Stocks tacked on a second positive trading session in a row as earnings reports continue to come in largely positive. Visa reported great earnings as did several other companies and Amazon is reporting earnings after the bell and as this blip goes to compliance for approval shares of Amazon are up 7% in afterhours trading. At the close the Dow was up 238 points on heavy trading volume to close at 24,322.
Facebook, aka Faceplant, posted earnings yesterday afternoon and the numbers blew away the gurus expectations as revenue was up 49% and net income gained 63%. Ad revenue was up 50% which drove the top and bottom line performance. The stock had closed yesterday below $160 but opened this morning above $170 in what is its biggest move in over two years. CNBC analyst James “Fog Horn” Cramer called it the most undervalued stock in the index and several big brokerage firms raised their target price estimates to anywhere from $205 per share to $275. Facebook continues to add to headcount and it appears the Cambridge Analytic controversy has not affected margins or growth metrics at all.
AT&T meanwhile reported a 3% decline in revenue and a 15% gain in net income. Since both numbers did not meet expectations and investors sent shares lower in heavy trading. AT&T is in the middle of a huge transition investing in a 5G buildout so that mobile phone, entertainment and media can be accessed from any device. CEO Randall Stephenson sounded upbeat on the call noting that 2018 was off to a good start as Ma Bell adds to its first mover 5G “world class gigabit network” and subscriber gains in “Direct TV Now” were solid. I hope AT&T improves their network. I learned right away that while on a scouting trip into the Cascades if anything goes wrong the first thing to do was to find out who had Verizon since my AT&T phone never had service.
Speakiing of that, the Boy Scouts had a great trip to Blake Island. The weather was fine and there were many new scouts on the trip who had recently joined the troop and who were on a steep learning curve. The Racoons on the island were out in force and any food left unattended was promptly scarfed up by….. in the words of Yosemite Sam ….”ya flea bitten vermin!”. At night when you shine a light into the woods all you see are sets of eyes looking back at you.