6 big earnings reports: Tesla drops on Q1 flop, Netflix misses outlook | Pro Recap

By Davit Kirakosyan

Investing.com -- Here is your Pro Recap of the biggest earnings reports you may have missed this week: a big miss for Tesla; strong numbers at J&J and IBM; and disappointments at Netflix, Goldman and Morgan Stanley.

Tesla reports Q1 miss, shares plunge

Tesla (NASDAQ:TSLA) shares dropped more than 9% yesterday on the company’s reported worse-than-expected Q1 results as margins were battered by price cuts.

As always, InvestingPro subscribers got this news first. Get real-time news for better, data-driven decisions.

Tesla's EPS was $0.85, below the consensus estimate of $0.86, while revenues came in at $23.3 billion, compared to the consensus of $23.78B.

The company cut the prices of its EVs globally, including in the U.S., where it had already lowered prices six times this year due to increasing competition. Consequently, Q1 gross margins dropped to 19.3% from 29.1% in the same period last year, missing the consensus estimate of 21%.

The company reported that despite implementing price reductions in different regions during Q1, it was able to maintain a manageable reduction in operating margins. The company also said further cost cuts are likely, including enhanced production efficiency at their newest factories and reduced logistics costs, with an emphasis on operating leverage as they scale up.

The company reaffirmed its full-year production guidance of 1.80 million, compared to the consensus estimates of 1.84M.

Netflix beats Q1 EPS, but guidance falls short

Netflix (NASDAQ:NFLX) shares fell more than 3% on Wednesday following Q1 earnings results.

EPS came in at $2.88 on revenue of $8.16B, compared to the consensus estimate of $2.86 on revenue of $8.17B, but Q2 guidance of $8.2B fell short of expectations given the introduction of an ad-supported tier and a crackdown on password sharing.

Global streaming paid net additions were 1.75M in Q1, compared to 7.66M last quarter, missing the consensus of 2.41M.

Goldman Sachs posts ‘a very messy report’, Morgan Stanley beats but NII falls short

Goldman Sachs (NYSE:GS) reported its Q1 results on Tuesday, with EPS of $8.79 coming in better than the consensus estimate of $8.24, but revenue of $12.22B missed the consensus of $12.83B. Net interest income (NII) came in at $1.78B, representing a large miss compared to the expected $2.18B.

Analysts from Vital Knowledge stated that Goldman's report was "messy" and complex with many moving parts. The initial reaction to the report was negative, as the results were not as strong as those of other financial institutions.

Morgan Stanley (NYSE:MS) reported its Q1 results on Wednesday. While both EPS of $1.70 and revenue of $14.5B came in better than the consensus of $1.67 and $14.03B, respectively, NII missed the expectations.

Johnson & Johnson reports Q1 beat & raises guidance, but shares fall

Johnson & Johnson (NYSE:JNJ) shares fell nearly 3% on Tuesday despite stronger-than-expected Q1 results and raised full-year guidance.

Q1 EPS came in at $2.68, compared to the consensus of $2.50. Revenue grew 5.6% year-over-year to $24.7B, beating the consensus estimate of $23.61B.

For the full year, the company now expects EPS in the range of $10.60-$10.70, up from the prior range of $10.45-10.65, and better than the consensus estimate of $10.51. Revenue is expected to be $97.9-$98.9B, up from the prior range of $96.9-97.9B, compared to the consensus of $97.71B.

The company also hiked its dividend by 5.3% to $1.19 per share.

IBM reports Q1 EPS beat while revenues fall short

IBM (NYSE:IBM) reported its Q1/23 earnings results on Wednesday, with EPS of $1.36 coming in better than the consensus estimate of $1.27. Revenue was $14.3B, compared to the consensus estimate of $14.37B, driven by an uptick in margins amid demand in its software business and cost cuts.

For the full year, the company expects revenue growth in the range of 3-5%, with a free cash flow of about $10.5B, up $1B from 2022.