Tuesday Morning Rebel Brief: Earnings Review

The indices opened higher this morning on the back of another round of earnings. Let’s review which companies came out on top, and which fell short.

Walmart ($WMT) Gets Walloped

Walmart missed EPS by 11% ($1.30 vs $1.46 expected) but beat on revenue by 2.5% ($141.57B vs 138.12B). The retail giant traded lower by more than 7% at the open. 

Walmart said it was committed to keeping costs low for it’s consumers through the inflationary period. That’s great for Walmart customers, but bad for Walmart’s profit margin. 

Home Depot ($HD) Beats and Raises Guidance

Home Depot beat EPS by 11.7% ($4.09 vs $3.66 expected) and beat on revenue by 3.8% ($38.91 vs $36.36 expected). As a result, Home Depot traded higher by more than 3% at the open.

The CEO quelled investors worries about the housing market and their concerns that the end of the pandemic would mean a slowdown in home improvement by raising its full-year guidance. The raise driven in part by strong demand for tools and building materials.

JD.com ($JD) Crushes EPS Expectations

JD.com beat EPS by a massive 66.7% ($0.40 vs $0.24 expected) and beat on revenue by 3.6% ($37.81B vs $36.50B). $JD is trading higher by more than 7% at the open.

Due in part to widespread Covid lockdowns in China, JD saw increased traffic to their platform, and strong customer demand for e-commerce. As a result, JD grew their revenue by 21.9%. 

TakeTwo ($TTWO) Takes a Win

TakeTwo missed EPS by 5.9% ($0.95 vs $1.01 expected) and beat revenue by 5.3% ($930M vs $883.30M expected). The gaming titan traded higher by more than 8% at the open.

Though the company missed EPS, they soared anyway due to 8% growth in net bookings for their most popular titles — specifically Grand Theft Auto V, WWE 2K22, Red Dead Redemption 2 and Red Dead Redemption Online. The company revealed higher revenue guidance than expected for fiscal Q2: between $810M and $860M, compared to estimates of $809.8M.

United Airlines Soars

United Airlines didn’t report earnings, but their stock is still flying higher due to higher revenue estimates for the current quarter. This defied some investor concerns about potential headwinds from lower capacity, reflecting the continued strength of business-level travel demand. As a result, the stock opened higher by more than 3%.