Earnings Still Catch Investors’ Attention

PepsiCo, the soft drinks and snacks giant, reported fourth-quarter adjusted earnings of $1.53 a share on revenue of $25.3 billion, both higher than analysts’ estimates, and the company’s forecast for 2022 organic revenue growth also topped forecasts. The stock, however, was down 2.5% to $167.66 on Thursday.

Rival Coca-Cola’s earnings also topped expectations. Coca-Cola stock was rising after the beverage giant reported earnings that surpassed analysts’ expectations.

Coca-Cola reported an adjusted quarterly profit of 45 cents a share, beating forecasts for 41 cents, on sales of $9.5 billion, topping expectations for $8.9 billion. Annual earnings came in at $2.32 a share on $38.7 billion.
Datadog made some noise, Thursday, as the network cybersecurity company’s shares surged more than 12% in the wake of a strong fourth-quarter report and first-quarter outlook.

Early Thursday, Datadog reported a fourth-quarter profit of 20 cents a share, excluding one-time items, on revenue of $326.2 million, while Wall Street analysts had forecast the company to earn 11 cents a share on $291.5 million in sales. During the same period in 2020, Datadog (DDOG) earned 6 cents a share on $177.5 million in revenue.

Datadog’s results showed the company is in “the very early days of a large security opportunity to complement a rapidly expanding observability market.

Among the highlights of the quarter was Datadog saying it ended the quarter with 216 customers that had annual revenue rates of more than $1 million, or more than double the 101 such customers it had in the fourth quarter of 2020.

Twitter misses earnings expectations across the board, authorizes $4 billion in share buybacks. Twitter reported earnings for the fourth quarter on Thursday that missed analyst estimates on earnings, revenue and user growth.

The release is the first under new CEO Parag Agrawal after Jack Dorsey stepped down from the role in November. Twitter’s announcement follows those from Facebook owner Meta and Snap, which both reported some impact from macroeconomic challenges.

Twitter reported earnings for the fourth quarter on Thursday that missed analyst estimates on earnings, revenue and user growth.

The company’s shares initially rose on the report and were up during its earnings call in premarket trading. But they fell 2% by the end of trading Thursday.

Earnings per share: 33 cents, adjusted vs 35 cents expected, according to a Refinitiv survey of analysts

Revenue: $1.57 billion vs $1.58 billion expected.

Monetizable Daily Active Users (mDAUs): 217 million vs 218.6 million expected.

The company provided revenue guidance for the next quarter ranging from $1.17 billion to $1.27 billion, while analysts had expected about $1.26 billion, according to Refinitv.

Twitter also announced a new $4 billion share buyback program. Half of that will be an accelerated share repurchase with the remaining being repurchased over time, the company said.

Despite the miss in user growth numbers, CFO Ned Segal said in a statement in the earnings release that its previously stated goals of reaching 315 million mDAUs in Q4 2023 and at least $7.5 billion in revenue in 2023 remained the same.

Twitter’s report follows those from Facebook owner Meta and Snap, which both reported some macroeconomic challenges like supply chain disruptions weighing on advertiser budgets.

Twitter said last quarter that the Apple changes had less of an impact in the period than expected, and this quarter said in its shareholder letter that the impact “remained modest” in Q4.

“Although retooling our revenue products in light of Apple’s privacy-related iOS changes took additional time, energy, and resources in 2020 and 2021, we believe that our product improvements have helped reduce the impact on Twitter,” the company wrote.

The Dow Jones Industrial Average slashed heavy losses, as Treasury yields jumped after hot inflation data Thursday. Blue chip stocks Coca-Cola and Disney, along with PepsiCo, Twilio, Twitter and Uber, were key earnings movers Thursday.

Among the Dow Jones leaders, Apple (AAPL) lost 0.7% Thursday, while Microsoft (MSFT) dropped 1.2% in today’s stock market. American Express (AXP), a Dow Jones stock to watch, is in buy range after Tuesday’s breakout.

Electric-vehicle leader Tesla (TSLA) skidded around 0.5% Thursday, threatening to fall after Wednesday’s 1.1% rise.

