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Tech Majors Report Earnings After the Bell: MSFT, FB, TSLA & More

Mark Vickery

Shares of Facebook FB are racing ahead in Wednesday’s late trading, up 8.4% following its Q1 earnings report released after the closing bell. Earnings of $1.71 per share missed the Zacks consensus by a penny, though quarterly revenues of $17.7 billion neatly excelled past the $17.3 billion expected. Ad revenue for the social media giant rose 17% year over year to $17.4 billion in the quarter, which was expected to be a possible point of weakness.

Daily Active Users (DAU) continued growing at a decent clip, up 9.3% year over year to 1.73 billion. Monthly Active Users topped 2.6 billion in the quarter, up more than 7% from a year ago.  Five weeks ago, Facebook had issued a warning about its ad revenue business coming up short of expectations. Based on this lowered bar, the company was able to exceed projections.

Microsoft MSFT kept its stellar track record of positive earnings surprises intact by posting $1.40 per share in its latest quarter, fiscal Q3 2020, beating estimates by 13 cents, while $35 billion in revenues surpassed the $33.86 billion in the Zacks consensus. Revenue growth for Azure — Microsoft’s cloud-computing space, an emerging rival of Amazon’s AWS — was up 59% year over year, helping fuel another strong quarter.

Productivity & Business Processes brought in a total of $11.7 billion in the quarter, up 15% year over year. This segment was led by Office 365 growth of 25% and LinkedIn up 21%. It was a remarkable quarterly performance from a company showing almost no signs of strain in dealing with the global coronavirus pandemic. Microsoft has not missed on quarterly earnings since fiscal Q3 2016.

Tesla TSLA posted a huge swing to the positive on its Q1 bottom line, with $1.24 per share swooping past the -22 cents expected, not to mention the -$2.90 per share reported in the year-ago quarter. This also marks the third quarter in the last four where Tesla has provided either a positive or negative earnings beat of over 100%. Revenues also outpaced expectations at $5.99 billion, growth of over 20% year over year.

Tesla had already provided a production update for the quarter earlier in the month: 103K vehicles produced and 88,400 delivered. This includes an announced delay in Model 3 deliveries to China back in February, due to coronavirus concerns. Shares have hit $800 in the wake of the earnings release, up 7.3% in late trading. but at north of 60x EV/EBITDA, Tesla continues to trade like a tech stock, not an auto manufacturer.

Qualcomm QCOM topped fiscal Q2 expectations on both top and bottom lines Wednesday afternoon, as well — 88 cents per share on $5.2 billion in sales sped past the 77 cents per share and $5.09 billion expected, respectively. Guidance for fiscal Q3 — between $4.8-5.2 billion in revenues, 60-80 cents per share — are steadily in line with Zacks forecasts. Chip shipments came in a tad below expectations, though QCOM shares are up 2.7% after hours.

Zacks Rank #2 (Buy)-rated eBay EBAY also outperformed estimates in its Q1 report, beating on earnings by 3 cents to 77 cents per share on $2.37 billion in sales, which surged slightly past the $2.34 billion analysts were looking for. Gross Merchandise Volume (GMV) also did slightly better than expected — $21.3 billion from $20.34 billion estimated — and Q2 guidance on the revenue side was raised to $2.38-2.48 billion. Yet shares are selling off roughly 1% following the release.

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