Three companies that posted first-quarter earnings in the technology sector are shocking markets today. The firms posted disappointing results that sent shares lower last night in after-hours trade.
ServiceNow (NOW) traded 4.7% lower to $711. Instead of praising the firm for the $2.6 billion in revenue, up 23.8% Y/Y, fearful investors did not like its guidance.
ServiceNow expects margins from operations of 25% in Q2/2024 and 29% for the full year. This software firm runs a great business. Take advantage of the lower share price.
IBM (IBM) lost nearly 9% after posting revenue rising by only 1.5% Y/Y to $14.46 billion. Consulting revenue barely rose, up by 2%. For the full year of 2024, IBM expects revenue to grow in the mid-single-digit percentage. Free cash flow will grow by around $12 billion.
Social networking giant Meta Platforms (META) dropped by around 15% after posting quarterly results. GAAP EPS was $4.71 on revenue of an impressive $36.46 billion. Investors worried over the firm’s 2024 capital expenditure of $35 billion to $40 billion. This is sharply above the previously expected range of $30 – $37 billion. Meta will spend far more next year to support its AI research and product development efforts.
Neither product development nor research translates to immediate profits. Still, Meta is investing in its future instead of pleasing shareholders with a short-term mindset.