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GM posts earnings beat with help from strong SUV, truck demand

Yahoo Finance’s Brian Sozzi, Julie Hyman, and Myles Udland break down the earnings reports for Match Group, General Motors, and Qualcomm.

Video Transcript

JULIE HYMAN: Back here in the US, we continue to watch earnings reports, which-- life goes on even as the counting goes on in various states. General Motors shares, for example, are up more than 3% today after profit beat estimates. Brian, you're tracking those numbers. What stands out to you, and what did you hear from the company?

BRIAN SOZZI: Yeah, Julie, I hopped on a media call with GM CEO Mary Barra, and I asked her does her long-term outlook for electric vehicles change if there is in fact a change in the White House. Joe Biden has been very upfront that he wants to create 1 million jobs in the EV industry. She says no change to her thinking. So what is that thinking? You know, GM still plans to spend $20 billion to get some 20 electric vehicles to market by 2023. It's a big number.

Also on the call, a lot of questions on margin sustainability. You know, GM's margins increased close to 70 basis points year over year in the quarter. That is a big gain for an automaker. She sounded upbeat, but still that's very, very tough to stay in this type of environment, Myles. But Match.com. What have you got?

MYLES UDLAND: Well, Sozzi, I just want to quickly wrap up the GM point. You're asking about electric cars. If you look at the results, talk about that margin expansion-- they're selling trucks. They're selling gas guzzlers.

BRIAN SOZZI: Yep.

MYLES UDLAND: These things are expensive, and, you know, everyone is going crazy for big cars right now. I find it very interesting that that's such a trend at the automakers at a time when we're thinking about the electrification of their fleets at some point in the future.

But let's turn our attention to Match, as you mentioned. This, of course, a favorite stock among folks on FinTwit. The stock chart is amazing-- immaculate we could say-- over the last couple of years. And the growth here is really happening outside of their Tinder business-- 23% growth in the non-Tinder part of their portfolio really driven by what they're seeing at Hinge and also Pairs. That is their Japanese dating app.

Now Tinder itself continues to be an absolute monster for Match. Well over half the company's revenues that they have a great chart in their shareholder letter. Total revenue for the pool of businesses they had five years ago $225 million. Now that's up to $630 million, so the growth there at Match certainly something, just on a top-line basis that investors have been excited about for sometime. And that stock is higher during today's session. But let's turn our attention to the tech space, and, Julie, what we're seeing over at Qualcomm again, as we called out earlier in the show, a massive move for a company this size.

JULIE HYMAN: Yeah, a massive move for a massive chip maker. You know, it looks like it's about 5G for Qualcomm. We have talked a lot about the promise of 5G, investors betting on 5G, whether 5G is actually going to be available and how quickly to a lot of people. Well Qualcomm has big hopes for it as well. They're talking about now that they expect 200 million smartphones with 5G to be shipped this year, 500 million 5G smartphones to be shipped next year. Why is that important for Qualcomm? Because they make the chips that go into the things.

And this is affecting their revenue forecast as well. Current quarter revenue going to be $7.8 billion to $8.6 billion. That is more than had been estimated. Remember, Qualcomm gets most of its profit from licensing patents for chips for smartphones, and so that business has been going quite well. The licensing business seeing sales rise 30%, chip revenue up 38%. So all of this [? wooing ?] the shares at a time when we're seeing large-cap tech generally rising. And to your point earlier, Myles, growth of value-- that is continuing. So all of that kind of combining to help that trade in Qualcomm today.

And I also want to take a look as we take you to break at what is happening in the drug makers today because we did get some numbers from the drug makers as well. Now AstraZeneca's numbers being overshadowed to some extent by the fact that it said it's going to get some vaccine results before the end of the year. This even as its third-quarter profit fell short of what analysts had been anticipating.

It's interesting among the drug makers. Some of them are talking about seeing lower demand for their drugs because people are still not going to the doctor as much, but others are saying that they're seeing some of that revenue come back, which is kind of an interesting situation. Regeneron is one of those. Of course, Regeneron also working on a vaccine as well as on treatments for COVID. But its numbers were buoyed by drugs that it already sells-- Eylea, for example, Dupixent, which treats eczema and other skin conditions-- its profit blowing away estimates.

And then there's Bristol Myers Squibb, which also saw demand for things like cancer drugs as well as its rheumatoid arthritis medicine. It raised its full-year profit forecast. So a lot to pay attention to today when it comes to these earnings.