Coffee With Greta: Amazon’s Storm Cloud

DJIA Futures: -107 (-0.3%)

SPX Futures: -8 (-0.2%)

NASDAQ Futures: -11 (-0.1%)

Good morning friends!

Futures are falling as traders digest the latest batch of earnings and new inflation data.

Let’s get right to it!

Amazon’s Cloud Outlook Disappoints

Amazon (AMZN) shares are down 2.4% ahead of the open as the company’s uncertain outlook for its cloud services overshadows strong Q1 results. 

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

• EPS: $0.31 vs $0.21 expected
• Revenue: $127.4 billion vs $124.6 billion expected
• Amazon Web Services revenue: $21.3 billion vs $21.22 billion expected
• Advertising revenue: $9.5 billion vs $9.1 billion expected

AWS sales rose about 16% in Q1, which was a slowdown from 20% in the previous quarter. 

Amazon’s CFO warned that slowdown is continuing. 

He said, “customers continue to evaluate ways to optimize their cloud spending in response to these tough economic conditions in the first quarter. We are seeing these optimizations continue into the second quarter with April revenue growth rates about 500 basis points lower than what we saw in Q1.” 

Amazon’s stock initially rallied in after-hours trading Thursday following the earnings beat but then dropped after the CFO’s comments on slowing cloud revenue.

The company expected Q2 revenue between $127 billion and $133 billion vs analysts’ estimates of $129.8 billion. 

Snap Plunges On Q1 Miss

Snap Inc (SNAP) shares are tumbling 18.5% in premarket trade after missing Q1 expectations. 

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

• Adjusted EPS: $0.01 vs $0.01 per share loss expected
• Revenue: 989 million vs $1.01 billion expected
• Daily active users: 383 million vs 384 million expected
• Average revenue per user: $2.58 vs $2.63 expected

Snap did not provide any official Q2 guidance but said its “internal forecast” for revenue would be $1.04 billion, which would be down 6% year over yera and lower than analysts’ estimates of $1.10 billion. 

Intel Beats Despite Largest Quarterly Loss In Company History

Intel (INTC) shares are up 6.8% ahead of the open after beating Q1 expectations on the top and bottom line. 

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

• Adjusted loss per share: $0.04 vs $0.15 expected
• Revenue: $11.7 billion vs $11.04 billion expected

Earnings plummeted 133% year over year while revenue dropped nearly 26%. 

The $2.8 billion net loss was the largest in company history.

Intel forecast Q2 revenue of $12 billion and a $0.04 loss per share vs analysts’ expectations for a $0.01 loss per share on $11.75 billion in revenue.

Exxon Mobil Reports Record Q1 Profit

Exxon Mobil (XOM) shares are up 0.3% in premarket trade after reporting a record profit in the first quarter. 

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

• Adjusted EPS: $2.83 vs $2.60 expected
• Revenue: $86.56 billion vs $85.65 billion expected

Exxon’s CFO said, “We delivered a first-quarter record despite the fact that energy prices and refining margins are softening a bit.”

The earnings beat was driven by increased oil and gas production which rose by nearly 300,000 barrels per day year over year. 

That higher production helped offset lower gas prices during the quarter.

Chevron Tops Q1 Expectations

Chevron (CVX) shares are slipping 0.5% ahead of the open despite beating Q1 expectations on the top and bottom line. 

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

• Adjusted EPS: $3.55 vs $3.40 expected
• Revenue: $50.79 billion vs $48.60 billion expected

Higher margins in Chevron’s oil refining segment helped income surge more than five times to $1.8 billion. 

But profit in the oil and gas production business tumbled 25% as prices dropped.

PCE Inflation Continues To Slow

The Fed’s preferred inflation gauge slowed as expected in March. 

The Bureau of Economic Analysis’ personal consumption expenditures price index rose 0.1% last month and 4.2% year over year. 

The core PCE price index rose 0.3% monthly and 4.6% annually.

That was in line with expectations on a monthly basis and slightly higher than estimates for a 4.5% gain annually.

In Case You Missed It

• Pending home sales fell unexpectedly in March. The National Association of Realtors reported the number of contracts signed to purchase a home last month fell 5.2%. That missed expectations for a 0.5% increase and was the first drop since November. Pending sales were down 23.2% year over year. 
• Lyft (LYFT) shares rose 1.5% on Thursday after the company announced layoffs. A new SEC filing showed the rideshare giant plans to cut 1,072 jobs, representing 26% of its workforce. These cuts come in addition to the 13% workforce reduction announced in November 2022.