U.S. equities dipped on a light-volume Thursday as Amazon.com, Inc. (NASDAQ:AMZN) sparked a 1.3% selloff in consumer staples stocks. The S&P 500 Index fell 0.2%, the Dow Jones Industrial Average declined 0.1% and the Nasdaq Composite fell 0.1%.
While Friday’s Federal Reserve symposium in Jackson Hole, Wyoming, and the impending landfall of Hurricane Harvey are taking up the macroeconomic spotlight, earnings are dominating single-company headlines. Today, investors should have their eyes fixed on Autodesk, Inc. (NASDAQ:ADSK), GameStop Corp. (NYSE:GME) and VMware, Inc. (NYSE:VMW).
GameStop Corp. (GME)
GME stock is reeling this morning following a disappointing second-quarter earnings report.
Overall, total revenues improved by 3.4% to $1.69 billion, topping Wall Street’s consensus estimate for $1.64 billion. That was weighed down by a 7.5% decline in its pre-owned video games business — its worst drop in more than a year — to $502 million. New video games slumped 3.4%.
The company’s Technology Brands unit — which includes AT&T Inc. (NYSE:T) and Apple Inc. (NASDAQ:AAPL) authorized retail stores — grew sales by 7% to $188.3 million. However, that was well shy of analyst expectations for $207.6 million.
Worse, net income came in 18.5% lower year-over-year to $22.2 million (22 cents per share). On an adjusted basis, profits of 15 cents per share were a penny shy of analyst expectations.
New consoles have helped GameStop’s sales from declining further; the Nintendo Switch’s release has been of paramount importance to the recent quarter. However, increased downloading of games has hurt the retailer.
GME stock is off more than 7% in Friday’s premarket trade.
Autodesk, Inc. (ADSK)
Autodesk shares were surging ahead of Friday’s bell after the company posted its most recent earnings results.
The software company unveiled a loss of $144 million, or 66 cents per share. On an adjusted basis, the company lost 11 cents per share, however, which was narrower than analysts’ expectations of a 16-cent loss.
Autodesk’s second-quarter revenue reached $501.8 million, dropping 9% year-over-year. Still, that was enough to beat Wall Street’s consensus estimate for sales of $494.9 million.
“During the second quarter we started offering a simple path for maintenance customers to move to subscription,” Autodesk CEO Andrew Anagnost said. “While the program didn’t begin until midway through the quarter, it is off to a great start with nearly one-in-four renewal opportunities moving to subscription.”
For its third quarter, the company sees revenue in a range of $505 million and $515 million, which is lower than analysts’ projections of at least $516 million. The company is projecting a loss in a range of 12 to 16 cents per share, which is slightly worse at the midpoint than expectations for 13 cents per share.
For fiscal 2018, Autodesk predicts revenue of $2.03 billion to $2.05 billion, in line with Wall Street’s consensus estimate of $2.04 billion. The loss is slated to come in between 54 and 61 cents, while analysts were looking for 56 cents of red ink.
ADSK stock is headed higher by nearly 4% this morning.
VMWare, Inc. (VMW)
The longs are starting to digest VMW’s second-quarter earnings beat.
In its second quarter of fiscal 2017, the computing and platform visualization services provider earned $334 million, or 81 cents per share. The latter figure marked a 30.65% improvement compared to the year-ago period.
VMWare posted adjusted earnings of $1.19 per share, which was stronger than analysts’ projections of $1.15 per share.
The company’s revenue came in at $1.9 billion, topping the year-ago figure by 12%. The figure also came in just ahead of Wall Street’s estimate of $1.88 billion, according to FactSet.
For the current quarter, analysts forecast that VMWare will earn $1.28 per share on an adjusted basis. They also see revenue at $1.93 billion.
VMW stock dipped slightly after Thursday’s close, but is swinging to a roughly 2% climb in Friday’s early trade.