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At the end of each financial quarter, publicly-listed companies will release a report detailing their earnings. There are several data points listed in an earnings report with investors usually focussing on net income, earnings per share, earnings from continued operations, and net scales.
Investors will analyse the above details in order to gauge the well-being of a company and try to predict their future growth and value. This will determine where and when they want to invest their money in this company, if at all.
We’ve listed 3 Earnings stocks we believe should be on your radar if you love to trade the quarterly reports.
STOCKS:
Macy’s Q3 earnings report:
Macy’s released a more than promising and somewhat surprising third quarter earnings report. The report covered until October 30th 2021 and exceeded the predictions from market analysts. Macy’s reported a net income of $239 million or 76 cents per share. A year earlier Macy's reported a $91 million or 29 cents a share loss, quite a turn-around since then.
Analysts suggested 31 cents per share but their predictions were proved significantly false when the report came in at $1.23 per share. They were simultaneously quietened when the sales growth came in at $5.4 billion and not their suggested $5.2 billion.
Macy’s has suggested they have a handle on the potential supply chain issues they have experienced previously, especially during the festive season surge. CEO Jeff Gennette has said they will continue addressing any supply issues during 2022.
DoorDash Q3 earnings report:
DoorDash managed to corner a very lucrative sector of the market at the start of the Covid19 Pandemic by being in the right industry at the right time. With restaurants forced to close their doors to patrons, DoorDash came to the rescue helping an entire industry hang on by a thread while everyone stayed in their homes.
Not only have they secured a significant community of loyal returning users, they are also introducing various other products to their catalogue which has ultimately helped push their revenue over $1 billion and officially reported $1.28 billion in revenue in its third quarter.
This is a 45% increase in revenue compared to a year prior. The company has not yet reported a profit but seems set to continue growing its offerings and revenue and hasn’t shown signs of any massive deceleration despite most economies reopening their pre-pandemic activities. This includes the acquisition of international delivery company Wolt for $8.1 billion.
Target Q3 earnings report:
Despite facing supply chain issues and rising prices of fuel and products in the U.S., Target made the bold choice to keep prices on the lower end of the scale, choosing to absorb some of the costs usually placed on the customers shoulders. This is in an effort to maintain relationships with their loyal customers that they hope will pay off in the long run and establish them as a customer-conscious consumer entity.
Although this means tighter margins for the company, it was still able to top predictions and come in at $25.65 billion in revenue as opposed to the suggested $24.7 billion. This is a sturdy 13% increase in revenue compared to the same quarter a year ago.
In store sales grew 9.7% while digital sales increased by an impressive 29% which is up 155% since the same time last year. With the festive season sales, there are some expectations from analysts of a 4th quarter report that is almost as equally impressive.
Trading the Quarterly Earnings Reports:
In conclusion, analysts and investors will wait for the earnings reports every quarter as these announcements for stocks and other assets generally cause some serious movements in the market, especially if the stock is a well followed security with a large market capitalization.
In fact, most companies would rather beat the earnings estimates for that quarter than focus on generally increasing the revenue and stock price from the previous quarter. This is because the consequences for not meeting or exceeding analysts' expectations can, and has, resulted in the sell-off of the stock.
The history of earnings reports suggests stock prices fluctuate wildly on days the reports are released. If you would like to take advantage of these reports and trading stocks in general, head over to the globally awarded CedarFX Broker where you can invest in these stocks as well as indices, forex, commodities, metals and cryptocurrencies.
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