AlphaNow highlighted yesterday that all nine S&P 500 technology companies that reported Q3 earnings last week (October 11 through October 17) delivered earnings beats.
Technology sectors snapshots
Advanced Micro Devices, Inc. (NYSE:AMD) declared EPS of $0.04 and revenue of $1.46B that beat estimates by $0.02 and $0.05B respectively. The company’s graphics business took up the slack from its PC processor division which is seeing a slowdown.
Semiconductors manufacturer Intel Corporation (NASDAQ:INTC) reported EPS of $0.58 and revenue of $13.48B that beat consensus forecasts by $0.05 and $0.01B respectively. The company recorded an increase in sales of data center chips like servers and storage, which offset the decline in PC unit sales and PC consumer demand in the emerging markets.
Internet major Yahoo! Inc. (NASDAQ:YHOO) reported EPS of $0.34 that surpassed estimates by $0.01. However, revenue of $1.08B was off estimates by $0.01B. The company appears to have gained a handle on the losses in its core business, but shares have been driven by the wealth effect from its holdings in Alibaba.com, which is likely to go public in the near future.
E-commerce biggie eBay Inc (NASDAQ:EBAY) delivered a $0.01 beat on its EPS which was $0.64. However, revenue of $3.89B failed to meet expectations by $0.01B. The company delivered soft guidance saying the macro environment was lackluster and the U.S. market was somewhat soft.
Google Inc (NASDAQ:GOOG) reported EPS of $10.74 that beat estimates handsomely by $0.37, and revenue of $14.89B that was ahead by $0.05B. The stock shot past the magical $1,000 number. The company reported robust growth in paid clicks that made up for softness in ad prices.
SanDisk Corporation (NASDAQ:SNDK) declared EPS of $1.59 and revenue of $1.63B that beat the Street by $0.27 and $0.06b respectively. The company reported solid demand for its SSD hard drives, particularly for mobile applications, led to a robust performance. Its earnings growth was 231% year-on-year. The company also issued optimistic Q4 guidance.
Netflix, Inc. (NASDAQ:NFLX) reported Q3 EPS of $0.52, surpassing analysts’ forecasts by $0.03 though revenues were in-line with estimates at $1.1B. The company reported strong subscriber growth in the U.S. and guided above estimates for Q4.
Can techs keep up this torrid pace?
AlphaNow says that the main companies where growth was expected have already reported, and hence the results this week may disappoint when compared to the stellar show last week.
Tailpiece: Techonolgy sector valuations still attractive, says Citi
Here’s an interesting viewpoint from Citi Research. According to Citi, the IT sector stands out as full of promise considering various valuation approaches. An analysis of the sector using both trailing and forward P/E ratios shows that both are currently at multi-year lows, and in that respect have not kept pace with the multiple expansion witnessed in other sectors.