The Winners and Losers of Earnings Season

It’s the most wonderful time of the year. Tech journalism is briefly possessed by sabermetrics, CEOs must answer direct questions about their companies’ futures, and lying on certain documents can land you in jail. Some stocks will rise; others will tumble. Fortunes will be created or erased. And analysts will find a way to explain how this outcome was inevitable, no matter who wins or loses.

Welcome to earnings season.

Winners

Facebook

While broke nerds (i.e., everyone in media) wring their hands over Facebook’s influence on politics, journalism, and social justice movements, the company is making money hand over fist. Facebook pulled in more than $6.4 billion in revenue for the quarter, crushing analysts’ expectations of $6 billion. The company’s adjusted earnings, at 97 cents per share, also beat estimates, pushing the company’s stock to an all-time high (adjusted EPS is the profitability measure most closely tracked by Wall Street, though it excludes expenses such as stock-based employee compensation and certain taxes). Facebook is living its best possible sports movie montage right now — it feels like nothing can go wrong! If there’s any loser here, it’s the people who insist on writing bad things about Facebook. Joke’s on you, because Mark Zuckerberg told analysts that he wants the site to be “video first” within the next five years. Your anti-Facebook articles will soon be swept under the algorithmically powered rug.

Alphabet

There was some drama at Alphabet during the quarter with the abrupt departure of Nest CEO Tony Fadell, but that controversy had no effect on the company’s cash cow, Google. The search giant is effectively handling the transition to mobile, with revenues of $21.5 billion and adjusted earnings of $8.42 per share both beating analysts’ projections. Meanwhile, Alphabet’s “Other Bets,” which includes Nest along with more nascent moon shots like the life sciences company Verily, saw its operating losses increase from $660 million to $859 million. Investors, though, are still willing to consider non-Google assets simply a rounding error — Alphabet’s stock rose more than 5 percent after its earnings report was released.

Amazon

For years, Amazon lost a comical amount of money as it aggressively discounted products and kept overstuffing its Prime membership. But the company raised the price of Prime by $20 two years ago and now seems to be moving away from bargain-bin deals. These changes have helped the company manage five straight profitable quarters, including adjusted earnings of $1.78 per share in the most recent period. Great for Wall Street and Jeff Bezos, perhaps not so great for anyone who assumed the online retail giant would always be a go-to place for dirt-cheap products.

Microsoft

Once it was super evil. Then it was super lame. Now, Microsoft appears content with being super competent (as long as we pretend the Windows Phone never happened). The company’s cloud-computing platform, Azure, doubled in revenue and could evolve into a formidable competitor to Amazon Web Services. And Office 365, the subscription-based version of your favorite ’90s productivity software, also grew significantly in sales. These winning products helped Microsoft net adjusted earnings of 69 cents per share and revenue of $22.6 billion, beating Wall Street estimates. CEO Satya Nadella finally seems to be finding success weaning his company off of Windows.

Losers

Apple

This is a tough one. On one hand, iPhone sales are in an ongoing slump, as are Apple’s revenue and profits. On the other hand, Apple had already lowered analyst expectations for the quarter during the last reporting period, so it managed to beat Wall Street’s earnings estimates. And strong sales for the pint-size iPhone SE helped make up for waning sales in Apple’s flagship products. But ultimately, as the world’s most valuable company, Apple is held to a higher standard than anyone else. Until we figure out what the company’s new baseline for success is (or it finally manages to release another hit product), any decline has to be taken as an L.

Netflix

Wall Street’s relationship with Netflix is a lot like Ross and Rachel’s relationship on Friends — a pointless waste of energy when you could be watching Seinfeld on Hulu instead. In December, Netflix stock peaked above $130 per share. In February, it was worth $83. Last week it climbed back to near $100, but when the company missed subscriber growth targets, shares again plunged down below $86. Netflix is what we call a “volatile” stock, which is code for “investors have no clue how to measure the future prospects of this company.” Buyer, beware. Streamer, watch Stranger Things as soon as possible.

Twitter

It feels like Twitter is in the Las Vegas residency of its life as a Silicon Valley darling — once beloved, still world-renowned, but increasingly unlikely to muster another smash hit. The social network gained 3 million users in the quarter (decent by Twitter’s anemic growth standards), while revenue failed to meet analysts’ expectations. Earnings did manage to beat Wall Street projections, but that couldn’t save Twitter’s stock from plummeting as much as 14 percent. With a market cap hovering below $12 billion, Twitter is getting into the range of couch-cushion money for Silicon Valley’s giants. Let’s hope the company can turn things around before it’s too late.

Yahoo

R.I.P.