Apple, Facebook Stock Rally On Strong Earning Results (AAPL), (FB)

Apple, Facebook post better-than-expected quarterly results , driving their respective stocks higher

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Facebook (NASDAQ:FB) shares jumped as much as 5% to $200 in late trading Wednesday after the company posted better-than-expected revenue and profit for its fiscal 3rd-quarter. The social-networking giant reported sales that rose 29% from a year earlier, to $17.7 billion, while profits jumped 19% to $6.09 billion, or (GAAP) $2.12 a share, topping Wall Street estimates for $1.91 a share on revenue of $17.36 billion. Operating margin, a measure of profitability, was 41%, down 1% year-over-year (y/y). Trailing-12 eps currently stand at $5.91.

“We had a good quarter and our community and business continue to grow,” Facebook Chief Executive Mark Zuckerberg said in a statement. “We are focused on making progress on major social issues and building new experiences that improve people’s lives around the world.”

Facebook also reported an increase in its monthly active users (MAUs). MAUs, a key barometer of Menlo Park’s growth, were 2.45 billion as of September 30, 2019, an improvement of 8% year-over-year. Facebook noted that more than 1.6 billion daily active users – up 9% y/y – visit its properties, which include WhatsApp, Instagram, Messenger and FB’s core social network, on a daily basis.

Shares in the Silicon Valley company gained 8 points, or about 5%, to $196.56 in pre-market hours trading. The stock has spiked 44% year-to-date, while the S&P 500 has gained 21%.

Facebook’s quarterly results is welcoming news for the social networking giant, which has been embroiled in scandals over the past two years over the way it has handled customer data and the spread of misinformation. It’s worth pointing out though that despite getting hit with negative news and investigations into its business practices, Facebook’s fundamental business has remained largely intact. FB is running “almost flawlessly,” analysts at Wedbush wrote (via BI) in a note to investors recently.

In other earnings news

Tech giant Apple (NASDAQ:AAPL) saw its highflying stock reach higher-highs to $248 and change in after-hours trading Wednesday, after the company reported fiscal fourth-quarter results that soundly beat analysts’ earnings estimates.

The iPhone maker posted quarterly revenue of $64 billion, up 2% from a year earlier, and above the high end of Cupertino’s guidance of $61 billion. Profit came in at $3.03 a share, up 4% from $2.91 y/y, and ahead of Wall Street’s $2.84.

“We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from Services (up 18% y/y to $12.5 billion), Wearables and iPad,” Apple CEO Tim Cook said in a statement. “With customers and reviewers raving about the new generation of iPhones, today’s debut of new, noise-cancelling AirPods Pro, the hotly-anticipated arrival of Apple TV+ just two days away, and our best lineup of products and services ever, we’re very optimistic about what the holiday quarter has in store.”

For Q1 2020, Apple guided higher, forecasting revenue of $85.5 billion to $89.5 billion, a range that’s above the Street consensus of $86.9 billion. Gross margin for the quarter is expected to range from 37.5% to 38.5% while operating expenses between $9.6 billion and $9.8 billion.

As far as Apple earnings by product is concerned, here is the y/y net sales breakdown by product category:

    $33.362 billion vs. 36,755 billion e year earlier: iPhone
    $12.511 billion vs. 10,599 billion: Services
    $6.991 billion vs. 7,340 billion: Mac
    $6.520 billion vs. 4,223 billion: Wearables, Home, and Accessories
    $4.656 billion vs. 3,983 billion: iPad

Stock Action

Apple shares were up 4 points, or 1.68%, to $247.16 at 9:25 a.m. in New York during pre-market trading.

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