Diamonds and Dogs

2/6/19

Oh Snap! Snapchat (SNAP) is jumping 26% following better than expected earnings. The company lost 4 cents a share verse estimates of 8 cents a share. Revenue rose 36.4% to $389.82 million ahead of estimates. The good news for Snapchat is the company is stabilizing business, losing fewer users and moving toward profitability. Looking forward, Snap expects between $285 million and $310 million in first quarter sales which would be a 24 percent to 34 percent year-over-year increase. The adjusted EBITDA loss is expected to improve as the company ended the year with $1.3 billion in cash and securities and no debt.

Video game retailers taking it on the chin once again. Electronic Arts (EA) is down 13% while Take-Two Interactive (TTWO) is down 11% following earnings. Electronic Arts earnings beat expectations even as revenue fell 18.4% to $1.61 billion below expectations. The company then lowered guidance as the CEO took the blame saying they didn't perform up to expectations. The good news is Electronic Arts does have some new games on the horizon to hopefully lift expectations.  Take Two Interactive easily beat expectations on a record quarter, but then lowered guidance for the first quarter. The CEO said they are firing on all cylinders, crushed the quarter and expects a record year, but investors seem to be focused on the lower guidance for the first quarter.