Earnings season has unfolded as a predominantly positive period, with a plethora of companies basking in post-earnings euphoria.
For investors, this has translated into a rosy picture, with companies like Netflix NFLX, Eaton ETN, and Arista Networks ANET reveling in margin expansion. Let’s delve deeper into the current standing of each.
Netflix
Delving into its recent figures, Netflix outperformed the Zacks Consensus EPS estimate by 17% and reported sales above expectations, showcasing significant growth compared to the previous year.
The streaming giant recorded a robust quarter, generating $2.1 billion in free cash flow and witnessing a year-to-date increase in operating margin to 28.1% (compared to 20.6% in FY23). Netflix also maintained its FY24 free cash flow outlook at $6 billion and executed a buyback of 3.6 million shares during the period.
The company’s future prospects appear promising, with consensus estimates for the current fiscal year anticipating a 52% rise in earnings on a 15% uptick in sales. The stock boasts a Growth Style Score of ‘A’.
Eaton
Eaton posted an EPS of $2.40 and revenue of $5.9 billion, setting new quarterly records. Furthermore, segment margins hit 23.1%, marking a 340-basis-point surge from the corresponding period last year.
Bolstering the strong results, the company provided upbeat guidance, elevating its projections for organic growth, segment margins, and EPS. Analysts responded by revising their earnings expectations upwards, elevating the stock to a favorable Zacks Rank #2 (Buy).
Arista Networks
In its recent performance metrics, Arista Networks surpassed the Zacks Consensus EPS estimate by 14% and reported sales exceeding expectations by 1.3%, both markers of growth from the prior year.
Additionally, the company’s gross margin stood at an improved 63.7%, a substantial enhancement from the 59.5% figure in the same period a year ago. Analysts have recognized the company’s advantageous position and adjusted their earnings forecasts accordingly, resulting in a favorable Zacks Rank #2 (Buy).
Concluding Thoughts
The earnings season is progressing steadily, with a multitude of companies already unveiling their quarterly achievements.
Enhanced profitability through margin expansion has bolstered the outcomes of numerous companies, including Netflix NFLX, Eaton ETN, and Arista Networks ANET.