After Hours Action: Alphabet Rises on Earnings Beat, Amazon Stuggles After Earnings Miss

U.S. equity markets were quite busy after the cash market close on Thursday following the release of earnings reports from Google parent company Alphabet and Amazon. The mixed results helped soften the blow from yesterday’s sharp sell-off in the major U.S. stock indexes that was fueled by a jump in global yields after European Central Bank President Mario Draghi told reporters at a press conference the chances of a recession in the Euro Zone is still “pretty low.”

Alphabet Announces Earnings Beat, Share Repurchase

Shares of Google parent company Alphabet initially rose more than 9% after the company reported second-quarter earnings that beat estimates Thursday.

Additionally, the company’s board of directors approved a repurchase of up to an additional $25 billion of its Class C capital stock. On a call with analysts, CFO Ruth Porat said the capital would be used to support growth and acquisitions and investments.

Here are the highlights:

Earnings per share: $14.21 per share, ex-items, vs $11.30 per share expected, per Refinitiv survey of analysts.

Revenue:  $38.94 billion, vs. $38.15 billion expected, per Refinitiv

Traffic acquisition costs:  $7.24 billion, vs. $7.27 billion, according to StreetAccount

Paid clicks on Google properties from Q2 2018 to Q2 2019: +28%

Cost-per-click on Google properties from Q2 2018 to Q2 2019: -11%

Amazon Beat on Sales, Missed on Earnings

Amazon shares fell 2% after the close after reporting mixed results in its second-quarter earnings release on Thursday. The numbers failed to meet profit expectations while exceeding revenue forecasts.

The good news for investors is Amazon’s renewed investments into the company are paying off, driving sales growth at the expense of lower profit margins. On the negative side, the company gave third-quarter profit guidance that fell well-below street estimates.

Here are the highlights:

Earnings per share: $5.22 vs. $5.57, according to analysts surveyed by Refinitiv

Revenue: $63.4 billion vs. $62.5 billion, according to Refinitiv

Amazon Web Service: $8.38 billion vs $8.5 billion, according to analysts surveyed by FactSet

Amazon’s revenue jumped 20% from the year-ago period, a rebound from 16.8% in the first quarter, which was the slowest in four years.

After-Hours Performance

At 03:52 GMT, Alphabet Inc. Class A shares are trading $1225.00, up $89.06 or +7.84% and, Inc. shares are trading $1941.15, down $32.67 or -1.66%.

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James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.