Earnings recap and preview for Snap

Investors are looking forward to the upcoming earnings, mostly from the technology sector. Tonight there will be at least two key tech companies that will post their results.

European stocks drifted lower after surging earlier in the day amid profit-taking. Gold and silver remained near the highs, and EUR/USD reached the 1.15 handle as we had anticipated.

Investors are looking forward to the upcoming earnings, mostly from the technology sector. US company earnings have not been as bad as expected so far in the reporting season, helping to fuel the stimulus-driven rally for the wider markets.

Today’s earnings recap:

IBM share rose more than 5% in afterhours trading but lost much of those gains during regular trading, after the company’s earnings topped expectation last night. IBM’s Q2 revenue fell 5.4% but still managed to beat expectations, as cloud sales rose 30% which offset falls in the consulting services unit.
The lockdown and the subsequent effects of the pandemic has had a considerable impact on Coca-Cola. The beverage seller reported a 16% fall in unit case volume and earnings fell by 33%. The firm reported an EPS of $0.42, beating expectations of $0.40. It matched expectations for revenue of $7.2B for Q2, leading to a jump in shares by 3% or so. Coca Cola is likely to see a resurgence in demand as lockdowns eases throughout the globe, with the CEO believing Q2 to be the most challenging of the year. Its shares have rebounded somewhat from the March low but remain well below the February high of around $60.
Lockheed Martin has reported earnings of $6.13 per share, beating expectations of $5.72. This comes in part due to the aeronautics business reporting higher sales. However, the company reported a lower outlook for sales in the second half of 2020 due to the delays in the supply chain caused by the pandemic. Shares rose by around 2%, extending the recent rally.

Coming up after the bell:

Snap, the parent company of Snapchat, is to report its earning after markets close on Tuesday. Although with its small size it will not impact the wider market, its earnings may provide a snapshot of the ever-changing social media landscape and the effects of recent events on user engagement with social media. Snap is projected to have an EPS of -$0.09 in Q2 with revenues of $440m, a year-on-year increase of around 22%. Much like other equities, Snap has seen a steady and impressive increase in its stock price since bottoming out at just below $8.00 in mid-March to now reaching above $25.
Texas instruments shares hit a fresh record high ahead of the release of the company’s earnings results after the close of play tonight. The semiconductor manufacturer is expected to post an EPS of $0.88 and revenues of $2.95B for Q2, representing a decline of 20% year-on-year, largely due to the pandemic downturn. Ti's stock price has recovered sharply, like most other technology names.