Earnings Results Have Netflix, Yahoo, IBM, and More Turning Heads

With the heart of earnings season officially here, it’s not surprising that many big-name stocks are in the spotlight. In this article we’ll take a closer look at the earnings results of five of the biggest, those being International Business Machines Corp. (NYSE:IBM), EMC Corporation (NYSE:EMC), Netflix, Inc. (NASDAQ:NFLX), Yahoo! Inc. (NASDAQ:YHOO), and VMware, Inc. (NYSE:VMW). In addition, we’ll use SEC filings to see how elite funds are positioned in each.

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IBM Beats Estimates

Perennial laggard International Business Machines Corp. (NYSE:IBM) may finally be turning the corner, as the company reported better than expected earnings results for the second quarter, on strong revenue. For the period, Big Blue earned $2.95 per share on revenue of $20.24 billion, beating the consensus estimates by $0.06 per share and $210 million respectively. Although revenue fell again, by 2.7% year-over-year, the company’s cloud platform, analytics, security, and cognitive solutions segments are showing promise. IBM is also committed to investing in the future growth markets of quantum computing, blockchain, and the Internet of Things. Shares are up by 1.4% in pre-market trading. Warren Buffett‘s Berkshire Hathaway is a big believer and stakeholder in International Business Machines Corp. (NYSE:IBM), owning 81.23 million shares of the company on March 31.

Yahoo! Reports Mixed Results

Although the results won’t matter much given that Yahoo! Inc. (NASDAQ:YHOO) is selling its core internet properties, the internet portal nevertheless turned in a so-so quarter for the three months ended June 30. For the time period, Yahoo! earned $0.09 per share on revenue of $1.3 billion, missing the bottom-line consensus by $0.01 per share while beating the top-line estimates by $220 million. Adjusted EBITDA was $172 million for the period, down from $262 million in the second quarter of 2015. Mavens revenue was $504 million, up from $401 million in the comparable period a year ago. The number of funds in our database which had holdings in Yahoo! Inc. (NASDAQ:YHOO) rose by 13 quarter-over-quarter to 97 as of the end of March.

On the next page we’ll see how Netflix Inc, EMC, and VMware did during their latest financial quarters.

Netflix Misses Subs Forecasts

Despite managing to beat earnings estimates by $0.07 per share with EPS of $0.09 and meeting revenue expectations at $2.1 billion (good for 28% year-over-year growth), Netflix, Inc. (NASDAQ:NFLX) shares are 12% lower in pre-market trading due to the company’s weak subscriber numbers for the quarter. For the period, Netflix added a net 160,000 users in the United States plus 1.52 million users overseas. Netflix had been guiding for around 2.5 million worldwide subs, while investors were anticipating slightly more. Netflix management remains confident the results were a blip on the radar, guiding for 2.3 million worldwide subscribers for the third quarter, though this fell 1.2 million below estimates. It remains to be seen whether competition or higher prices has anything to do with the lower sub numbers. 64 funds that we track were long Netflix, Inc. (NASDAQ:NFLX) at the end of March, unchanged from December 31.

Solid Quarter for EMC

Although the merger with Dell removes a lot of buzz from its latest earnings report, EMC Corporation (NYSE:EMC) turned in a solid second quarter, with EPS of $0.45 on revenue of $6 billion. The results beat estimates by $0.03 per share on the bottom-line and were in-line with top-line expectations. Profits rose by 19% year-over-year while revenue retreated by 1.2% year-over-year. The company’s shareholders are expected to meet today to vote on whether to give the thumbs up to Dell’s $60 billion merger offer. Of the 766 active funds that we track, 83 owned shares of EMC Corporation (NYSE:EMC) at the end of March.

VMware Turns in a Good Quarter

VMware, Inc. (NYSE:VMW) reported excellent second quarter results of EPS of $0.97 on revenue of $1.69 billion, beating the consensus estimates by $0.02 per share and $10 million respectively, pushing shares up by 8.5% in the pre-market hours. Revenue rose by 5.6% year-over-year, while license revenue inched up by 1% to $644 million. License revenue plus sequential change in unearned license revenue rose by 5% year-over-year. The company’s free cash flow for the quarter was a respectable $539 million. 36 funds in our system owned shares of VMware, Inc. (NYSE:VMW) at the end of the first quarter, down by seven funds over the quarter.

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