morning. The upward move came even though the digital payment disruptor saw its net income swing to a loss during the first quarter of 2022.
Block's gross profits showed continued growth, rising 34% year over year in the first quarter to $1.29 billion. Those gains came from both segments of its business, as Cash App posted 26% growth while the Square unit saw gross profit rise 41%. However, a substantial portion of the increase came from the recent acquisition of buy now, pay later specialist Afterpay, which added about 9 percentage points to gross profit gains overall. Block lost $204 million during the quarter, reversing a modest year-earlier profit.
Block has followed several strategic initiatives to further its overall goals. It has pushed cryptocurrencies, with more than 10 million Cash App accounts having bought Bitcoin since its introduction. On the Square side of the business, attempts to cultivate better relationships with up-market sellers have gone well, producing better profit growth than the segment overall. In the end, Block wants to expand its ecosystem and get more people to enter it while existing customers take advantage of more of its features.
What's remarkable is that shareholders were able to get past a more than 50% drop in adjusted earnings per share and instead focus on what they hope will be more favorable trends for the future. That's an attitude the market hasn't taken much lately, and it might signal a shift in sentiment more broadly.
DoorDash dashes higher
Elsewhere, shares of DoorDash were up more than 6% Friday morning. The delivery specialist gave a favorable forecast, and its results for the first quarter of 2022 were solid.
DoorDash's metrics looked generally good. Revenue was up 35% year over year to $1.46 billion. Total orders came in at 404 million, higher by 23% from year-earlier levels, while its marketplace's gross order volume rose 25% to $12.4 billion. Net losses widened from the year-ago quarter, but adjusted pre-tax operating earnings were modestly higher.
Moreover, DoorDash was extremely optimistic about what the future will bring. It expects U.S. consumers to spend $1.6 trillion at restaurants, grocery stores, and convenience stores, while international consumers in several of the company's key markets across the globe will spend another $1.1 trillion. With relatively low market penetration, DoorDash sees a huge opportunity for expansion and market share gains.
That translated into favorable numbers in DoorDash's guidance, including calls for $49 billion to $51 billion in gross order volume and up to $500 million in adjusted pre-tax operating earnings for the full 2022 year. Given the uncertainties of the economy and its emergence from the challenges of the early portion of the COVID-19 pandemic, DoorDash's views gave shareholders new hope about its ability to bounce back after massive share-price declines.