Q1 Earnings Season: Key Takeaways from Top 25 Companies

Earnings season for Q1 2024 is already upon us, and we’ve captured key takeaways from the biggest companies to provide earnings analysis in real-time. Coming off a period of macroeconomic volatility, this quarter’s results are sure to uncover insights that could have implications for your portfolio. Using the AlphaSense platform and our Company Smart Summaries feature, we highlight the key themes, trends, and insights from each company’s earnings transcripts.

This quarterly earnings recap serves as the first step of your earnings analysis each quarter, as we help you monitor the top companies across various industries to deliver critical insights as they unfold. Below, we bring you the relevant takeaways and respective earnings transcript snippets designed to give a briefing of the company’s earnings call.

A few macro trends we see mentioned throughout this earnings season include implications of steady interest rates, the relevance of generative AI, and ongoing supply chain and inflationary challenges. Bookmark this page — or add it to your growing tabs — to get our dynamic updated analysis as each earnings call takes place. 

Microsoft [MSFT]

Earnings Date: April 25, 2024

• Microsoft’s reported revenue for the quarter exceeded expectations at $61.9 billion, up 17%, and earnings per share was $2.94, up 20%. Performance was driven by the strength of Microsoft Cloud, which surpassed $35 billion in revenue, up 23%. 
• The company reported that more than 90% of the Fortune 100 are now GitHub customers, and revenue accelerated over 45% YoY.
• Bing reached over 140 million daily active users, and the company is encouraged by its momentum in mobile.
• For the full 2024 financial year, Microsoft expects operating margins to increase over 2 points year-over-year, despite cloud and AI investments, the impact from the Activision acquisition, and the headwind from the change in useful lives last year.

When asked about the potential impact of AI on the firm’s IT spending, Microsoft’s CEO Satya Nadella stated that AI will be accretive to spending and will transform businesses by reducing waste, increasing speed, and customer value. He believes that AI will lead to a cultural change within organizations, requiring them to adopt new processes and technologies to drive operating leverage. 

Apple [AAPL]

Earnings Date: May 2, 2024 

• For the quarter, Apple reported revenue of $90.8 billion and an EPS record of $1.53, setting revenue records in more than a dozen countries and regions.
• Revenue from Services set an all-time record of $23.9 billion, up 14% year-over-year.
• The company raised its dividend by 4% to $0.25 per share of common stock and plans for annual increases in the dividend going forward.
• Total company revenue in Q2 is expected to grow low single digits year-over-year despite a foreign exchange headwind of about 2.5 percentage points.

The company is excited about their increased focus on generative AI and is pushing hard on innovation on every front. They have invested over $100 billion in R&D in the past 5 years and plan to continue along the same lines going forward, with a hybrid model where they make some investments themselves and share them with suppliers and partners.

NVIDIA Corporation [NVDA]

Earnings Date: May 22, 2024

Alphabet Inc [GOOG + GOOGL]

Earnings Date: April 25, 2024

• The company reported that Google Search and other advertising revenues were $46.2 billion in Q1, up 14% quarter-over-quarter led by growth in retail.
• YouTube surpassed 100 million Music and Premium subscribers globally, including those who signed up by trial, in Q1.
• Other Bets revenues were $495 million in Q1, benefiting from a milestone payment in one of the Other Bets businesses.
• Google expects a larger headwind from foreign exchange in Q2 relative to this quarter.

Sundar Pichai, CEO of Alphabet, was asked about the adoption of new features in core search and the impact on CapEx spending. He explained that the company is seeing early confirmation of its thesis that SGE (Search Generative Experience) will expand the universe of queries where users can get a mix of actual answers linked to sources across the web and crowd-sourced answers from community forums. Google has already rolled out AI overviews in the U.S. and the U.K. to tackle complex queries and have already served billions of queries. 

Amazon.com Inc [AMZN]

Earnings Date: April 30, 2024

• The company’s worldwide revenue was $143.3 billion, up by 13% YoY. AWS revenue growth accelerated to 17.2%. Net sales are expected to grow between 7% and 11% compared with Q2 2023.
• Operating income in the international segment was $903 million, an improvement of $2.2 billion year-over-year.
• The company saw an unfavorable impact from global currencies weakening against the US dollar, leading to a $700 million headwind to revenue. Additionally, there were notable headwinds in year-over-year foreign exchange in Q1, and these headwinds are expected to grow in Q2.
• The company anticipates higher CapEx in 2024, driven by higher infrastructure CapEx to support growth in AWS, including generative AI. Amazon also expects the AWS operating margins to fluctuate over time, driven in part by the level of investments made in the business.

Speaking to the impact of investments in AI, the company acknowledges making these investments but they are also focused on maintaining profitability. They expect to see a meaningful increase in CapEx, primarily to support AWS infrastructure and generative AI efforts. The company has historically managed a balance between investment and profitability, and they intend to continue this approach.

Meta Platforms Inc [META] 

Earnings Date: April 24, 2024

• Meta reported their total family of apps revenue for Q1 was $36 billion, up 27% YoY.
• Reels revenue continued to grow across Instagram and Facebook in Q1, driven by higher engagement and increased monetization efficiency through ads ranking and delivery improvements.
• The company expects that Reality Labs operating losses will increase YoY due to ongoing product development efforts and investments to scale the ecosystem.
• The company expects to continue working on surfaces with relatively lower levels of monetization, like video and messaging, as additional growth opportunities.

Mark Zuckerberg, Meta’s founder and CEO, addressed the impact of AI on the advertising ecosystem. Zuckerberg believes that AI will have a significant impact on the advertising ecosystem, but it is difficult to predict the exact timing of adoption and utility. They focus on building products and scaling them before monetizing them, and they typically do not focus on monetization until the products reach significant scale. 

Berkshire Hathaway Inc [BRK.B]

Earnings Date: May 10, 2024

Eli Lilly and Company [LLY]

Earnings Date: April 30, 2024

• The company’s revenue growth in Q1 was driven by recent product launches, primarily Mounjaro and Zepbound. Mounjaro sales were $1.8 billion globally, and $1.5 billion in the U.S., up from $568 million and $536 million in Q1 2023, respectively.
• Marketing, selling, and administrative expenses increased by 12% due to promotional efforts supporting current and future launches and increased compensation and benefit costs.
• The company is increasing its full-year revenue outlook by $2 billion on the top and bottom end of the range to be between $42.4 billion and $43.6 billion.
• The company expects to report top-line results from Quint 4 and Quint 2 in the coming weeks. The company also continues to make progress against its plans to increase manufacturing capacity.

Anat Ashkenazi, Executive VP & CFO, weighed in on the supply and demand situation for Eli Lilly’s products and when they might come closer together. The company expects the supply and demand situation to remain tight in the near term and midterm, as the demand is strong due to the health benefits provided by their products. They are investing in ramping up production and adding more supply across different presentations, but demand is expected to outpace supply through 2025, and potentially 2026, as the company continues to invest and progress.

Broadcom Inc [AVGO]

Earnings Date: June 6, 2024

Tesla Inc. [TSLA]

Earnings Date: April 23, 2024

• Tesla reported a 9% drop in revenue for Q1, recognizing opportunities for cost reduction and the impact of wage increases. The company is hyper-focused on cost reduction and is facing challenges in predicting auto gross margins due to many moving parts, including change in tariffs and local incentives.
• The company’s Model Y became the best-selling vehicle globally with over 1.2 million units delivered.
• The company expects volume growth in 2024 to be lower due to focus on the launch of the next-generation vehicle. Tesla believes that Chinese car companies are the most competitive in the world and will have significant success outside of China if trade barriers are not established.

Elon Musk, CEO & Director acknowledged that Tesla faced several challenges in Q1, including seasonality, macroeconomic pressure, attacks at its factory, and ramped production of Model 3 and Cybertruck. These factors contributed to a difficult quarter, but the company expects Q2 to be better. They do not expect these issues to recur, giving them confidence in unit growth in 2024.

JPMorgan Chase & Co. [JPM]

Earnings Date: April 12, 2024

• The company’s securities services division reported revenue of $1.2 billion, up 3% year-over-year. The company ended the quarter with a CET1 ratio of 15%, relatively flat versus the prior quarter, reflecting net income which was predominantly offset by higher RWA and capital distribution.
• JPMorgan’s expenses were up $1.8 billion or 9% YoY, driven by higher compensation, including growth in employees and the increase to the FDIC special assessment.
• Looking forward, the company expects deposit balances to be flat to modestly down, which is a little bit of a headwind at the margin. The company also expects their expense run rate to decline later in the year as it continues making progress on integration.
• The company expects to see ongoing migration and yield-seeking behavior even if the current yield curve environment were to change and meaningful cuts were to be reintroduced.

Jeremy Barnum, JPMorgan’s Executive VP and CFO, weighed in on M&A activity and the company’s commitment to fighting for market share:

“..I think we’re seeing better IPO performance. Obviously, equity markets have been under a little bit of pressure the last few days. But in general, we have a lot of support there, and that always helps. Dialogue is quite good. A lot of interesting different types of conversations happening with global firms, multinationals, carve-out type things. So dialogue is good. Valuation environment is better, like sort of decent reasons for optimism there.”

Visa Inc. [V]

Earnings Date: April 23, 2024

• The company reported $8.8 billion in net revenue, up 10% for the quarter.
• Payments volume for the quarter grew by 8% year-over-year in constant dollars. International transaction revenue was up 9% YoY, excluding intra-Europe, impacted by lapping strong currency volatility from last year.
• Adjusted net revenue growth is expected in the low double digits, generally in line with the adjusted Q2 growth rate.
• Net revenue growth is expected to have a 1 point drag due to currency exchange.

In terms of areas where the company saw the most pronounced growth recovery compared to the previous quarter, commercial volume growth was steady at 8%, and Visa Direct transactions were up 31% for the quarter. Additionally, new flows revenue grew 14% in total, in line with expectations. 

ExxonMobil Corporation [XOM]

Earnings Date: April 26, 2024

• ExxonMobil projects its stand-alone production in 2024 to be about 3.8 million oil-equivalent barrels per day, rising to about 4.2 million oil-equivalent barrels per day. 
• The company expects to see a full year of earnings benefit from the Beaumont refinery expansion and Permian Crude Venture in 2024, achieving capacity of 220,000 barrels a day in January, just 2 months after startup and well ahead of the industry average of 15 months.
• The company saw negative timing effects in a rising price environment, primarily related to the mark-to-market on unsettled derivatives.
• The company expects to grow upstream earnings by an additional 50% between 2023 and 2027, and has a clear line of sight on the nearly $5 billion in earnings from strategic projects in 2027.

Darren W. Woods, Chairman of the Board, President & CEO commented on the pending Pioneer transaction, as the company is working closely with the Federal Trade Commission (FTC) and has provided extensive documentation to address antitrust concerns. The company is confident that the transaction will not raise any antitrust issues and expects to close the deal in Q2.

UnitedHealth Group Incorporated [UNH]

Earnings Date: April 16, 2024

• The company’s Optum Health division’s revenue grew 16% to $26.7 billion this quarter as the company increased the number of patients served. It’s currently on track to approach 5 million patients in value-based care by year-end.
• Optum Rx continues to see momentum coming off last year’s record selling season with a recent win in Hawaii and the renewal of its contract with the Department of Veteran Affairs. The company has a strong pipeline of Medicaid RFPs and is confident that its offerings will resonate in other states.
• Cash flows from operations in Q1 were impacted by about $3 billion due to the funding acceleration to care providers and collection extensions to affected customers. The timing of public sector receipts was also a factor.  
• The company expects full-year adjusted EPS in the range of $27.50 to $28, incorporating the $0.30 to $0.40 per share of business disruption impacts.

Regarding the company’s growth rates and guidance, John Rex, President & CEO indicated that they are still working on providing more specific guidance for next year, but are confident in continued growth in areas such as outpatient care for seniors and orthopedic and cardiac categories. They also emphasized that they are focused on managing medical trends and engaging with members to help them manage their costs.

Mastercard Incorporated [MA]

Earnings Date: May 1, 2024

• The company reported that Q1 net revenues were up 11%, and adjusted net income up 16% versus a year ago. Outside of the US, volume increased by 13% with credit growth of 12% and debit growth of 13%.
• Payment network net revenue increased by 8%, driven by domestic and cross-border transaction and volume growth and growth in rebates and incentives.
• The company expects an expense of approximately $85 million in Q2, higher than Q1, driven by lower forecasted net average cash balances in Q2, primarily due to higher working capital requirements and the geographic mix of cash.
• The company is confident that the shift to digital for person to merchant payments will continue over the long term.

Michael Miebach, Mastercard’s CEO, President & Director, stated that the company received the license to operate in China in November and is excited about the opportunity. They are working on building out issuance relationships with banking partners in China and building out the acceptance footprint. The company expects to go live with the first transactions in the month of May and is excited about the medium- to long-term opportunity. 

The Procter & Gamble Company [PG]

Earnings Date: April 18, 2024

• The company reported that U.S. volume share was up 40 bps, reflecting continued strong volume growth ahead of the underlying market. Consumer demand for P&G brands remains very strong in the U.S. with all outlet consumption value growth of 5%.
• From a geopolitical perspective, business in China grew by 11%, with a share growth of more than 1 point. Russia continues to be a headwind for the company due to reduced portfolio and lack of business support. Headwinds from Greater China and Asian, Middle Eastern, and African markets had a 150 bps impact on total company sales.
• From a forward looking perspective, PG expects to grow slightly ahead of projections by driving market growth, which in turn will drive share and a bigger part of the company leading the market.
• The company expects the environment to continue to be volatile and challenging, from input costs and currencies, to consumer, retailer, and geopolitical dynamics.

When asked about the competition’s struggle with volume growth and how it affects the company’s guidance, Andre Schulten, Chief Financial Officer, acknowledged that destocking in the U.S. was primarily due to Personal Health Care-related factors. He also noted that the industry-wide recovery of the supply chain has led to a decrease in the need for safety stock.

Johnson & Johnson [JNJ]

Earnings Date: April 15, 2024

• The company’s Innovative Medicines—DARZALEX, TREMFYA, ERLEADA—all grew over 20% in Q1. Globally, Innovative Medicine sales of $13.6 billion increased by 2.5%, with growth of 8.4% in the U.S. and a decline of 4% outside of the U.S. 
• The company received FDA approval for RYBREVANT in combination with chemotherapy for the first-line treatment of patients with locally advanced or metastatic non-small cell lung cancer with EGFR exon 20 insertion mutations.
• The company expects to deliver the fourth consecutive year of global share gains in IOLs, driven by tremendous performances of its IOL business in Asia-Pac and in EMEA.

Joaquin Duato, CEO & Chairman, stated that Johnson & Johnson’s M&A strategy is consistent and disciplined, with a focus on evaluating opportunities agnostic to sector and size. The company is looking for technologies that improve the standard of care, have a positive patient impact, align with in-house capabilities, enable entry into higher growth markets, and deliver a compelling financial result for shareholders. The company’s M&A strategy has been a cornerstone of its ability to create value, and J&J will continue to evaluate dealmaking opportunities in the future.

The Home Depot, Inc. [HD]

Earnings Date: May 14, 2024

Merck & Co., Inc. [MRK]

Earnings Date: April 25, 2024

• For the quarter, Merck reported that sales of KEYTRUDA grew 24% to $6.9 billion, driven by increased uptake from earlier-stage cancers and continued strong demand from metastatic indications.
• The company received FDA approval for WINREVAIR, a first-in-class treatment for adults with pulmonary arterial hypertension, a rare progressive and ultimately life-threatening disease. The company remains focused on advancing its expansive and diverse pipeline of leading-edge programs for the benefit of patients.
• The company drove strong growth across key therapeutic areas, executed strategic business development, and is launching a significant new product in the cardiometabolic space while also preparing for the potential approval and launch of two additional candidates for vaccines in oncology.
• From an outlook perspective, the company expects to increase and narrow its expected EPS range from $8.53 to $8.65. The company maintains ample capacity given its strong investment-grade credit rating and cash flow to pursue additional science-driven value-enhancing transactions.

Merck management mentioned that there will be a stream of data presented at June’s ASCO conference, including follow-ups and updates on several Phase III trials for various molecules, including Bomedemstat, KRAS, and ADCs. They also noted that the company will discuss a wide range of compounds, including those from Daiichi Sankyo and other ADCs.

Costco Wholesale Corporation [COST]

Earnings Date: May 30, 2024

Oracle Corporation [ORCL]

Earnings Date: June 18, 2024

Chevron Corporation [CVX]

Earnings Date: April 26, 2024

• The company reported that production is up 12% year-over-year, including an increase of 35% in the U.S., due to the PDC Energy acquisition and organic growth in the Permian Basin.
• The company has achieved start-up of WPMP this month with the first inlet separator and pressure boost compressor in service, as well as the completion of the conversion of the first metering station to low pressure. Later this quarter, the company expects a second pressure boost compressor online and a third gas turbine generator to provide power to the Tengiz grid.
• Adjusted upstream earnings were down due to lower realization and liquids liftings. Cash flow from operations was impacted by an approximate $300 million international upstream ARO settlement payment and $200 million for the expansion of the retail marketing network.
• The company expects to have additional major equipment ready for operations for next quarter.

When asked about their exploration opportunities, specifically Block 90 in the Orange Basin offshore Namibia, Chevron confirmed their two blocks in this location. The company plans to spud the first exploration well in that block later this year or early next year, based on rig availability. Chevron also recently farmed into Block 82, which is further north in the Walvis space, and the industry has had a high degree of success in the Orange Basin. 

Bank of America Corporation [BAC]

Earnings Date: April 16, 2024

• The company announced that its sales and trading division delivered its eighth consecutive quarter of year-over-year revenue improvement at $5.2 billion, the highest first-quarter result in over a decade.
• The company delivered good improvement in its fee-based business, driven by continued organic growth and good market conditions. The company’s investment banking arm delivered nearly $1.6 billion in fees and grew 35% year-over-year.
• Consumer Banking decreased 15% year-over-year due to revenue decline from lower deposit balances compared to last year.
• The company expects a decline from the Q1 level of net interest income in Q2.

Brian Moynihan, Chairman, CEO & President, addressed questions about the company’s plans to improve its efficiency ratio and reach an efficiency ratio below 60%. He explained that the company is reducing marginal expenses and increasing revenue growth, especially in the wealth management business, in order to achieve this goal. He also noted that the company is focusing on deploying expenses in operating leverage and returning to its previous levels once the twist in the NII is resolved.

AbbVie Inc. [ABBV]

Earnings Date: April 26, 2024

• AbbVie reported adjusted EPS of $2.31 for the quarter, which is $0.11 above the guidance midpoint. The company’s market capitalization has increased substantially from $54 billion to roughly $300 billion.
• The company’s immunology division delivered total revenues of approximately $5.4 billion in Q1, exceeding expectations.
• The company expects economic headwinds in China to persist over the near term with the China aesthetics market flat overall for 2024.
• Forward looking, AbbVie raised its EPS guidance to between $11.13 and $11.33, including $0.26 of operating overperformance. The company expects total net revenues to be approximately $55 billion, an increase of $800 million.

The company is confident that they can continue to grow in 2025 despite headwinds from the IRA and Humira. They have several drivers that will offset the erosion of Humira and the Part D benefit redesign impact, including the ex-Humira growth platform, which is demonstrating great momentum, and the neuroscience franchise, which will grow by over $1 billion this year.

Coca-Cola Company [KO]

Earnings Date: April 30, 2024

• The company reported that volume and comparable margins grew in Q1, and the company continued to invest across the business. The company expects organic revenue growth of 8% to 9%, and comparable currency-neutral EPS growth of 11% to 13% for 2024.
• A price/mix growth of 13% in Q1 was driven by intense inflationary pricing, pricing actions across a number of markets, and favorable mix.
• The company faced geopolitical and economic challenges in Eurasia and the Middle East, affecting its business in the region.
• The company expects 2024 to be a more normal year in terms of pricing, comparatively to pre-inflationary times.

James Robert B. Quincey, Coca-Cola’s Chairman & CEO, indicated that the company expects flat to modest growth in volume on a long-term basis in North America with good pricing. He also mentioned that the company is focused on continuing to build the business, driving revenue, and winning in the marketplace.

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