This is the gain from this morning's introduction, you can Sign up Receive in your inbox every morning:
Decoding a public company's earnings report can be crazy within 24 hours of release.
This is why.
A company that beats sales and earnings estimates may open its tongue on one of the CEOs or CFOs on the revenue call (you can now keep listening with Yahoo Finance). Check out the company's report of the full beat of the 20% outbreak gap (GAP) stock, but issued a tariff warning that many people should have seen.
GAP CEO Richard Dickson made a compelling case for the status of Yahoo Finance’s business.
A company that misses sales and earnings estimates may see its share price soaring, as the “bad news” for analysts and investors was “included in stocks” a few months ago. What's not priced? Positive hype about future growth of future earnings calls.
crazy.
I usually say on the side of the fence that companies should not get passes for unsuited numbers or bad dormitories.
Numbers are numbers. You can evaluate them, reprocess them, think further, repeat the process 75 times, and then make a decision on the stock. This is not rocket science.
For this, I don't think AI Chip Darling Nvidia (NVDA) deserves exactly the free pass that I received this week in a confusing quarter. It reported adjusted EPS of $0.81, compared to an estimated $0.93, although the company's second (adjusted) EPS figure was $0.96 after excluding “H20 charges and related tax impacts.”
In other words, the $0.96 figure represents that Nvidia's business in China is not in the bargaining chip, which is provided by Trump's bargaining export control, which is a reality that does not exist.
NVIDIA has gained numerous fans on Wall Street through years of strong execution and fundamentals. Analysts quickly “ruleed out” the fall of once profitable Chinese business. After the results, every study statement was filled with “Let’s blow more smoke for Nvidia Bulls.” Price targets were for hiking. All NVIDIA positives are bold in PDF documents.
Of course, CEO Jensen Huang pointed to the mention of the earnings call for his demand for AI chips. Chief Financial Officer Colette Kress said profit margins could tend toward historical normal levels later this year.
