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Qualcomm Drops on Mixed Q1; eBay Higher on Q4 Beat; PYPL Beats

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Mark Vickery
·3 min read
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Market indexes finished regular Hump Day trading sliding into the closing bell toward flat levels for the Dow (+0.12%), Nasdaq (-0.02%) and the S&P 500 (+0.10%). We saw a topsy-turvy day in general, with the Dow having fallen 166 points at its intraday low. But strength in recently dormant Energy stocks, along with Cannabis plays gaining attention on legalization efforts, helped move the needle forward on the day for the S&P 500, albeit modestly.

Qualcomm QCOM shares have dropped 7% immediately upon the release of its fiscal Q1 earnings report after the bell Wednesday afternoon, on mixed results for the top and bottom lines: earnings of $2.17 per share outpaced the Zacks consensus by seven cents, but quarterly revenues missed expectations — $8.23 billion versus $8.30 billion expected. The company never misses earnings estimates: the last time Qualcomm posted a negative earnings surprise was in its fiscal Q4 of 2014.

Guidance for fiscal Q2 were also raised on both top and bottom lines, to $1.55-1.75 per share compared to the $1.56 our analysts had been looking for, with sales now expected in a wide range of $7.2 billion - $8 billion, up from the Zacks consensus $7.17 billion. But with shares having gained 30% in just the past three months and up 80% from year-ago levels, this Qualcomm after-market activity looks at first blush to be a “sell the news” event. The company carried a Zacks Rank #2 (Buy) rating ahead of its earnings release.

eBAY EBAY topped expectations by 3 cents on its bottom line to 86 cents per share, while revenues blew past expectations to $2.87 billion from the estimated $2.70 billion, swinging to a positive from year-ago revenues. Shares are up almost 8% on improved guidance for the current quarter, with Gross Merchandise Volume (GMV) growing 26.6%. The company also increased its dividend yield 13% and added $4 billion to its share buyback program.

PayPal PYPL shares are up 1% in late trading on its Q4 beat on both earnings and revenues: $1.08 per share was eight cents higher than predicted, with $6.12 billion outperforming the $6.06 billion expected. The company announced 16 million net new active users in the quarter, on total payment volume up 36% to $277 billion. The stock had already enjoyed 40% growth in just the last three months, and double its value from a year ago.

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