Tech Earnings Reflect Conscious Attempts At Circumventing Headwinds

Markets Benzinga

Tech stocks are making waves again this reporting season, and overall, the sentiment has largely been positive. The PHLX Semiconductor (INDEX: SOX) is up 0.90 percent thus far this week, while the NYSE ARCA COMPUTER HARDWARE INDEX (INDEX: HWI) is down 0.5 percent. The tech-weighted Nasdaq Composite Index, a broader gauge of technology stocks cutting across sub-sectors, has thus far gained 0.53 percent.

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IBM A Beat, But Investors Still Unimpressed

International Business Machines Corp. (IBM), which kicked off the tech earnings of the week, reported above-consensus earnings per share and revenues, thanks to the results it reaped from its investment in strategic imperatives such as cloud and business analytics. The company also reiterated its full-year adjusted earnings per share forecast.

However, since the release, the stock has seen over 2 percent downside, probably reflecting concerns that the company has not been able to arrest the slide in revenues, which have been down for 18 straight quarters now.

Netflix: A Subscriber Growth Story

After a disappointing Q2, Netflix, Inc. (NFLX) vindicated itself by a strong third quarter performance, boosted by strong subscriber additions. The stock has jumped about 24 percent since the release, signaling that it is back to its winning ways following a setback in the first half of 2016.

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Related Link: The Street Is Gaining Confidence In Microsoft's Cloud Business

Intel's Soft Q4 Guidance Does It In

Meanwhile, Intel Corporation (INTC) faced the wrath of investors for having guided fourth-quarter revenues below estimates. This is despite beats on both earnings and revenues for the third quarter. In the two sessions that followed the release, the stock has lost over 6 percent.

Yahoo Beats Ahead Of Sale

Yahoo! Inc. (YHOO) shares are up 1.5 percent since its third-quarter earnings release as the bottom line beat estimates and revenues were in line. The company also revealed traffic statistics to appease the Street over any potential fallout from the massive data breach it divulged.

Seagate Pips Past Estimates

Notwithstanding above-consensus results, Seagate Technology PLC (STX) stock has pulled back below its recent trading range.

EBay Misses On Key Metrics

Although eBay Inc (EBAY) reported better-than-expected results for the third quarter, investors nit-picked on the misses on some key metrics such as gross merchandise volumes and global active buyers. The fourth-quarter guidance wasn't saleable either. The stock promptly reacted with a 11 percent plunge.

Microsoft Shares Inch Close To Record Territory On FQ1 Results

Armed with strong support from its Azure cloud business, Microsoft Corporation (MSFT) turned in another stand-out quarterly showing. The stock is teasing its all time high in reaction to the results.

PayPal Pays Off For Investors

Paypal Holdings Inc (PYPL) reported in-line third-quarter earnings per share but its revenues beat estimates, as active customer accounts increased. The stock is up over 9 percent.

Although the picture looks perfect, some of the beats have come due to lowered expectations. That said, tech companies have been consciously adopting strategies to counter the macroeconomic headwinds by investing in growth areas and managing costs efficiently. It remains to be seen if the outperformances could be sustained on an ongoing basis.

Related Link: Goldman Raises Target On PayPal To $49 Following Q3 Earnings

At Time Of Writing ...

  • EBay was down 1 percent at $28.73.
  • Microsoft was up 4.23 percent at $59.67.
  • Netflix was down 0.30 percent at $122.98.
  • IBM shares were down 0.88 percent at $150.18.
  • Intel shares were down 0.34 percent at $35.31.
  • PayPal shares were up 8.02 percent at $43.30.
  • Seagate shares were down 0.40 percent at $34.83.
  • Yahoo was down 0.93 percent at $41.99.

Technology SPDR (ETF) (XLK) is up 11 percent year-to-date, but flat on the month and on the day.

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