As we delve into the Q4 earnings cycle, a multitude of companies are unveiling their quarterly results, with many boasting remarkable margin expansion during this period.
Notably, three corporations – Netflix NFLX, Procter & Gamble PG, and Meta Platforms META – all experienced substantial improvements in their profitability, garnering favorable investor reactions. For potential investors eager to capitalize on this earnings momentum, let’s delve deeper into each company’s performance.
Netflix
The streaming giant, Netflix, has witnessed positive revisions in earnings estimates, earning a Zacks Rank #1 (Strong Buy).
During its latest period, Netflix’s operating income surged to $1.5 billion from $0.5 billion, with the operating margin improving from 7% to 17% compared to the same period the prior year.
The company also exceeded expectations with subscriber additions totaling 13.1 million, surpassing our consensus estimate of 8.8 million. This trend of surpassing subscriber expectations has been consistent over time.
Meta Platforms
Meta Platforms has consistently delivered strong earnings results, surpassing our consensus earnings per share (EPS) estimates by an average of 20% over its last four releases. Impressively, the company achieved an operating margin of 41%, significantly higher than the 20% figure from the same quarter a year ago.
Additionally, the latest report shows a 25% year-over-year revenue growth and a 77% increase in EPS. Notably, the 25% revenue growth marks the highest year-over-year growth rate in eight quarters.
To further solidify its impressive performance, the company announced its inaugural dividend, payable on March 26th to shareholders recorded at the close of business on February 22nd.
Procter & Gamble
Procter & Gamble exceeded Zacks Consensus EPS estimates by 8% and reported revenue slightly below expectations, both of which were higher than the figures from the previous year. The company’s gross margin stood at 52.7%, notably higher than the 47.5% margin from the prior year.
Following these results, the company raised its FY24 core net EPS growth projection to a range of 8% – 9%, an improvement from the previously estimated 6% – 9%. As a result, the stock witnessed bullish behavior following the release, inducing positive sentiment.
Conclusion
A conducive operating environment has contributed to increased profitability for several companies, leading to a surge in share prices post-earnings throughout the Q4 2023 cycle thus far.
For investors eyeing companies with expanding margins, Netflix NFLX, Procter & Gamble PG, and Meta Platforms META have all seen marked improvements in their profitability.