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Google Blows Away Q1 Estimates; Plus MSFT, SBUX & More

The big beats in calendar Q1 earnings season continue after the closing bell today, on a flat regular trading session on both the Dow and S&P 500. The Nasdaq dipped 0.34% off its record highs set Monday. Case-Shiller Home Prices for February this morning posted their biggest gains in five years, up 12%, with 19 of the 20 cities surveyed having grown year over year. Otherwise, it’s all about earnings, which continue in the after-market:

Google parent Alphabet Inc. GOOGL blew the doors off expectations in its Q1 report, posting an eye-popping $26.29 per share in earnings, which trounced the $15.46 Zacks consensus and topped year-ago earnings by more than 2.5x. Revenues of $55.31 billion similarly left expectations of $42.34 billion in the dust. This is the fourth-straight earnings beat for the company, but the biggest earnings beat — 58.8% — in more than a year.

Ad revenue came in at $44.7 billion in the quarter, including $6 billion from YouTube alone — better than expected. Q1 Cloud numbers, however, were a tad shy of the $4.07 billion expected. Alphabet has also allotted an additional $50 billion in stock repurchases, helping boost the stock 4% in late trading. GOOGL shares have already gained 33% year to date, making it the best performer of FAANG stocks in 2021 thus far. These results don’t look to tarnish this one bit.

Microsoft MSFT also topped expectations after the close, with fiscal Q3 earnings of $1.95 per share beating the Zacks consensus by 19 cents. Sales of $41.71 billion improved from the $40.94 billion estimate, up 18% year over year. Productivity Business Processes earned $13.6 billion in the quarter. Intelligent cloud was up 23%, with Azure growing a solid 50% year over year. Xbox grew 34%, while LinkedIn gained 25%. Yet Microsoft shares declined 3% in late trading; clearly this strong quarter wasn’t impressive enough.

Starbucks SBUX posted mixed results for its fiscal Q3 report, beating on earnings by a dime to 62 cents per share on $6.67 billion in revenues, which was lower than the expected $6.80 billion, +11% year over year. Global comps were +15% overall, slightly lower than estimates, with an impressive +91% in China bolstering the more lackluster U.S. comps. Next quarter guidance was upped slightly, but shares are down 2% in the after-market on the news.

Visa V beat on its fiscal Q2 bottom line, as always — the credit card giant has a perfect record of positive earnings surprises: $1.38 per share topped the $1.26 expected, though down a penny from the year-earlier number. Revenues also posted a modest beat: $5.73 billion from $5.56 billion Zacks consensus, also down year over year. Payments volume grew 11% from a year ago. The company issued no full-year guidance in its earnings release.

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Microsoft Corporation (MSFT): Free Stock Analysis Report
Starbucks Corporation (SBUX): Free Stock Analysis Report
Visa Inc. (V): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
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