6 Majors Earnings Release Highlights – Q2 2019

22 August 2019  |  TRADING IDEAS

This market report looks at 6 noteworthy companies and reports on their earnings releases for the end of Q2 2019. They include:

  1. Facebook Inc. (NASDAQ: FB)
  2. Alphabet Inc. (NASDAQ: GOOG)
  3. Snap.Inc (NASDAQ: SNAP)
  4. Coca-Cola.Co (NYSE: KO)
  5. Starbucks Corporation (NASDAQ: SBUX)
  6. Atlassian Corporation PLC (NASDAQ: TEAM)

Facebook, Inc. (NASDAQ: FB)

Facebook generated $16.9 billion in revenue (+28% year-on-year). 98% of revenue was from its advertising platform. Operating income decreased from the previous year reflecting a penalty payment to the Federal Trade Commission.

Daily active users (DAU) increased by 116 million to 1,587 billion at the end of June 2019 which equated to approximately 20% of the global population.

Average revenue per user was $10.60, up 16% from a year ago. Looking at revenue/DAU numbers by region, North America was the most profitable region with ARPU of $32.60.

Alphabet Inc. (Nasdaq: GOOG)

Alphabet achieved a substantial increase in profits posting $38.9 billion in revenue (+19.3% year-on-year) and $9.2 billion in operating income.

Advertising revenue is the primary source of the company’s revenue, while other revenues increased by 40% from a year ago. Smartphone sales also contributed to revenue growth. Alphabet disclosed that its growing cloud business now has an $8 billion annual revenue target, exceeding the previous prediction of $7 billion estimated by analysts.

The company has increased revenue in all regions of the world, especially in APAC, up 28% from a year ago.

Looking into monetisation metrics, the number of paid clicks declined by 28% but cost-per-click improved. Traffic acquisition cost also went down by 22% in a year.

Sales of Google Pixel 3a released in May, which is half the price of the flagship Pixel 3, have been going strong. The number of smartphone sales doubled during the last year.

Waymo, self-driving technologies, received permission by Californian regulators to transport passengers in its robotaxi vehicles. This approval is a major milestone for the company.

Snap Inc. (NYSE: SNAP)

Snap Inc. has finally released its new, rebuilt Snapchat Android app, which the company has been working on since the beginning of 2018.

Snap reported $388 million in revenue (+48% year-on-year). Operating losses have been reducing gradually. In the last quarter, the company released a function called AR filters for Snapchat, which has become a big hit. Total DAU exceeded 200 million for the current quarter.

DAU growth is remarkable outside of North America and Europe, which includes emerging countries where the Android user population is big. ARPU also increased year-on-year.

(Left: Male, Right: Female) 

Snap released its AR filters back in April 2019, which allows the user to ‘swap’ genders using face filter functionality and attracted significant user attention. The company also launched a gaming service with six game titles in the last quarter, in an attempt to increase the time spent in the app.

The global games market is worth $135 billion and half of it is attributable to mobile. Market expectation for Snap was raised and the stock price soared by 18.7% after the quarter release, which was above the IPO price of $17, having dipped marginally to $16 as at today.

The Coca-Cola Co (NYSE: KO)

Coca-Cola posted a strong result in 2Q19; $9.9 billion in revenue (+6.1% year-on-year) and $2.9 billion in operating income (+12% year-on-year). Coca-Cola Zero Sugar performed well, with a seventh consecutive quarter of double-digit volume growth globally.

Looking into revenue by regions, North America steadily performed well. Global ventures, which was founded last year, made $635 million. It includes revenue from Costa, a UK coffee chain that Coca-Cola acquired last year.

The first energy drink under the Coca-Cola brand was launched in Europe, and it is now available in 14 countries, including recent launches in Japan, Australia and South Africa.

Starbucks Corporation (Nasdaq: SBUX)

Starbucks posted $6.8 billion in revenue (+6% year-on-year) in 3Q19, which is driven by a 3% increase in average ticket sales and a 3% increase in comparable transactions. Revenue in America increased by 10% to $4.6 billion. Starbucks performed well in China / Asia Pacific where Luckin Coffee is competing.

Starbucks opened 442 new stores net in 3Q, yielding 30,626 stores at the end of the quarter. Nearly one-third of net new store openings were in China, which ended up with 3,922 stores. While Luckin Coffee, a fast-growing Chinese coffee shop chain, has opened more than 3,000 stores.

Atlassian Corporation PLC (Nasdaq: TEAM)

Atlassian increased revenue by 37% to $335 million in 4Q19. In FY2019, the company posted over $1 billion in revenue. Revenue from Agilecraft, which Atlassian acquired in March, helped contribute this increased result. Atlassian has actively invested in research and development.

Looking into revenue by segment, subscriptions increased by 50% to $181 million from a year ago. App purchases in the marketplace have been growing as well. Their number of customers surpassed 150,000.

The original article was published by Stockclip, Inc. on 28/07/2019.

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Netflix Earnings (2Q 2019)

Slack Filed to Go Public through A Direct Listing to The NYSE

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Facebook, Alphabet, Snap, Coca-Cola, Starbucks, Atlassian,

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