Photo: A Dutch Bros Coffee stand / Dutch Bros Coffee, Wikimedia Commons / CC BY-SA 4.0
The closing bell did not end the action on Wall Street Wednesday. A wave of earnings reports released after the market closed sent some well-known stocks soaring and others tumbling in extended trading, setting up a jolted opening for Thursday.
The swings matter to anyone with a retirement account or index fund, because after-hours moves usually carry into the next trading day. They also offer one of the clearest scorecards of how American companies, and the shoppers and businesses that spend with them, are holding up.
The winners: an ad-tech standout and an optics maker
AppLovin, a software company best known for placing advertising inside mobile games, was the night’s biggest winner. Its shares jumped more than 20% after the company reported third-quarter revenue of $2.18 billion and adjusted earnings before interest, taxes, depreciation and amortization of $1.84 billion, both ahead of what analysts expected, CNBC reported.
Coherent, which makes optical materials used in lasers and data-center equipment, rose about 7% after beating profit estimates and forecasting a stronger current quarter than analysts had penciled in. E.l.f. Beauty, the budget cosmetics maker, gained more than 4% after its quarterly profit roughly doubled Wall Street’s expectations, according to CNBC’s roundup of the after-hours session.
The losers: a coffee chain, a real-estate site and a chip giant
Dutch Bros, the fast-growing drive-through coffee chain, sank about 19% after trimming its full-year profit outlook and reporting weaker growth at stores open at least a year than analysts expected. Zillow, the online real-estate marketplace, dropped more than 16% after missing revenue and profit estimates. Snap, the company behind Snapchat, fell about 7% after reporting slightly less revenue and fewer daily users than forecast.
Qualcomm slid almost 6% even though its quarterly results slightly beat estimates. The chip designer, whose processors power many smartphones, forecast current-quarter earnings of $2.15 to $2.35 per share, a range whose midpoint sat below what analysts were hoping for, as a handset slowdown offset gains in its automotive business.
Cava, the Mediterranean restaurant chain, fell more than 11% after missing expectations. MercadoLibre, Latin America’s largest e-commerce company, slipped about 7% on weaker-than-expected profit, and travel site Expedia dropped more than 7% after issuing cautious guidance for the holiday quarter even as its summer results beat estimates.
A high bar for tech
Some of the night’s steepest drops hit companies that actually beat expectations. Design-software maker Figma fell almost 7% and marketing platform Klaviyo slid about 5% despite topping estimates, and chip designer Arm dipped nearly 2% on a strong report. The pattern, analysts noted, is that investors have bid many technology stocks so high that merely good news is no longer enough.
Traders will get the next read when regular trading resumes Thursday morning, with the after-hours moves pointing to a mixed open. For everyday investors, the lesson of the evening is an old one: in earnings season, what a company says about the future often matters more than what it just earned.
JBizNews Desk | Wall Street
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