As we course through earnings season, we are inundated daily with a flood of quarterly results. So far, the trend has been predominantly upward, buoyed by a stellar showing from several members of the elite Mag 7 and the tech sector as a whole.
Amid this positive wave, we have witnessed spectacular quarterly records from some notable contenders such as Apple AAPL, Decker’s Outdoor DECK, and Alphabet GOOGL, each achieving new milestones across different financial metrics. What were the highlights in each of these exceptional performances? Let’s delve deeper into this triumph.
Deckers Outdoor
Deckers Outdoor, currently perched at Zacks Rank #1 (Buy), stands tall as a prime designer, manufacturer, and purveyor of distinctive, niche footwear and accessories crafted for outdoor pursuits and lifestyle-centric endeavors.
In terms of headline figures, DECK has outperformed expectations with a commanding 32% beat over the Zacks Consensus EPS estimate, and its reported sales soared 8.5% ahead of forecasts, exhibiting growth rates of 44% and 16% respectively. Impressively, the EPS at $15.11 and revenue at $1.6 million set new quarterly records, fueled by the impressive performance across its stable of brands.
The chart below illustrates the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Notably, the company’s UGG and HOKA brands were standout performers, with sales of each growing 15% and 22% from the year-ago period, respectively. Deckers also provided a sanguine guidance after the release, now anticipating net sales of $4.15 billion with a gross margin of 54.5%.
Analysts have adjusted their earnings expectations upwards following this extraordinary performance, with the $26.59 Zacks Consensus EPS estimate for the current fiscal year signaling a 37% year-over-year growth.
Image Source: Zacks Investment Research
Apple
Apple reported quarterly revenue of $119.6 billion and achieved a record EPS of $2.18, marking growth rates of 2% and 16% respectively. Not only did the EPS hit a new quarterly high, but Services revenue, raking in $23.1 billion, also reached its pinnacle and expanded by 11% year-over-year.
While the Services results were largely robust, it’s worth noting that the reported figure marginally fell short of the Zacks Consensus estimate.
Image Source: Zacks Investment Research
iPhone revenue came in as a pleasant surprise, reported at $69.7 billion and marking a 6% improvement from the year-ago period. However, Apple shares experienced a setback in their price action following the release, mainly triggered by concerns about demand in China. Revenues in China totaled $20.8 billion, representing a 13% decline year-over-year.
Over the past year, Apple shares have slightly lagged behind the S&P 500, gaining 22% in value compared to a 24.4% increase. Although the performance hasn’t been as robust as that of other members of the Mag 7, shares have proved to be a sanctuary for investors seeking business stability amid a somewhat uncertain economic climate, primarily due to Apple’s exceptional cash-generating prowess.
Image Source: Zacks Investment Research
Alphabet
Alphabet surpassed the Zacks Consensus EPS estimate by 2.5%, marking the fourth consecutive period of outperforming bottom-line expectations. The quarterly revenue stood mightily at $86.3 billion, setting a new quarterly record and advancing by 13% year-over-year.
Image Source: Zacks Investment Research
The release had several noteworthy highlights, with YouTube ad revenue growing by 15% year-over-year and Google Cloud registering an operating income of $864 million, a striking feat compared to the loss of -$186 million in the year-ago period.
GOOGL shares are not overly inflated in terms of valuation, with the current F1 forward earnings multiple standing at 21.8x which is below the five-year median and compares favorably to the Zacks Technology sector average of 27.4x.
The company’s earnings are projected to rise by 16% in its current fiscal year (FY24) on 12% higher sales.
Image Source: Zacks Investment Research
Bottom Line
The earnings season is steadfastly trudging on, unveiling surprises at every turn. We have already witnessed a substantial number of results, with more than two-thirds of S&P 500 members having already disclosed their quarterly performance.
What’s particularly heartening is that all three companies – Apple AAPL, Decker’s Outdoor DECK, and Alphabet GOOGL – have defied expectations and clinched new quarterly records.
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