Q2 Earnings Recap: Tesla, Netflix, IBM, United Airlines, and Las Vegas Sands Shine Despite Some Misses
Q2 Earnings Recap: Tesla, Netflix, IBM, United Airlines, Introduction
The second quarter of the earnings season has provided a whirlwind of financial reports from various industries.
The markets continued their upward trend as the Dow and S&P 500 closed with gains, while the Nasdaq lagged behind.
In this earnings snapshot, we will delve into the latest performance of key companies such as Tesla, Netflix, IBM, United Airlines, and Las Vegas Sands. The EV giant, Tesla, exceeded expectations on both revenue and earnings.
Netflix’s results were mixed, with robust subscriber additions but a slight revenue miss.
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IBM beat estimates on the bottom line but faced headwinds with revenue. United Airlines delivered impressive quarterly numbers, and Las Vegas Sands outperformed in the gaming sector.
Tesla’s Strong Q2 Performance
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Tesla, the leading electric vehicle manufacturer, unveiled its Q2 earnings report with remarkable performance.
The company exceeded expectations on both revenue and earnings per share. Earnings came in at 91 cents per share, surpassing the Zacks consensus by 8 cents and showing notable growth from the previous year’s 76 cents per share.
Revenues also outperformed, reaching $24.93 billion compared to the expected $24.88 billion.
Despite meeting full-year delivery guidance, Tesla’s gross margins, excluding zero-emissions credits, saw a slight decline from the previous quarter, standing at 18.2%.
The company, however, anticipates continued growth in this area. Operating margins were reported at +9.6%, showcasing Tesla’s consistent ability to surpass earnings expectations, achieving its tenth consecutive earnings beat.
Tesla’s shares experienced fluctuation on the news, ranging from below $285 per share to over $295 moments later. Despite the volatility, Tesla remains one of the best-performing stocks in 2023.
Netflix’s Mixed Q2 Results
Netflix, the streaming giant, released its Q2 results, which were a mixed bag for investors.
Earnings per share stood at $3.29, exceeding expectations by 46 cents and registering positive year-over-year growth. However, the company narrowly missed revenue expectations, reporting $8.19 billion in revenue for the quarter.
Netflix’s net subscriber additions far surpassed analyst consensus, with 5.89 million new subscribers compared to the anticipated 2 million.
Yet, the revenue miss impacted the company’s full-year guidance, which was lowered to $8.52 billion from the Zacks consensus of $8.63 billion.
The company’s next-quarter earnings guidance, however, showed promise, being increased to $3.52 per share. Netflix’s preliminary “paid sharing” program contributed to these improved prospects. The program aims to tackle password-sharing,
which has been a persistent issue for the company, and is expected to generate $9 billion in revenues through 2025. Additionally, Netflix recently announced the discontinuation of its $10 basic subscription plan.
As a result of these mixed results, Netflix’s shares dipped more than -3%, with investors possibly having high expectations that were not fully met.
IBM’s Q2 Earnings Report
IBM reported its Q2 earnings, delivering an impressive bottom-line performance by earning $2.18 per share, exceeding expectations by 18 cents. However, the company faced challenges in its top-line figures, with revenues amounting to $15.48 billion, falling short of the anticipated $15.54 billion.
Currency fluctuations accounted for an 80 basis-point impact on IBM’s revenue, according to the company’s statement. Despite this, IBM’s Red Hat software segment achieved substantial growth, outperforming other software developers with an 11% increase.
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Following the earnings announcement, IBM’s shares experienced a decline of -0.87% in after-hours trading. The company’s shares remain in negative territory year-to-date.
United Airlines’ Impressive Q2 Performance
United Airlines displayed exceptional quarterly results, surpassing estimates on its bottom line with earnings of $5.03 per share, significantly above the expected $3.99.
The company reported sales of $14.17 billion for the quarter, comfortably exceeding the Zacks consensus with a +17% year-over-year growth.
United Airlines’ performance metrics, including Passenger per Seat Mile and Cost per Seat Mile, showed positive growth of +2.2% and +2% respectively. Additionally, the company provided upbeat guidance for both earnings and revenues in the next quarter, marking its fourth consecutive earnings beat.
The positive news resulted in a +3.5% increase in United Airlines’ shares during late trading, showcasing investors’ confidence in the airline’s financial outlook.
Las Vegas Sands’ Strong Q2 Results
Las Vegas Sands, a major player in the international gaming entertainment industry, also reported strong Q2 results. Earnings of 46 cents per share beat estimates by a penny, while revenues amounted to $2.54 billion, surpassing the expected $2.36 billion.
The company announced the issuance of its first quarterly dividend since before the pandemic, amounting to 20 cents per share. Notably, the property EBITDA in Las Vegas Sands’ Macau and Singapore locations surged to $973 million for the quarter, reaching 82% of the 2019 capacity.
Despite experiencing some losses in the afternoon session, Las Vegas Sands’ shares managed to recover from their lows. The company remains down -2.7% for the day.
Conclusion
The Q2 earnings season has been eventful, with some companies showcasing exceptional performance while others faced challenges. Tesla’s continued earnings beat streak and Netflix’s subscriber growth are notable, while IBM and Las Vegas Sands encountered some headwinds. United Airlines stands out with impressive numbers, reflecting a promising outlook for the industry.
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