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Q2 Earnings Beats Don't Stop Late-Market Selloffs

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All market indexes closed in the green this Thursday, despite falling home sales figures and a weak IPO for trading app company Robinhood. The Dow closed back over 35K today, +0.44%, while the S&P 500 came up just short of a new record close, +0.42%. Both indexes broke two-day losing streaks. The Nasdaq finished higher for the seventh day in eight sessions, while the small-cap Russell 2000 once again outperformed the field, +0.68%.

Pending Home Sales for June posted their first negative drop in four months, down -1.9% from an expected gain of +0.5%. This came off a very strong — and upwardly revised — +8.3% read for May. Rising prices were the clear culprit, as may have been expected: the Midwest posted the best results, and it also has the lowest relative prices of any region in the country currently.

Amazon AMZN beat earnings estimates for its Q2 in the release after the market close, but the stock is falling -6.3% in late trading. Quarterly revenues missed expectations, coming in at $113.1 billion versus $115.1 billion in the Zacks consensus. Aside from  the top-line miss, the biggest issue hitting the stock in after-hours trading came in the form of Q3 revenues guidance: $106-112 billion, versus expectations of $119.25 billion.

AWS Cloud performed just fine: $14.8 billion was better than the $14.2 billion estimate. Its e-commerce online stores performed weaker, however: $53.2 billion, versus $57 billion expected. Subscription services came in-line, and Other Revenues, which include advertising, posted a big beat over estimates: $7.9 billion  versus $7.0 billion. This is consistent with what we’ve seen from Alphabet GOOGL and others this quarter.

The sales miss in Q2 and lowered expectations for Q3 points to the Great Reopening having a negative effect on this company, which was among the absolute winners during the pandemic era. This is a company clearly not ready to disappear anytime soon, and may present a buying opportunity with its share price back to where it was in early June. Amazon has now posted six earnings misses in the past five years.

Pinterest PINS is falling even harder in late trading Thursday after beating estimates on both top and bottom lines in its Q2 earnings report after the bell. Earnings of 25 cents per share almost doubled the 13 cents in the Zacks consensus, on $613 million in sales which surpassed the $561 million expected. But the stock is falling 16.5% on a steep drop in Monthly Active Users (MAU): 454 million versus 482 million anticipated.

Gilead GILD also outperformed expectations on both top and bottom lines this afternoon: $1.87 per share outpaced the $1.76 in the Zacks consensus on $6.22 billion in sales, supplanting the $6.15 billion estimate. Its HIV unit fell 2% year over year, but both its Hep-C and Remdesivir units outperformed expectations. In fact, Remdesivir guidance for full-year 2021 is up to $2.7-3.1 billion. (Perhaps all three of these reporting companies would benefit from a new wave of the pandemic.)

T-Mobile TMUS performed much better than expected in its Q2 report Thursday afternoon, though shares here are down -2% on the news. Earnings of 78 cents per share swept well past the 52 cents expected and 61 cents per share in the year-ago quarter, while $19.95 billion outpaced the $19.39 billion Zacks consensus on the top line. The company boasted its highest quarter in new account growth in history: 349K for the quarter.

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