Amid a volatile stock market rally, Alphabet (GOOGL), Blackstone (BX), CF Industries (CF) and Stifel Financial (SF) are among Thursday’s top stocks to buy and watch. All four are in or near new buy zones.

Microsoft, Stifel and Tesla are IBD Leaderboard stocks. American Express was featured in this week’s Stocks Near A Buy Zone column. Blackstone is an IBD SwingTrader stock. Stifel was a recent IBD Stock of the Day.
Dow Jones Today: Inflation Data

After the stock market open Thursday, the Dow Jones Industrial Average declined 0.3%, while the S&P 500 dropped 0.5%. The tech-heavy Nasdaq composite cut losses to 0.6% in morning trade. Among exchange traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (QQQ) moved down 0.9%, and the SPDR S&P 500 ETF (SPY) dropped 0.5% after Thursday’s open.

The 10-year Treasury yield briefly spiked above 2% Thursday morning after the hot inflation report before paring some gains. Meanwhile, U.S. oil prices gained nearly 1%, as West Texas Intermediate crude moved back above $90 a barrel. WTI briefly topped $93 a barrel last week.

Disney (DIS) beat analyst forecasts for the fiscal first-quarter earnings late Wednesday, as theme park revenue bounced back. Disney+ subscriptions also topped analyst views. DIS shares surged nearly 6% Thursday.

Twilio (TWLO), Twitter (TWTR) and Uber Technologies (UBER) reported before the stock market opens Thursday.

Twilio’s fourth-quarter revenue blew past estimates as the company also projected profitability on an adjusted basis by 2023. TWLO shares surged more than 14% Thursday morning.

Uber reported strong fourth quarter revenue late Wednesday, sparking a 1.5% climb in morning action. UBER stock ended Wednesday about 37% off its 52-week high.
Dow Jones Stocks To Watch: American Express

American Express advanced 3.3% Tuesday, breaking out past what IBD MarketSmith chart analysis plotted as a cup base buy point at 189.13. Shares are in the 5% buy range that tops out at 198.59. AXP stock traded up 0.2% Thursday.

Bullishly, the stock’s relative strength line is at new highs, indicating significant stock market outperformance.

Outside the 30-stock Dow Jones industrials, FANG stock Alphabet attempted a breakout past a 3,019.43 buying point following strong earnings results last week, but fell more than 7% below the new entry following recent losses. GOOGL shares regained their 50-day line, rising 1.6% Wednesday. Shares were down 1.6% Thursday.

Despite Alphabet’s sell signal, last week’s strong earnings reaction was a big positive. Keep an eye on the search giant; it could be adding a handle to its current formation which could potentially result in a new entry.

IBD SwingTrader stock Blackstone is again approaching a double-bottom base’s 136.56 buy point, and the stock is about 1% away from the entry following Wednesday’s 4.6% advance. Shares lost almost 3% Thursday.

Fertilizer producer CF Industries is about 2% away from its ascending base’s 74.87 buy point following Wednesday’s 0.3% fall. CF stock boasts a perfect 99 IBD Composite Rating, per IBD Stock Checkup. Shares traded down 1.4% Thursday.

IBD Leaderboard stock Stifel Financial remains above a 78.70 buy point in a consolidation despite Wednesday’s 0.7% fall. Its RS line hit a new high Tuesday. Shares were down 0.1% Thursday.

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Tesla stock skidded 0.5% Thursday, threatening to fall after Wednesday’s 1.1% rise. The stock found much-needed support at its long-term 200-day moving average in recent sessions. But Tesla shares remain sharply below their 50-day line and there is no proper entry in sight.

Among Dow Jones stocks, Apple stock rose 0.8% Wednesday, adding to Tuesday’s 1.85% gain. Shares are again about 15% past a 153.27 buy point out of a cup-with-handle base, according to IBD MarketSmith chart analysis. Shares lost 0.7% Thursday.

A new base is likely forming, but it is slightly too early for a proper buy point. However, a decisive move past Thursday’s high of 176.24 could be used as an early entry for aggressive investors.

Software leader Microsoft gained 2.2% Wednesday, as the top Dow Jones stock continues to build a new base. But shares remain below their 50-day line. MSFT stock was down 1.2% Thursday.