Nvidia (NVDA)
Nvidia's long-awaited earnings report has finally arrived as investors have been closely watching the company because its significant market presence means that any changes in its stock can impact the broader market. Wednesday after the market closed, Nvidia (NVDA) exceeded Wall Street's targets for its fiscal second quarter, reporting adjusted earnings of 68 cents per share on sales of $30.04 billion, surpassing expectations of 65 cents per share on $28.74 billion in revenue. This marks a 152% year-over-year increase in earnings and a 122% rise in sales, continuing a streak of triple-digit annual gains for the fifth consecutive quarter. Despite this strong performance and a forecast of $32.5 billion in revenue for the current quarter—beating the $31.71 billion expectation—Nvidia's stock fell more than 4% in after-hours trading to $119.75. Patrick Seitz, Investors Business Daily author, reported, “Why is Nvidia stock sinking? Investors likely wanted a bigger beat-and-raise from Nvidia, Thomas Monteiro, senior analyst at Investing.com, said in a client note. ‘While the numbers indicate that the AI revolution remains alive and well, the smaller beat compared to the previous quarters adds to the multiple warning signs across the tech space earlier in this earnings season,’ Monteiro said.” Nvidia also announced a $50 billion share repurchase program and reported record data center revenue of $26.3 billion, driven by high demand for its Hopper architecture and anticipation for its upcoming Blackwell processors. CFO Colette Kress confirmed that Blackwell production will ramp up in the fourth quarter and continue into fiscal 2026, with several billion dollars in expected revenue. This earnings report could be the most significant of the quarter, so investors should closely monitor its impact on the tech sector and the broader market.
Salesforce (CRM)
Salesforce (CRM) stock climbed over 3.5% in extended trading on Wednesday after the company reported second-quarter earnings and revenue that surpassed expectations. Salesforce provides cloud-based software solutions that help businesses manage customer relationships, sales operations, marketing, and customer service through a subscription-based model. It offers tools for organizing and automating various business processes to enhance efficiency and customer engagement. The company reported that earnings rose 21% to $2.56 per share and revenue climbed 8% to $9.33 billion, beating estimates of $2.35 on sales of $9.2 billion. The operating margin also beat estimates, rising to 33.7%. Despite these positive results, Salesforce's revenue guidance for the current quarter fell short of analyst expectations, projecting $9.31 billion to $9.36 billion versus the anticipated $9.42 billion. A key financial metric for the company, current remaining performance obligations (CRPO) bookings, increased by 10% to $26.5 billion, slightly above forecasts. The company also announced that Chief Financial Officer Amy Weaver will step down. Despite mixed results, Salesforce's earnings were strong enough to lift the stock, providing a much-needed boost in what has been a slower-than-expected 2024. The stock has only risen slightly over 1% year to date, significantly underperforming the broader market.
CrowdStrike (CRWD)
CrowdStrike Holdings (CRWD) reported strong second-quarter results, with its stock rising 3.5% in after-hours trading following the announcement. This report provided much-needed reassurance to investors after the global outage CrowdStrike experienced on July 19th, 2024, which disrupted its services for worldwide firms, including airlines, and impacted customer access to its cybersecurity platform. The outage caused the stock to plummet, leading to a challenging few weeks as investors considered the potential long-term consequences. The cybersecurity firm posted adjusted earnings per share of $1.04, surpassing analyst estimates of $0.97, and generated revenue of $963.9 million, marking a 32% year-over-year increase and exceeding the consensus forecast of $958.32 million. The company's Annual Recurring Revenue (ARR) grew 32% year-over-year to $3.86 billion, with $217.6 million in net new ARR added during the quarter, while subscription revenue, which makes up the majority of its earnings, rose 33% to $918.3 million. Despite the strong performance, CrowdStrike's full-year guidance fell short of expectations, with projected FY2025 adjusted EPS of $3.61-$3.65 and revenue of $3.89-$3.9 billion, below analyst estimates. The company attributed part of the guidance shortfall to an estimated $30 million impact on subscription revenue in each remaining fiscal quarter due to customer incentives. Nonetheless, CrowdStrike's financial position remains robust, with $4.04 billion in cash and equivalents as of July 31, 2024, and a record Q2 operating cash flow of $326.6 million alongside free cash flow of $272.2 million.
Abercrombie & Fitch (ANF)
Abercrombie & Fitch (ANF) reported a strong Q2 performance with a 127% increase in earnings to $2.50 per share and a 21% revenue spike to $1.13 billion, beating expectations. Despite this, the stock dropped nearly 17% on Wednesday due to concerns over the impact of a shorter fiscal year on future sales, which the company expects to reduce Q4 sales by $80 million and full-year sales by $50 million. Abercrombie lifted its 2024 sales outlook to 12%-13% growth, ahead of prior expectations, and reported strong sales growth for both its Abercrombie and Hollister brands. However, uncertainties in the market and the anticipated fiscal challenges weighed on investor sentiment, despite the stock having gained 57% so far this year.
Five Below (FIVE)
Five Below, Inc. (FIVE) reported its second-quarter results after Wednesday's closing bell, with earnings of 54 cents per share meeting analyst expectations. Quarterly sales reached $830.07 million, exceeding forecasts by 0.96% and marking a 9.37% increase year-over-year. However, while net sales grew 9.4%, comparable sales declined by 5.7%. The company opened 62 new stores, bringing its total to 1,667 locations. Five Below lowered its third-quarter and full-year sales and earnings outlooks, forecasting third-quarter net sales of $780-$800 million and earnings of 10-22 cents per share, both below estimates. For the full year, it revised its net sales outlook to $3.73-$3.8 billion and earnings to $4.35-$4.71 per share, also missing estimates. Despite these adjustments, Five Below shares rose 5.42% in after-hours trading to $84.36.
Comments