Coffee With Greta: Big Tech Earnings Bounce

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Good morning friends!

Futures are up as traders digest the first batch of big tech earnings.  

Let’s get right to it!

Microsoft Rallies On Earnings Beat

Microsoft (MSFT) shares are rallying 7.9% ahead of the open after beating fiscal Q3 expectations on the top and bottom line. 

Here’s how the tech giant’s results compared to analysts’ estimates: 

• EPS: $2.45 vs $2.23 expected
• Revenue: $52.86 billion vs $51.02 billion expected

For fiscal Q4, Microsoft forecast revenue between $54.85 billion and $55.85 billion, beating expectations for $54.84 billion.

The CFO said, We will continue to invest in our cloud infrastructure, particularly AI-related spend, as we scale to the growing demand driven by customer transformation. And we expect the resulting revenue to grow over time.”

Alphabet Tops Q1 Expectations

Alphabet (GOOGL) shares are up 0.3% in premarket trade after reporting better-than-expected Q1 results. 

Here’s how the company’s results compared to analysts’ estimates:

• EPS: $1.17 vs $1.07 expected
• Revenue: $69.79 billion vs $68.9 billion expected

It was the first time Alphabet has beat expectations since Q4 2021. 

YouTube ad revenue was better-than-expected at $6.69 billion while traffic acquisition costs were lower-than-expected at $11.72 billion. 

Google’s cloud service turned $7.45 billion in revenue during the quarter, slightly lower than expectations, but the segment was profitable for the first time on record.

The cloud segment generated $191 million in operating income last quarter.

Boeing Rises After Revenue Beat

Boeing (BA) shares are up 3% ahead of the open after reporting mixed Q1 results. 

Here’s how the plane maker’s results compared to analysts’ estimates: 

• Loss per share: $1.27 vs $1.07 expected
• Revenue: $17.92 billion vs $17.57 billion expected

Sales were up 28% year-over-year with commercial airplane revenue surging 60%. 

Boeing said it plans to increase output of its 737 Max planes later this year to 38 a month from 31.

It also plans to increase production of the 787 Dreamliner to five planes per month from 3 currently. 

With demand rising, the company expects to deliver a total of 400 to 450 737 planes this year.

The CEO said, “This is an important year for us. As demand surges across our markets, we must focus together on execution and meeting our customer commitments.”

Chipotle Smashes Q1 Expectations

Chipotle Mexican Grill (CMG) shares are up 7.7% in premarket trade after solidly beating Q1 expectations. 

Here’s how the restaurant chain’s results compared to analysts’ estimates: 

• EPS: $10.50 vs $8.92 expected
• Revenue: $2.37 billion vs $2.34 billion expected

Higher menu prices and lower avocado prices helped improve Chipotle’s profit margins during the quarter. 

Same-store sales jumped 10.9% vs 8.6% expected. 

Chipotle forecast same-store sales growth in the mid-to-high single digits next quarter and for the full year, in line with expectations.

The company also reiterated its plans to open between 255 and 285 new restaurants this year.

Durable Goods Orders Jump

Durable goods orders rose more than expected in March as demand for planes jumped. 

The Commerce Department reported durable goods orders rose 3.2% monthly vs expectations for a 0.5% gain. 

That increase was led by transportation orders which surged 9.1%. 

Excluding transportation, orders rose 0.3% monthly vs estimates for a 0.2% decline. 

February’s contraction was revised higher to -1.2% from -1% previously.

Mortgage Demand Rebounds Despite High Rates

Mortgage demand jumped last week despite rates hitting the highest level in a month. 

The Mortgage Bankers Association reported total application volume rose 3.7% weekly. 

Purchase applications were up 5% weekly and 28% lower year over year. 

Refinance applications rose 2% weekly and were down 51% annually. 

The average 30-year contract rate rose to 6.55% from 6.43%. 

In Case You Missed It

• Consumer confidence slipped to a 9-month low in April. The Conference Board’s consumer confidence index fell 2.7 points this month to 101.3. That was lower than economists’ estimates for the index to be unchanged at 104. The expectations index fell to 68.1 from 74. One-year inflation expectations improved to 6.2% from 6.3%. 
• Home prices rose for the first time in seven months in February. The S&P Case-Shiller national home price index rose 0.2% monthly and 2% year over year. The largest annual gains were in Miami, Tampa, and Atlanta where prices rose 10.8%, 7.7%, and 6.6% respectively. 
• New home sales surged in March as buyers turn to builders. The Census Bureau reported new sales jumped 9.6% last month to a seasonally adjusted annual rate of 683,000 units. That was better than expectations for 634,000 and the fourth straight monthly gain in new sales.