Finance
Making sense of the markets this week: February 4, 2024 – MoneySense
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Facebook thrives—the rest of tech, not so much
While all four of the tech titans that announced quarterly earnings this week managed to beat their predicted earnings and revenue targets, only Facebook announced earnings that really got investors excited.
Big tech earnings highlights
All numbers below are in U.S. currency.
- Microsoft (MSFT/NASDAQ): Earnings per share of $2.93 (versus expected of $2.78) and revenues of $62.02 billion (versus $61.12 billion predicted).
- Alphabet (GOOGL/NASDAQ): Earnings per share of $1.64 (versus expected of $1.59) and revenues of $86.31 billion (versus $85.33 billion predicted).
- Meta (META/NASDAQ): Earnings per share of $5.33 (versus $4.96 predicted) and revenues of $40.1 billion (versus $39.18 billion predicted).
- Apple (AAPL/NASDAQ): Earnings per share of $2.18 (versus $2.10 predicted) and revenue of $119.58 billion (versus $117.91 billion predicted).
With Meta, often referred to as Facebook, announcing excellent ad revenue growth, decreased expenses, and even introducing its first-ever dividend ($0.50 a share, paid in March), it was no surprise to see share prices pop in after-hours trading on Thursday. That said, the 14% surge (on top of a 12% year-to-date gain) caps off an incredible run for Facebook that has seen the share price quadruple since November 2022. This good news comes despite the virtual reality unit at Facebook losing $4.65 billion this quarter (which is about what the entire company of Air Canada is worth as a comparison).
When Microsoft and Alphabet released earnings on Tuesday, it was puzzling to see the solid earnings results lead to substantial drops in share prices for both companies. This price movement was likely due to sky-high expectations that led to outsized price run-ups in 2023 and the first month of 2024.
Considering that bigger picture is important, as Microsoft is still up over 7% year to date, and Google (despite an 8% loss on Wednesday) is up nearly 2% so far in 2024.
Both Google and Microsoft announced that their cloud computing services were large growth vectors, and that layoffs were in the works in the name of cost-cutting and efficiency.
Apple had similar earnings results to Google and Microsoft, as they beat their earnings projections but share prices were down 4% in after hours trading on Thursday, as several red flags were apparent in their quarterly earnings numbers. Most notably, a 13% sales decrease in China, and decreased revenue guidance for iPhones going forward. The stock is basically flat year-to-date.
CP and Brookfield keep a steady hand on the profit tiller
On our side of the border this week, the notable earnings calls included Brookfield Infrastructure and CP Rail.
Canadian earnings highlights
All figures in Canadian dollars, unless otherwise stated.
- Brookfield Infrastructure Corp (BIP/TSX): Earnings per share came in at a loss of USD$0.20 (versus positive USD$0.11 predicted) and revenues were USD$4.97 billion (versus USD$2.03 billion predicted).
- Canadian Pacific Kansas City Ltd. (CP/TSX): Earnings per share came in at $1.18 (versus $1.12 predicted) and revenues were $3.78 billion (versus $3.68 billion predicted).
Before you get too worried about those wonky results from Brookfield, keep in mind that their reported numbers are often quite complicated to make sense out of due to their unique corporate structure and accounting practices. Given that the massive infrastructure conglomerate is often buying and selling large utilities, its quarterly numbers can look misleading. In this instance, the market took the news in stride, as BIP was up over 1% on the day.
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Kyle Prevost
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