 The Market Sum | Insight after the bell
By Caleb Silver, Editor in Chief Thursday's Headlines 1. Microsoft enters the Trillions club Markets Closed
 Getty Images/Justin Sullivan
A Tale of Two Earnings
3M Stumbles The DJIA fell 135 points or 0.5% today as 3M, a Dow component reported weaker than expected earnings and plans to lay off 2,000 employees worldwide. Shares of 3M fell nearly 13% on the day, the biggest daily decline for the stock since 1987. For those that don't know the company, you probably know some of its products like Scotch Tape, Post it Notes, Ace Bandages and Thinsulate, to name just a few. It also has a massive industrial and health care business with sales all over the world. Its earnings miss is alarming because of the scope and scale of its businesses.
And then, there's Amazon Amazon.com reported its quarterly earnings after the market close today and its results reflect a big change inside the company. It is emphasizing profit margins, which it grew robustly in the past quarter, as opposed to pure revenue growth. For the first ten years of Amazon's life as a public company, CEO Jeff Bezos scoffed at generating a profit, preferring instead to plow money back into the company to create great experiences for users as it came to dominate nearly every retail channel imaginable. Now, the company is investing heavily in some areas like cloud computing, content for Amazon Prime, logistics and health care, but it is generating enormous profits in the process.
For the quarter, Amazon reported a profit of $7.09 per share, vs estimates of $4.72.
Revenue came in at $59.7 billion, which was on par with forecasts.
Amazon Web Services, its fastest growing and most profitable business, generated $7.7 billion for the quarter.
Just to emphasize its emphasis on generating profit margins and growth, this was the first chart on Amazon's quarterly earnings presentation to investors today:  Earnings Round Up More than 170 S&P 500 companies have reported quarterly results so far, according to FactSet. Of those companies, 78% have posted better-than-expected earnings.
Here's a round up of some of the other big companies reporting results today, via Reuters.
Make that $1 Trillion Microsoft joined the $1 trillion club, making it the third company to do so besides Amazon and Apple. Those two held the title for a few days last fall, but fell back under the mark during December's brutal sell-off. Microsoft attained the trillion dollar valuation earlier today on the heels of a strong third quarter earnings report.
While the FAANG stocks have been stealing the spotlight, Microsoft has quietly plodded its way to stellar returns as it has expanded its business into cloud computing, services and exciting new hardware like its Surface computers.
If you look at Microsoft's third quarter earnings report (for the first three months of 2019) you'll see that its three main business lines are all generating around $10 billion per quarter. Here are the stats as of the prior quarter:
James has more on MSFT's path to $1 Trillion, but I'll leave you with one more stat:
Microsoft was the largest company in the world in 2000. It is again today. On the top ten list of the biggest companies in 2000, only Microsoft remains.
chart courtesy of @charliebillelo 
Tesla's Spoils We covered Tesla's troubles yesterday given the struggles the automaker faced in the past quarter, and the challenges in front of it. It has gone from being the top performing automaker to the bottom of the pile in a little less than a year. It's also one of the most shorted stocks in the S&P500, according to S3Partners. Still, the following chart from @charliebilello puts its misfortunes into perspective. It may come roaring back if it fixes its manufacturing problems and its CEO, Elon Musk, can muzzle his twitter, but the mighty has fallen, and the legacy automakers have picked up the share.  Charts courtesy of www.koyfin.com  Despite Facebook's potential regulatory problems, investors are buying its advertising strategy as Instagram stories proves to be able to convert sharers into buyers.  We told you about 3M earlier, but UPS got punished today after missing earnings estimates and blaming the weather for the shortfall.  Word of the Day Given the news that the IRS (Internal Revenue Service) of the U.S. said today that the average refund check that was sent to tax filers last week was $2,725, which is down 2% from last year, we have chosen standard deduction as our word of the day.
The IRS standard deduction is the portion of income that is not subject to tax that can be used to reduce your tax bill. You can take the standard deduction only if you do not itemize your deductions using Schedule A of Form 1040 to calculate taxable income. The amount of your standard deduction is based on your filing status, age, and whether you are disabled or claimed as a dependent on someone else's tax return.
Under the Tax Cuts and Jobs Act of 2017, the standard deduction has been nearly doubled to $12,000 for single filers ($24,000 for joint) and a number of key itemized deductions have been curtailed. Today in History  photo courtesy of intel.com On April 25, 1961, Robert Noyce, a physicist at Fairchild Semiconductors, is awarded the first patent for an integrated circuit. Noyce later goes on to be a co-founder of Intel Corp. with Gordon Moore.Read more on Intel's history, here. Chart of the Day: Microsoft's Path to $1 Trillion  The chart above shows a timeline of Microsoft's path to the extremely exclusive Trillion Dollar Club, and some of the key events that contributed to the company's sustained rise. This includes CEO Satya Nadella ascension to replace Steve Ballmer; the pivotal release of Windows 10 (the so-called "last operating system"); the acquisition of LinkedIn; and the launch of the much-heralded Xbox One X. The main technical events include "golden crosses" that resulted in even further advances for the company's stock.
Where does the stock go from here? It remains to be seen whether Microsoft will be able to regain and sustain a $1 trillion valuation. But Wednesday's earnings show that the company is still one of the strongest contenders for world's most valuable company.
How can we improve the Market Sum? Tell us at marketsum@investopedia.com
Enjoy the Market Sum? Share it with a friend. Or share the link below to invite friends to sign up.
CONNECT WITH INVESTOPEDIA
Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here.
114 West 41st St, floor 8 New York NY 10036 © 2019, Investopedia, LLC. All Rights Reserved | Privacy Policy |
Thursday, April 25, 2019
A Trillion
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment