Snap Shares Surge On Strong Second Quarter Earnings Beat

Plus, Twitter also delivered a beat, Boston Beer cited disappointing demand for its hard seltzer as cause for its earnings results miss, and Alphabet launched a new robotics software startup.

Stocks were higher at the open on Friday with the Dow adding 31 points, or just under 0.1%. The S&P 500 gained 0.3%, while the Nasdaq rose nearly 0.5%.

Snap shares are up more than 20% at the time of writing following the social media company’s strong second quarter earnings beat. After the bell on Thursday, Snap posted earnings per share of $0.10 on revenue of $982 million, while analysts had expected earnings per share of $0.01 on revenue of $846 million. “Our second quarter results reflect the broad-based strength of our business, as we grew both revenue and daily active users at the highest rates we have achieved in the past four years,” CEO Evan Spiegel said in the earnings release. “We are pleased by the progress our team is making with the development of our augmented reality platform, and we are energized by the many opportunities to grow our community and business around the world.” Morgan Stanley said in a note, “We have written much about the strength of the online ad markets over the past 9 months… but even we under-estimated 2Q/3Q results. SNAP’s ad revenue strength was broad-based across use cases (Stories, Discover, lenses and AR, etc) as performance-focused innovation like improved matching, dynamic product ads, and new AR lenses are leading to increased advertiser and spend per advertiser growth.”

Twitter also delivered an earnings beat, posting its fastest revenue growth since 2014. Twitter announced second quarter earnings per share of $0.20 on revenue of $1.19 billion, versus analyst estimates for earnings per share of $0.07 on revenue of $1.07 billion. “We delivered better-than-expected performance across all major products and geographies while growing our audience,” said Twitter CFO Ned Segal. “We continued to make significant progress on our direct response and brand products with updated ad formats, improved measurement, and better prediction. We are driving more value for advertisers with our strong push into performance-based advertising and expanded offerings for small and medium-sized businesses.”

Boston Beer shares are down more than 23% this morning after the brewer pointed to disappointing demand for its hard seltzer as cause for its earnings results miss. The company reported earnings per share of $4.75 on revenue of $603 million, while analysts had expected earnings per share of $6.69 on revenue of $658 million. “We overestimated the growth of the hard seltzer category in the second quarter and the demand for Truly, which negatively impacted our volume and earnings for the quarter and our estimates for the remainder of the year,” CEO Dave Burwick said in a statement. “Our outlook for the hard seltzer category in the second half of 2021 is uncertain and we have planned our capacity and spending based upon several volume scenarios.”

General Motors issued a second recall of its 2017 – 2019 Chevrolet Bolt EVs this morning, following at least two of the electric vehicles that had previously been repaired for a different issue erupted into flames. The recall covers roughly 69,000 of the cars globally, including 51,000 in the U.S. GM said it and LG Energy Solution, which supplies the battery cells for the vehicle, have identified the “simultaneous presence of two rare manufacturing defects” in the EVs’ battery cells that increases the risk of fire. “We’re working with our supplier and manufacturing teams to determine how to best expedite battery capacity for module replacement under the recall,” GM spokesman Dan Flores said. “These teams are working around the clock on this issue.”

And Google-parent Alphabet announced it is launching a new robotics software company named “Intrinsic” out of its “moonshots” division. Intrinsic is developing software tools to make industrial robots easier to use, cheaper, and more flexible for users. “Intrinsic is working to unlock the creative and economic potential of industrial robotics for millions more businesses, entrepreneurs, and developers,” said Intrinsic chief Wendy Tan-White in a blog post. “We’re developing software tools designed to make industrial robots (which are used to make everything from solar panels to cars) easier to use, less costly and more flexible, so that more people can use them to make new products, businesses and services.”

Stocks We’re Watching

Arvinas Inc (NASDAQ: ARVN): Arvinas shares are up more than 12% today after the company announced yesterday a global collaboration with Pfizer to develop and commercialize ARV-471, an investigational oral PROTAC® (PROteolysis TArgeting Chimera) estrogen receptor protein degrader. “This collaboration has the potential to be transformational, as it combines our leadership in targeted protein degradation with Pfizer’s global capabilities and deep expertise in breast cancer. This should significantly enhance and accelerate the development and potential commercialization of ARV-471 while also advancing Arvinas’ strategy of building a global, integrated biopharmaceutical company,” John Houston, Ph.D., Chief Executive Officer at Arvinas, said in a statement. “We share Pfizer’s deep commitment to people with breast cancer and are thrilled to partner with them to develop this potentially best-in-class therapy. Despite advancements in oncology in recent years, considerable unmet need persists in the treatment of HR+ breast cancer. Together with Pfizer, we will deploy our PROTAC technology in an effort to help people with this devastating disease.”

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