Pinterest (PINS) Q2 2022 earnings

Pinterest shares jumped on better-than-expected user numbers even as earnings and revenue missed estimates and the company gave weak guidance for the third quarter.

Activist investor Elliott Management confirmed separately that it's Pinterest's top investor and said it has "conviction in the value-creation opportunity" at the company. 

Here's how the company did.

• Earnings: 11 cents adjusted per share vs. 18 cents per share expected, according to Refinitiv.
• Revenue: $666 million vs. $667 million expected, according to Refinitiv.

Pinterest said global monthly active users declined by 5% from a year earlier to 433 million. While that sort of drop-off is alarming for a social media app that relies on eyeballs to attract advertisers, analysts were expecting a steeper decline to 431 million.

The company's financials were gloomy, following a trend in the social media market. Facebook parent Meta, Twitter, and Snap all reported second-quarter earnings that missed on the top and bottom lines, and all attributed a weak online advertising market to their bleak results.

A woman walks past sign at the headquarters of Pinterest in the South of Market neighborhood of San Francisco.

Smith Collection | Gado | Archive Photos | Getty Images

More troubling than its second-quarter results was Pinterest's commentary about what's expected this quarter. The company said it estimates third-quarter revenue will grow "mid-single digits on a year-over-year percentage basis," below analysts' projections for sales growth of 12.7%.

In a letter to investors, Pinterest said economic challenges are leading marketers to reel in spending.

"The macroeconomic environment has created meaningful uncertainty for our advertiser partners," Pinterest said in the letter." The company said it saw "lower than expected demand from U.S. big box retailers and mid-market advertisers, who pulled back ad spend due to concerns about weakening consumer demand."

Pinterest said that its third-quarter guidance takes into account "slightly greater foreign exchange headwinds" than the previous quarter.

In June, Pinterest co-founder Ben Silbermann stepped down as the company's CEO, and was replaced by Bill Ready, previously the leader of Google's commerce unit. Pinterest's hiring of Ready pointed to a deeper push into e-commerce and online retail.

Elliott's involvement with the company was reported in July by The Wall Street Journal, which said at the time that the firm had built a stake of over 9% in the company. After Pinterest's results were released on Monday, Elliott confirmed it's the company's biggest shareholder and said it's pleased with Ready's progress.

"As the market-leading platform at the intersection of social media, search and commerce, Pinterest occupies a unique position in the advertising and shopping ecosystems, and CEO Bill Ready is the right leader to oversee Pinterest's next phase of growth," Elliott said in a statement.

WATCH: Earnings Exchange looks at Pinterest, Caterpillar and JetBlue

Source https://www.globalcourant.com/pinterest-pins-q2-2022-earnings/?feed_id=5433&_unique_id=62e8b422b3c48

S&P 500 sheds nearly 1% Friday on Snap-led tech sell-off, but finishes higher on week

The S&P 500 fell nearly 1% on Friday, but finished the week higher, as investors digested disappointing results from Snap that sent social media shares reeling.

The Dow Jones Industrial Average lost 137.61 points, or 0.43%, to 31,899.29. The S&P 500 declined 0.93% to 3,961.63, while the Nasdaq Composite traded 1.87% lower to 11,834.11.

Those losses cut into weekly gains for all three major averages, with the Dow closing out the week nearly 2% higher. The S&P 500 advanced about 2.6%, and the Nasdaq capped the week up 3.3%.

An earnings miss from Snap, which sent shares tumbling about 39.1%, halted this week's Nasdaq rally. Traders, eyeing some better-than-expected results from tech companies, had deliberated whether markets had finally found a bottom.

"Snap has managed to snap the uptrend in the Nasdaq by reporting disappointing earnings, which has created a cascading effect on the S&P," said Sam Stovall, chief investment strategist at CFRA Research.

"This is just an example of the volatility that investors should expect as earnings are reported, and, therefore, could cause fluctuations in prices in response to better than or worse than results," Stovall added.

The results from the Snapchat parent were followed by a slew of analyst downgrades on the stock. Snap's quarterly report also weighed on other social media and tech stocks, which investors feared could face slowing online advertising sales.

Shares of Meta Platforms and Pinterest fell about 7.6% and 13.5%, respectively, while Alphabet lost 5.6%.

Twitter rose 0.8% despite reporting disappointing second-quarter results that missed on earnings, revenue and user growth. The social media company blamed challenges in the ad industry, as well as "uncertainty" around Elon Musk's acquisition of the company, for the miss.

Verizon was the worst-performing member of the Dow after reporting earnings. The wireless network operator dropped 6.7% after cutting its full-year forecast, as higher prices dented phone subscriber growth.

About 21% of S&P 500 companies have reported earnings so far. Of those, nearly 70% have beaten analyst expectations, according to FactSet.

Economic data weighs on sentiment

Meanwhile, concerns over the state of the U.S. economy also weighed on sentiment after the release of more downbeat economic data. A preliminary reading on the U.S. PMI Composite output index — which tracks activity across the services and manufacturing sectors — fell to 47.5, indicating contracting economic output. That's also the index's lowest level in more than two years.

The report comes a day after the U.S. government reported an unexpected uptick in weekly jobless claims, raising questions about the health of the labor market.

Still, Wall Street has enjoyed a strong week for markets, as traders absorbed second-quarter results that have come in better than feared. On Friday, the S&P 500 touched the 4,000 level, which it hasn't hit since June 9, before coming back down.

The Dow got a boost earlier in the session following a robust earnings report from American Express. The credit card company jumped about 1.9% after beating analyst expectations, because of record consumer spending in areas such as travel and entertainment.

"This is showing you that market expectations are really low, that a little bit of good news can go a long way when you have low expectations," said Truist's Keith Lerner, noting that investors rotated back into growth stocks even amid weak economic data.

To be sure, some market participants do not believe the bear market is over despite this week's gains. Since World War II, nearly two-thirds of one-day rallies of 2.76% or more in the S&P 500 occurred during bear markets, with 71% occurring before the bottom was in, according to a note this week from CFRA's Stovall.

Stovall believes the broader market index could rally as high as the 4,200 level before coming back down to challenge June lows.

— CNBC's Fred Imbert contributed to this report.

Lea la cobertura del mercado de hoy en español aquí.

Source https://www.globalcourant.com/sp-500-sheds-nearly-1-friday-on-snap-led-tech-sell-off-but-finishes-higher-on-week/?feed_id=454&_unique_id=62db294674865