Coffee With Greta: Mixed Big Tech Results

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Good morning friends!

Futures are mixed as traders digest earnings from Microsoft and Alphabet.

Let’s get right to it!

Microsoft Pops On Earnings

Microsoft (MSFT) shares are up 4.5% ahead of the open after beating fiscal Q1 expectations on the top and bottom line. 

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

• EPS: $2.99 vs $2.65 expected
• Revenue: $56.52 billion vs $54.50 billion expected

Revenue rose nearly 13% year over year while net income surged 27%.

Revenue in Microsoft’s Intelligent Cloud segment rose 19% from a year ago to $24.26 billion. 

Azure revenue surged 29% vs 26% growth expected.

The CFO called for fiscal Q2 revenue in the range of $60.4 billion to $61.4 billion vs analysts’ estimates of $60.9 billion. 

She also said Azure revenue growth is expected to come in at 26% to 27% next quarter and then remain stable through the second half of the fiscal year.

Alphabet Misses On Cloud Revenue

Alphabet (GOOGL) shares are dropping 5.9% in premarket trade despite beating Q3 expectations as cloud revenue disappointed. 

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

• EPS: $1.55 vs $1.45 expected
• Revenue: $76.69 billion vs $75.97 billion expected
• YouTube ad revenue: $7.95 billion vs $7.81 billion expected
• Google Cloud revenue: $8.41 billion vs $8.64 billion expected

Total revenue rose 11% year over year, the first quarter of double digit growth in more than a year. 

Although cloud revenue was weaker than expected, the segment still grew 22% from a year ago. 

Alphabet has focused on the cloud unit as it tries to compete with Amazon Web Services and Microsoft Azure. 

The unit is also key to the growth of generative artificial intelligence.

Snap Tops Expectations

Snap (SNAP) shares are up 1.7% ahead of the open after beating Q3 expectations on the top and bottom line. 

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

• Adjusted EPS: $0.02 vs $0.04 loss expected
• Revenue: $1.19 billion vs $1.11 billion expected
• Global Daily Active Users: 406 million vs 405.7 million expected
• Average revenue per user: $2.93 vs $2.74 expected

Revenue was up 8% from a year ago, marking a return to sales growth for Snap. 

Although Snap did not provide official guidance, the company’s internal forecast called for Q4 sales between $1.32 billion and $1.38 billion vs $1.33 billion expected by analysts. 

The company cited “the unpredictable nature of war” for its decision not to provide official guidance. 

Snap said it has “observed pauses in spending from a large number of primarily brand-oriented advertising campaigns immediately following the onset of the war in the Middle East.”

Boeing Jumps On Revenue Beat

Boeing (BA) shares are rising 3.3% in premarket trade despite reporting a steeper Q3 loss than expected.

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

• Adjusted loss per share: $3.26 vs $2.96 expected
• Revenue: $18.10 billion vs $18.01 billion expected

Revenue rose 13% year over year as commercial aircraft sales jumped 25%. 

Boeing cut its 737 Max delivery forecast for the year as it works through production flaws. 

The company now expects to deliver between 275 and 400 of the planes down from its previous estimate of 400 to 450.

Boeing maintained its forecast for 2023 free cash flow of $3 billion to $5 billion. 

The planemaker’s conference call with analysts begins at 10:30 a.m. ET.

Adjustable-Rate Mortgage Demand Jumps

Mortgage demand remained stalled at the slowest pace in 28 years last week. 

The Mortgage Bankers Association reported total application volume dropped 1% from the week before. 

Purchase applications fell 2% weekly and 22% year over year while refinance applications dropped 2% weekly and 8% annually.

But the adjustable-rate share of total mortgages jumped to 9.5%, the highest level in nearly a year. 

The average 30-year fixed contract rate rose to 7.90% from 7.70%. 

But the average 5/1 ARM rate rose to 6.99% from 6.52%.