Big Tech Companies Announced Their Second Quarter Results

A busy earnings season in the markets

The market is experiencing one of the busiest weeks for third-quarter earnings reports. As of October 24, 29% of S&P 500 companies have reported their results, and analysts expect a 9.2% increase in earnings per share for this quarter according to FactSet data. If this prediction comes true, positive earnings growth will reach its ninth quarter, but this represents a slowdown compared to the 12% earnings increase reported in the second quarter of this year.

As the third quarter began, expectations were slightly lower; analysts were forecasting a 7.9% increase in earnings per share for S&P 500 companies.

This week, five of the "Magnificent Seven" technology companies — Microsoft (MSFT), Alphabet (GOOG), Meta (META), Apple (AAPL), and Amazon (AMZN) — represent about a quarter of the S&P 500 and are announcing their results.

This week also includes updates from other major companies such as Boeing (BA), Visa (V), Starbucks (SBUX), UnitedHealth Group (UNH), Verizon (VZ), Mastercard (MA), Chipotle (CMG), Merck & Co. (MRK), Shell (SHEL), Exxon Mobil (XOM), Chemron (CVX), Coinbase (COIN), Caterpillar (CAT), ServiceNow (NOW), Anheuser-Busch InBev (BUD), and Eli Lilly (LLY).

Apple (AAPL) surpassed analyst expectations in its fourth-quarter earnings, but iPhone sales fell short of expectations. The stock dropped about 2% in after-hours trading.

Amazon (AMZN) saw a 10% increase in its stock as an initial reaction to its earnings results. Amazon CEO Andy Jassy stated, "We see strong momentum and growth at Amazon with meaningful advancements driven by artificial intelligence across every area." AWS (Amazon Web Services) is accelerating with a 20.2% year-on-year growth rate.

Jassy noted that the workforce reductions were unrelated to artificial intelligence but stemmed from overhiring. "Our announcements were made from a cultural perspective, not a financial one," he said.

Apple (AAPL) CEO Tim Cook expressed excitement about the strength they are seeing and expects the revenue for the December quarter to be their best period.

Merck (MRK) reported earnings that exceeded analyst expectations in the third quarter, but the pharmaceutical company failed to satisfy investors due to the expiration of major patents. The stock dropped 2.5% in pre-market trading.

Cigna (CI) shares fell 12% after highlighting margin pressures in its pharmacy benefit manager segment, with earnings per share reported at $6.98, which was above expectations. Meanwhile, Altria (MO) forecasts that its revenue growth will slow in the fourth quarter. Crocs (CROX) shares rose 7% with a $100 million cost-saving target.