After-Hours Market Movers: Warner Bros. Discovery, Zillow, and More
The stock market closed Wednesday, August 7th, but the trading action didn’t stop there. Several companies saw significant price swings in extended trading, offering investors insights into the financial health and market sentiment surrounding these businesses. From strong earnings reports to disappointing guidance, here’s a breakdown of some of the notable movers:
Key Takeaways:
- Zillow’s Stellar Report: The real estate platform soared after reporting strong second-quarter earnings, exceeding analyst expectations for both earnings and revenue.
- Warner Bros. Discovery’s Write-Down: The entertainment giant tumbled following the announcement of a $9.1 billion write-down related to its TV networks. This news also came alongside disappointing revenue for the quarter.
- Mixed Results in the Tech Sector: Several tech companies saw mixed results, with some like Klaviyo and Duolingo posting strong earnings, while others like JFrog and Fastly experienced setbacks due to disappointing guidance or revenue misses.
- Struggles in the Food and Beverage Industry: Dutch Bros and Bumble both saw significant drops in their stock prices, with Dutch Bros falling despite beating expectations on the top and bottom lines and Bumble struggling due to weaker-than-expected revenue.
A Closer Look at the Movers
Zillow’s Resurgence
Zillow Group, Inc. (Z) experienced a significant surge in after-hours trading after unveiling its second-quarter earnings report. The company exceeded analyst expectations, reporting adjusted earnings of 39 cents per share, well above the 12 cents predicted by analysts. Revenue also surpassed expectations, coming in at $572 million compared to the anticipated $538 million. This positive performance indicates a strong showing for Zillow amidst an evolving real estate market, suggesting a healthy demand for its services and an optimistic outlook for the company.
Warner Bros. Discovery Faces Headwinds
Warner Bros. Discovery (WBD) faced a challenging Wednesday, as the entertainment conglomerate announced a $9.1 billion write-down related to its television networks. This announcement, coupled with a disappointing second-quarter revenue that fell short of analyst expectations, sent the company’s stock plummeting by 8.5% in after-hours trading. This write-down highlights the ongoing challenges faced by traditional media companies in a rapidly changing entertainment landscape. The company’s ability to adapt and thrive in the face of streaming domination remains a key area of focus for investors.
Tech Sector Sees a Mix of Successes and Setbacks
The technology sector continued to be a source of both positive and negative news, with several companies reporting varied results.
Klaviyo (KLVO), a marketing platform provider, enjoyed a significant boost in its share price following the release of its second-quarter earnings report. The company surpassed analyst expectations, delivering adjusted earnings of 15 cents per share and revenue of $222 million. This strong performance demonstrates the company’s continued growth and popularity in the marketing technology space.
Meanwhile, Duolingo (DUOL), a language learning app, saw its stock rise by 5% after reporting second-quarter results that exceeded analyst expectations. The company generated 51 cents of earnings per share, surpassing the anticipated 32 cents. Revenue also came in slightly ahead of expectations, at $178 million. Duolingo’s strong performance suggests a growing demand for accessible language learning tools, particularly as interest in language learning continues to steadily climb.
However, not all news was positive in the tech sector. JFrog (FROG), a software company focused on DevOps, experienced a steep decline in its stock price after it issued weaker-than-expected guidance for the third quarter. The company projected earnings per share between 9 cents and 11 cents, significantly below the 14 cents per share predicted by analysts. This downward guidance, coupled with a projected revenue range of $105 million to $106 million (again falling short of the anticipated $108 million), understandably led to investor concerns.
Similarly, Fastly (FSLY), a cloud computing services company, faced a share price drop after delivering soft full-year guidance. The company forecast a loss between 16 cents and 11 cents per share, with revenue ranging from $530 million to $540 million. This outlook fell short of analyst expectations, which projected a loss of 11 cents per share on revenue of $558 million.
Food and Beverage Industry Faces Challenges
The food and beverage industry also saw some struggles in after-hours trading.
Dutch Bros (BROS), known for its drive-thru coffee locations, experienced a significant drop in its share price despite exceeding analyst expectations for its second-quarter earnings. While the company surpassed projections for both earnings and revenue, its full-year revenue guidance, revised to a range of $1.215 billion to $1.23 billion, resonated poorly with investors. This guidance, roughly in line with the Street’s estimate of $1.228 billion, appears to have raised concerns about the company’s future growth potential.
Bumble (BMBL), a dating app company, faced a more significant drop in its stock price after its second-quarter revenue results came in below analyst expectations. The company reported $269 million in revenue for the quarter, falling short of the $273 million anticipated by analysts. This disappointing revenue performance seems to have sparked concerns among investors about the company’s momentum, particularly in a competitive dating app market.
A Look at Other Notable Movers
Applovin (APP), a mobile advertising and app discovery company, saw its stock fall despite exceeding profit estimates for the second quarter. While the company reported earnings per share of 89 cents, surpassing the 75 cents predicted by analysts, revenue came in at $1.08 billion, matching expectations. However, the company’s announcement of a decline in its monthly active payers metric year-over-year seems to have weighed heavily on investors’ minds.
SolarEdge Technologies (SEDG), a maker of solar power products, experienced a nearly 7% drop in its stock price after reporting a wider-than-expected adjusted loss for the second quarter. The company reported an adjusted loss of $1.79 per share, surpassing the analyst estimate of a $1.58 loss. While revenue did exceed expectations, coming in at $265 million compared to the anticipated $262 million, the larger-than-anticipated loss seems to have triggered investor concerns.
McKesson (MCK), a leading medical supply company, saw its stock fall by more than 7% after its fiscal first-quarter revenue missed analyst expectations. The company reported revenue of $79.28 billion, falling short of the $82.53 billion anticipated by analysts. This disappointing revenue performance, while the company did not disclose earnings, seems to have raised investor concerns about the company’s ability to maintain its current financial momentum.
These after-hours market moves offer a valuable glimpse into the performance and prospects of various companies across different sectors. While some companies thrived due to impressive earnings reports, others faced challenges due to underwhelming performance or disappointing guidance. Investors will continue to closely monitor these companies’ future performance and their ability to navigate the evolving economic and market conditions.
