Bank of America, Citi and Johnson & Johnson had shockingly good first quarter earnings. Their results came in well above analysts’ expectations and helped fuel a bullish sentiment that lifted shares in premarket trading. Further complicating this, Netflix announced some pretty unrealistic revenue targets and aspirations for the market as it seeks high single-digit growth in subscribers by 2030.
Bank of America just announced a quarterly profit of $7.4 billion. That’s a stunning 11% jump over this time last year. The bank’s net interest income was the biggest surprise, as was its trading revenue. This extraordinary performance was driven by a 5.9% increase in revenues which totaled $27.51 billion. These results are a testament to the company’s strong fiscal health and solid market standing.
Citi certainly helped the mood with solid results of their own, making $1.96 per share on revenue of $21.50 billion. Analysts were expecting earnings of $1.85 per share on $21.29 billion in revenue. Citi’s outperformance over the market in this strong performance makes it a potentially truly compelling case.
Johnson & Johnson completely beat the street on earnings of $2.77 per share. Their revenue shot up to $21.89 billion, beating analysts’ estimates on both counts by nearly a mile. Even so, the company is reaffirming its full-year earnings guidance. It’s increased its sales projection, even as it predicts $400 million in costs this year from new tariffs on medical devices.
In a parallel announcement, Netflix established specific, aggressive targets for its revenue ramping path during 2016-2018. The streaming behemoth has its eyes on a $1 trillion market cap by 2030. To meet this ambitious goal, it intends to double its revenue from last year’s $39 billion. Netflix has set a goal of $9 billion in annual global ad sales by 2023. This decision underlines the company’s broader strategic pivot to increase advertising revenue while further developing their subscription service.
It’s those optimistic earnings beats and ambitious growth plans that have led to high investor confidence going into the market’s opening. As major companies continue to demonstrate resilience and adaptability in a challenging economic environment, market participants remain optimistic about future performance.
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