Earnings Spotlight: Snap, Inc., Twitter, Facebook

Stunning fourth-quarter earnings and positive guidance continued to support higher stock prices in the past week. The S&P 500 and Dow both rallied more than 1.5% since last Wednesday’s close. We’re in the heart of earnings season now, and this week brings us two of the big-name social media companies, Snap, Inc. (SNAP) and Twitter (TWTR).

SNAP’s fourth-quarter results from Tuesday hit it out of the park. The stock surged over 26% today on the strong numbers. An earnings per share loss of $0.04 topped estimates for a $0.08 per share loss – and that also represented a 68% increase from a year ago.

SNAP’s revenue also beat, rising 36.4% year-over-year to a record $389.8 million. This was well ahead of expectations for $379 million. It was also better than management’s revenue forecast of $355 million to $380 million. Daily active users were flat year-over-year, but this was still better than the expected decline.

Twitter is up with its fourth-quarter results on Thursday. The consensus estimate calls for earnings of $0.25 per share, or 31.6% annual earnings growth. Fourth-quarter revenue is forecast to increase 18.9% year-over-year to $869.5 million. And earnings estimates have remained steady over the last 90 days.

Facebook (FB), another big-name social media company, will not report until late April or early May, but analyst estimates are already rolling in. The company has been struggling over the past few months due to negative headlines about its invasion of privacy, so it’ll be interesting to see how that plays out in the report. As of now, analysts are looking for earnings of $2.19 per share, a 52% increase from earnings of $1.44 per share a year ago, on revenue of $16.4 billion. This is a 26.4% year-over-year increase from sales of $12.97 billion.

Overall, the fourth-quarter earnings season is off to a fantastic start. So far, the S&P 500’s fourth-quarter results are running at an annual sales pace of 7.4% and an annual earnings pace of 13.5%. And companies that post earnings surprises and guide higher will continue to emerge as market leaders.

Sincerely,

Louis Navellier

Louis Navellier

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