Quarterly earnings reports are a great opportunity for a company to release their “report cards” so that investors can evaluate all aspects of the company. This lets investors gain better insight into whether a company is a suitable investment candidate for their hard-earned dollars. These three companies have shown that they deserve your cash and should offer a respectful return over time.
Mobile ad growth drives strong quarter
Facebook Inc (NASDAQ:FB) has received a lot of attention since its highly-anticipated IPO. Investors were watching the company’s second quarter results very closely, looking for positive signs (particularly from the much-criticized mobile users) that can drive share prices back to the IPO price of $38 a share.
Mobile ad dollars cleanly beat the Street’s estimates as mobile advertising accelerated in the quarter. This was helped by growth in both units sold and price per ad, as well as ads placed in the “news feed” of users. Mobile ad revenue grew 76% as compared to the previous quarter, totaling $656 million; this was an extremely impressive beat of $200 million. Needless to say, the sequential progress in mobile revenue was far more significant than what analysts and investors were expecting.
User engagement was also a concern as the site’s popularity has been questioned as of late. Looking closely at the numbers, the number of daily active users grew 27% year-over-year. CEO Mark Zuckerberg stated that people are spending more time on the site than ever before.
Both mobile ads and user engagement are reason enough to justify a higher share price and the stock should (rightfully) see continued price appreciation. It is likely that we will see the Street’s estimates revised higher for 2014 and 2015 given the company’s acceleration in mobile revenue and user engagement.
Strong beat, further upside to 2014
Visa Inc (NYSE:V) reported a healthy third quarter earnings per share of $1.88, a healthy beat of the $1.80 that the Street was looking for. Overall, the strong beat as well as the company’s full-year earnings per share guidance raise shows just why investors should purchase the company’s stock. It also demonstrates the sustainability of the company’s strong underlying growth, since its operating margin of 60.9% was well above consensus estimates of 59.3%.
Looking forward, the company projected revenue growth of approximately 13% and earnings per share growth in the low twenties. As if investors need further reason to purchase the stock, management also took the opportunity to update shareholders on share repurchases and announced a new $1.5 billion share repurchase program. This was in addition to the purchase of approximately $1 billion worth of stock that was completed during the quarter.
Shares of Visa Inc (NYSE:V) remain well positioned for continued outperformance from current levels. Analysts at Credit Suisse envision a price target of $210 based on stronger revenue growth. It is not too late for investors to jump in and buy shares, even near the historical all-time high; the company has been setting new highs and pleasing investors since 2011.
A stock everyone can find attractive
Ford Motor Company (NYSE:F) released second quarter earnings that presented a compelling case to attract new investors beyond the traditional automotive investor. Investors who are looking for a company with an extremely strong North American presence, a strong presence in Europe that can profit when the sector improves and rapid share growth internationally (particularly in China) have found such an investment in Ford Motor Company (NYSE:F).