Short week, quiet earnings

Nov. 28, 2020

The short week of trading that just ended has seen some interesting quarterly earning releases. Although these companies’ results weren’t particularly highlighted by the news, they nevertheless provide an insight on the current state of the economy and on the reactiveness of the stock market.

Best Buy Co. Inc.

On Tuesday Best Buy released earnings that exceeded estimates. Earnings per share of $2.06 resulted higher than the expected $1.7 and revenue of $11.85 billion was higher than the $11 billion expected.

Despite earnings beating expectations, the stock (NYSE: BBY) fell almost 7% on the day of the release. The reason is to be found in the expectation of lower margin from the sales that will take place in the near future. In particular, the company’s management believes that although the Q4 sales growth will be positive, sales trends are not expected to remain at the levels seen during Q3.

GAP Inc.

With earnings per share lower than expectations, neither the big rise in online sales nor the higher than expected revenue were sufficient to avoid a negative trend in the stock price. The stock (NYSE: GPS) closed down more than 19% on the day following the release.

HP Inc.

On November 24 during after-hour market, HP released its quarterly earnings beating expectations. In particular, earnings of 62 cents per share beat 52 cents per share expected and revenue of $ 15.3 billion beat the $ 14.7 expected.

After initially jumping 9% in extended trading on Tuesday, we didn’t assist to a particular rise in the stock price at the end of the following day. Investors had apparently already priced in the rising PC notebook sales, since the stock price remained stable.

That’s all for this quick overview on some of the major companies that released their earnings this week (Nov. 23 to Nov. 27, 2020). Stay tuned!