Earnings season – when blue chips trade like pennies and fortunes are won and lost.
This article will briefly showcase a basket of technology stocks that have shocked and surprised investors during this season’s earnings call.
Linkedin Corporation (NYSE:LNKD)
On Feb 8. the social network for the business community wrapped up one of the most impressive sessions of this earnings seasons. Shares of the company soared – closing up over $26.00 (or 21.27%) per share at a record high – on news that recent earnings had eviscerated analyst expectations. The company posted a bottom and top-line beat after achieving success with new product innovations like Talent Solutions and growth in premium subscriptions, while forecasting above-consensus revenue for the current quarter.
“Rapid product innovation and high engagement drove upside to growth in all segments, and LinkedIn passed the 200M+ members milestone in the quarter,” JP Morgan analysts said in a note. They added: “We expect shares to respond favorably to the better than expected 4Q results and solid 2013 outlook.”
Netflix, Inc. (NASDAQ:NFLX)
Netflix absolutely killed it this earnings seasons. Investors of the company could not be happier, as their shares climbed from $100 on Jan. 23 to over $180 three weeks later. During its earnings call in January, Netflix reported a surprise profit of $0.13 per share while announcing it had signed up an additional 2.05 million subscribers in the fourth quarter. This brings Netflix’s total US streaming subscribers to 27.2 million, with another 6.1 million in global markets.
Netflix’s DVD-by-mail subscriptions continued to shrink, falling 380,000 to 8.2 million.
Netflix has been working hard to add new content to its constantly evolving media library, including recent deals with Disney, Time Warner, and Warner Bros. Analysts are conflicted – as usual – on which direction the company will head from here. One thing is certain, however: optimism for Netflix’s long-term growth potential is growing stronger day-by-day, as illustrated by Wall Street’s heavy dose of recent buying activity in the company’s shares.
Apple Inc. (NASDAQ:AAPL)
On Jan. 23, Apple – just before reporting record breaking earnings and the sale of 18 million more iPhones and iPads – traded at a hair over $500 per share. On Jan. 25, the company hit a 52-week low of $435 per share. So, what happened?
Depends on who you ask. Sales were record-breaking, but profits were flat. Even worse, Apple executives predicted growth would continue to slow. The company expects revenue to grow at about 7% after reporting an 18% gain in the holiday quarter. This earnings report – even before it was released – proved to be one of the most important for the company in recent history, as investor concerns over demand for the iPhone 5 and iPad tablets eroded the stock from its all-time high of $705+.
However, it’s important to note that Apple has growing cash reserves in excess of $137 billion. That’s enough to give every American $437, or shareholders a one-time dividend of close to $146 per share.