Earnings season is heating up, and this past week delivered some key reports that Wall Street had been anticipating.
Two of the biggest names to report – Amazon (AMZN) and News Corp (NWSA) – gave us insight into the state of the consumer and the media industry.
Let’s dive into what these numbers tell us about the broader market and what to watch in this week.
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Amazon (AMZN) Blows Past Estimates
Amazon once again flexed its dominance, delivering fourth-quarter results that smashed expectations. The e-commerce and cloud giant reported net sales of $187.8 billion, a 10% increase year-over-year, signaling strong consumer spending despite economic uncertainty.
But the real star of the report was Amazon’s profitability.
The company posted net income of $20.0 billion ($1.86 per share), nearly doubling the $10.6 billion ($1 per share) from Q4 2023.
Key drivers of Amazon’s growth:
- AWS (Amazon Web Services): The company’s cloud division continues to be a cash cow, contributing heavily to profits.
- Advertising Growth: Amazon’s ad business is becoming a juggernaut, driving higher-margin revenue.
- Retail Strength: Despite concerns over consumer spending, Amazon’s holiday season sales showed resilience.
The stock reacted positively, with analysts raising their price targets as Amazon proves its ability to deliver both top-line growth and margin expansion.
News Corp (NWSA) Posts a 58% Profit Surge
News Corp, the global media powerhouse behind Dow Jones, The Wall Street Journal, and other major brands, reported a 58% jump in second-quarter profit. The company brought in $306 million in net income, compared to $156 million a year ago, as it capitalized on digital real estate, book publishing, and financial news subscriptions.
What’s driving the growth?
- Dow Jones Strength: As market volatility continues, more investors are flocking to premium financial news subscriptions.
- Digital Real Estate Boom: News Corp’s stake in digital real estate platforms is paying off amid a shift in home-buying trends.
- Book Publishing Gains: Strong sales in the publishing division further bolstered earnings.
This report highlights the continued demand for high-quality financial news and digital assets, reinforcing News Corp’s strategic position in the media industry.
Looking Ahead: Earnings to Watch this Week
With Amazon and News Corp setting the tone, here are the key earnings reports to watch this week:
- Tuesday, February 11: Coca-Cola (KO), Shopify (SHOP), BP (BP), Super Micro Computer (SMCI), Energy Transfer (ET), Lyft (LYFT), Upstart Holdings (UPST)
- Wednesday, February 12: CVS Health (CVS), Kraft Heinz (KHC), Restaurant Brands International (QSR), Biogen (BIIB), Cisco Systems (CSCO), The Trade Desk (TTD), QuantumScape (QS), Robinhood Markets (HOOD), MGM Resorts (MGM)
- Thursday, February 13: Deere & Co. (DE), Roku (ROKU), Applied Materials (AMAT), Coinbase Global (COIN), Palo Alto Networks (PANW), DraftKings (DKNG), Twilio (TWLO), Airbnb (ABNB)
- Friday, February 14: Moderna (MRNA)
Investors will be particularly focused on Coca-Cola to gauge consumer sentiment, Shopify to see how e-commerce trends are evolving, and Coinbase to get a read on the crypto market. Meanwhile, Palo Alto Networks and Cisco will provide insight into cybersecurity and enterprise tech demand.
We’ll be watching closely to see what these numbers reveal about the broader market and where the next big trades might emerge.
Trade Smart,
S.E.A.L. Alpha Team