Higher Q3 EPS Couldn’t Stop the Decline in US Stock Markets

Posted Wednesday, April 26, 2023 by
Skerdian Meta • 2 min read

Yesterday was a strange day on financial markets after First Republic Bank announced that its customers had withdrawn about $100 billion in deposits in March, which was much higher than expected. The bank already received an emergency injection of $30 billion from other large banks.

So, at first, the stock price decline was not too significant, but it gradually deteriorated during the US session as the bank did not provide any clear plan for the future except to say that it was pursuing opportunities. First Republic Bank shares fell around 45%. Risk assets also tumbled lower, while safe havens surged higher.

Later in the evening, earnings and revenues for large multinational corporations were released. Most of the reports were positive, but that didn’t stop US stocks from closing the day near the bottom. Although, we’ll see if they will open higher when the U session starts. But, the overall market sentiment is still the overall driver, so we will have to follow how events unfold today.

Microsoft earnings beat on the top and bottom line:

Earnings-per-share $2.45 versus $2.23 expected
Revenues $52.9 billion versus $51.02 billion expected
Cloud revenue $28.5 billion versus $28.15 billion expected
Intelligent cloud revenue $22.1 billion, up 16%
Productivity and business processes +11% to $17.5 billion

Microsoft shares trading at $287.11 after closing at $275.56 up 4.20%.

Google/Alphabet also came in better

Revenues 69.8B versus a $68.96 billion expected
EPS $1.17 versus $1.08 expected
YouTube revenue $6.69 billion versus expected $6.65 billion expected
advertising revenue $54.55 billion versus $53.79 billion expected
service revenues $61.96 billion versus $61.27 billion expected
cloud revenue $7.45 billion versus $7.46 billion expected

Shares trading up around 4.1% in after-hours trading (4:07 PM ET)

In other earnings:

Texas Instruments:

EPS $1.95 versus $1.78 expected
revenues come in at $4.3 billion versus $4.3 billion expected
For the next quarter see EPS at $1.62 – $1.88 versus expectations of $1.83 on revenues of $4.17 billion – $4.53 billion (expected $4.44 billion)

Shares of Texas Instruments trading down to $167.50 versus $169.39 closing level

Visa: