Misses and Beats: 3 Stocks That Are Moving Markets Right Now

Key Points

• Multiple major semiconductor firms, Netflix, and several big banks were among the companies reporting earnings results during the week of October 14, 2024.
• Notable winners include TSMC, which posted massive top- and bottom-line growth amid the AI boom, and Netflix, which has continued to boost its subscriber levels.
• ASML disappointed on net bookings, prompting a slump in share price.

Mid-October brought a flurry of earnings results from major semiconductor firms like Taiwan Semiconductor Manufacturing Co. NYSE: TSM and ASML Holding N.V. NASDAQ: ASML, plus reports from several big banks, Netflix Inc. NASDAQ: NFLX, American Express Co. NYSE: AXP, and many others. This quarterly check-in allows investors to gauge how these and other firms have performed over the last several months. As always, investors have watched to see whether there are any surprises, including top- or bottom-line performance that comes in above or below analyst predictions. Here are a few of the most notable earnings updates for the week of October 14, 2024.

NFLX Beats Expectations Amid Subscriber Growth

Netflix beat analyst predictions on revenue with $9.83 billion for the third quarter, up 15% year-over-year. Net income of $2.36 billion and EPS of $5.40 per share also topped expectations and were up significantly from $1.68 billion and $3.73 for net income and EPS, respectively, last year at this time. Helping to drive both top- and bottom-line growth was a 14% year-over-year increase in total active subscribers, bringing the streaming giant to nearly 283 million. This pace of growth slowed slightly compared to recent quarters. Still, analysts expect shares to continue to rise.

Notably, investors will have to gauge Netflix's performance based only on its financials very soon, as the company has just one more quarter of subscriber data to share publicly. Beginning in 2025 the firm has said it will stop reporting subscriber numbers.

TSM Spikes on Strong Earnings and Outlook

Taiwan Semiconductor Manufacturing, the second-largest semiconductor manufacturer in the world based on market capitalization, reported significant growth in both revenue and income for the third quarter. Revenue jumped by 39% to about $23.6 billion, while net income soared 54% year-over-year to about $10.1 billion after currency conversion. Both of these figures topped analyst expectations.

TSM attributed the performance to a spike in demand for hardware related to AI applications, and the firm expects this trend to continue through the end of the year. Shares of TSM stock rose by about 9% immediately following the earnings report and have since shifted slightly downward from that level.

ASML Disappoints With Early Results

Dutch semiconductor maker ASML, unlike TSMC, fell short of analyst predictions in some areas. Net sales of €7.5 billion (approximately $8.1 billion) were a bright spot, as they exceeded expectations. However, net bookings of €2.6 billion (around $2.81 billion) were less than half of what analysts had forecast.

ASML executives cautioned that a recovery in the semiconductor space would be slower than expected, issuing a new net sales outlook for 2025 between €30 billion and €35 billion (roughly $32.4 billion to $37.8 billion). This forecast lands at the lower end of the company’s previous estimates and falls short of analysts' expectations for the coming year.

Another surprise was the release of ASML's earnings, which happened a day ahead of schedule due to a technical error. ASML shares have dropped by more than 15% in the last five days, primarily due to the earnings results and guidance.

AXP, JPM, WFC, and Other Financial Companies Post Largely Positive Results

American Express topped profit expectations with net income of $2.5 billion or $3.49 per share. It narrowly missed on revenue but beat forecasts for net interest income. On top of that, the credit card and services company boosted its full-year EPS guidance to a range of $13.75 to $14.05 when it was previously $13.30 to $13.80.

Big banks, including JPMorgan Chase & Co. NYSE: JPM and Wells Fargo & Co. NYSE: WFC, also posted quarterly results this week. Most of the reports were positive, with these and several other banks topping predicted earnings levels. However, while JPMorgan saw net interest income rise by 3% year-over-year, Wells Fargo's dropped by almost 11%. Higher spending rates to maintain deposits have hurt net interest margins, although the results reported this week do not reflect the full impact of the Federal Reserve's September rate cut. Several banks also significantly increased the funds set aside to cover potential credit losses. A bright spot for many banks was investment banking and wealth management revenue, driven by the prolonged rally in U.S. markets.